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43 » VISIT US ONLINE @ DSNEWS.COM SEN. WARREN TURNS SIGHTS TOWARD WALL STREET AGAIN U.S. Senator Elizabeth Warren (D-Massachusetts), whose continued fights for tough Wall Street reform may have prevented her from being chosen as the vice president on Hillary Clinton's ticket, is trying to make sure that big financial firms and not taxpayers are on the hook for losses that occur from risky derivative trading. Warren along with U.S. Sen. Mark Warner (D-Virginia), and U.S. Congressman Elijah Cummings (D-Maryland), Ranking Member on the House Committee on Oversight and Government Reform, have introduced the Derivatives Oversight and Taxpayer Protection Act in order to strengthen federal oversight of the derivatives market, which totals in the multi-trillions. Derivatives were reported by the Financial Crisis Inquiry Commission to be the center of the storm in the financial crisis. "e only way to make sure that derivatives can never lead to a financial crisis and taxpayer bailouts again is to put in place clearer rules and stronger oversight," Warren said. "Otherwise, big financial firms will be able to rake in billions when things go well, then come back to taxpayers with their hands out when things come crashing down." According to an announcement on Warren's website, a lack of federal oversight of the derivatives market allowed firms to build up massive levels of leverage and risk, which resulted in billions of dollars in taxpayer bailouts and precipitated the crisis in 2008. "Reckless derivatives trading at AIG helped precipitate the global financial crisis of 2008 and usher in the Great Recession. at is why Congress required stricter capital, margin, and clearing requirements for derivatives activities in Dodd-Frank. is bill builds on our financial reform efforts by improving transparency, closing gaps in regulatory oversight, and giving CFTC resources adequate to accomplish these goals," said Warner, who is the Ranking Member of the Senate Banking Subcommittee on Securities, Insurance & Investment. Derivatives trading has also hurt the housing market in the last year, leading to Freddie Mac taking a loss of at least $350 million in two of the last three quarters. e Warren/Warner/Cummings bill would strengthen federal oversight of the derivatives market by authorizing the Commodity Futures Trading Commission (CFTC) to collect user fees from financial firms, similar to what the SEC does, and imposing tougher penalties on those who break the rules. e bill also aims to close loopholes for firms that are looking to go around the CFTC rules, and it creates an incentive for private parties to better assess the risk of derivatives contracts by ending special treatment for derivatives in bankruptcy. MILLIONS OF BOOMERS PREFER TO RENT Earlier in June, Freddie Mac reported that the 67 million baby boomers and other homeowners over the age of 55 control two- thirds of the nation's aggregate home equity and therefore are in a position to greatly influence the direction of housing market over the next decade. According to a new Freddie Mac 55+ survey (polling 6,000 homeowners and renters born in 1961 or earlier), approximately six million homeowners stated they would prefer to move at some point and rent instead of own. Nearly as many renters age 55 and over said they would prefer to move out and continue renting. More than five million of those said they are likely to move and rent by the year 2020, according to Freddie Mac. e survey found that more than half (51 percent) of homeowners 55 and over preferred renting over owning. Also, the majority of those surveyed who currently rent (71 percent) and own (83 percent) said that they expect their next rental home will cost the same or less than where they currently live. "When a population this large expects to move into less expensive rental housing, we have to expect it will create significant new pressure on both the supply and cost of existing affordable rental housing," said David Brickman, EVP, Freddie Mac Multifamily. Affordable rental housing will likely play a key role in determining who moves and when among the baby boomer crowd. Close to half (47 percent) of survey respondents who rent said that sometimes they struggle from paycheck to paycheck. About 13 percent said sometimes they could not afford basics until their next check arrived, according to Freddie Mac. Sixty percent of respondents listed affordability as a "very important" factor when choosing where to rent; 44 percent said they want to live in a place where they do not have to perform property maintenance; and 43 percent said they want to live in a walkable community, according to Freddie Mac. However, 38 percent of respondents said they did have enough money beyond each paycheck—including money to put into savings, and more than half of respondents (59 percent) said they believe it makes sense for people their age to rent, Freddie Mac reported. e Five Star Institute recently formed the Single-Family Rental Association, a Five Star member organization focused on responding to business opportunity and industry betterment in the evolving real estate landscape. Five Star's Second Annual Single- Family Rental Summit will be November 1 through 3 in Frisco, Texas, presenting the premier education and networking event for private equity, REIT, institutional/bank, and small/mid-sized investors. The number of permanent loan modifications in April, bringing the total to 1,941,419 since the conservatorships began in September 2008. Source: FHFA STAT INSIGHT 10,784

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