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30 HOUSE BILL WOULD STREAMLINE VOLCKER RULE e House of Representatives passed a bill in April that would streamline the Volcker Rule, joining a push of preventative reforms enacted following the 2008 financial crisis. Implemented as part of the larger Dodd-Frank Wall Street Reform and Consumer Protection Act, the Volcker Rule limits the types of speculative investments banks can participate in. is new House bill, passed with a vote of 300-104, would make the Federal Reserve the sole regulator for Volcker Rule compliance. is change would streamline the current system, in which five different governmental entities are involved in Volcker regulation-- the Federal Reserve, the Office of the Comptroller of the Currency, the Commodity Futures Trading Commission, the SEC, and the FDIC. Critics of the current system have decried it as inefficient and burdensome at best, and argue that this has contributed to decreased liquidity in some markets. "Regardless of how you stand on a particular rule or regulation, it at least ought to be clear, and there ought to be one interpretation and one enforcer of the rule," said Rep. Jeb Hensarling (R-Texas), Head of the House Financial Services Committee. Revisiting and revising the content of the Volcker Rule itself is also a priority for critics, but doing so will require all five currently involved regulatory agencies to agree to the changes. Some proponents of Volcker reform are now calling for this latest House bill to be rolled into the larger Dodd-Frank reform bill passed by the Senate earlier this year, which has landed back in the House to undergo further discussion and potential changes. In March, the Senate voted to advance S. 2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act, after several weeks of debate, amendments, and negotiations. e bill enacts numerous reforms and changes regulations pertaining to lenders. One of the primary changes is increasing the threshold for enhanced regulatory standards from $50 billion to $250 billion, a change designed to exempt some smaller and mid-sized banks from regulations that would still apply to the larger banking entities. e affected regulations pertain to issues such as capital and liquidity rules, risk management standards, and stress testing requirements. ASSESSING THE STATE OF THE MARKET e State of the U.S. Housing Market webinar by Carrington Mortgage Holdings hosted by Rick Sharga, EVP, Carrington Mortgage Holdings looked at the various indicators that are affecting the housing market today and how they would impact it in the future. Starting off with an overview of the overall U.S. economy, Sharga said, "Inflation is something that people are watching more closely." e solid numbers posted by the economy have meant that the Fed is now watching for inflation to get to a certain level and put brakes on the economic stimulus to keep it there. e strong job numbers have also helped boost the overall economic indicators as more workers are re-entering the workforce. e market might be finally putting the foreclosure crisis behind it according to the report. "We are seeing foreclosure activity falling rapidly with the activity concentrated only in a handful of states," Sharga said. According to data from Black Knight's recent Mortgage Monitor Report, delinquencies and foreclosures starts were declining with total U.S. delinquency rates at 4.3 percent and total U.S. foreclosure inventory rate falling to around 0.65 percent. e total delinquency rates were a little higher than expected due to the natural disasters of 2017 but were showing a decline on a month-over-month basis. "ere simply won't be many distressed properties going around by this time next year," Sharga said. "You won't see many people in foreclosure until late 2019 or early 2020." Moving on to the housing market, Sharga pointed out that existing home sales were off to a weak start in 2018. "Existing home sales are still well away from the record numbers we saw during the housing boom of 2006," Sharga said. While existing home sales stagnated at 5.4 million by the end of 2017, we should be closer to 6 million existing home sales by the end of 2018. e culprit? Inventory shortage. According to Sharga, existing home sales inventory was a little under four months' supply at present. "A significant percentage of existing home sales inventory is not for sale right now, which is driving inventory shortage," Sharga said, citing various factors such as a psychological hangover where people were afraid to put their homes on the market because they wouldn't be able to sell it for enough to buy a new home, and the fact that homeowners were staying in a home for a longer period of time, with the average being 10-11 years today, compared to six to seven years as previously experienced. is scarcity was also driving prices higher, with Black Knight's HPI estimating a 6.6 percent home price appreciation in 2017 and a median home price of around $283,000. Despite these price increases, Sharga said that affordability was better than what people thought. "e prior peak was reached in 2006, and since then we've had 12 years of wage appreciation, and even with the higher interest rates today, we still have lower mortgage rates than we had in 2006 which was in the 6-7 percent range," Sharga said. While the inventory crisis is not as acute for new homes, sales for these were also lagging in the first quarter of 2018 according to the report, as labor, capital issues, and regulatory constraints continued to restrict builder activity leading to weak housing starts.

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