Power of Attorney Changes by State; Tweak LIBOR Rather Than Eliminate?
From LOs to investors, no matter the real estate market, the story is the same: “Loosen up the credit guidelines all you want, but if there’s no inventory of houses for sale or being built, then I’ll merely have 20 prequals on my desk instead of the 10 I have now.”
State-Level Power of Attorney News
Yes, California has 20 million people more living in it than New York. The Census Bureau reports the top 10 largest states in population in 2016 are: CA (39.2mm), TX (27.9mm), FL (20.6mm), NY (19.8mm), IL (12.8mm), PA (12.8mm), OH (11.6mm), GA (10.3mm) and NC (10.2mm). All told, this group of states represents 51% of the US population.
What does California have in store for housing? Due up soon: "The package of housing bills, the statement said, will include ongoing funding for low-income development, a bond on the 2018 statewide ballot and regulatory changes to make it easier to build housing." Homeownership in California has dropped to 1940s levels. And rents have skyrocketed. Among the top 10 least affordable counties in the nation, seven of them are in California, and six of those clustered around San Francisco.
New Hampshire enacted provisions concerning its Uniform Power of Attorney Act. These provisions are effective on January 1, 2018. Under the Act, a power of attorney is a writing or other record that grants authority to an agent to act in the place of the principal. When a power of attorney is created under chapter 564-E:102(15), it will be durable unless expressly provided that it is terminated by incapacity. A power of attorney is effective when it is executed, unless the principal provides in the power of attorney otherwise.
At that time in NH to execute a general power of attorney, the principal must sign (not electronically) and it must be acknowledged before a notary public. An Affixation must accompany to the power of attorney that includes specific language regarding facts. A principal may designate two or more persons to act as co-agents under the power of attorney. Additionally, a principal may designate one or more successor agents. Duties of the agent under a power of attorney include acting in accordance with the principal's reasonable expectations, acting in the principal's best interest, acting in good faith, and acting only within the scope of authority granted in the power of attorney.
North Carolina recently enacted the Uniform Power of Attorney Act (the Act), effective January 1, 2018. The Act amends the North Carolina General Statues by adding Chapter 32C, cited as the North Carolina Uniform Power of Attorney Act. Power of Attorney is defined as "a writing or other record that grants authority to an agent to act in the place of the principal, whether the term power of attorney is used."
Article 1 of the Act outlines definitions and general provisions, including applicability, durability, execution, and validity of the power of attorney. A power of attorney created pursuant to Chapter 32C is durable unless the instrument expressly provides that it is terminated by the incapacity of the principal. Article 2 of the Act includes provisions regarding the general and specific authority that a principal may give an agent in a power of attorney, such as authority involving real property, tangible personal property, and stocks and bonds. Article 3 provides statutory forms.
Effective as of August 31, 2018, North Carolina House Bill 584 serves to clarify the process for correcting nonmaterial errors in recorded instruments of title, creates a curative procedure for obvious description errors in documents of title, and creates a seven-year curative provision for certain defects in recorded instruments of title.
Notice of a nonmaterial typographical or other minor error in a deed or other recorded instrument may now be given by recording a corrective notice affidavit. Prior to recording a curative affidavit, the authorized attorney will serve a notice of intent and a copy of the unsigned proposed curative affidavit to individuals as set forth in the bill. The act provides a recommended form for the curative affidavit, and specifies that "no particular phrasing is required for the curative affidavit." Additionally, an instrument conveying or purporting to convey an interest in real property that contains a defect, irregularity, or omission shall be deemed effective to vest title as stated therein and to the same extent as though the instrument had not contained the afore mentioned if two specified conditions are met.
Effective October 31, 2017, Alaska has enacted the Revised Uniform Fiduciary Access to Digital Assets Act as Title 13, Chapter 63 of the Alaska Statutes. The Act addresses four common types of fiduciaries: executors or administrators of estates, guardians or conservators, agents acting under a power of attorney, and trustees of a trust. The Act allows a fiduciary, in accordance with a user's estate plan, to compel the disclosure of digital assets stored by a custodian. The Act only applies to a custodian if the user resides in the state of Alaska or resided in the state of Alaska at the time of the user's death. The Act does not apply to the digital assets of an employer used by an employee in the ordinary course of business.
Capital Markets
Most lenders are focused on debt, not equity. This debt and its corresponding receivable, of course, is often securitized - think mortgage-backed securities, for example. But the overall level of debt is raising some eyebrows: Household debt rose for the 12th straight quarter in Q2 of 2017, and is $12.8 trillion, a record. But our economy has grown: the Q2 level amounts to 67% of GDP, compared to 87% in 08Q3, when household debt last peaked. But credit card and auto loan delinquencies are rising despite debt service payments being just 10% of disposable income, a near all-time low, and household savings is 3.8%, a near decade low. Not ideal, huh?
A big chunk of this debt is tied to LIBOR, and amending the structure of the London Interbank Offered Rate, which is due for termination in 2021, might be simpler and cheaper than replacing it with an interest-rate benchmark that has yet to be established. This author suggests adjusting Libor to embrace data from real-time transactions, such as bond-clearing prices, credit default swaps and commercial paper.
Is it quiet out there, or what? U.S. Treasuries started the week on a modestly higher note, but activity was on the light side. Longer-dated issues finished the day near their overnight highs while the 2-yr note climbed into the close. The benchmark 10-yr yield hit 2.18% and settled at its lowest level since June 26. The 2s10s spread ticked up to 89 bps from 88 bps on Friday. Agency MBS prices roughly unchanged. Blah blah blah.
Today we've had the Philly Fed's Non-Manufacturing Indices for August; coming up are weekly chain store sales from Redbook, the FHFA Home Price Index for June, and some forgettable Richmond Fed release. In the early going we find our friend the 10-year yielding 2.21% and agency MBS prices worse an .125.
Jobs, Personnel, and Company News
Pacific Union Financial, LLC continues its expansion of the West Division with the hiring of Dennis Waller as the new Regional Wholesale/Non-Delegated Correspondent Sales Manager for the Northwest and Rocky Mountain States. Mr. Waller is an industry veteran who brings years of experience leading Sales. "I am very excited to join the Pacific Union Financial Wholesale and Non-Delegated Correspondent Division. The West Division team is truly providing the best experience for our Broker and Non-Delegated partners and their borrowers. My goal is to attract like-minded sales professionals and continue to aggressively grow our footprint in these markets," Waller said. Mr. Waller is looking to build a strong team of Account Executives and will be hiring in WA, CO, OR, UT, ID, MT, WY and AK. If you are an experienced Wholesale or Non-Delegated Account Executive and interested in joining a company that is financially strong with competitive products and pricing, please contact Dennis Waller or Susan Trejo, Corporate Recruiter.
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No starter homes? One reason is that big companies are buying them up for rentals. More and more companies buying up single-family homes to rent out to American families that cannot own a home on their own. Recently 2 of the largest companies in this space merged to create a stock jump for each company - Blackstone's Invitation Homes (INVH) and Starwood Waypoint Homes - and accounts for almost 100,000 homes nationwide.