Global Warming, Mortgage Insurance and Bad Christmas Music

November 30, 2018 at 9:30 am 2 comments

(Updated 2:50) Greetings, people. If all goes according to plan this is the weekend that the Meier family will be cutting down, yes cutting down, the family Christmas tree. That being said, there’s a lot I have to get off my chest before I focus in on my Christmas joy. So here it goes.

It appears that we are once again seeing a last second reprieve of the NFIP take shape.  Late last night the Senate and house did agree on a seven day extender of the program which now does not expire until December 7.  Sorry I missed that this morning.

Here’s an analysis from the Mortgage Bankers Association of what the consequences of the lapse may be. One thing I would add however is that unless you are portfolio-ing your loan, in other words you do not want the option of selling them to secondary market participants, I would continue to insist on flood insurance for mortgages in flood zones.

No matter what variation of kick-the can Congress ultimately decides to play  it seems to me that the increasingly contentious debates about how to fund and make more effective our flood insurance program exposes gross hypocrisy on both sides of the global warming debate.

For the record, I am not one of those conservatives who feel that a good republican buries his head in the sand with the flood waters rise around it. That being said, it does seem odd to me that democrats such as New Jersey Senator Robert Menendez are scrambling to prop up a program which provides incentives for people to buy housing in areas that are simply going to become more expensive to maintain in the coming years. For instance, the Union of Concerned Scientists (Does that mean there’s a union of unconcerned scientists?) issued a report in September calculating “that by 2045—near the end of the lifetime of a 30-year home mortgage issued today—sea levels are projected to have risen such that nearly 311,000 of today’s residential properties, currently home to more than half a million people, would be at risk of flooding chronically, representing a doubling of at-risk homes in the 15 years between 2030 and 2045. Not only are the mortgage loans on these homes at growing risk of default if the value of the properties drops, but each successful sale of one of these homes represents the potential transfer of a major latent financial liability. Eventually, the final unlucky homeowners will hold deeds to significantly devalued properties.”

By the way, even if you are a climate change skeptic, insurance companies are going to use statistics like these in assessing the risk to property. Against this backdrop, one must wonder if a system predicated on subsidizing insurance costs with the American public ultimately on the hook, is a sustainable policy.

Nominee to Head CFPB Clears Important Hurdle

Kathy Kraninger, President Trump’s pick to be the anti-Cordray CFPB Director, cleared a procedural vote by a 50-49 vote yesterday indicating that she will shortly win approval to take the reins of the controversial but still hugely powerful independent agency. As I like to remind credit unions, Presidents and Directors will come and go but the CFPB will always be here, like it or not.

Worst Christmas Song Ever

It’s not even December, but this year’s winner of the blog’s occasional award bestowed on the most annoying Christmas song in the Universe is “Last Christmas” by Wham!, which has spawned several equally  obnoxious covers. Yoko Ono has previously won this prestigious prize.

Nothing says Happy Holidays like this beautiful lament from a spurned lover who is determined not to be jolted again even as he is apparently still obsessed with talking to the jolter. “Last Christmas, I gave you my heart, But the very next day you gave it away, This year, to save me from tears I’ll give it to someone special.” I’ll be sure to play that song as we set out to cut the tree and decorate the house for the Holidays. See you Monday.

Entry filed under: General, Legal Watch, Mortgage Lending, Regulatory. Tags: , , .

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2 Comments Add your own

  • 1. Thom Powers  |  November 30, 2018 at 10:10 am

    “Last Christmas”…a Wham beauty. Think about how the band got it’s name. It seems that bandmate Andrew Ridgeley wrote those lines about one time partner George Michael…Ridgeley later retreated from the group to marry a woman from another beautifully named group “Bananarama”…happy tree cutting.

    Reply
    • 2. Henry Meier  |  December 4, 2018 at 11:31 am

      And now you know the rest of the story. Thank you Thom Paul Harvey Powers

      Reply

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Authored By:

Henry Meier, Esq., General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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