[Danny Vesokie | Affiliated Financial Partners]

Major shake up of the corruption and fraud at the federal government.

https://youtu.be/jgVM9QZFP5E?si=X2o7cwhqL8rOp7YA

[Lisa Jones]

GCA FORUMS HOUSING AND MORTGAGE NEWSWednesday, February 19, 2025

Major Developments in Housing and Mortgage News: Uncovering Fraud and Reforming Policies

In a significant turn of events, President Donald Trump is ramping up efforts to expose what appears to be the largest fraud and corruption scandal in U.S. history. With the support of Elon Musk, who has recently taken the helm of the newly established Department of Government Efficiency (DOGE), the focus is now on uncovering vast sums of embezzled taxpayer funds. Within just three weeks of Musk’s leadership, DOGE has already identified trillions of dollars in fraudulent activities, including payments made to deceased individuals through Social Security checks.

Key Findings from DOGE Investigations

The investigations are revealing alarming instances of financial mismanagement, including payments to millions of deceased individuals, raising serious questions about accountability within federal agencies. President Trump emphasized that the fraud identified so far represents less than 1% of what is yet to be uncovered, with expectations of revealing potential hundreds of billions of dollars tied to major federal entities.

Impact on Housing and Mortgage Markets

The implications of these revelations extend directly to the housing and mortgage sectors, affecting both homeowners and prospective homebuyers.

Key agencies involved in housing and mortgage regulation include:

• Federal Reserve Board: The central bank’s monetary policies significantly influence interest rates and lending practices.
• Consumer Financial Protection Bureau (CFPB): This agency oversees financial institutions to ensure fair treatment of consumers.
• Internal Revenue Service (IRS): Tax policies directly affect homeowners, particularly regarding property tax deductions.
• Department of Housing and Urban Development (HUD): As the Federal Housing Administration (FHA) parent agency, HUD plays a crucial role in housing finance.
• Department of Defense (Pentagon): Military housing benefits and loans are vital for veterans and active-duty service members.
• Department of Veterans Affairs: Responsible for providing housing assistance to veterans.
• United States Department of Agriculture (USDA): This agency offers loans for rural homebuyers and helps create affordable housing.

Other significant players include Fannie Mae, Freddie Mac, the U.S. Treasury, and the Department of Homeland Security, all of which contribute to the landscape of housing finance and regulation.

Property Tax Legitimacy and Potential Reforms

Another pressing issue concerns the legitimacy of property taxes on single-family homes. Many homeowners, particularly older people, are voicing concerns about the burden of property taxes. President Trump is contemplating abolishing the IRS, federal income, and property taxes as part of his reform agenda. This radical approach could reshape the financial landscape for many Americans.

Stimulus Checks and Economic Relief

In light of the fraud uncovered, Trump is also considering issuing stimulus checks to the American public, aimed at providing financial relief as a direct response to the misappropriations of taxpayer funds. This initiative could have far-reaching implications for families and the economy at large.

Abolishing the Federal Reserve Board

In a bold move, President Trump is exploring the possibility of abolishing the Federal Reserve Board. Such a change could lead to decreased interest rates and a stabilization of inflation, as the U.S. dollar would be backed by gold and silver rather than subject to the whims of monetary policy.

As this story continues to develop, the implications for the housing and mortgage markets are significant. The potential reforms being considered may address current inefficiencies and reshape the financial landscape for homeowners and homebuyers nationwide. Housing market stakeholders are urged to stay informed as these investigations unfold, and new policies emerge from the ongoing efforts to combat government fraud and corruption.

• This reply was modified 1 day, 14 hours ago by  Lisa Jones.

[Ollie]

How might these changes affect the availability of mortgages?

[Lisa Jones]

The expected changes resulting from those in charge of the examination of the efficiency of government spending in state departments (DOGE) and the reforms President Trump suggests make it likely that there will be an effect on the availability of real estate loans in these ways:

Greater Responsibility and Scrutiny

Greater oversight:

• DOGE investigating and implementing changes may increase interference in federal agency lending purviews, thereby causing more housing businesses to be more trustworthy in their lending practices.

Reduction of False Claims:

• Efforts toward fraud control may credibly aid in lower-level fraud and provide impetus for lenders to offer more loans to eligible borrowers.

Changes to the Cost of Borrowing

Federal Reserve conveys the Imposition changes:

• The Federal Reserve’s abolishment or restructuring will significantly decrease the interest rate.
• Lower interest rates make loans more affordable, making it easier for homebuyers to buy homes.

Reliability and Stability:

• A fundamentally altered monetary policy is likely to lead to expanded lending.
• However, it may be based on commodities such as gold and silver, which may restrain the interest rate, providing more stability.

Changes To Property Taxes

Better Mortgage Qualifying:

• Legislation aimed at abolishing property tax is highly likely.
• This would improve the chances of getting a mortgage and increase the desire and demand for homes.

Changes to disposable income:

• Eliminating property taxes will likely improve homeowners’ financial situation and allow them to afford bigger mortgages.

Effects on Stimulation

Stimulus Payments:

• Government-issued stimulus payments could help consumers fortify their downpayment funds, thereby increasing the number of people who qualify for mortgages.

Increase in Economic Optimism:

• Consumers might become more economically relieved as spending would motivate them to purchase homes, which is a positive for the housing market.

Changes To Policies Regarding Loan Issuance

Consumer Financial Protection Bureau (CFPB):

• Changes that the Bureau may consider may impose control on lending arrangements.
• Some borrowers might be denied access due to stringent regulations, whereas others might gain access because of moderate regulations.

Alterations in Risk Evaluation:

• The FHA may change the criteria for risk assessment evaluation as a result of the investigations, which will determine the number of borrowers who may receive loans.

Commercial Factors

The relationship between Supply and Demand:

• Reforms aimed at increasing homeownership can increase mortgage demand.
• This tendency would likely improve the lending products and services on the market.

The Relationship between Supply and Demand:

• Improved transparency and responsibility for the housing market may increase competition among intimate lenders, resulting in improved lending conditions for borrowers.
• The suggested modifications may result in a more open, reliable, and easier-to-access mortgage market.

Although the precise effect will be determined by the details of the reforms and the manner in which they are carried out, the growing availability of mortgages is likely a positive change. People in the housing sector must pay attention to these changes to appreciate their impact on home loans.

[Angela]

What specific DOGE findings are most likely to impact mortgage availability?

[Angela]

The impacts of the Department of Government Efficiency’s findings that are most likely to influence the availability of a mortgage are listed below.

Fraudulent Benefit Payments

Social fraud’s reach, which includes issuing payments to dead people, clearly shows that the Social Security Administration, alongside other federal programs, has several problems that, if solved, could improve the financial standing of these government institutions so they can aid in housing assistance programs.

Federal Agency Incompetence

To restore trust in the system, many oversights must be solved inside agencies such as the Federal Housing Administration and Consumer Financial Protection Bureau. Greater trust will facilitate increased loan issuing, while systemic fraud and mismanagement oversight will be solved through government regulations issued by these agencies.

Accountability In Housing and Mortgage Agencies

Federal regulation changes through DOGE findings can lead to structural changes inside the Federal Reserve, immensely changing how the central bank functions. It is evident that interest rates affect the cost of a mortgage, and thus, lowering them will make it easier for more people to secure loans.

Wages Disbursement

Increased regulators’ fraud and negligence over the lending system enable lenders to issue loans freely, as they know no productive actions will be taken to mitigate systemic fraud, allowing for the increased issuance of loans.

The Validity of Property Tax

Reform Discussion:

• As property tax debates arise, many tax cap discussions can impact a homeowner’s monthly payment.
• Most homeowners would be more willing to remove a mortgage if property taxes were phased out.

Subsidized Housing Program Funding

Funding Resource Shift:

• Identifying fraudulent activity can often lead to the discovery of substantial savings that can be used to fund housing programs.
• This could promote more spending on down payment assistance programs and subsidized loans, making it easier for families to get a mortgage.

Market Environment Changes and Consumer Feeling

Higher Market Confidence:

• The progress of investigations and exposures of fraud lead to increased confidence in the housing market for different stakeholders.
• More confidence, in turn, leads to higher home purchases and, thus, more mortgages sought.

Market Diversification:

• Increased transparency can lead to poaching and lenders competing for more borrowers, resulting in better mortgage products and terms offered to consumers.
• The new findings from DOGE are expected to have big consequences in the housing and mortgage sectors.

Possible changes to interest rates, the allocation of funds, and the control and elimination of fraud could lead to more mortgages and better terms offered to homebuyers. Everyone engaged in these activities should follow closely all these changes because they will surely impact the market for a long time.

[Stella]

How likely is it that interest rates will decrease due to DOGE’s work?

[Ollie]

The chances of interest rates going down after the Department of Government Efficiency (DOGE) probes and reforms kick in will depend on many interlinked issues:

Effects on The Federal Reserve

Reforms To The Federal Reserve:

• Interest rates may drop if the DOGE findings restructure or change the Federal Reserve’s operations meaningfully.
• For example, suppose the Federal Reserve is closed down or changed to a more publicly accountable institution.
• In that case, there is likely to be a shift towards a more responsible monetary policy, which could lower rates.

Fiscal Health and Fraud Austerity

Improved Fiscal Health:

• Some form of investigation and action on fraud should lead to better financial health for federal programs.
• Suppose the government’s mismanagement and waste are brought under control.
• In that case, it can lead to greater monetary policy accommodation via reduction of interest rates.

Economic Stability

Public Assurance:

• Public confidence in government institutions and the financial system must be restored to improve economic conditions.
• Such stability generally increases creditors’ confidence in lowering interest rates.

The Changes in Mortgage Demand and Supply Relationships.

The Mortgage Demand Scenario:

• If reforms enhance the affordability and approachability of the housing market, mortgage demand could increase.
• In such cases, lenders may become more inclined to reduce interest rates to attract more borrowers, particularly if competition among financial institutions intensifies.

The Control Rule

Inflation Control Procedure:

• If the inquiries produce results that attempt to control inflation, the possibility of lowering interest rates can also be considered.
• Controlled inflation can encourage a central bank to decrease rates in an effort to increase the circulation of money and consumption within the economy.

Political Will Accompanied by an Economic Policy

Reform Support:

• The political arena and the executive’s commitment to implementing reforms based on DOGE’s findings will be immensely important.
• Suppose the consensus in support of lowering rates is high.
• In that case, monetary policy processes may be determined as such to take advantage of that will.

Although there are numerous ways in which DOGE’s work could result in considerably low interest rates, the reality is that the result will depend on how well the reforms that have been set in place are implemented, the response from the Federal Reserve, and the economy’s climate. Keeping an eye on these changes can help assess how powerful the short-term monetary policy interest rate changes will be.

[Stella]

What specific DOGE reforms are most likely to impact interest rates?

[Bruce]

The changes within the Department of Government Efficiency (DOGE) that are considered likely to shift the interest rate most include:

Reforms of The Federal Reserve

Shifts in Approach:

The Reserve’s monetary policy could be significantly affected if:

• a) DOGE’s recommendations resulting from its studies are implemented
• b) The Federal Reserve is being restructured, which increases its accountability and transparency.
• A proactive Fed can reduce interest rates to increase output.

Stronger Financial Supervision

Restoration of Trust:

• Stricter supervision of financial institutions and government agencies may enhance public confidence in the economic system and thus stabilize the economy, enabling the Fed to reduce rates.

Reduction of Fraud

Prudent Spending:

• Decreasing fraud and waste within federal programs can lower budget deficits.
• Lowering the budget deficit may allow the Federal Reserve to ease its monetary policy and lower interest rates.

Economic Recovery Programs

Indirect Economic Actions:

• If DOGE suggested stimulation measures based on discovered fraud, they would enhance consumer spending and investment, supporting an economic upturn that would lead the Fed to lower interest rates to ensure continued economic expansion.

Changes to Housing and Mortgage Policies

Support for Homeownership:

• Reforms that improve mortgage and housing options can increase loan demand.
• If the housing market improves, the Fed might lower interest rates to stimulate borrowing and investment in real estate.

Mechanisms for Controlling Inflation

Policies for Managing Inflation:

• Any reformation steps that aid in managing inflation, such as fiscal discipline coupled with alterations of government spending, may lower rates in the future.

Structural Changes to the Tax Code

Tax Reforms:

• As an outcome of DOGE’s investigations, if reforms are issued that fundamentally change tax policies.
• If, for instance, property tax or the IRS were eliminated, taxation policy would change, and interest rates might change depending on the government’s borrowing needs.
• The specific reforms proposed by DOGE, which address structural features of the financial systems, increase control and supervision, and address fiscal responsibility, will likely affect interest rates.

With such reforms, the economy might have more stability and confidence in government functioning, which is a condition for cutting interest rates in the future. These are the developments that all people working in the economy and housing sector need to be concerned with.

[Ollie]

Can you elaborate on how fraud reduction impacts the Fed’s rate decisions?

[Bruce]

Of course! Reduction Fraud could impact the Federal Reserve’s (Fed) decision on interest rates considerably in the following ways:

Improving Budgetary Positions

Cutting Down on Fraud:

• The government is often criticized for fraud in its programs, which can be tremendously reduced.
• When taxpayer funds are not wasted, the government can operate in a positive budgetary position.
• A better budgetary position can reduce the need for government debt, affecting the Fed’s interest rate decision.

Stabilized Economic Growth

Market Trust:

• Lessened fraud gives agencies and the economic conduct system greater trust.
• An increase in confidence may lead to consumer activity and investment spending.
• Therefore, the Fed may lower the interest rate to boost economic activity.

Cost Control Measures

Inflation:

• Fraud can potentially disrupt a market’s operation and increase costs.
• Reduction in fraudulent activities could assist the Fed in controlling Inflation.
• If the costs remain low and stable, the Fed can stimulate investment by lowering the interest rate.

Credibility of Monetary Policy

Economic Data:

• Reducing fraud enhances the economic data and information in the hands of The Fed.
• Fraud elimination ensures that data is easily verifiable.
• Authentic data enables the Fed to act according to the existing economic situation and modify the monetary policy.

Potential For Economic Growth

Encouraging Growth:

• When eliminated, Fraudulent activities allow resources to be channeled toward economically productive activities that result in economic growth.
• If the economy indicates stronger growth, the Fed may drop rates to stimulate growth further.

Lower Premiums For Risk

Increased Confidence:

• With less fraud, lenders are more confident and willing to take out loans due to lowered chances of default.
• This makes loans more accessible, which lets the Fed drop interest rates since there is less risk associated with borrowing money.

Framework For Monetary Policy In Future Years

Balanced Approach:

• There is reason to believe that a fraud reduction commitment can result in a more positive fiscal framework.
• Suppose the government can prove through actions that it possesses long-term fiscal credibility.
• In that case, the Fed might respond by adjusting rates to foster a stable economy.

In summary, enhanced fraud reduction improves financial well-being and market confidence. It improves the reliability of economic and economic data, which are critical for the Federal Reserve’s interest rate decision. A stable economic environment means the Fed can adopt expansionary monetary policies, including lowering interest rates to stimulate growth through borrowing and investments. Therefore, continuous efforts to reduce fraud can greatly impact the economy and the Fed’s approach towards interest rates.

[Danny Vesokie | Affiliated Financial Partners]

Huge historic buyers market news coming. There are major changes in HUD and FHA, coming where the real estate market is turning into a home buyers market. Stay tuned folks. 2025 might not be bad after all.

https://youtu.be/_Y9MpyrHNZM?si=6t3Fg5LrN2BCFETB