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GCA Forums News For Tuesday January 13 2026
GCA Mortgage Forums News For Tuesday, January 13, 2026
Criminal investigations involving Federal Reserve Chair Jerome Powell focus on cost overruns from the Federal Reserve headquarters renovations. There are no confirmed plans to remove the Federal Reserve Board, so financial markets assume Powell will remain in his role. Interest rates and markets are stable, with silver near record highs, mortgage rates declining, the 10-year Treasury yield at around 4%, and 2026 housing forecasts projecting gradual price increases and improved inventory, rather than a market crash.
Powell Subpoena and Federal Reserve Developments
A criminal investigation into whether Jerome Powell committed perjury before Congress in 2025, along with the rising cost of the Federal Reserve’s Washington headquarters renovations, now estimated at $2.5 to $2.6 billion, has prompted the Department of Justice to issue Grand Jury subpoenas to the Federal Reserve.
- Powell has said he views the subpoenas as an attempt by the Trump White House to exert political pressure, especially as the Federal Reserve has resisted more aggressive rate cuts.
- The Justice Department is reviewing Powell’s testimony and related expenditure documents.
- The original renovation cost, estimated at $1.9 billion, has increased due to federally mandated design changes, asbestos and soil remediation, challenges associated with below-grade construction, and issues with materials and contractors.
- Critics, both inside and outside the administration, argue that these costs are high and call for full accountability.
Will Trump Seek to End the Federal Reserve?
- Trump has criticized the Federal Reserve’s independence and questioned Powell’s competence.
- His allies have used the renovation dispute to allege that the current Board is corrupt or lacks control.
- No legislative or executive measures exist to dismantle the Federal Reserve System.
- Financial markets, global central bankers, and leading CEOs continue to support the Federal Reserve’s independence and the central banking system, despite ongoing debates about Powell’s leadership.
Market Update: Rates, Housing, Stocks, Silver
- The yield on the U.S. 10-year Treasury bond remains in the low 4% range, recently fluctuating between 4.17% and 4.20%.
- This is a lower peak than last year, influenced by a slight increase in core inflation and heightened geopolitical and political tensions.
- The average 30-year fixed mortgage rate is about 6.0%, with current rates ranging from the high 5% to the low 6%.
- This is a decrease from August but remains above pre-pandemic figures.
- Other sources report conforming 30-year mortgage rates between 5.9% and 6.2%, a modest improvement.
- Forecasts for 2026 anticipate a stronger housing market, with home prices projected to rise by 1–4% and sales volume expected to increase as mortgage rates decline slightly.
- More sellers are also expected to enter the market.
- In 2026, housing inventory is projected to improve, with active listings expected to rise by about 9%.
- However, inventory will remain about 12% below pre-pandemic levels.
- This suggests sustained but slower price growth, rather than a market collapse.
- The S&P 500 has experienced modest growth, with anticipated rate cuts widely cited as a contributing factor.
- Equity markets at the beginning of 2026 have remained volatile, similar to previous years, but have generally stayed stable.
- The S&P 500 is expected to continue its gradual gains as rate cuts are forecasted, while weak bank earnings are projected to persist.
- Powell’s position is also expected to remain stable.
- Today, the Dow is down about half a percent, despite investors welcoming lower core inflation and a decline in Treasury yields.
- Most analysts note that political developments in Washington are less influential than macroeconomic factors in determining the direction of the Dow.
Silver Prices and Bullion Market Challenges
- Silver has been trading between $86 and $89, representing an increase of nearly 40% over the past month and approximately 200% compared to the same period last year.
- This price movement is attributed to heightened demand for safe havens, geopolitical tensions, and speculative activity.
- Commentators in the bullion market observe a pronounced divergence between the paper and physical markets, characterized by wide spreads, high premiums, and insufficient inventory among some dealers.
- These conditions may lead to extended shipping times and delays for fully paid orders.
Silver Price Forecasts
- YouTube and newsletter personalities promote extreme price predictions, often attributing them to potential monetary resets.
- Most of these forecasts are highly unlikely and differ significantly from established institutional projections.
- Robert Kiyosaki, author of Rich Dad Poor Dad, is known for bullish long-term predictions on gold and silver prices.
- These views should be considered marketing opinions rather than base case forecasts.
Political And Legal: Minnesota, Sanctuary Cities, Trump DOJMinnesota Welfare Fraud and Somali-Linked Schemes
- Federal and congressional investigations into Minnesota welfare fraud and the so-called “Feeding Our Future” scandal have resulted in documented theft of hundreds of thousands of dollars, with significant involvement from some networks in Minnesota’s Somali Community, some of whom are believed to have engaged in the diversion of funds to overseas jurisdictions.
- Minnesota’s Gov. Walz and Attorney General Keith Ellison have faced significant criticism in recent congressional hearings for allegedly failing to take swift action regarding the whistleblower alerts and for allegedly retaliatory actions directed against individuals in Ellison’s and Walz’s circles who advocated for the shutdown of the fraud operators.
- Those allegations are disputed by Ellison and Walz.
Minneapolis, ICE, and Sanctuary Policy Conflicts
- Minneapolis and other municipalities continue to experience tension between local leadership and federal immigration authorities.
- City leaders have publicly stated that local law enforcement is not welcome, often using strong rhetoric at rallies and press events, and have advised officials to restrict federal enforcement activities.
- This conflict is linked to sanctuary city policies.
- Local officials say these policies protect immigrant populations from aggressive enforcement, while critics argue they enable crime, human trafficking, and fraud due to insufficient oversight.
The Trump DOJ, Bondi, Patel, and Anti-Corruption Efforts
- As U.S. Attorney General during the Trump Administration, Bondi was involved in politically sensitive law enforcement actions and investigations, including those related to Kash Patel. These activities have generated significant controversy and criticism from Senate Democrats.
- Patel, formerly FBI Director and currently being considered for Acting Director of the ATF, has drawn congressional scrutiny. Lawmakers have raised concerns about his qualifications, professional record, political affiliations, and connections to the defense industry.
Focused Anti-Corruption Initiatives
- Congressional Republicans aligned with the administration characterize the Department of Justice’s approach as a constructive effort to address alleged corruption in both Democratic and Republican jurisdictions.
- They reference welfare fraud in Minnesota and procurement issues in Washington as instances where federal oversight has reportedly intensified.
- However, some critics attribute recent high-profile investigations, particularly the unprecedented criminal indictment of the sitting Federal Reserve Chair, to the potential politicization of the justice system and a perceived erosion of its independence.
- They argue that such developments could undermine investor confidence and have negative economic consequences.
GCA/Nexa Context and Housing-Mortgage Market ChallengesMortgage Industry Pressures
- Mortgage originators face pressure from persistently high, though off-peak, mortgage rates, limited affordability, and gradually improving inventory.
- Transaction volumes remain well below pandemic-era refinancing and purchase booms.
- The industry continues to see layoffs, consolidations, and litigation across lending and brokerage sectors.
- Industry forecasts for 2026 indicate some improvement, with interest rates expected to decline and transaction volumes projected to increase.
- However, profit margins are likely to shrink, and competition is expected to intensify as technology-driven firms and specialists gain market share over higher-cost, diversified legacy operators.
- In 2025, the company introduced an AI platform designed to automate back-office tasks, enabling loan officers to concentrate on client relationships and productivity.
- Nexa Mortgage has also faced internal challenges, including litigation against former executives for alleged unethical employee poaching and misuse of training materials.
- These issues reflect heightened competition and legal disputes affecting the mortgage broker sector.
The Need for Change in Platforms Like Gustan Cho Associates
- Within the mortgage industry, firms that have survived and are positioned for growth typically emphasize specialization, focusing on non-QM niches, manual underwriting, and complex income files.
- Gustan Cho Associates also use aggressive digital marketing and search engine optimization to generate demand in a market dominated by larger, less competitively priced banks.
- Independent networks, such as Gustan Cho Associates, and their counterparts in franchise-style networks rely on these strategies to maintain a healthy mortgage pipeline.
Autos, the Broader Economy, and Trump’s StandingAuto Market and Financing
- The auto industry is seeing lower prices for new vehicles, while auto loan rates remain elevated.
- Borrowers with lower incomes are increasingly missing payments, a trend attributed to overextended supply chains and persistently high prices.
- Growth will be limited by credit constraints.
- The market remains structurally choppy due to ongoing conflicts with the Fed, tariffs, and policies related to crime and immigration.
- Trump’s Term and Pro-Equity Policies
- Analysts and market participants view Trump’s presidency as carrying significant risk.
- While his energy, manufacturing, and defense policies are welcomed by traditional industry executives, leaders in technology and finance see the instability and pro-business stance as a concern, preferring established approaches.
Criminal Subpeona of Fed Chair Jerome Powell
Powell could be in legal trouble, as he is the first Fed Chair to be criminally investigated; however, he still has strong support from many central bankers and some prominent bank CEOs.
- They view Jerome Powell as a safeguard against more overt political influence on the central bank.
- Pam Bondi is under significant pressure from Senate partisans regarding her management of the Department of Justice and key appointments.
- Kash Patel, serving as both FBI Director and Acting ATF head, continues to face criticism for his perceived lack of leadership experience and for contributing to concerns about the politicization of law enforcement.
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3 Replies
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GCA Mortgage Forums Headline:
DOJ Targets Powell as Fed Renovation Scandal Explodes While Rates, Silver, and Housing Markets Enter a New Era of VolatilitySubhead:
A shaken Jerome Powell faces a criminal subpoena over multibillion‑dollar Fed HQ cost overruns as President Trump’s justice team ramps up anti‑corruption moves, mortgage and auto lenders battle high‑rate headwinds, silver soars amid delivery anxieties, and housing, stocks, and sanctuary‑city politics collide heading into the 2026 market reset. -
Does anyone know what is going on with Minnesota Governor Tim Waltz and MN AG Keith Ellison? This Welfare Fraud in Minnesota is mega global news that went on for years. What are the whistelblowers saying? Is it true that after Former Vice President Kamala Harris named Tim Waltz as her Vice President running mate, that Governor Waltz came up with $35 million dollars the first day? Why was Governor Tim Waltz chosen as VP? What extent do Tim Waltz and Keith Ellison have with the Somali community in Minnesota? This fraud in Minnesota has been going on for years. Many whistleblowers said they were shunned away when they brought up the Minnesota Somali fraud to Waltz and Ellison. Can we please get some answers? The story is not adding up.
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This issue is complex and carries significant political risks. The following analysis, based on information available as of 2023, presents the facts clearly and concisely. The correct name is Gov. Tim Walz. The referenced scandal is the Feeding Our Future welfare fraud case in Minnesota, which has received substantial attention. Credible sources, including the Star Tribune, AP, and federal investigation updates, are cited. For the latest information, consult Google News or official government updates.
Political narratives often include multiple allegations and ongoing investigations. This analysis remains objective.
Overview of Tim Walz and Attorney General Keith Ellison’s Involvement
Political stories often involve multiple allegations and ongoing investigations. This analysis maintains objectivity.
The Feeding Our Future case involves fraudulent schemes targeting federal programs that provide meal services for children, including COVID-19 school meal programs. The case reportedly defrauded the United States of over $250 million through fictitious meal sites and fraudulent business entities. The scandal emerged in 2022 when federal authorities raided and charged dozens of individuals. Many of those charged were Somali-American immigrants or members of Minnesota’s large Somali community, which is the largest in the country and based in Minneapolis.
This is one of the largest fraud cases associated with the Flex Funds scam during the COVID-19 pandemic. By late 2023, over 70 individuals had been accused, and more than five had been convicted. In June 2024, a jury convicted five additional defendants. The fraud occurred during a period of relaxed federal COVID-19 regulations and persisted for several years.
This case has garnered extensive international media coverage, particularly in the United States and the United Kingdom, with reports from prominent outlets such as the BBC, CNN, The Independent, Al Jazeera, and The New York Time.
Regarding the roles of Walz and Ellison, neither individual has been accused of wrongdoing in connection with the case.
The Walz administration, through the Minnesota Department of Education, has faced criticism for inadequate policy management. A 2023 state auditor’s report faulted the department for failing to detect and report the fraud promptly.
Ellison has participated in prosecuting the case at the state level and has collaborated with federal prosecutors. He has publicly condemned the fraud, emphasizing that it does not represent the Somali community or the broader population.
Some critics, particularly conservatives, have accused Walz and Ellison of allowing the fraud and ignoring evidence that could implicate them.
Several whistleblowers have come forward. For example:
Between 2021 and 2022, employees at the Minnesota Department of Education reported suspicious claims by Feeding Our Future, including inflated meal counts and questionable meal sites. Some employees said their concerns were dismissed or that state officials responded slowly.
According to the Star Tribune and federal documents, a state education department employee who acted as a whistleblower reported improper practices in 2020. The employee stated that management was reluctant to act due to concerns about potential discrimination against minority-led non-profits, several of which were Somali-American.
Other former Feeding Our Future employees have provided court testimony regarding the operation of the schemes, including the use of fraudulent invoices for money laundering.
Some whistleblowers reported being ignored or facing retaliation. Audits and federal investigators have credited whistleblowers with initiating the investigation. No whistleblower has directly accused Walz or Ellison of wrongdoing. Reports from Fox News and the Minnesota Reformer indicate that responses from Walz’s administration or Ellison’s office were slow, possibly due to insufficient evidence and concerns about discrimination against the immigrant community. Federal investigators have acknowledged the contributions of whistleblowers. Audits suggest the main issue was inadequate oversight, not intentional disregard. While no whistleblower has alleged undue influence by Walz or Ellison, some critics cite a lack of leadership.
This likely refers to campaign fundraising. On August 6, 2024, after Harris announced Walz as her running mate, the campaign reported $36 million in donations within 24 hours (CNN, Harris-Walz statements). Such increases are typical when a running mate is announced and have occurred in previous campaigns.
There is no evidence to support claims about other funds. The $35 million to $36 million figure refers specifically to campaign donations and is unrelated to Walz’s actions as governor. The rationale for Harris’s selection of Walz as vice presidential candidate is discussed below.r candidates, including Governor Josh Shapiro and Senator Mark Kelly. Analysts and campaign staff cited specific reasons for this choice. As a Midwestern progressive, Walz is seen as approachable and relatable. His background includes experience as a school teacher, football coach, and 24 years in the National Guard, including a deployment to Iraq. He is expected to appeal to white, working-class, and rural voters in swing states such as Minnesota, Wisconsin, and Michigan.
Political Stance: Walz has built a strong reputation in Minnesota. He is known for progressive achievements, including free school lunches, abortion rights, paid family leave, and legalizing cannabis. He also signed a bill allowing undocumented immigrants to obtain driver’s licenses, which appeals to many Democrats. He has referred to GOP policies as weird, a label that went viral. Unlike some alternatives, Walz does not have significant controversies that could alienate progressive voters. For example, Shapiro has faced criticism for his positions on Israel and Palestine.
Conspiracy theories alleging Somali community involvement in Walz’s selection lack factual support. The decision was pragmatic and based on Harris’s campaign strategy.
The Somali population in the United States is estimated to be between 80,000 and 100,000, with over 10,000 residing in the Twin Cities, including leaders such as Representative Ilhan Omar. As governor, Walz has engaged with the Somali community, supporting initiatives for mosques, refugee resettlement, and immigrant protection. He has publicly praised the community’s contributions and emphasized that the actions of a few do not represent the entire group. Some critics view his approach as overly liberal, especially after the fraud scandal, yet he continues to support the community. Ellison, the first Muslim elected to Congress in 2007 and currently Attorney General, maintains strong ties to the Somali community. Although he is African-American and Muslim, he is not Somali. He has addressed issues such as anti-Black racism, anti-Islamophobia, and policing in Somali neighborhoods. Ellison advocates for fair prosecution in the fraud case without blaming the entire community. Community leaders have indicated that the scandal has strained relationships between officials and the Somali community, primarily due to their involvement in Democratic politics.
The Feeding Our Future scandal is ongoing and has revealed significant oversight failures. Allegations that Walz or Ellison engaged in a cover-up remain unsubstantiated, as the federal investigation continues and neither has been charged with any wrongdoing. Whistleblowers have highlighted systemic failures, though claims of intentional disregard are disputed. The vice presidential selection and related fundraising activities are standard political practices and appear unrelated to the fraud case.
If something seems unclear, it may be due to the influence of partisan narratives, particularly in conservative media. For more details, consult official sources such as the U.S. Attorney’s Office for Minnesota or state auditor’s reports. If you would like additional information or specific sources, please let me know, and I can update my analysis. I welcome your feedback.
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