March 27, 2019

In This Issue:

  • Legislative Update: TTIGA Bill Advances, State Budget, Property Tax Relief, and More
  • When Big Businesses Want to Fight Their Property Tax Bills, Texas Law Hands Them an Easy Way, Critics Say
  • Fannie and Freddie Return to Senate Spotlight as Crapo Seeks Fix
  • World’s Biggest Banks Accused of Price-Fixing Fannie Mae, Freddie Mac Bonds
  • What Housing Industry Marketers Need to Know About Facebook's Latest Moves

Legislative Update

The committee substitute for HB 1614—the TTIGA update bill that’s among TLTA’s 86th Session priorities—was reported favorably from the House Insurance Committee on Tuesday. Now it's headed to the House Calendars Committee before it can be heard on the House floor.

We continue to monitor the identical bills (SB 1062/HB 3228) filed by Chairman Hancock and Rep. Muñoz that would empower any interested person to compel the Commissioner of Insurance to initiate a title insurance premium rate hearing. These bills have not advanced, nor have they secured co-authors. Likewise, Sen. Taylor's SB 1437 relating to easements to be included in title commitments remains waiting in committee, where it was when we last reported on it. Your TLTA legislative staff and lobby team continue visiting with all three of these members, their staff, and committee staff to address our concerns with their legislation.
We also continue monitoring the development of these 77 bills and other issues that could impact our industry or industry partners. Among the bills we're monitoring is HB 2024 related to survival of mechanics retainage liens after foreclosure. That bill was heard in the House Committee on Business and Industry Tuesday, and Roland Love testified against the bill on behalf of TLTA. Also testifying against the bill were John Fleming on behalf of the Texas Mortgage Bankers Association, Karen Neeley on behalf of Independent Bankers Association of Texas, and John Heasley on behalf of Texas Bankers Association. We had a very productive conversation with the bill's author, Rep. Romero, and we look forward to working with him.
Today on the floor of the Texas House, state representatives are discussing and revising the state budget (HB 1). More than 300 HB 1 amendments were prefiled as of the deadline on Sunday, and we expect the House's budget-related debate to continue until late tonight or early tomorrow morning. After the House approves its version of the budget, HB 1 will be sent to the Senate, where senators will approve their own version before a conference committee is assigned to work out the differences.
On Wednesday of next week, the Texas House will debate that chamber's school finance reform and property tax relief bill (HB 3) – subjects identified as the 86th Session's top priorities by the Governor, Lieutenant Governor and Speaker of the Texas House. HB 3 would inject $9 billion in new funding over the next two years. $2.7 billion of that new funding would be used to buy down local property tax rates for school districts. Prefiled amendments for HB 3 are due by Monday, April 1 at 5 p.m. 
Elsewhere in the Texas Legislature this week, legislation related to Hurricane Harvey recovery and future flood mitigation was passed by the Texas Senate. And, our Texas Realtor friends hosted their Day at the Texas Capitol yesterday, March 26. There were nearly 3,000 realtors on hand for the event, and we remain proud to call them our allies. 

When Big Businesses Want to Fight Their Property Tax Bills, Texas Law Hands Them an Easy Way, Critics Say

Texas Tribune | March 26, 2019
As state leaders promote their property tax reform package as needed relief for everyday Texans, some Democrats and county appraisers suggest a provision in the tax code has stacked the system in favor of corporations that can appeal their valuations with a combativeness most homeowners can’t muster.

At issue: a 1997 amendment, drafted by a prominent tax attorney, that critics say has allowed business and industry to lower their property tax burden at the expense of other taxpayers. The provision offers all Texans a way to fight their appraisals by arguing they were treated unfairly compared to other properties. But critics say large property owners have capitalized on it to drive down their costs, while residences and small businesses can’t afford to do the same.

“If you have a whole category of property that is nonresidential systematically paying less, well who do you think is paying more?” said Bexar County chief appraiser Michael Amezquita.

Amezquita is one of several officials who say their districts have been inundated by appeals and lawsuits from commercial owners trying to lower their appraisals, which determine what taxes are owed on a property. Supporters of the “equity” provision say it’s a critical tool for all property owners, and that commercial properties aren’t afforded the tax exemptions many home and agricultural land owners receive. Critics counter only well-funded property owners can afford to sue — and when they do, there’s often little an appraisal district can do to fight back.
Read More »

Fannie and Freddie Return to Senate Spotlight as Crapo Seeks Fix

National Mortgage News | March 25, 2019
A Fannie Mae and Freddie Mac fix is on Washington’s agenda —- again.

Congress this week kicks off its latest attempt to forge a path forward for the mortgage giants, something that's proved extremely elusive in the 11 years that the companies have been under U.S. control. Starting March 26, Senate Banking Committee Chairman Mike Crapo will hold two days of hearings on his plan for returning Fannie and Freddie to private ownership and giving the government an explicit role in backstopping the housing market.

The stars seemed to be aligned for progress, with Republicans, Democrats and President Trump's administration all saying it's a priority. Plus, everyone agrees few issues are as important to the nation's economic health as housing finance, where Fannie and Freddie are dominant players backing about $5 trillion of loans.
Read More »

World’s Biggest Banks Accused of Price-Fixing Fannie Mae, Freddie Mac Bonds

HousingWire | March 22, 2019
More than a dozen of the world’s largest financial institutions conspired to fix the prices on more than $485 billion in bonds issued by Fannie Mae and Freddie Mac over a five-year period, according to a new blockbuster lawsuit.

The lawsuit was filed this week by the state of Pennsylvania, which claims that Bank of America; Barclays Capital; BNP Paribas; Citigroup; Credit Suisse; Deutsche Bank; Deutsche Bank Securities; First Tennessee Bank; FTN Financial Securities; Goldman Sachs; JPMorgan Chase; J.P. Morgan Securities; Merrill Lynch; and UBS Securities conspired to both overcharge and underpay investors on debt bonds issued by Fannie and Freddie between 2009 and 2014.

The lawsuit, filed by Pennsylvania Treasurer Joe Torsella, is a class action lawsuit that claims that the state invested in the bonds but was financially harmed by the financial institutions alleged actions.

The lawsuit seeks to have other aggrieved parties join it, but the lawsuit states that the groups’ supposed conduct may have harmed “at least thousands” of other investors.

It’s important to note that the bonds in question are not mortgage bonds. They are bonds issued by the government-sponsored enterprises to support their operations. The bonds are traded “over the counter,” which means that investors work with the bond trading desks at the named institutions to buy and sell the bonds.

Since the bonds are not traded on a public exchange, the broker wields more control over pricing, as comparative bond trading is not made public. Bond values must then be derived based on a price the buyer is willing to pay and what the seller is willing to sell for; known as derivative trading.

The lawsuit claims that the named institutions conspired to fix the prices on those bonds, which allowed them to underpay sellers and overcharge buyers.
Read More »

What Housing Industry Marketers Need to Know About Facebook's Latest Moves

HousingWire | March 25, 2019
Last week, Facebook changed its ad policies to comply with anti-discrimination laws, and the move has broad implications for all of us in consumer finance and housing.
But that’s just one of three important strategy shifts the social media giant has made lately, and all are likely to impact those in the housing world.
Here’s what you need to know, and how you can adjust your processes to benefit:
1. Facebook’s latest ad policy changes make branding more important than lead gen. 

Facebook’s great strength is letting marketers be ultra-precise when targeting customers, but it recently changed its policy to avoid violations against anti-discrimination laws in housing, lending and employment.
In effect, the limited targeting abilities makes branding more important than demand generation within the Facebook feed.
Branding is top-of-the-funnel visibility and awareness that allows you to first identify potential customers and engage. Demand gen is deeper funnel activity where you refine targeting and convert these folks to customers.
Read More »

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