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Monday, July 21, 2014

Tuesday: CPI, Existing Home Sales, Richmond Fed Mfg Survey

by Calculated Risk on 7/21/2014 08:01:00 PM

Here is a followup on an earlier article concerning short sale fraud, from E. Scott Reckard at the LA Times: Former BofA short-sales employee gets prison term for taking bribes

A former Bank of America mortgage employee was sentenced to 30 months in prison for pocketing $1.2 million in payoffs to approve sales of distressed properties for far less than their actual value.
Plea agreements filed by three other defendants at the time of Lauricella's arrest indicated that the manipulation of Southland home sales for illicit profit was widespread.

"It's part of a large, ongoing investigation," Katzenstein said. "There are a large number of related cases."
Short sale fraud was widespread, especially in the 2009 through 2012 period. Fraud has always been a key problem with short sales (the agent represents the "seller" who has no equity in the home - and this creates an obvious agency problem with unscrupulous agents).

There are many types of short sales fraud (money under the table to either seller or agent, agents not actually marketing property, etc.), and unfortunately most of the fraud will never be prosecuted - but we can still hope some more of them will be caught.

• At 8:30 AM ET, the Consumer Price Index for June. The consensus is for a 0.3% increase in CPI in June and for core CPI to increase 0.2%.

• At 9:00 AM, the FHFA House Price Index for May. This was original a GSE only repeat sales, however there is also an expanded index. The consensus is for a 0.3% increase.

• At 10:00 AM, Existing Home Sales for June from the National Association of Realtors (NAR). The consensus is for sales of 4.99 million on seasonally adjusted annual rate (SAAR) basis. Sales in May were at a 4.89 million SAAR. Economist Tom Lawler estimates the NAR will report sales of 4.96 million SAAR.

• Also at 10:00 AM, the Richmond Fed Survey of Manufacturing Activity for July. The consensus is for a reading of 5.5, up from 3 in June.