Published on: April 30, 2018


The University of Michigan consumer sentiment index, which had seemed on track to hit a new post-2004 high in mid-March, slipped in the final survey at month’s end, reflecting the increasing concern of higher-income households about the threat of a trade war, and their uncertainty about the impact of Trump administration economic policies. Still, the index remained near its recovery peak, bolstered by the increasing confidence of households in the lower third of the income spectrum.

Hinting at growing concern about the economic outlook, consumer spending, which had surged in in the fourth quarter of last year, tapered off in January and February. Although household income increased by 0.4 percent in both months, spending rose only 0.2 percent. Savings, meanwhile, totaled $487.4 billion in February, the highest level since August of last year.

Analysts attribute the spending constraint in part to tighter credit standards, reflecting lender concerns that consumers may be getting over-extended. The Federal Reserve reports that aggregate household debt balances, which have been rising steadily for the past year, now total $473 billion – above the pre-recession 2008 peak.

“There are warning signs out there,” said Kevin Morrison, senior analyst at the Aite Group, told CNBC.


Paris officials are just saying “Non” to Airbnb in a big way. They’ve asked a court to require the short-term rental platform and others to remove the listings of owners who don’t comply with a city ordinance requiring them to register primary residences they are renting through these on-line sites. The order, if granted, would impose fines of more than $1,200 per day for each non-compliant listing, totaling an estimated $1 million a month for Airbnb.

Paris officials are concerned about the impact the short-term rental business has on the availability of affordable housing for local residents ─ a concern shared widely by municipal officials in other countries, including the U.S. The Massachusetts Legislature is considering a measure that would require registration and taxation of short-term rental units. In Cambridge, a recently enacted ordinance requires condominium owners and tenants who rent their units on line to register the property with the city and obtain permission from their condominium association or landlord before doing so. The ordinance also requires “hosts” to live in the same building or a building adjacent to the one in which they are offering a short-term rental unit.

Airbnb says the move to restrict Parisian rentals “will hurt local families who share their homes and puts their needs behind the financial interests of big hotel chains and well-funded lobby groups.” Paris officials counter that they are fighting to preserve “the very identity of Paris. We can’t let Paris become a museum city where no one can afford to live, Ian Brossat, the city’s deputy mayor in charge of housing policy, told the Wall Street Journal.


In the footrace between home prices and income gains, home prices are winning. They’re increasing at an annual rate of close to 6 percent, while income gains have averaged around 3 percent for the last two years. The imbalance has pushed affordability ratios, measured by a National Association of Realtors (NAR) index downward — from 0.86 to 0.84 during the 12 months ending in March. Rising mortgage rates have exacerbated the affordability strain. With new home construction levels still lagging well behind demand, and many existing homeowners reluctant to sell, industry executives see little near-term hope for relief on the supply side. The strong income gains that might offset higher housing costs aren’t likely either, economists warn. A majority of the respondents to a recent Wall Street Journal poll agreed that low productivity growth, demographic changes and foreign competition will continue to create a drag on wage gains, despite their consensus forecast for relatively strong economic growth.


Increasingly concerned about the risk of collisions between drones and commercial aircraft, the International Air Transport Association, a trade group representing airlines worldwide, is supporting a United Nations proposal to establish a global registry for unmanned aircraft.

The airlines are working jointly with the operators of airports to find mechanisms for ensuring the safety of air travel, while allowing the use of drones by hobbyists and businesses, such as Amazon, that are anxious to launch drone deliveries on a large scale.

In addition to registering drones, the registry would compile and report data on incidents and accidents involving drones and commercial and passenger aircraft.

In the United States, the Federal Aviation Administration reported nearly 1,300 drone-related safety violations between February and September of 2016 – a 46 percent increase over the 2015 total for the same period.


Engineers have proposed an unusual plan to repair Millennium Towers, the luxury high-rise condominium that has been doing a distressing imitation of Italy’s Leaning Tower of Pizza. The 50-story structure is tilting – and sinking. Built on less than solid (mud and clay) ground, the building sits on a thick mat foundation secured by reinforced concrete piles that don’t reach bedrock – hence the tilting and sinking. Engineers have suggested drilling piles down to bedrock to stabilize one side, then allowing the other side to continue sinking until the building reached equilibrium. The idea is as costly as it is unusual. The repairs are expected to take as long as five years; the estimated cost – $200 -$500 million – may exceed the $350 million construction cost.

“The engineers are very confident this is going to stabilize the building,” Vision Winter, a partner at O’Melveny & Myers, the law firm representing homeowners, who have been forced to vacate the structurally unsound building, told the San Francisco Chronicle.

The engineers may be right, but repairs can’t begin until the multiple parties suing each other agree, which could take as long as the repairs themselves. In a note discussing this ongoing saga, Clifford Treese, president of Association Data, Inc., said, “This reminds me of the story in the Old Soviet Union where it took so long to get a telephone that the formal request for the phone was treated as an inheritance and placed in the estate of the deceased. Presumably, after a long wait, someone at least got a telephone.”


The New York Department of Financial Services is scrutinizing rent-to-own programs, which, some critics contend, represent a form of predatory lending.

Budget-conscious home buyers may skimp on some features, but they are willing to pay a premium for “green” technology.

The shortage of housing inventory isn’t confined to the pricey east and west coast markets; the problem is nationwide – and chronic – according to a coalition of housing industry groups. The group, “Up for Growth,” calculates that 22 states and the District of Columbia consistently failed to build enough housing to meet demand between 2000 and 2015.

The Massachusetts House and Senate have passed slightly different versions of bills that would regulate and tax short-term rentals.

Housing evictions reached epidemic proportions in the U.S. The 2.3 million evictions tallied for 2016 represented one eviction every four minutes, according to one report.



The scramble to be made whole after a foreclosure often pits condo associations against lenders, A Florida HOA prevailed in one such foreclosure-spawned tug-of-war, in a case that underscores the importance of adhering closely to the procedures mandated by both condominium statutes and banking laws.

The lender in this case (Ballantrae Homeowners Association v. Federal National Mortgage Association) was Fannie Mae, which initiated foreclosure actions against two owners of units in this community, who had defaulted on their loans. Fannie did not name the association as a party in the foreclosure – a fatal oversight, as it turned out, though not the only problem for Fannie in this litigation.

After purchasing both units at the foreclosure auction, Fannie asked the HOA to provide an accounting of the assessments due on the units. The association’s calculation included pre-foreclosure assessments as well as those that had accrued since the foreclosure. Fannie disputed that calculation, citing the association’s declaration, which specified that the association’s lien was subservient to that of the first mortgage, and applied “only to the assessments which have become due and payable prior to a sale or transfer of the property” pursuant to a foreclosure action.

A trial court agreed with Fannie Mae and issued summary judgment in its favor, which Ballantrae appealed. The association’s primary argument was, because it was not named as a party in the foreclosure action, the association’s liens covering pre-foreclosure assessments were not extinguished by the foreclosure sale, and Fannie Mae, as the owner in possession, was required to pay them.

Fannie argued that, consistent with previous Florida decisions, purchasers of a foreclosed condo unit were not liable for pre-foreclosure assessments incurred by previous owners; and the failure to name the association in the foreclosure had no impact on the association’s claim, because had it been named, its lien covering pre-foreclosure assessments would have been erased. Siding with the association, the Appeals Court rejected both arguments.

In one of the decisions Fannie cited to support its contention that foreclosing lenders were not liable for pre-foreclosure assessments, the condominium declaration contained language to that effect, specifying that: “a mortgagee acquiring a property through foreclosure would not be entirely responsible for the unpaid assessments of its mortgagor.” Ballantrae’s declaration, the court pointed out, contained no such provision “specifically limiting or eliminating a subsequent owner’s liability for unpaid assessments.”

The court also rejected Fannie’s ‘no harm-no foul’ contention, that failure to name the association in the foreclosure action had not harmed its interests. On the contrary, the court said, “had the Association been named as a defendant in the foreclosure it would have had the opportunity to bid for the property or stir up other bidders in hopes of benefiting from a surplus, in addition to having the opportunity to assert any available defenses. The Association had no such opportunities here.”
Failure to name the association left its subordinate lien in place following the foreclosure, the court concluded, leaving Fannie with two options for addressing the problem: Seeking a court order compelling the association to redeem the properties, or filing new actions to, essentially, re-foreclose the mortgages. But Fannie elected instead to bring actions seeking declaratory and injunctive relief, the court noted, “neither of which is a recognized remedy for removing the lien of an omitted junior lienor.”


“There is no shortage of statistics that illustrate the reality that, too often, the benefits of economic growth have been unevenly shared,” ─Jamie Dimon, Chairman and CEO, JPMorgan Chase & Co.