Without the discipline of paying constant, daily attention, we take things for granted. Be serious. Life is not a practice session.
For every disciplined effort, there are multiple rewards. That's one of life's great arrangements. If you sow well, you will reap well. Life is full of laws that both govern and explain behaviors, but the law of sowing and reaping may well be the major law we need to understand: For every disciplined effort, there are multiple rewards.
What a concept! If you render unique service, your reward will be multiplied. If you're fair and honest and patient with others, your reward will be multiplied. If you give more than you expect to receive, your reward is more than you expect. But remember: The key word here—as you might well imagine—is discipline. Everything of value requires care, attention and discipline. Our thoughts require discipline. We must consistently determine our inner boundaries and our codes of conduct, or our thoughts will be confused. And if our thoughts are confused, we will become hopelessly lost in the maze of life. Confused thoughts produce confused results.
Remember the law: For every disciplined effort, there are multiple rewards. Learn the discipline of writing a card or a letter to a friend. Learn the discipline of paying your bills on time, or arriving to appointments on time, or using your time more effectively. Learn the discipline of paying attention, or paying your taxes, or paying yourself. Learn the discipline of having regular meetings with your associates, or your spouse, or your child, or your parent. Learn the discipline of learning all you can learn, of teaching all you can teach, of reading all you can read.
For each discipline, multiple rewards; for each book, new knowledge; for each success, new ambition; for each challenge, new understanding; for each failure, new determination. Life is like that. Even the bad experiences of life provide their own special contribution. But a word of caution here for those who neglect the need for care and attention to life's disciplines: everything has its price. Everything affects everything else. Neglect discipline, and there will be a price to pay. All things of value can be taken for granted with the passing of time.
That's what we call the Law of Familiarity. Without the discipline of paying constant, daily attention, we take things for granted. Be serious. Life is not a practice session. Think about your life at this moment. What areas need attention right now? Perhaps you've had a disagreement with someone you love or someone who loves you, and your anger won't allow you to speak to that person. Wouldn't this be an ideal time to examine your need for a new discipline? Perhaps you're on the brink of giving up, or starting over, or starting out. And the only missing ingredient to your incredible success story in the future is a new and self-imposed discipline that will make you try harder and work more intensely than you ever thought you could.
The most valuable form of discipline is the one that you impose upon yourself. Don't wait for things to deteriorate so drastically that someone else must impose discipline in your life. Wouldn't that be tragic? How could you possibly explain the fact that someone else thought more of you than you thought of yourself? That they forced you to get up early and get out into the marketplace when you would have been content to let success go to someone else who cared more about themselves.
Your life, my life, the life of each one of us is going to serve as either a warning or an example. A warning of the consequences of neglect, self-pity, lack of direction and ambition... or an example of talent put to use, of discipline self-imposed, and of objectives clearly perceived and intensely pursued.
Approximately 3.4 million homeowners have received mortgage modifications through the government’s Home Affordable Refinance Program (HARP) since the program’s inception in 2009.
Now that many of those homeowners have built up sufficient equity and mortgage rates are low, however, many HARP refinancers are leaving the program behind in favor of more conventional mortgage modifications, according to Freddie Mac’s January 2016 Insights & Outlook report released on Friday. Aggregate home equity in the United States has grown by $6 trillion since the middle of 2011.
As part of a trend Freddie Mac has dubbed “unHARPing,” an estimated 10 percent of the 3.4 million HARP borrowers have refinanced into a non-HARP loan. Many of the borrowers who refinanced through HARP from 2009 to 2012 likely have a mortgage rate of higher than 5 percent, and many of them have taken advantage of the low mortgage rates. Since there are more than 2 million current active HARP loans in the United States, there remains significant potential for those borrowers to refinance using a conventional loan.
“The HARP program allowed millions of underwater borrowers with good payment history to refinance without paying down the balance of their current mortgage,” Freddie Mac Chief Economist Sean Becketti said. “Many borrowers who took advantage of HARP over the past five years now have built sufficient equity so they can UnHARP to a conventional refinance with little or no cash brought to closing. This is yet another indicator of the effectiveness of the HARP program. And yet there remains many thousands more who can still take advantage of the HARP program that are currently underwater on their mortgage that should be utilizing this highly successful program.”
Some trends among borrowers who have “unHARPed,” according to Freddie Mac:
· The majority of unHARPed borrowers have chosen 30-year fixed-rate mortgages, though 43 percent did choose a 20- or 15-year term—which is higher than the 25 percent of HARP loans who did the same.
· The unHARPed borrower’s home appreciated by an average of 24.6 percent in Q3 2015 compared to 9.5 percent in 2011.
· UnHARPed borrowers lowered their interest rates by an average of between 0.6 and 1.5 percentage points.
· Early in Freddie Mac’s sample, about one-fourth of unHARPed borrowers were required to bring cash to closing in order to refinance; now the number is less than 5 percent.
HARP was launched in March 2009 in response to the housing crisis as a way for underwater borrowers with good payment records and little or no equity to refinance their mortgages and lower their monthly payments. While originally scheduled to last one year, the program has since been extended several times and is now scheduled to expire at the end of 2016. FHFA Director Mel Watt has stated that the program will not be extended beyond the end of this year.
Much has been made of the economic improvements that led the Federal Reserve to raise the short-term interest rates for the first time in nearly a decade in December 2015. However, economic growth nearly ground to a halt in the Bureau of Economic Analysis (BEA) “advance” estimate for the fourth quarter of 2015, coming in at an annualized rate of 0.7 percent in the data released on Friday. This estimate follows GDP growth of 2.0 percent in the third quarter and 3.9 percent in the second quarter.
The Bureau emphasized that the advance estimate for Q4 is based on incomplete data and is subject to further revisions; the second estimate, based on more complete data, will be released on February 26, 2016.
According to the BEA, “The deceleration in real GDP in the fourth quarter primarily reflected a deceleration in PCE (personal consumption expenditures) and downturns in nonresidential fixed investment, in exports, and in state and local government spending that were partly offset by a smaller decrease in private inventory investment, a deceleration in imports, and an acceleration in federal government spending.”
The substantial slowdown in GDP growth in the Q4 advance estimate is not a cause for alarm or a sign of economic gloom and doom to come, according to Capital Economics. “The slowdown in GDP growth to a very modest 0.7 percent annualized in the final quarter of last year is a temporary blip,” Capital Economics said in a statement. “With employment increasing by a monthly average of 284,000 during that quarter and final sales to domestic purchasers rising at a more acceptable 1.6 percent rate, we do not believe this is the start of a more serious downturn. GDP growth was 2.4 percent for 2015 as a whole and we anticipate a 2.5 percent gain in 2016.”
Despite the weak fourth quarter of 2015, things are looking up for 2016, according to Freddie Mac’s January 2016 Insights & Outlook report released on Friday. “Tracking data for fourth quarter 2015 growth has been negative and we’ve revised down our forecast for full year 2015 real GDP growth a tenth of a percentage point to 1.9 percent,” Freddie Mac said in the report. “The current expansion is the weakest in postwar history. According to our forecast, 2016 will mark the sixth full year of sub-3-percent economic growth. During prior postwar U.S. expansions economic growth averaged over 4 percent per year. The prospects for 2016 and 2017 are a little brighter, with real GDP growth projected to be 2.5 and 2.3 percent respectively, but still well below the postwar average.”
While foreclosure continue to steadily decline, the number of foreclosure alternatives completed is adding up, and the industry completed another 99,000 foreclosure prevention actions in November 2015, according to data released by HOPE NOW on Wednesday.
The 99,000 foreclosure prevention actions completed in November included permanent loan modifications, deeds-in-lieu of foreclosure, short sales, and other workout plans. Meanwhile, at the other end of the spectrum, foreclosure sales for the month totaled 24,500, meaning that non-foreclosure solutions still outpaced completed foreclosures by a four to one ratio.
"This metric is important as it shows the breadth of solutions available to at-risk homeowners and that these homeowners are likely to receive an alternative solution to foreclosure," HOPE NOW's report stated. "It is interesting to note that nearly 40 percent of foreclosure alternative solutions for families were repayment plans. This indicates most families are experiencing short term hardships."
Approximately 26,00o of the foreclosure prevention action were permanent loan modifications, according to HOPE NOW. This number included 19,000 modifications through proprietary programs and 7,691 through the government's Home Affordable Modification Program (HAMP).
"As we turn our attention to 2016, our data continues to indicate recovery in the overall housing market," said Eric Selk, Executive Director of HOPE NOW. "Our November report shows that key trends remain consistent with previous reports. Specifically, foreclosure starts and foreclosure sales completed are at or near pre-crisis norms. Although fewer modifications are being reported, families are receiving assistance through foreclosure alternative solutions such as retention plans and formal repayment plans. This is reflective of an early intervention process that all servicers are employing. The goal is to keep families in their home and respond quickly when someone goes delinquent."
The number of serious delinquencies in the mortgage market also tumbled year-over-year in November, from 1.97 percent down to 1.65 percent, according to HOPE NOW. "Another key indicator of positive market stability is the decline in serious delinquency," Selk said. "HOPE NOW tracks those homeowners who are 60+ days delinquent and we have reported a steady total of about 1.65 million borrowers for the past 5 months. This is a far cry from the nearly 2 million borrowers who were seriously delinquent just 18 months ago. This is a true testament to the hard work of the HOPE NOW Alliance and others, as well as the recent jobs report and economic recovery."
While the Federal Reserve saw enough improvement in the economy to raise the short-term interest rates in December, the Conference Board reports that the economy actually lost momentum at the end of the year.
The Conference Board’s Leading Economic Index (LEI) dropped by 0.2 percent in December down to 123.7 (2010=100) after increasing by 0.5 percent in both October and November. The Bureau of Economics and Analysis (BEA) reported at the end of December that real GDP grew at only half the pace in Q3 (2.0 percent) that it did in Q2 (3.9 percent), indicating that economic activity was slowing down.
“December’s decline in the LEI, while small, was led by the decline in housing permits, followed by weak new orders in manufacturing,” said Ataman Ozyildirim, Director of Business Cycles and Growth Research at The Conference Board. “Over the last six months, the housing permits component showed three negative components offsetting the other three month’s increases. In the last six months, housing permits haven’t supported the LEI as much as expected although, despite larger than usual volatility in recent months, the overall trend in the housing market has also been positive.
He continued, “In 2016, even though growth may be stuck in the slow lane, increasing employment and consumer confidence should support more young people finally moving out of parents’ basements into their own homes creating demand that pushes building activity up, however jagged the pace may be.”
The LEI contains 10 economic components, including stock prices, average weekly hours in manufacturing, interest rate spread and 10-year Treasury bonds less federal funds, and building permits/private new housing units.
“In 2016, even though growth may be stuck in the slow lane, increasing employment and consumer confidence should support more young people finally moving out of parents’ basements into their own homes creating demand that pushes building activity up, however jagged the pace may be.”
Ataman Ozyildirim, The Conference Board
In December, the Conference Board forecasted GDP growth of 2.4 percent in 2016 due to persisting economic headwinds that include oil-related cuts to investment, stronger dollar and weak external environment along with ongoing inventory correction despite the fact that consumption and housing are supportive of growth. Despite December's slight decline, Ozyildirim said the index continues to suggest moderate growth in the near-term and that it is too early to interpret the decline as a substantial rise in the risk of recession. “The short-term trends in the LEI, measured by looking at its six month growth rate, is still well in positive territory associated with economic expansions even though this growth rate has moderated since earlier in 2015,” he said. “Last June the LEI was growing at a 2.0 percent rate (not annualized) but now it is growing less than half that, at 0.7 percent. So it is too early to say that LEI is signaling a change in the direction of the economy, but the LEI is consistent with slow to moderate growth—not too far below the economy’s potential but not much above it either.”
In order for the economy to regain its momentum in 2016, Ozyildirim said, “Continued gains in job, increasing incomes, and consumer confidence remain the main factors supporting this expansion so far. Despite domestic and global volatility, especially jittery financial markets, we expect those trends to continue and deliver about trend growth for the U.S. economy, unless repeated bouts of financial volatility and other geo-political risks start to sap consumer, business, and investor confidence.”