Author: Andrew Scoggin

Obama taps Cordray to head CFPB in recess appointment

HousingWire.com, January 4, 2012

Obama taps Cordray to head CFPB in recess appointment

By Andrew Scoggin

President Barack Obama named Richard Cordray Wednesday as director of the Consumer Financial Protection Bureau.

The appointment came as the Senate is in recess, though senators met briefly for a pro forma session Tuesday. The upper branch of Congress is not scheduled to fully reconvene until Jan. 23.

Senate Republicans blocked the appointment of Cordray in early December, and said the pro forma sessions would prevent any recess appointments.

Cordray, former Ohio attorney general, joined Obama on stage at a speech outside Cleveland.

“There’s no question that Richard is the right person for the job,” Obama said. “When Congress refuses to act … then I have an obligation to do as president what I can without them.”

White House Communications Director Dan Pfeiffer announced the appointment Wednesday morning in a post on the White House blog. He called the pro forma sessions “a gimmick,” during which no actual business is conducted.

The Constitution gives the president the power to fill vacancies during Senate recess with terms that expire at the end of the following Senate session.

“But gimmicks do not override the president’s constitutional authority to make appointments to keep the government running,” Pfeiffer said.

The Senate will meet in another pro forma session Friday.

Senate Minority Leader Mitch McConnell, R-Ky., said Obama “has arrogantly circumvented the American people” in appointing “an unaccountable czar.” The Cordray move, McConnell said, breaks precedent that presidents make recess appointments only when the Senate recesses for at least 10 days.

“Congress has a constitutional duty to examine presidential nominees, a responsibility that serves as a check on executive power,” McConnell said in a statement.

Sen. Tim Johnson, D-S.D., and chair of the Senate Banking Committee, said in a statement Cordray is “eminently qualified for the job.”

“I look forward to working with Mr. Cordray and the CFPB as he moves forward on implementing long-overdue consumer financial protections for all Americans,” Johnson said.

Consumer advocates applauded the recess appointment, including the Consumer Federation of America, The Leadership Conference on Civil and Human Rights, the Center for Responsible Lending and the Woodstock Institute.

With a director, the CFPB can exercise its full authority via the Dodd-Frank Act, including regulation over nonbank financial institutions.

Senate Republicans want a five-member committee to lead the CFPB as well as a simple majority vote by an oversight council to veto bureau rules, rather than the current two-thirds vote.

Anthony Sanders, a professor of finance at George Mason University, said regulatory agencies like the CFPB typically act with good intentions, but can lead to limits in credit availability.

Obama also appointed three members to the National Labor Relations Board. He last made recess appointments in December 2010.

(Original post — external link)

House Democrats push FHFA on mortgage modifications

HousingWire.com, February 7, 2012

House Democrats push FHFA on mortgage modifications

By Andrew Scoggin

Three Massachusetts congressmen are asking the Federal Housing Finance Agency to reconsider options in loan modifications, saying the regulator hasn’t done enough to help homeowners.

Reps. Barney Frank, Michael Capuano and Stephen Lynch, all Democrats and members of the House Financial Services Committee, wrote in a letter to FHFA Acting Director Ed DeMarco that despite different options, “there is no question that action is better than inaction.”

Frank, ranking member of the committee, said in an interview with HousingWire Tuesday that he supports principal write-downs, along with additional modification and refinancing options. Capuano and Lynch in the letter do not outright back mortgage principal modifications, which would alter the actual amount due on the loan.

DeMarco heads “a public agency” with “public money,” Frank said, adding that DeMarco’s broadest duty is to help the economy.

“He is withholding his support for getting a significant piece of getting this recovery going,” Frank said. “It’s moving, but he can make it better. As the recovery picks up speed, the FHFA is a beneficiary because they own more houses than anybody.”

The three congressmen wrote to DeMarco that the statute that created the FHFA in 2008 does not require “you to withhold your cooperation from this effort to the extent that you have.” Frank was chairman of the financial services committee at that time, while Capuano and Lynch were members.

The FHFA is the conservator for Fannie Mae and Freddie Mac.

“There’s nothing in the mission of the FHFA that keeps him from doing this,” Frank said. “That’s his choice.”

The letter to DeMarco backs another signed last week from Massachusetts Attorney General Martha Coakley. In that letter to DeMarco, she wrote that the GSEs’ “unwillingness” to participate in principal write-down is “troubling.”

California AG Kamala Harris said in November she supports principal modifications, calling them a “common-sense reform.”

DeMarco resisted calls for principal write-downs in part on grounds they would cost taxpayers too much. A January analysis from the FHFA estimated reductions on GSE loans would cost Fannie and Freddie more than $100 billion, on top of the $151 billion they owe in federal bailouts as of the end of the third quarter.

That estimate doesn’t take into account any potential benefit to home prices or the economy, Frank said. Nor does it include any costs of defaulting homeowners. Though he said principal write-downs don’t always help borrowers avoid default. About 4.1 million borrowers are at least 30-days late on their mortgage, according to Lender Processing Services ($19.10 -0.52%).

The three Massachusetts House members said it’s important to protect taxpayers, but they’re “exposed to further problems when efforts that could enhance the pace of economic recovery” are not pursued by the FHFA.

DeMarco, the agency’s acting director since August 2009, has drawn fire from legislators for his positions on principal modifications at the GSEs. House Democrats from California asked President Barack Obama to recess appoint a permanent director to replace DeMarco, similar his installation of Richard Cordray as director of the Consumer Financial Protection Bureau.

Oregon Appeals Court backs former Vernonia pastor in First Amendment case

The Oregonian, February 8, 2010

Oregon Appeals Court backs former Vernonia pastor in First Amendment case, upholds $355,000 judgment in defamation suit

By Andrew Scoggin

A church can’t use the First Amendment as a defense against a defamation lawsuit if church officials accuse a former pastor of being a thief in front of the congregation, according to a game-changing ruling from the Oregon Court of Appeals.

The appeals court upheld a $355,000 jury award to Tim Tubra, who was fired as interim pastor of the Vernonia Foursquare Church in 2004 after church officials accused him of “misappropriation of church funds.” Tubra discovered later that church officials had made the accusation public in a letter read aloud to the congregation after he left his position. He was never charged with a crime.

A Multnomah County jury sided with the former pastor but the trial judge threw the verdict out, ruling that the circuit court didn’t have jurisdiction because of First Amendment issues.

However, the Oregon Court of Appeals ruled that the defaming statements were not religious in nature, so they didn’t qualify for protection under the First Amendment.

In the opinion, written by appellate Judge Rex Armstrong, accusing a pastor of theft is no more or less a religious matter “than is a defamatory statement accusing a pastor of child molestation.”

Armstrong described the specific circumstances of the case as a first in the United States.

The defense plans on appealing the decision to Oregon’s Supreme Court, said defense attorney John T. Kaempf. Because the case was argued in the appeals court Aug. 8, 2008, he said the length of time between that and this decision “confirms that this is a very important issue of First Amendment constitutional law.”

“The First Amendment protects a church’s right to speak to church members about a church pastor’s conduct without interference by secular courts,” Kaempf said in an e-mail. “Until the Oregon Court of Appeals’ decision (Jan. 27), this was the holding of every court in the country addressing similar facts.”

Professor Steven K. Green from Willamette University’s College of Law said historically there has been a “zone of protection” surrounding what happens in a church, but that this perception is changing dramatically.

“The decision puts Oregon on the vanguard in this area,” said Green, who is the director of the Center for Religion, Law & Democracy at the school. “Traditionally, employment disputes internal to a church have been off limits to courts because of the difficulty of determining what is theological.”

President and founder of conservative legal organization The Rutherford Institute, attorney John W. Whitehead, said the key to a court’s involvement in church matters is whether the issue at hand is ecclesiastical in nature. He said he had not seen a case quite like this.

“They’re not above the law, and they shouldn’t argue that they are,” said Whitehead, whose group deals in large part with religious issues.

Green said above all, the ruling, which he said would probably be affirmed if appealed to Oregon’s Supreme Court, could force churches to make some changes.

“The most noteworthy thing is it will change the way some churches do their business,” he said. “They will have to be more careful about criticizing each other in their own church. Many of things within religious bodies are done quite informally.”

The attorney for the Foursquare Church said no charges were filed against the former pastor because officials wanted to resolve the issue within the church community.

What happened in Vernonia came down to an agreement between Tubra and church elders before he took the interim job after being laid off as an associate pastor for the Columbia City Foursquare Church.

According to the court file, after Tubra was laid off because of economic reasons from his position as associate pastor at Columbia City Foursquare Church in September 2003, senior pastor John Michael Cooke offered him a position at a church in Vernonia.

Tubra was reluctant to take the job because of the low pay, according to the document, but Cooke and Ron Swor , another supervisor, offered him $1,100 a month for the first three months in addition to the normal $1,500 salary. He agreed to take the position November 2003 on an interim basis.

In April 2004, Tubra withdrew $3,000 from the Vernonia church’s account and explained to the church council that it had been earmarked for him as a gift. However, Cooke and Swor accused Tubra of a “misappropriation of church funds” and fired him.

In a letter written by Cooke and Swor and read aloud to the congregation, the two said that “there has been, to some extent, a financial misappropriation by former pastor (Tubra),” among other things.

Tubra did not know about the letter until a church member confronted him about it in the member’s home, and a Columbia City church member asked him about it in a grocery store.

When Tubra asked for the letter from church officials, one official said in an e-mail to another’s secretary that Tubra “has already demonstrated a willingness to lie and steal.”

After more than 20 years in the ministry, Tubra found himself unable to find steady work as a pastor. He had to sell his house and move into a fifth-wheel trailer with his wife, according to court documents. Tubra filed a defamation suit in September 2005 against The International Church of the Foursquare Gospel.

His attorney, Christopher G. Lundberg, said his client was heartened by the appeals court decision upholding the jury’s judgement.

“Mr. Tubra’s rights have been vindicated again,” said his attorney Christopher G. Lundberg. “This is big and very meaningful to him.”

(Original post — external link)

Susan Rice withdrawal gives GOP a rare victory

Politically Inclined, December 14, 2011

Susan Rice withdrawal gives GOP a rare victory

By Andrew Scoggin

Thursday’s big story out of Washington came not from fiscal cliff talks, but from U.N Ambassador Susan Rice bowing out of consideration for the soon-to-be-open post of Secretary of State.

Rice, reportedly once a heavy favorite to replace Hillary Clinton, faced the likelihood of a contentious Senate confirmation, having to appear before GOP lawmakers who heavily criticized her role in the response to the attack on the U.S. consulate in Libya. That September incident, which left four dead, became a major talking point for Republicans in the lead-up to and after the election.

Consider it a victory for congressional Republicans, who have had a rough go of it between the Supreme Court’s decision on Obamacare and the election. The legitimacy of their qualms aside, they wanted someone to take the blame for the Obama administration’s actions.

But there’s something bigger at play here, aside from tussling for political points. Rice stepping out could, in theory, give the GOP back a Senate seat they lost in November.

Sen. John Kerry (D-Mass.) is the hot new name for Secretary of State. He chairs the Senate Foreign Relations Committee, and his longtime Senate colleagues would likely give him an easy confirmation process (despite zingers like this).

And if Kerry becomes Secretary of State, that leaves his Senate seat vacant. Massachusetts law would call for a special election, last seen in 2010 after the death of Sen. Ted Kennedy. As we know, former Sen. Scott Brown (R-Mass.) has a great track record in special elections (though not so much in general ones).

Gaining any Senate seat is huge for Republicans, but especially in a Democratic stronghold like Massachusetts. Brown has the name and apparatus in place to mount a strong campaign, and Democrats just spent a lot of time and money to replace him with Senator-elect Elizabeth Warren.

Of course, this Senate seat speculation is moot if President Barack Obama opts for someone else as the country’s chief diplomat. And while prominent politicians assumed the post in early America (like Thomas Jefferson or James Madison), the trend before Hillary Clinton was to pick outside of politics (like Colin Powell or Madeleine Albright).

Besides the GOP hullabaloo, the Obama administration has more important things to worry about, like this fiscal cliff thing we’ve all heard about so much. Rice said as much in her letter to Obama released Thursday:

“… if nominated, I am now convinced that the confirmation process would be lengthy disruptive and costly — to you and to our most pressing national and international priorities. That trade-off is simply not worth it to our country. It is far more important that we devote precious legislative hours and energy to enacting your core goals, including comprehensive immigration reform, balanced deficit reduction, job creation and maintaining a robust national defense and effective U.S. global leadership.”

That last sentence is especially important for the administration. If it can divert attention away from Cabinet nominations, it instead can focus on Obama’s goals for his second term on matters that will contribute much more to his legacy and more directly effect the direction of the country.

For Republicans, they may have won this round, but the Obama administration still holds a significant political advantage. The president was just reelected a month ago, and more people approve of his actions in fiscal cliff talks than House Speaker John Boehner’s (R-Ohio).

So with Rice out of the limelight, it’s time for GOP lawmakers to lay off the Benghazi business and focus on the fiscal cliff, Sen. John McCain (R-Ariz.) chief among them. His passion might be foreign affairs, but as a senior leader and former presidential nominee, it’s time he concentrated his efforts on more pressing matters.

After all, even if Republicans gain a Senate seat, they’re likely to shoulder more of the blame if Washington fails to reach a consensus on the fiscal cliff.

(Original post — external link)

How ‘right-to-work’ became nontoxic in Michigan

Politically Inclined, December 11, 2012

How ‘right-to-work’ became nontoxic in Michigan

By Andrew Scoggin

Michigan, the once-proud bastion of the modern labor movement, became the 24th state to ban mandatory union membership Tuesday. And judging by the political and social undertones, it isn’t all that surprising.

Both the Republican-controlled House and Senate have passed versions for public and private sectors, and Republican Gov. Rick Snyder quickly signed them into law late Tuesday afternoon.

The manner in which the “right-to-work” legislative effort came up in a lame-duck session surprised many, and a whole lot of people are upset about the bills. The Detroit Free Press reported roughly 12,500 protesters around the state capitol at the height of the kerfuffle.

Still, from the outside looking in, it’s still shocking to see this happen in, of all places, Michigan.

Why is this happening right now?

For those who have seen “Lincoln,” they’d know a lame-duck legislature (as in, after an election but before a new session) is a great time to pass controversial measures. Even the fiscal cliff would be a good example nationally of how political actors behave when not as concerned with reelection.

The Michigan GOP has other motivation to push through right-to-work legislation now. The party lost five House seats in the November election, and now holds a narrow eight-seat advantage over Democrats. It might be more difficult to find votes once the new session convenes.

But despite Republican losses, right-to-work advocates gained an immense advantage. A referendum to add collective bargaining rights to the state constitution lost by 16 percentage points. An anti-union law might not be as toxic politically as once thought.

As an Oct. 16 story from the Associated Press said, what happens during the lame-duck session “has as much to do with the candidates’ performance as the proposals” in the election. That’s certainly true here, although the story did not raise the possibility of right-to-work legislation coming up.

After all, neither Snyder nor Republicans had said much about it.

So what’s going on here? Why is it happening at all?

All downfalls and collapses need scapegoats. For hockey fans, it’s NHL Commissioner Gary Bettman. For Republicans, it’s guys like Todd Akin or even Mitt Romney.

And for some Michiganders, it’s unions. They place the blame for the state’s economic struggles on these still-influential bodies, for keeping away businesses and driving them to nonunion states.

Whether that’s a fair assessment is another matter, but it’s hard to deny the momentum behind this train of thought. Every state in the South has right-to-work laws on the books, and many see this as the reason as to why foreign carmakers are building plants and factories there, and not in Michigan.

But more recently, what may have heightened this attitude in Michigan are actions in a neighboring state. (Not you, Ohio. Michigan has had enough of you.)

Indiana passed a similar law earlier this year, becoming the first Midwestern state to ban unions from requiring representation fees. But aside from showing this could happen in the Rust Belt, some in Michigan also saw this as a threat to business interests.

Michigan’s demographics could also explain why passing these laws may not be a political death wish. The state’s population fell between 2000 and 2010 censuses, but the western region’s total actually grew about 3 percent. That area of the state traditionally leans Republican, and the southeast region around Detroit – a Democratic stronghold – no longer makes up a majority of the state’s population.

Also, the proportion of Michigan employees represented by unions is just 18.3 percent as of 2011. It’s near the top among states, but it’s still below places like New York (26.1 percent) and even Alaska (23.7 percent). And while it’s a sizable voting bloc, it’s possible to ignore them altogether in certain areas and still win an election.

What does all this mean?

Questions remain as to this legislation’s impact. It’s unclear how it’ll impact the state’s economy, whether unions’ power will further wane and what effect it’ll have on workers.

Also, although the measures are referendum-proof, it’s still possible to repeal them. Democrats could take back the legislature – though they’d need to make heavy gains in the Senate – and the governorship in 2014. After all, President Barack Obama carried the state by nearly 10 percentage points.

But clearly Michigan, and the country, has changed since unions’ political high-point in the 1930s. Public support isn’t what it used to be, and maybe rightly so. After all, minimum wage laws are now the norm, and labor conditions are much safer than in other nations.

The fact that right-to-work legislation is even possible in Michigan – let alone that it makes some political sense – is as indicative of the labor movement’s strength as anything else.

(Full disclosure: My mom, a second-grade teacher, belongs to a union, and I worked under the auspice of one while at The Indianapolis Star. Also I’m from Michigan, so odds are that’s colored my understanding at least somewhat.)

(Original post — external link)

Column: Of all players, why Persa?

The Daily Northwestern, November 14, 2011

Column: Of all players, why Persa?

By Andrew Scoggin

It’s a cruel twist of fate, like something you might hear in an Alanis Morissette song.

Or, as Drake Dunsmore would say, “That’s football.”

Dan Persa had quite possibly the game of his life, guiding Northwestern on consecutive 85-yard and 91-yard drives in the fourth quarter to put the Wildcats up 21-17.

As Demetrius Fields hauls in the 20-yard touchdown from Persa, it’s absolute bedlam at Ryan Field with 1:22 remaining. But I look back at Persa 30 seconds after the catch to see the trainers helping him as he lies on the field.

He goes to the bench with a row of linemen sheltering him from about 47,130 pairs of eyes, and as his teammates celebrate the upset over No. 13 Iowa, he’s taken off on a cart rather than on the shoulders of adoring fans.

“He should’ve been out there,” junior safety Brian Peters said. “It sucks that he couldn’t be.”

Coach Pat Fitzgerald breaks the news after the game: ruptured Achilles tendon, done for the season.

Dan Persa, we’ll see you in 2011.

His style of play might make you think this sort of thing was inevitable. So many rushes out of the pocket, so many dives for first downs, so many big hits from opposing defenses. In fact, it already happened against Indiana with his concussion, though he missed all of about eight minutes of game action.

But this play, this was not when Persa was meant to end his season. He stayed in the pocket and was not so much as barely even tapped on the shoulder by Iowa’s pass rush.

Fitzgerald said Persa told him that he was “just going to run to celebrate with Demetrius” and he heard something pop.

It brings to mind Bill Gramática’s torn ACL and Gus Frerotte’s sprained neck, but Persa didn’t even have time to celebrate before he went down.

It’s an unfair judgment by the football gods. Mr. Iron Cat, who already has emphatically put his stamp on the program, can’t even bask in NU’s biggest win so far this season. I was all set to write about how he should be a prime candidate for the Heisman, but now he’ll be watching NU’s game at Wrigley from the metaphorical dugout.

Now batting, redshirt freshman Evan Watkins.

“I know one guy that probably won’t sleep tonight, and that’s Evan,” Fitzgerald said. “I got a feeling the first guy I’ll see tomorrow morning will be Evan. I got a feeling the guy I’m going to see the most this week will be Evan.”

Fitzgerald knows a thing or two about going down with an injury and missing big games. He broke his leg in the second-to-last regular season game against Iowa (of all teams) in 1995 and had to sit out NU’s first Rose Bowl appearance in 47 years.

The next season, Fitzgerald won his second-straight Big Ten Defensive Player of the Year award and the Bronco Nagurski Trophy.

Any doubts Persa has Sept. 3, 2011, circled on his calendar?

“He’ll be back ready for his senior year,” Fitzgerald said. “You better look out, because he’s going to come back with a vengeance.”

Gunning for No. 2

WildcatReport.com, March 11, 2011

Gunning for No. 2

By Andrew Scoggin

EVANSTON — A team is only as good as its backup quarterback. Northwestern fans found out just how true that old adage was in 2010, when an injury to starting quarterback Dan Persa derailed the season.

The Wildcats’ thrilling 21-17 win over Iowa last November is now better known for Persa’s torn Achilles than it is for a 10-point comeback against the 13th-ranked team in the country. It was all downhill after that game for the Wildcats, who closed out the season 0-3 by a combined score of 163-88 with a backup lining up behind the center.

Evan Watkins has taken more snaps than the other two QBs in the battle.

With Persa still on the mend, eyes this spring are focused on sophomores Evan Watkins and Kain Colter and redshirt freshman Trevor Siemian as they battle it out for the No. 2 quarterback job.

Most teams have quarterback competitions in which the loser winds up as the backup. In Northwestern’s battle, the winner will assume the second-string role.

All three QBs have split reps with the first team offense this spring. And after three practices, coach Pat Fitzgerald says that a favorite has yet to emerge.

“They’re going to rotate through and we’ll have different combinations until maybe one guy takes it over,” Fitzgerald said. “Will that happen in the first week? I doubt it.”

The quarterbacks themselves say the same thing. Though Watkins couldn’t speak for himself (he had class after practice), neither Colter nor Siemian said any of the three had an upper hand.

“We all have our strengths and weaknesses, and we’re all doing good,” Colter said. “I’m just going to leave that up to the coaches. We all want to win the job, though, no doubt.”

Who held that understudy job wasn’t so clear at the end of the 2010 season. Though Watkins started each of the last three games, he split time with Colter, who ran for 105 yards and two touchdowns on 18 carries and even brought in a 32-yard reception in the TicketCity Bowl. But it was Watkins who got the large majority of pass attempts, going 36-of-70 for 378 yards, two touchdowns and five interceptions on the season. Siemian redshirted and didn’t see any action, earning an extra year of eligibility.

And though there’s still plenty of time before the 2011 season begins, Siemian says that now’s the time for players to “win your jobs.”

Fitzgerald thinks that may be a little premature, however, as the three are “nowhere near where they need to be” in his mind.

“They’re all doing good things. They’re all doing things that are going to get us beat,” he said. “It’s a work in progress. The guys are doing a nice job.”

Speaking about the team as a whole, Fitzgerald said some players are “light years away” from understanding the playbook, and that’s certainly true for the quarterbacks, who have more to learn than anyone. Some players learn faster than others; Fitzgerald said it took him two years to fully grasp his role when he was a Wildcat linebacker. Watkins is in his second year at NU, while Colter and Siemian are still in their first.

“Some guys struggle with it because maybe in high school they were able to just run free,” Fitzgerald said. “A lot of areas you try to start over and break some bad habits.”

Siemian, who got a lot stronger after winter workouts, says that a greater understanding of the game is his big goal for the spring. But Colter’s primary objective might be proving to some doubters that he’s more quarterback than athlete.

“I’ve been trying to focus on being a true quarterback, going through my reads, making the throws,” he said. “I’m looking to throw first, run second.”

Colter completed only three passes on nine attempts for 38 yards and one interception last season, but that’s understandable given that he only played in the last three games, after Persa’s injury.

Colter, who now wears No. 2 rather than No. 14, said he hasn’t run too much this spring. On Thursday, though, he scrambled a few times during practice, picking up 10 yards on one play.

Siemian connected on a few deep passes, including one 15-yarder to senior wide receiver Charles Brown and another 20-yard strike to sophomore Mike Jensen. Watkins threw with some zip on the ball, though he seemed to struggle the most of the three as a few of his passes bounced off the hands of his intended receivers.

Of course, Fitzgerald isn’t going to say who looked best.

“I’m not telling you that,” he said. “You’re going to ask me probably at the end of spring and I’m not going to have an answer. It’s going to be a day-by-day.”

(Original post — external link)

Demps ready to take the point at Northwestern

WildcatReport.com, April 28, 2011

Demps ready to take the point at Northwestern

By Andrew Scoggin

Although he has a shot to replace four-year starter Michael Thompson next season, incoming freshman Tre Demps hadn’t really played point guard before committing to Northwestern.

Sure, the 6-foot-3 guard took the ball up the court during his junior season at San Antonio (Texas) Ronald Reagan, but Demps said he was never the facilitator on offense. That, along with his quiet demeanor, changed with the arrival of first-year coach John Hirst.

Demps was named first-team all-state after leading Reagan to a 30-6 record.

“From the start I trusted him and it motivated me to be more vocal to those guys,” Demps said. “It was my job to get those guys going where as in the past it was only my responsibility to get myself going.”

Though Demps’s stat line didn’t change much (his points per game average actually went down to 16.6 from 19), he led his team to a 30-6 record and was named first-team all-state by the Texas Association of Basketball Coaches.

He’ll play in two all-star games in the next three months, both sponsored by Texas coaches’ associations.

“Most of my peers really appreciate his game because he’s not just a high-wire act, someone who just makes you say, ‘Wow,'” Hirst said. “Tre’s one of those guys at the end of the game that you say wow because you look at those numbers.”

That’s not to say Demps didn’t have a flair for the dramatic at times, Hirst said.

“I can’t tell you how many big shots he hit, too,” Hirst said. “I can’t think of how many times the game was in doubt and Tre makes a play.”

Unlike most seniors during the spring, Hirst said Demps is now working hard on improving on an individual level. He has had Evanston on his mind for a while, at least judging by his wardrobe, which often features purple socks that clash with Reagan’s green-and-white color scheme.

Demps didn’t wait long to commit to Northwestern, turning down offers from schools like Minnesota and Colorado in the process. For him it was the usual combo of high academics and the Big Ten that made him a Wildcat, though NU’s renowned Medill School of Journalism also played a role.

“I used to (write) when I was younger,” Demps said. “I’m really interested in satire, stuff like The Onion. … I think that ties in well with my personality.”

His intelligence extends to the court as well. Demps’s basketball IQ is “off the charts,” Hirst said, likely due in part to his father, former NBA player and current New Orleans Hornets GM Dell Demps.

He grew up with his mother in the Bay Area in California, and spent summers with his dad.

“I’ve been around the game my whole life,” Demps said. “I think I’ve got to see things I’d say 99.9 percent of the kids who play basketball haven’t seen. Over the years my knowledge of basketball has gone up and up and up.”

Demps said he had built a close relationship with former Northwestern assistant coach Mitch Henderson, who walked him through the Wildcats’ gameplan before their 58-57 loss to No. 1 Ohio State in January. Though Henderson left to coach Princeton earlier this month, Demps said he still talked a good amount with coach Bill Carmody, who Demps describes as fairly laid back.

“I feel like we’ll have a great relationship because we both kind of have a chip on our shoulder because we both get criticized for certain aspects of the game,” Demps said. “I think we can relate really well and take this thing to the next level.”

For Demps, he said that criticism against him centers mostly on his speed and ability to spread the ball around the floor.

“I think a lot of people around the city criticize me for not getting my teammates involved,” he said. “People say I’m not quick enough to play in the big conferences. I’m still using that as motivation right now. I really want to be known as a guy who can get people going.”

After missing out on a point guard for the class of 2010, NU will bring in two in Demps and David Sobolewski of Lisle (Ill.) Benet Academy. Demps said he and Sobolewski speak frequently, mostly talking basketball.

The two will join JerShon Cobb and Alex Marcotullio, among others, in the backcourt, and Demps said he’ll take whatever role is best for the team.

“Maybe in the past I would want that starting position,” Demps said. “But now whatever they ask me to do is what I’m going to do and it’s what I’ll want to do.”

As for comparisons with Thompson, Demps said their games don’t have much in common. He said Thompson is feistier, while he’s a little more finesse.

“Coming in I’m not going to try to duplicate what he did, as far as how we play,” he said. “I’m going to try my best to be a leader.”

Still, his coach isn’t going to undersell him.

“We really feel like Northwestern got a steal, not that he’s going to be jaw-dropping and maybe he will be as a freshman,” Hirst said. “But we’re talking about a guy who’s going to be really great for three or four years.”

(Original post — external link)

Big Ten: Expansion in future?

The Daily Northwestern, May 25, 2010

Big Ten: Expansion in future?

By Andrew Scoggin

While in Washington for a meeting with the Association of American Universities last month, University President Morton O. Schapiro’s son, Matt, called him about a story on ESPN.com.

Matt told him that, according to the article, the school presidents of the Big Ten would be meeting in Washington about the possible conference expansion. ESPN picked up a story from the Chicago Tribune that read, “Morton Schapiro and the other Big Ten presidents” had planned a secret meeting, Schapiro said.

“It’s so funny, I don’t know why they picked me,” Schapiro told The Daily. “He said, ‘Dad, they think you’re a real player. They must not know you.’ They certainly don’t know me.”

The article’s phrasing made it seem like Northwestern was the sole decision-maker as to who could be admitted to the Big Ten, Schapiro said. Of course this isn’t the case, but as one of 11 school presidents, or chancellors, in the conference, Schapiro’s vote carries some weight.

“As president of Northwestern, I’m in the middle of this thing that a lot of people seem to think is extraordinarily important to the future of college sports in this country,” he said.

Since its seven-member founding in 1896, the Big Ten has inducted an additional five members, with the latest addition of Penn State in 1990. The conference sits at 11 schools, as the University of Chicago, a charter member, bowed out in 1946.

The conference announced in a December press release that it was looking into the possibility of expansion, and set a 12- to 18-month timetable. Schapiro said he does not expect a decision to made soon, echoing words said last week by Big Ten Commissioner Jim Delany.

With this, it has been widely rumored the Big Ten could add as many as five schools-as many as it has added in its 114-year history.

“We’re doing this again, and we’re really making these decisions every 20 years,” Schapiro said. “We don’t want to blow this thing. We want to get it right.”

ACADEMICS

In the evaluation of potential candidates, the conference is not willing to compromise academics to add a “football factory,” ESPN.com writer Adam Rittenberg (Medill ’03) told The Daily.

“They’re not going to add a third-tier academic institution,” said Rittenberg, who writes ESPN.com’s “Big Ten Blog.” “It’s a big part of who the Big Ten is. There’s really no one outside of what people would consider the top tier of schools.”

As the decision to add any new members ultimately comes down to the approval of at least eight of 11 presidents, Rittenberg said that “you’ve got to figure academics are going to be a big part of it.”

Schapiro said academic issues are important, adding the Big Ten is the only conference in which all schools are members of the Association of American Universities. The organization, made up of 63 U.S. and Canadian universities, focuses on research funding and policy issues, according to the group’s website.

The AAU is open to new members by invitation only. The Georgia Institute of Technology became its newest member in April, though Rittenberg said a similar invite for the school to join the Big Ten is unlikely.

“Are you really going to extend yourself all the way to Atlanta for Georgia Tech?” he said.Other schools that have been mentioned as potential candidates, including Missouri, Nebraska and Rutgers, are also members of the AAU. Notre Dame, long considered a prize catch for the Big Ten, is not a part of the AAU.

“It’s funny because I think it’s very important, and yet I think it won’t matter,” said Teddy Greenstein (Medill ’94), a Chicago Tribune writer who covers Big Ten and NU athletics. “It won’t matter for Notre Dame.”

WHY EXPAND?

Greenstein said the predominant reason for expansion is possibility of increased revenue.

“Those are probably the first three reasons,” he said. “Lacrosse sticks don’t pay for themselves.”

Under the Big Ten’s revenue sharing system, each school receives about $22 million, Greenstein said. The Big Ten Network, which launched in 2007, has helped to bolster this revenue stream, he said.

Adding schools could possibly dilute the amount of money each school receives if they don’t bring in enough additional revenue.

“You know we’re in a great situation,” Schapiro said. “We’re the envy. We get the biggest check, the biggest exposure. So we better make sure if we’re going to expand it’s going to help us all.”

Rittenberg said NU likely has benefited the most from the system. As a smaller school, he said, NU would “get the short end of the stick” in a conference with inequitable revenue sharing, such as the Big 12.

“Even though (expansion) might make it a tougher league-competition wise … Northwestern needs to look at it very closely.”

WHO COULD JOIN?

This inequitable system in the Big 12 might provide motivation for members to bail for the Big Ten, Rittenberg said. He particularly noted Nebraska, whose prominence in the Big 12 is not quite what it was in the former Big Eight Conference, he said.

“Why would you want to stay when Texas is getting such a big cut of it?” he said.Texas has been the subject of a rumored courtship by the Big Ten, particularly after Delany said last week the national population shift to the South was a major part of their expansion study.

While Rittenberg said “you’d have to be crazy” to not consider adding Texas, Greenstein said he doesn’t see the Longhorns leaving the Big 12 and emphasized their distance from the rest of the Big Ten.

Other schools mentioned as possible candidates include Syracuse, Pittsburgh and Connecticut.

Notre Dame turned down an invitation to join the Big Ten in 1999, according to a recent article from Sports Illustrated. Rittenberg said it would be tough to attract Notre Dame, as reports from multiple outlets have said it wants to maintain its independent status for football. The school is a member of the Big East Conference for most other sports.

“Notre Dame is just totally conflicted, but with Notre Dame they’ve got something so special with independence,” Greenstein said. “If their big money donors are not on board with joining the Big Ten, that’s where the conversation ends.”

Though Schapiro said it’s possible the Big Ten could choose to not add any new members, both Rittenberg and Greenstein said they saw this as unlikely.

WHAT DOES IT MEAN FOR NU?

The attention on the possibility of expansion has been “tremendous,” Schapiro said. At an alumni event in Washington last Tuesday night, he said the first question regarded whether Notre Dame would join the Big Ten.

“It really helps Northwestern,” he said. “The fact that … many people seem obsessed about this expansion thing is the best free publicity you could ever get.”

Schapiro said Delany asked Big Ten presidents and athletic directors to not speak publicly about adding schools. NU Athletic Director Jim Phillips declined to comment on expansion.

“I know I’m supposed to just say ‘no comment,’ but I’m not going to just say that at an alumni event,” Schapiro said. “I’m going to go as close as I can before crossing the line because I respect that we’ve agreed not to talk about it.”

Tyris Jones, a sophomore running back on NU’s football team, said players haven’t been put on a similar gag order. He said he hadn’t given it much thought, but he said “the possibility of expansion is definitely a great one.”

“The better the competition, the better the play … the better we look nationally,” Jones said. “From a player standpoint, it’d be exciting to play a team that we wouldn’t have an opportunity to play during a regular year.”

Though he said he didn’t see the big deal about expansion, freshman Arby Fields, a centerfielder on NU’s baseball team and running back on the football team, said he wouldn’t mind taking on Notre Dame every year.

“I feel like if we had an Oklahom
a or a Notre Dame … playing those teams and beating those teams, which we feel like we’re capable of doing, that’ll be big for us,” he said.

The last six months have been quite a whirlwind for the Big Ten, sweeping up the conference to the national spotlight. Schapiro said he didn’t mind the attention.

“Just keep this rumor going,” he said. “The attention at Northwestern has been unbelievable.”

Premium FHA knowledge

HousingWire Magazine, May 2012

Premium FHA knowledge

How changes at the agency could affect borrowers, the market and the FHA

By Andrew Scoggin

As the housing market collapsed around it, the Federal Housing Administration moved in to prop up the remains.

The FHA, at the height of the subprime boom, insured just 3.4% of single-family mortgages originated in 2007, per total dollar volume. That share skyrocketed a year later to 16.1%, trickling down to 12.8% in 2011.

As of mid-November 2011, the FHA oversaw an insurance portfolio of $1.3 trillion.

“FHA has played a huge role in providing liquidity in the mortgage market for the past several years,” said Charles Coulter, deputy assistant secretary for single-family housing in the Department of Housing and Urban Development. It’s a role that’s countercyclical to the dearth of the private market, he said.

After all, it is the reason the government created the FHA. Formed in 1934, the agency helped to shore up a mortgage insurance space that all but collapsed during the Great Depression.

But this time around, as the FHA significantly bolstered its market share during the recession, its own insurance fund suffered. Its reserves, as a percentage of all backed loans, fell to 0.24% in 2011, well below the required 2% level.

That led to insurance premium increases, the latest of which took effect in early April. The FHA says this will help shore up the fund, but others aren’t so sure, warning of a possible dip into Treasury Department funds.

“Their scenario is quite rosy, and they’re hoping they’ll grow their way out of this,” said Ed Pinto, a fellow at the American Enterprise Institute, a conservative think tank. “That’s not necessarily a recipe for success.”

When the FHA makes premium changes, Coulter said it is usually done with the impact on three different areas in mind: borrowers, the housing market and the agency’s mutual mortgage insurance fund. The April changes to the one-time, upfront premium are driven primarily by the FHA’s shrunken capital ratio, Coulter said.

It’s a significant increase, a 75-basis-point boost — up from 1% of the initial mortgage amount. But borrowers can still receive financing on it and fold it into the loan.

“We’re doing it in a way that has the least impact on the borrower,” Coulter said. An upfront premium increase is not as detrimental as adding onto the annual insurance premium, he said.

But the FHA is also raising its annual premiums on new loans by 10 basis points, though not of its own volition. Legislators included the increase in the December measure to temporarily extend the payroll tax cut, the same one that increased the guarantee fees charged by Fannie Mae and Freddie Mac.

Unlike that g-fee bump, the proceeds from the FHA premium increase will stay with the agency. The FHA also decided to raise rates on mortgages above $625,000 another 25 basis points to address an additional risk in those loans, Coulter said.

The changes probably won’t do much to upset the housing marketplace, said Mark Calabria, director of financial regulation studies at

the Cato Institute, a libertarian think tank. It could put downward pressure on prices in markets with a constrained housing supply, he said, because borrowers focus more on the monthly payment rather than the loan balance.

Pinto notes the higher upfront rate could also bump up the initial loan-to-value ratio of the mortgage. That’s assuming borrowers continue to pay the minimum 3.5% down payment, but Pinto said that makes it an even riskier proposition for them.

“Unless house prices really rebound, they’re not going to have enough equity to sell the house in three or four years,” Pinto said.

REFINANCE REDUCTION

Another set of premium changes that reduce the rates on streamlined FHA refinances could have a more direct, positive impact on existing borrowers.

The move, announced by the White House in early March, will allow certain homeowners to refinance at a lower interest rate with a next-to-nothing upfront premium charge of 0.01%. That’s down from 1%, and it also includes a reduced annual premium of 0.55% from 1.15%.

“This is not something the government by itself can solve,” President Barack Obama said at the time of the announcement. “But I’m not one of those people who believe that we should just sit by and wait for the housing market to hit bottom.”

Eligible mortgages include only those already backed by the FHA and originated before June 2009, the same date used for the Making Home Affordable Program’s loan modifications and refinances.

“The principal motivation behind that move was to help homeowners, but to do it in a way to target borrowers that were most affected by the housing downturn,” FHA’s Coulter said.

Calabria, a former FHA and Senate Banking Committee staffer, isn’t convinced the streamlined refinance changes make much difference for borrowers, despite how good it sounds.

“It’s fair to say in anybody’s defense, what do you do? What is the option?” Calabria said. “It’s not easy to address the fundamentals.”

The refinance changes, which the Obama administration estimates could affect 2 million to 3 million homeowners, fall mostly on one side of the dichotomy the FHA must maintain.

John Weicher, who led the FHA from 2001 to 2005, said the agency strikes a balance between the public interest and financial stability. At times it will take on more risk to support new homeowners, and in harder spells tighten credit standards and raise premiums to boost its capital ratios.

“Whatever you’re doing with FHA, you start with the fact that it’s established to promote homeownership,” said Weicher, now a senior fellow at the Hudson Institute, a conservative think tank. “It’s always a balance, and the balance changes from time to time.”

LENDER INCENTIVES

Another change to the streamlined refinance program could drive more lenders to get involved, as the FHA won’t count a refinanced

mortgage against a company if it defaults. It’s the primary reason Fairway Independent Mortgage will now participate in the program, said Dan Cutaia, head of the company’s risk management operations.

In 2011, Fairway originated $3.6 billion in loans, a third of those backed by the FHA, according to Cutaia. It’s likely to have more of an effect on lenders, Cutaia said, than the increases on new purchase loans.

“I don’t think the premium increases will put a dent in whether or not a borrower is going to buy a house,” Cutaia said.

FHA FUND IMPACT

The refinance changes, which go into effect in June, will have a negligible impact on the FHA’s reserve fund, Coulter said. Those refinanced loans will likely perform better on reduced premium payments, he said.

Still, Weicher said it’s possible the FHA could be missing out on potential revenue, even with a modest dip in defaults.

“You would like to keep the premiums coming in on the good loans,” Weicher said. “The benefits for FHA will come somewhere down the road.”

The premium increases will add $1.48 billion to the fund over 2012 and 2013, according to recent congressional testimony by Housing and Urban Development Secretary Shaun Donovan. FHA Acting Commissioner Carol Galante told legislators $8 billion total will be added to the reserve fund in 2013. The FHA, in its most recent actuarial review, projects its capital ratio on the reserve fund to go back above 2% in 2014.

“I would not call us worried at this stage of the game,” Coulter said, “but I would call us focused.”

The FHA’s fund will receive a boost, to the tune of nearly $1 billion, from settlements with lenders, including more than $500 million from a Bank of America deal. That helps to cover a $688 million shortfall that the Obama administration estimated for the fund in its fiscal year 2013 budget, but Donovan said that doesn’t include revenue from the increased premiums.

The raised premiums signify an FHA that’s desperate for cash, Pinto said. The agency has altered overall premiums four times since April 2010, and has paid out $37 billion in insurance claims in the past three years. That’s more than double than in the three years prior combined.

Galante said the agency wouldn’t need a bailout, but some outside observers aren’t so sure. University of Pennsylvania professor Joseph Gyourko said in October that the FHA would need $50 billion to $100 billion from the Treasury Department over the next several years.

A bill in the House, which passed the committee stage in late March, would allow the FHA to raise premiums up to 2.05%, giving the agency more flexibility. The measure held bipartisan support.

But like so much other congressional action during an election year, any changes made to the agency are more likely to be structural than substantial. If and when the FHA needs some extra cash, Calabria said that would likely shift the debate.

“We don’t shut government programs down just because their liabilities are greater than their assets,” Calabria said.

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