A weekend topic starting with Fox Business. "Federal Reserve Chairman Jerome Powell downplayed significant price increases in the U.S. housing market, despite noting that activity in the sector is at its highest level since before the global financial crisis. Powell said there has been a 'very strong rebound' in the housing market – but some of the tightness that has led to price increases is a 'passing phenomenon.' 'So there’s a one-time shift in demand that we think will get satisfied – also that will call forth supply and we think those price increases are unlikely to be sustained,' Powell explained."

The Waco Tribune Herald in Texas. "Ameritex, a Dallas-based company, has secured almost 90 permits to build homes and duplexes in Waco that critics say are too small, unattractive and overpriced and may become unoccupied eyesores in a few years. Mike Stone, the Grassroots Community Development chief, said he has concerns about foundation work, having visited dozens of Ameritex homesites locally. 'I’m not an engineer, but I’m seeing slabs being put straight on the dirt, with no pad prep at all,' Stone said."

"Sammy Smith, president of the Brook Oaks Neighborhood Association, said he was dumbfounded when he learned Ameritex would charge $1,100 a month to lease a single unit in the duplexes it proposed for North Waco. 'That’s a lot of money for one side of a duplex. It was really a jaw-dropping moment,' Smith said. 'Then there were quotes of $140,000 for houses to be sold, though I don’t know if that’s a standard house. Those with a garage may be more expensive.'"

From Hospitality.net. "The housing market crisis during the COVID-19 pandemic has caused more people to look at extended stay hotels as an attractive solution. Another economic factor is the ability to make a mortgage payment (or lack thereof). There were more than 10 million outstanding mortgages with a debt total over $2.4 trillion. As recently as early 2018, 25% of all delinquent borrowers nationwide had not made a mortgage payment in at least five years. In New York State, New Jersey, and Washington, D.C., that percentage was more than 40%."

"Small landlords have been devastated by lockdowns, evidenced by the latest survey published by the National Association of Independent Landlords (NAIL). The survey revealed that the percentage of respondents who received a full rent payment from their tenants plunged to 55% in June 2020, down from 83% in February. On top of this, almost 20% had vacant rental properties due to the pandemic."

"There has been an emptying out in Brooklyn and Los Angeles simply because people cannot afford the rent and have been threatened with eviction due to nonpayment. There are at least 15 million properties owned by these small landlords nationwide. Many were in precarious financial situations even before the lockdown. According to the HUD July 2020 report, 17% of 8 million insured mortgages are now delinquent. This percentage includes mortgages in forbearance as well as those not in forbearance. Hard-hit metropolitan areas include New York City with 27.2% delinquency, Miami with 24.4%, and Atlanta with 21%."

The Press Democrat in California. "Even with the olive branch from the state, smaller landlords in Sonoma County are unhappy, calling this another regulation that will squeeze them. They are left questioning whether owning rental investment properties is still viable for them — especially since the county Board of Supervisors are considering further action next month to add to tenant protections. For almost 30 years, Jennifer Coleman has been a landlord renting two duplexes, two townhomes and three single-family homes. Most of them are in a partnership that she has with another investor, a rental portfolio rebuilt since the Great Recession in 2008."

"She cited the list of expenses for each property: taxes, insurance, maintenance and more. She and her investor partner rely on cash flow from monthly rents to be sustainable. 'We took what little money we had left (after the last recession) and with sweat equity put it into an investment property. So these are my semi-retirement earnings,' said Coleman, who is also a renter. 'I can't afford to subsidize people.'"

"Bob Miller, who has owned three rental properties in Sonoma County for almost 20 years. One of his tenants in a southeast Santa Rosa unit has not paid rent since April. By December, Miller’s tenant was behind $17,000 in rent and that put him in a financial bind. 'If you are asking my opinion, I suspect that we are at risk of reaching a tipping point,' Miller said, noting the financial predicament for landlords who can longer shoulder property expenses when tenants don’t pay rent obligations."

The Laguna Beach Independent in California. "A prominent Laguna Beach real estate investor is on the brink of foreclosure on a $195.5-million loan backed by a portfolio of 19 properties, including the Hive complex, Royal Hawaiian restaurant, and Holiday Inn on South Coast Highway. 4G Ventures CEO Mohammad Honarkar was supposed to pay the approximately $133 million remaining on the loan, held by Delaware-based LCC Warehouse, by Dec. 9, but he did not do so, according to a lawsuit."

"The receiver also argued that Honarkar’s businesses were severely lacking in cash on hand. He wrote in court filings that they were hampered by several lawsuits, a state tax audit and the specter of looming debts, including an estimated $150,000 in back taxes to Laguna Beach. In another sign of financial distress, Honarkar’s lease for Hotel Laguna, which he acquired in 2018 in the hopes of restoring it to its former grandeur, could face termination following a reported failure to pay its owners $7 million in unpaid rent by Jan. 1, according to court documents."

"'When I took over the Business there was woefully inadequate infrastructure, staff, and systems in place to profitably run all of the various business segments, many of which had already failed by the time I took control,' Beverly Hills-based attorney Blake Alsbrook wrote in the final receiver’s report to the court. He described the enterprise as having 'woefully insufficient'cash on hand to make the payroll, creditor and settlement payments, 'let alone the luxury yacht and Lamborghini payments [Honarkar] was making monthly.'"

The Puget Sound Business Journal. "The manager of an Everett call center pleaded guilty Tuesday in U.S. District Court in Seattle to conspiracy to defraud approximately 1,000 distressed homeowners facing foreclosure. U.S. Attorney Brian T. Moran said Edwin Josue Herrera Rosales, aka Josh Herrera, 34, pleaded guilty to one count of conspiracy to commit wire fraud in connection with his operation of call centers."

"According to records filed in the case, Herrera Rosales conspired with others in Southern California. Each week the operation sent approximately 4,000 mailers to distressed homeowners across the country. Herrera Rosales oversaw a staff of call center operators. When homeowners called, Herrera Rosales had operators follow a script designed to make it appear as if each caller’s mortgage was being reviewed by the company’s 'underwriting' and 'legal department' to make sure the homeowner qualified for the supposed federal program."

"Operators were instructed to put each caller on hold for a set amount of time, to make it appear a review was underway. Operators returned to the line and told each victim that they were among the 'very select few' who qualified for the program — but only if the they paid the call center a $3,000 fee."

From Fox 5 New York. "An Internal Revenue Service agent was arrested after allegedly stealing someone's identity and using it to purchase a co-op apartment on the Upper East Side of Manhattan. Yong Hee Cho, 49, faces 10 counts of possessing a fake foreign passport; aggravated identity theft; making false statements during a background check and wire fraud, according to the U.S. Attorney's Office for the Eastern District of New York."

"Cho also allegedly forged tax returns and bank statements that inflated his income and assets to gain approval for the purchase of the co-op. He also funneled hundreds of thousands of dollars from a foreign bank account to pay for the apartment."

From Bisnow New York. "HFZ Capital Group’s pandemic problems have continued to mount. Westbrook Partners, the developer’s partner on an Upper West Side condominium conversion at 225 West 86th St., took control of the project sometime between September and this week, The Real Deal reports. Plans for the building include 95 new units, New York YIMBY reported in 2018, when development first began. The designer for the project was Robert A.M. Stern Architects. HFZ bought the building for $575M in 2015, and it later brought in Westbrook as a partner."

"This is the latest in a series of financial and legal problems for HFZ this month alone. The company was sued the first week of the year by its lender, Children’s Investment Fund, for allegedly failing to pay $160M of its loan payments on The IX, the company’s billion-dollar condominium project near the High Line in Chelsea."

"HFZ founder and CEO Ziel Feldman was sued by his lender, W Financial REIT, earlier this month for reportedly failing to make payments on a loan for some of the development firm’s Upper East Side properties, TRD reported. One of the company’s former executives, John Simonlacaj, pleaded guilty to submitting a false tax return in a case that tied him to the Gambino crime family, the U.S. Department of Justice announced Jan. 15. Simonlacaj allegedly accepted free work on his home by a mob-related contracting company while the company billed HFZ for it."

Two reports from the Globe and Mail. "One of the most amusing bits of the 2008 financial crisis, for me anyway, was seeing the US$1-billion-plus that British billionaire Joe Lewis had sunk into Bear Stearns, some of it just hours before the Wall Street firm collapsed, vaporize in seconds. Rich guys who live as tax exiles in the Bahamas generally do not garner our sympathy."

"I had the same reaction this week, when an army of amateur traders derided – or celebrated – as 'basement dwellers' or 'trolls' drove the shares of GameStop Corp into the exosphere, shredding the massive short positions of the Wall Street funds that were betting the shares of the struggling U.S. video-game retailer would collapse."

"The hedge funds exposed to GameStop lost billions, effectively triggering a massive transfer of wealth from undeserving billionaires and millionaires to taco-stuffed kids armed with the Robinhood mobile-trading app and accounts on Reddit message boards. Justice, revenge, retribution! What’s not to like?"

"Here’s what one Redditor said: 'We have a once in a lifetime opportunity to punish the sort of people who caused so much pain and stress a decade ago … Your ilk were rewarded and bailed out for terrible and illegal financial decisions that negatively changed the lives of millions.'"

"Never mind that the hedgies and their private equity fund brethren had little to do with the 2008 financial meltdown – it was a lovely narrative, but also entirely fanciful. The losers in this romantic little romp were not the Wall Street biggies; the losers were the investors, notably the pension funds, that backed them."

"The bull, it seems, has gone berserk. What had been a relentless but mostly orderly rise in stock prices since last spring has given way to a riotous new phase of the bull market, fuelled by frenzied trading among the growing ranks of small investors and rookie day traders. But the retail investing movement that set the whole episode in motion has actually been building for several months, fuelling concerns about frothy stock valuations in the process."

"Since the COVID-19-induced market crash started nearly a year ago, a once-unfathomable volume of monetary and fiscal stimulus has provided a steady supply of adrenaline to revive financial markets. 'When your teenaged cousin living in the basement starts talking about trading stock options, that is usually the sign of a market bubble,' said Jason Del Vicario, a portfolio manager at HollisWealth in Vancouver. 'There are just crazy amounts of speculative interest in the market right now. The last time we saw this was in 1999 and 2000. Nobody cares about valuation. It goes up, so you buy it.'"

"But powerful bull markets have a way of masking the risks of investing. With most stocks on the rise, many new entrants are rewarded with big gains. Investing forums have been full in recent days of users posting screenshots of their brokerage accounts, showing off six-figure gains on paper. As was seen during the dot-com boom two decades ago, mom-and-pop investors can easily get fooled into thinking they can trade like the pros. "

"To stimulate a global economy trounced by the pandemic, central bankers around the world slashed short-term interest rates to near-zero, and bought trillions of dollars’ worth of bonds to try to keep longer-term interest rates down. While markets may be frothy, and the risk of a correction rising, the needs of the economy remain paramount so long as the pandemic rages on, according to Tobias Adrian, director of the International Monetary Fund’s capital markets division. 'We do not believe we are anywhere close to the point where policies should be tightened,' Mr. Adrian said."

"Assuming policy makers take that advice and stay the course, investors big and small will effectively be encouraged to take on risk. 'It’s a culture of fast, easy money,' said Mr. Del Vicario, 'and I can guarantee you, it will not end well.'"