A proposal floated by the Trump administration to create a 50-year mortgage product to improve housing affordability could offer significant immediate savings to homebuyers, but at the steep cost of a doubled interest payment burden over the life of the loan, according to a recent analysis by John Lovallo of UBS Securities.
Caveating that many basic questions remain unanswered, a back-of-the-envelope calculation shows a clear trade-off between immediate monthly affordability and long-term debt accumulation. Based on Lovallo’s estimates, the extended loan term could lower the monthly payment on a median-priced home by roughly $119.
While the short-term financial relief is meaningful for consumers struggling with current housing costs, the long-term fiscal penalty is severe. According to the UBS analysis, extending the loan duration from three decades to five decades could double the dollar amount of interest paid by the homebuyer on that median-priced home over the life of the loan. Furthermore, this significantly extended repayment schedule would substantially slow the rate of equity accumulation for the homeowner.
This is a problem since the extraordinary length of this proposal poses another demographic complication. UBS points out the average first-time buyer just hit 40 years old. This age profile means many initial borrowers could die before their mortgage matures.
“It’s typically not a goal of policymakers to pass on mortgage debt to a borrowers’ children,” Mike Konczal, senior director of policy and research at the Economic Security Project, told the Associated Press. The AP came to a similar calculation as Lovallo, finding the average borrower would pay an additional $389,000 in interest over the life of a 50-year mortgage compared to a 30-year.
How the math breaks down
UBS analysts on Lovallo’s team, including Spencer Kaufman and Matthew Johnson, based this calculation on a median-priced home of about $420,000, assuming a 12% down payment of $50,400, leaving a loan amount of $369,600. For comparison, the analysis posits a standard 30-year mortgage would carry a 6.33% interest rate, resulting in a monthly payment of $2,295.
However, the 50-year product is estimated to carry a rate 50 basis points higher, at 6.83%. Despite this higher rate, extending the term to 600 months (50 years) would reduce the monthly payment to $2,176. This calculation suggests an increase to the average consumer’s buying power of almost $23,000, allowing them to afford a home priced up to $442,995 while keeping the monthly payment at the 30-year benchmark of $2,295.
The viability and structure of the 50-year mortgage face several complicating factors. With Fannie Mae and Freddie Mac currently under conservatorship, they could potentially purchase these longer-term mortgages from lenders and then package them into securities to be sold to investors, assuming sufficient demand exists. The UBS analysts speculated amending the Dodd-Frank Act to allow 50-year mortgages to be classified as qualifying loans may be difficult, which would result in the longer-maturity loans carrying higher interest rates than the 30-year version.
Infrastructure Investment?
In concluding its initial thoughts on the proposal, UBS reiterated its finding from the end of a three-year study in early October: The housing market is so inefficient and frozen the one clear solution is direct government investment in housing infrastructure. The answer lies in, of all things, manufactured wall panels.
In October, Lovallo’s team noted several damning facts: Housing affordability is close to the worst it’s been since the mid-1980s, per the NAR Affordability Index, while Federal Reserve research indicates construction is the “only major industry to have registered negative average productivity growth since 1987.” Finally, Lovallo’s team estimated a structural shortage of homes in the U.S. housing market of 7 million units.
UBS suggested boosting the penetration of manufactured wall panels would be a meaningful strategy, generating up to a 30% reduction in framing days alongside a 20% reduction in waste. Construction costs would increase by $783 per unit, the UBS study found, suggesting reluctance on the private sector’s part.
These calculations may be a moot point, as President Donald Trump seemed to downplay the idea, if not back away from it, in a Tuesday interview with Fox News. He said it was “not a big deal” and it “might help a little bit,” as interviewer Laura Ingraham pressed him on an uproar among his base of voters about the proposal. ResiClub editor Lance Lambert noted the seeming unpopularity of the idea among his 11 takeaways in an analysis of the proposal.
The Justice Department released thousands of files Friday about convicted sex offender Jeffrey Epstein, but the incomplete document dump did not break significant ground about the long-running criminal investigations of the financier or his ties to wealthy and powerful individuals.
The files included photographs of famous people who spent time with Epstein in the years before he came under suspicion, including some candid snapshots of Bill Clinton, who flew on Epstein’s jet and invited him to the White House in the years before the financier was accused of wrongdoing. But there was almost no material related to another old Epstein friend, President Donald Trump, aside from a few well-known images, sparing the White House from having to confront fresh questions about a relationship the administration has tried in vain to minimize.
The records, consisting largely of pictures but also including call logs, grand jury testimony, interview transcripts and other documents, arrived amid extraordinary anticipation that they might offer the most detailed look yet at nearly two decades worth of government scrutiny of Epstein’s sexual abuse of young women and underage girls. Yet the release, replete with redactions, seemed unlikely to satisfy the clamor for information given how many records had yet to be released and because some of the materials had already been made public.
Democrats and some Republicans seized on the limited release to accuse the Justice Department of failing to meet a congressionally set deadline to produce the files, while White House officials on social media gleefully promoted a photo of Clinton in a hot tub with a woman with a blacked-out face. The Trump administration touted the release as proof of its commitment to transparency, ignoring that the Justice Department just months ago said no more files would be released. Congress then passed a law mandating it.
In a letter to Congress, Deputy Attorney General Todd Blanche wrote that the Justice Department was continuing to review files in its possession, was withholding some documents under exemptions meant to protect victims and expected additional disclosures by the end of the year.
Trump, who was friends with Epstein for years before the two had a falling-out, tried for months to keep the records sealed.
But bowing to political pressure from fellow Republicans, Trump last month signed a bill giving the Justice Department 30 days to release most of its files and communications related to Epstein, including information about the investigation into his death in a federal jail. The law set a deadline for Friday.
Limited details about Trump
Trump is hardly glimpsed in the files, with the small number of photos of him appearing to have been in the public domain for decades. Those include two in which Trump and Epstein are posing with now-first lady Melania Trump in February 2000 at an event at his Mar-a-Lago resort.
Trump’s connection to Epstein is well-documented, but he has sought to distance himself from his former friend. He has said he cut off ties with Epstein after the financier hired young female employees from Mar-a-Lago and has repeatedly denied knowledge of his crimes.
The FBI and Justice Department abruptly announced in July that they would not be releasing any additional records, a decision that was supported by Trump. But the president reversed course once it became clear that congressional action was inevitable. He insisted the Epstein matter had become a distraction to the Republican agenda and releasing the records was the best way to move on.
The White House, meanwhile, has moved to shift focus away from Trump’s ties to Epstein, with Attorney General Pam Bondi last month saying that she had ordered a federal prosecutor to investigate Epstein’s connections to Trump’s political foes, including Clinton.
Neither Trump nor Clinton has ever been accused of wrongdoing in connection with Epstein, and the mere inclusion of someone’s name in the files from the investigation does not imply otherwise.
Among other prominent Epstein contacts is the former Prince Andrew, who appears in a photograph released Friday wearing a tuxedo and lying on the laps of what appear to be several women who are seated, dressed in formalwear. Pop star Michael Jackson also appears in multiple photos, including one showing him standing next to a smiling Epstein.
New photos of Clinton
Unlike Trump, Clinton is featured prominently in the files, though the records included no explanation of how the photographs of the former president related to any investigation or the context surrounding them.
Some photos showed him on a private plane, including one with a woman, whose face is redacted, seated alongside him with her arm around him. Another shows him in a pool with Epstein’s longtime confidant, British socialite Ghislaine Maxwell, and a person whose face was also redacted. He is also seen in a hot tub with a woman whose face was redacted.
This undated, redacted photo released by the U.S. Department of Justice shows Ghislaine Maxwell and former President Bill Clinton swimming with an unknown person.
U.S. Department of Justice via AP
Senior Trump White House aides took to X to promote the Clinton photos.
White House press secretary Karoline Leavitt wrote “Oh my!” and added a shocked face emoji in response to a photo of Clinton in the hot tub.
“They can release as many grainy 20-plus-year-old photos as they want, but this isn’t about Bill Clinton,” Clinton spokesman Angel Ureña said in a statement.
“There are two types of people here,” he said. “The first group knew nothing and cut Epstein off before his crimes came to light. The second group continued relationships after that. We’re in the first. No amount of stalling by people in the second group will change that.”
The Epstein investigations
After nearly two decades of court action, a voluminous number of Epstein records had already been public before Friday, including flight logs, address books, email correspondence, police reports, grand jury records, courtroom testimony and deposition transcripts.
Besides public curiosity about whether any of Epstein’s associates knew about or participated in the abuse, Epstein’s accusers have also sought answers about why federal authorities shut down their initial investigation into the allegations in 2008.
“Just put out the files,” said Marina Lacerda, who says she survived sexual assault by Epstein. “And stop redacting names that don’t need to be redacted.”
One of the few revelations in the documents was a copy of the earliest known concern about Epstein’s behavior — a report taken by the FBI of a woman in 1996 who believed photos and negatives she had taken of her 12-year-old and 16-year-old sisters for a personal art project had been stolen by Epstein. The documents don’t show what, if anything, the agency did with that complaint.
Police in Palm Beach, Florida, began investigating Epstein in 2005 after the family of a 14-year-old girl reported being molested at his mansion. The FBI joined the investigation. Authorities gathered testimony from multiple underage girls who said they’d been hired to give Epstein sexual massages.
Ultimately, prosecutors gave Epstein a deal that allowed him to avoid federal prosecution. He pleaded guilty to state prostitution charges involving someone under age 18 and was sentenced to 18 months in jail.
Epstein’s accusers spent years in civil litigation trying to get that plea deal set aside. One of those women, Virginia Giuffre, accused Epstein of arranging for her to have sexual encounters, starting at age 17, with other men, including billionaires, famous academics, politicians and Andrew Mountbatten-Windsor, then known as Britain’s Prince Andrew.
Prosecutors never brought charges in connection with Giuffre’s claims, but her account fueled conspiracy theories about supposed government plots to protect the powerful. Giuffre died by suicide in April.
Federal prosecutors in New York brought new sex trafficking charges against Epstein in 2019, but he killed himself in jail after his arrest. Prosecutors then charged Maxwell, his longtime confidant, with recruiting underage girls for Epstein to abuse. She was convicted in 2021 and is serving a 20-year prison sentence.
The Justice Department’s extensive redactions to the Jeffrey Epstein files on Friday don’t comply with the law that Congress passed last month mandating their disclosure, according to Rep. Ro Khanna.
The California Democrat and Rep. Thomas Massie, R-Ky., led the effort on the legislation, which required that the DOJ put out its entire trove of documents by today.
But he blasted the document dump and singled out one file from a New York grand jury where all 119 pages were blacked out.
“This despite a federal judge ordering them to release that document,” Khanna said in a video posted on X. “And our law requires them to explain redactions. There’s not a single explanation. That entire document was redacted. We have not seen the draft indictment that implicates other rich and powerful men who were on Epstein’s rape island who either watched the abuse of young girls or participated in the abuse of young girls in the sex trafficking.”
He said Attorney General Pam Bondi has been “obfuscating for months” and called the files on Friday “an incomplete release with too many redactions.”
The Justice Department didn’t immediately respond to a request for comment.
In a separate X post, Massie agreed with Khanna, saying the DOJ “grossly fails to comply with both the spirit and the letter of the law” that President Donald Trump signed last month.
Deputy Attorney General Todd Blanche told Congress that the Justice Department had identified 1,200 victims of Epstein or their relatives and redacted materials that could reveal their identities, according to the New York Times.
Earlier on Friday, Blanche told Fox News that “several hundred thousand” pages would be released on Friday. “And then, over the next couple of weeks, I expect several hundred thousand more,” he added.
“Thomas Massie and are exploring all options,” Khanna warned. “It can be the impeachment of people at Justice, inherent contempt, or referring for prosecution those who are obstructing justice. We will work with the survivors to demand the full release of these files.”
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The highly anticipated Epstein files have so far landed with a thud as page after page of documents have been blacked out, with many nearly totally redacted.
While hundreds of thousands of documents have been released so far on the Justice Department’s site housing the information, there isn’t that much to see.
“Simply releasing a mountain of blacked out pages violates the spirit of transparency and the letter of the law,” Senate Minority Leader Chuck Schumer said in a statement. “For example, all 119 pages of one document were completely blacked out. We need answers as to why.”
That appeared to refer to a document titled “Grand Jury NY.”
The data dump came late Friday, the deadline that Congress established last month for disclosing the trove of files, though other documents had already been released earlier by the DOJ, Congress and the Epstein estate.
Numerous celebrities were also in that document, such as Rolling Stones singer Mick Jagger and the late pop idol Michael Jackson, who also appeared in photos with Epstein.
Former Senators John Kerry and George Mitchell were on the list as were Jes Staley, a former JPMorgan and Barclays executive, and Leon Black, a cofounder and former CEO of Apollo Global Management.
Appearing in the files doesn’t necessarily imply any wrongdoing as Epstein mingled in wider social circles and was ofter asked for charitable donations.
But Staley said he had sex with a member of Epstein’s staff, and Black was pushed out of Apollo over his Epstein ties, which Black maintains were for tax- and estate-planning services.
Numerous hotels, clubs and restaurants are listed too, plus locations simply described as “massage.” Banks included the now defunct Colonial Bank as well as Bear Stearns and Chemical Bank, which both eventually became part of JPMorgan.
Other entries fell under country categories like Brazil, France, Italy and Israel. Former Israeli prime ministers Ehud Olmert and Ehud Barak were on the list.
Politics8 years ago