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62-701: RESPA was enacted in 1974 and was originally administered by the Department of Housing and Urban Development (HUD) . In 2011, the Consumer Financial Protection Bureau (CFPB) , created under the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act , assumed the enforcement and rulemaking authority over RESPA. On December 31, 2013, the CFPB published final rules implementing provisions of

124-491: A mixed strategy , the game always has an one equilibrium solution. The different game theoretic solution concepts of Nash equilibrium , minimax , and maximin all give the same solution. Notice that this is not true for pure strategy . A game's payoff matrix is a convenient representation. Consider these situations as an example, the two-player zero-sum game pictured at right or above. The order of play proceeds as follows: The first player (red) chooses in secret one of

186-417: A buyer purchases a derivative contract which provides them with the right to buy an underlying asset from a seller at a specified strike price before a specified expiration date – is an example of a zero-sum game. A futures contract – whereby a buyer purchases a derivative contract to buy an underlying asset from the seller for a specified price on a specified date – is also an example of a zero-sum game. This

248-400: A cake , where taking a more significant piece reduces the amount of cake available for others as much as it increases the amount available for that taker, is a zero-sum game if all participants value each unit of cake equally . Other examples of zero-sum games in daily life include games like poker , chess , sport and bridge where one person gains and another person loses, which results in

310-399: A deal to acquire Company D, and investors believe that the acquisition will result in synergies and hence increased profitability for Company C, there will be an increased demand for Company C stock. In this scenario, all existing holders of Company C stock will enjoy gains without incurring any corresponding measurable losses to other players. Furthermore, in the long run, the stock market is

372-482: A department of Housing and Urban Affairs was taken up by President John F. Kennedy, with Pennsylvania Senator and Kennedy ally Joseph S. Clark Jr. listing it as one of the top seven legislative priorities for the administration in internal documents. The department was established on September 9, 1965, when Lyndon B. Johnson signed the Department of Housing and Urban Development Act into law. It stipulated that

434-419: A favourable cost to themselves rather than prefer more over less. The punishing-the-opponent standard can be used in both zero-sum games (e.g. warfare game, chess) and non-zero-sum games (e.g. pooling selection games). The player in the game has a simple enough desire to maximise the profit for them, and the opponent wishes to minimise it. For two-player finite zero-sum games, if the players are allowed to play

496-416: A fee for services connected with a federally related mortgage except for services actually performed. Permissible Compensation It is the responsibility of the lender to monitor third party fees in relationship to the services rendered to ensure no illegal kickbacks or referral fees are made . Upon receipt of a qualified written request, a mortgage servicer is required to take certain steps, each of which

558-436: A fixed rate. If rates increase, then Firm A will gain, and Firm B will lose by the rate differential (floating rate – fixed rate). If rates decrease, then Firm A will lose, and Firm B will gain by the rate differential (fixed rate – floating rate). Whilst derivatives trading may be considered a zero-sum game, it is important to remember that this is not an absolute truth. The financial markets are complex and multifaceted, with

620-485: A lender or broker is required to provide the consumer with the standard Good Faith Estimate (GFE) form. A Good Faith Estimate of settlement costs is a three-page document that shows estimates for the costs that the borrower will likely incur at settlement and related loan information. It is designed to allow borrowers to shop for a mortgage loan by comparing settlement costs and loan terms. These costs include, but are not limited to: The bank or mortgage broker must provide

682-412: A new aviation model is introduced, feasibility tests need to be carried out in all aspects, taking into account the economic inflow and outflow and displacement effects caused by the model. Derivatives trading may be considered a zero-sum game, as each dollar gained by one party in a transaction must be lost by the other, hence yielding a net transfer of wealth of zero. An options contract - whereby

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744-490: A parallelism interest with another player by adjusting his conduct, or the opposite; that he can choose with which of other two players he prefers to build such parallelism, and to what extent. The picture on the left shows that a typical example of a zero-sum three-person game. If Player 1 chooses to defence, but Player 2 & 3 chooses to offence, both of them will gain one point. At the same time, Player 1 will lose two-point because points are taken away by other players, and it

806-501: A positive-sum game. As economic growth occurs, demand increases, output increases, companies grow, and company valuations increase, leading to value creation and wealth addition in the market. It has been theorized by Robert Wright in his book Nonzero: The Logic of Human Destiny , that society becomes increasingly non-zero-sum as it becomes more complex, specialized, and interdependent. In 1944, John von Neumann and Oskar Morgenstern proved that any non-zero-sum game for n players

868-421: A probability vector, giving the probability that the maximizing player will choose each possible pure strategy. If the game matrix does not have all positive elements, add a constant to every element that is large enough to make them all positive. That will increase the value of the game by that constant, and will not affect the equilibrium mixed strategies for the equilibrium. The equilibrium mixed strategy for

930-432: A range of participants engaging in a variety of activities. While some trades may result in a simple transfer of wealth from one party to another, the market as a whole is not purely competitive, and many transactions serve important economic functions. The stock market is an excellent example of a positive-sum game, often erroneously labelled as a zero-sum game. This is a zero-sum fallacy: the perception that one trader in

992-439: A real estate agent or an attorney to protect their interests at closing. United States Department of Housing and Urban Development The United States Department of Housing and Urban Development ( HUD ) is one of the executive departments of the U.S. federal government . It administers federal housing and urban development laws. It is headed by the secretary of housing and urban development , who reports directly to

1054-408: A situation that involves two competing entities, where the result is an advantage for one side and an equivalent loss for the other. In other words, player one's gain is equivalent to player two's loss, with the result that the net improvement in benefit of the game is zero. If the total gains of the participants are added up, and the total losses are subtracted, they will sum to zero. Thus, cutting

1116-403: A two-player, zero-sum game by using a change of variables that puts it in the form of the above equations and thus such games are equivalent to linear programs, in general. If avoiding a zero-sum game is an action choice with some probability for players, avoiding is always an equilibrium strategy for at least one player at a zero-sum game. For any two players zero-sum game where a zero-zero draw

1178-498: A vector u : ∑ i u i {\displaystyle \sum _{i}u_{i}} Subject to the constraints: The first constraint says each element of the u vector must be nonnegative, and the second constraint says each element of the M ;u vector must be at least 1. For the resulting u vector, the inverse of the sum of its elements is the value of the game. Multiplying u by that value gives

1240-463: A zero-net benefit for every player. In the markets and financial instruments, futures contracts and options are zero-sum games as well. In contrast, non-zero-sum describes a situation in which the interacting parties' aggregate gains and losses can be less than or more than zero. A zero-sum game is also called a strictly competitive game, while non-zero-sum games can be either competitive or non-competitive. Zero-sum games are most often solved with

1302-400: Is because the fundamental principle of these contracts is that they are agreements between two parties, and any gain made by one party must be matched by a loss sustained by the other. If the price of the underlying asset increases before the expiration date the buyer may exercise/ close the options/ futures contract. The buyers gain and corresponding sellers loss will be the difference between

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1364-419: Is equivalent to a zero-sum game with n  + 1 players; the ( n  + 1)th player representing the global profit or loss. Zero-sum games and particularly their solutions are commonly misunderstood by critics of game theory , usually with respect to the independence and rationality of the players, as well as to the interpretation of utility functions . Furthermore, the word "game" does not imply

1426-475: Is evident that Player 2 & 3 has parallelism of interests. Studies show that the entry of low-cost airlines into the Hong Kong market brought in $ 671 million in revenue and resulted in an outflow of $ 294 million. Therefore, the replacement effect should be considered when introducing a new model, which will lead to economic leakage and injection. Thus introducing new models requires caution. For example, if

1488-418: Is impossible or non-credible after the play is started, such as poker, there is no Nash equilibrium strategy other than avoiding the play. Even if there is a credible zero-zero draw after a zero-sum game is started, it is not better than the avoiding strategy. In this sense, it's interesting to find reward-as-you-go in optimal choice computation shall prevail over all two players zero-sum games concerning starting

1550-414: Is similar in the three-person game. A particular move of a player in a zero-sum three-person game would be assumed to be clearly beneficial to him and may disbenefits to both other players, or benefits to one and disbenefits to the other opponent. Particularly, parallelism of interests between two players makes a cooperation desirable; it may happen that a player has a choice among various policies: Get into

1612-420: Is subject to certain deadlines. The servicer must acknowledge receipt of the request within 5 business days. The servicer then has 30 business days (from the request) to take action on the request. The servicer has to either provide a written notification that the error has been corrected, or provide a written explanation as to why the servicer believes the account is correct. Either way, the servicer has to provide

1674-673: The Brooklyn and Harlem housing market, with $ 70 million in HUD loans going into default . Critics said that the department's lax oversight of their program allowed the fraud to occur. In 1997, the HUD Inspector General issued a report saying: "The program design encourages risky property deals, land sale, and refinance schemes, overstated property appraisals, and phony or excessive fees." In June 1993, HUD Secretary Henry Cisneros admitted that "HUD has in many cases exacerbated

1736-566: The Inspector General Act of 1978 to ensure integrity and efficiency in government. The Inspector General is appointed by the President and subject to Senate confirmation. He or she is responsible for conducting and supervising audits , investigations, and inspections relating to the programs and operations of HUD. The OIG is to examine, evaluate and, where necessary, critique these operations and activities, recommending ways for

1798-399: The buying and selling of real estate , such as lenders, real estate agents , construction companies and title insurance companies were often engaging in providing undisclosed kickbacks to each other, inflating the costs of real estate transactions and obscuring price competition by facilitating bait-and-switch tactics. For example, a lender advertising a home loan might have advertised

1860-440: The minimax theorem which is closely related to linear programming duality , or with Nash equilibrium . Prisoner's Dilemma is a classic non-zero-sum game. The zero-sum property (if one gains, another loses) means that any result of a zero-sum situation is Pareto optimal . Generally, any game where all strategies are Pareto optimal is called a conflict game. Zero-sum games are a specific example of constant sum games where

1922-624: The president of the United States and is a member of the president's Cabinet . Although its beginnings were in the House and Home Financing Agency, it was founded as a Cabinet department in 1965, as part of the " Great Society " program of President Lyndon B. Johnson , to develop and execute policies on housing and metropolises. The idea of a department of Urban Affairs was proposed in a 1957 report to President Dwight D. Eisenhower, led by New York Governor Nelson A. Rockefeller. The idea of

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1984-523: The "open architecture" system currently in place, where a customer can choose to use any service provider for each service, to one where the services are bundled, but where the real estate agent or lender must pay directly for all other costs. Under this system, lenders, who have more buying power, would more aggressively seek the lowest price for real estate settlement services. While both the HUD-1 and HUD-1A serve to disclose all fees, costs and charges to both

2046-618: The Dodd-Frank Act, which direct the CFPB to publish a single, integrated disclosure for mortgage transactions, which included mortgage disclosure requirements under the Truth in Lending Act (TILA) and sections 4 and 5 of RESPA. As a result, Regulation Z now houses the integrated forms, timing, and related disclosure requirements for most closed-end consumer mortgage loans. RESPA was created because various companies associated with

2108-500: The FHA, rebuilding cash reserves that had been depleted by loan defaults. The second stated and eponymous objective is to stabilize communities, by requiring purchasers to service the loans in a manner that stabilizes the surrounding communities by getting the loans to re-perform, renting the home to the borrower, gifting the property to a land bank or paying off the loans in full. An audit published August 2014 found "only about 11 percent of

2170-566: The GFE no later than three business days after the lender or mortgage broker received an application, or information sufficient to complete and application, the application. A person may not give or receive a fee or anything of value for a referral of mortgage loan settlement business. This includes an agreement or understanding related to a federally related mortgage. Fees paid for mortgage-related services must be disclosed. Additionally, no person may give or receive any portion, split, or percentage of

2232-456: The United States" based upon decrepit conditions of buildings and questionable eviction practices. In September 2010, HUD started auctioning off delinquent home mortgage loans, defined as at least 90 days past due, to the highest bidder. It sold 2,000 loans in six national auctions. In 2012, this sale was massively increased under a "Distressed Asset Stabilization Program" (DASP), and the 100,000 loans sold as of 2014 have netted $ 8.8 billion for

2294-399: The buyer and seller involved in a real estate transaction, it is not uncommon to find mistakes on the HUD. Both buyer and seller should know how to properly read a HUD before closing a transaction and at settlement is not the ideal time to discover unnecessary charges and/or exorbitant fees as the transaction is about to be closed. Buyers or sellers can hire an experienced professional such as

2356-457: The declining quality of life in America." In 1996, Vice President Al Gore , referring to public housing projects, declared that, "These crime-infested monuments to a failed policy are killing the neighborhoods around them". HUD Assistant Secretary for Fair Housing Roberta Achtenberg has been quoted as saying "HUD walks a tightrope between free speech and fair housing. We are ever mindful of

2418-599: The department to carry out its responsibilities in the most effective, efficient, and economical manner possible. The mission of the Office of Inspector General (OIG) is to: The OIG accomplishes its mission by conducting investigations pertinent to its activities; by keeping Congress, the Secretary, and the public fully informed of its activities, and by working with staff (in this case of HUD) in achieving success of its objectives and goals. The Honorable Rae Oliver Davis, who

2480-605: The department was to be created no later than November 8, sixty days following the date of enactment. The actual implementation was postponed until January 14, 1966, following the completion of a special study group report on the federal role in solving urban problems. HUD is administered by the U.S. Secretary of Housing and Urban Development . Its headquarters is located in the Robert C. Weaver Federal Building . Some important milestones for HUD's development include: The major program offices are: The United States Congress enacted

2542-499: The fee they charge. One of the core elements of the debate is the fact that customers overwhelmingly go with the default service providers associated with a lender or a real estate agent, even though they sign documents explicitly stating that they can choose to use any service provider. There have been various proposals to modify the Real Estate Settlement Procedures Act. One proposal is to change

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2604-400: The fundamental insight that probability provides a way out of this conundrum. Instead of deciding on a definite action to take, the two players assign probabilities to their respective actions, and then use a random device which, according to these probabilities, chooses an action for them. Each player computes the probabilities so as to minimize the maximum expected point-loss independent of

2666-461: The game or not. The most common or simple example from the subfield of social psychology is the concept of " social traps ". In some cases pursuing individual personal interest can enhance the collective well-being of the group, but in other situations, all parties pursuing personal interest results in mutually destructive behaviour. Copeland's review notes that an n-player non-zero-sum game can be converted into an (n+1)-player zero-sum game, where

2728-799: The loan with a 5% interest rate, but then when one applies for the loan one is told that one must use the lender's affiliated title insurance company and pay $ 5,000 for the service, whereas the normal rate is $ 1,000. The title company would then have paid $ 4,000 to the lender. This was made illegal, in order to make prices for the services clear so as to allow price competition by consumer demand and to thereby drive down prices. RESPA outlines requirements that lenders must follow when providing mortgages that are secured by federally related mortgage loans. This includes home purchase loans, refinancing, lender approved assumptions, property improvement loans, equity lines of credit, and reverse mortgages. Under RESPA, lending institutions must: For closed-end reverse mortgages,

2790-438: The loans sold through DASP [were] considered 're-performing'". "Rather than defaulting—[FHA] keeps many of the properties they’re tied to from going through the typical foreclosure process. As a result, the FHA might actually be diverting housing stock from first-time homebuyers, the very group it was formed to serve..." Zero sum Zero-sum game is a mathematical representation in game theory and economic theory of

2852-512: The minimizing player can be found by solving the dual of the given linear program. Alternatively, it can be found by using the above procedure to solve a modified payoff matrix which is the transpose and negation of M (adding a constant so it is positive), then solving the resulting game. If all the solutions to the linear program are found, they will constitute all the Nash equilibria for the game. Conversely, any linear program can be converted into

2914-433: The minimizing player chooses pure strategy i and the maximizing player chooses pure strategy j (i.e. the player trying to minimize the payoff chooses the row and the player trying to maximize the payoff chooses the column). Assume every element of M is positive. The game will have at least one Nash equilibrium. The Nash equilibrium can be found (Raghavan 1994, p. 740) by solving the following linear program to find

2976-422: The model is valid only for recreational games . Politics is sometimes called zero sum because in common usage the idea of a stalemate is perceived to be "zero sum"; politics and macroeconomics are not zero sum games, however, because they do not constitute conserved systems . In psychology, zero-sum thinking refers to the perception that a given situation is like a zero-sum game, where one person's gain

3038-425: The n+1st player, denoted the fictitious player , receives the negative of the sum of the gains of the other n-players (the global gain / loss). It is clear that there are manifold relationships between players in a zero-sum three-person game, in a zero-sum two-person game, anything one player wins is necessarily lost by the other and vice versa; therefore, there is always an absolute antagonism of interests, and that

3100-522: The name and telephone number of a person with whom the borrower can discuss the matter. The servicer cannot provide information to any credit agency regarding any overdue payment during the 60-day period. If the servicer fails to comply with the "qualified written request", the borrower is entitled to actual damages, up to $ 2,000 of additional damages if there is a pattern of noncompliance, costs and attorneys fees. Critics say that kickbacks still occur. For example, lenders often provide captive insurance to

3162-567: The need to maintain the proper balance between these rights." Libertarian critic James Bovard commented that, "The more aggressive HUD becomes, the fewer free speech rights Americans have. Many words and phrases are now effectively forbidden in real estate ads... Apparently, there are two separate versions of the Bill of Rights -- one for private citizens and the other for federal bureaucrats and politicians". In 2006, The Village Voice named HUD "New York City's worst landlord" and "the #1 worst in

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3224-430: The number of new airlines departing from and arriving at the airport is the same, the economic contribution to the host city may be a zero-sum game. Because for Hong Kong, the consumption of overseas tourists in Hong Kong is income, while the consumption of Hong Kong residents in opposite cities is outflow. In addition, the introduction of new airlines can also have a negative impact on existing airlines. Consequently, when

3286-415: The opponent's strategy. This leads to a linear programming problem with the optimal strategies for each player. This minimax method can compute probably optimal strategies for all two-player zero-sum games. For the example given above, it turns out that Red should choose action 1 with probability ⁠ 4 / 7 ⁠ and action 2 with probability ⁠ 3 / 7 ⁠ , and Blue should assign

3348-609: The payoff matrix and attempt to maximize the number of their points. Red could reason as follows: "With action 2, I could lose up to 20 points and can win only 20, and with action 1 I can lose only 10 but can win up to 30, so action 1 looks a lot better." With similar reasoning, Blue would choose action C. If both players take these actions, Red will win 20 points. If Blue anticipates Red's reasoning and choice of action 1, Blue may choose action B, so as to win 10 points. If Red, in turn, anticipates this trick and goes for action 2, this wins Red 20 points. Émile Borel and John von Neumann had

3410-414: The probabilities 0, ⁠ 4 / 7 ⁠ , and ⁠ 3 / 7 ⁠ to the three actions A, B, and C. Red will then win ⁠ 20 / 7 ⁠ points on average per game. The Nash equilibrium for a two-player, zero-sum game can be found by solving a linear programming problem. Suppose a zero-sum game has a payoff matrix M where element M i , j is the payoff obtained when

3472-449: The stock market may only increase the value of their holdings if another trader decreases their holdings. The primary goal of the stock market is to match buyers and sellers, but the prevailing price is the one which equilibrates supply and demand. Stock prices generally move according to changes in future expectations, such as acquisition announcements, upside earnings surprises, or improved guidance. For instance, if Company C announces

3534-400: The strike price and value of the underlying asset at that time. Hence, the net transfer of wealth is zero. Swaps , which involve the exchange of cash flows from two different financial instruments, are also considered a zero-sum game. Consider a standard interest rate swap whereby Firm A pays a fixed rate and receives a floating rate; correspondingly Firm B pays a floating rate and receives

3596-427: The sum of each outcome is always zero. Such games are distributive, not integrative; the pie cannot be enlarged by good negotiation. In situation where one decision maker's gain (or loss) does not necessarily result in the other decision makers' loss (or gain), they are referred to as non-zero-sum. Thus, a country with an excess of bananas trading with another country for their excess of apples, where both benefit from

3658-422: The title insurance companies they work with, which critics say is essentially a kickback mechanism. Others counter that economically the transaction is a zero sum game, where if the kickback were forbidden, a lender would simply charge higher prices. To which others counter that the intended goal of the legislation is transparency, which it would provide if the lender must absorb the cost of the hidden kickback into

3720-416: The transaction, is in a non-zero-sum situation. Other non-zero-sum games are games in which the sum of gains and losses by the players is sometimes more or less than what they began with. The idea of Pareto optimal payoff in a zero-sum game gives rise to a generalized relative selfish rationality standard, the punishing-the-opponent standard, where both players always seek to minimize the opponent's payoff at

3782-437: The two actions 1 or 2; the second player (blue), unaware of the first player's choice, chooses in secret one of the three actions A, B or C. Then, the choices are revealed and each player's points total is affected according to the payoff for those choices. Example: Red chooses action 2 and Blue chooses action B. When the payoff is allocated, Red gains 20 points and Blue loses 20 points. In this example game, both players know

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3844-436: Was appointed on January 23, 2019, is the current Inspector General. The Department of Housing and Urban Development was authorized a budget for Fiscal Year 2015 of $ 48.3 billion. The budget authorization is broken down as outlined in the following chart. A scandal arose in the 1990s when at least 700 houses were sold for profit by real estate speculators taking the loans; at least 19 were arrested. The scandal devastated

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