Archive for the ‘Housing Market’ Category

…here’s a compiled list (reported to be all?) of the programs aimed at helping the banks and homeowners in the housing crisis.  And yet, the crisis is still ongoing.

I, too, have been surprised there hasn’t been a tsunami of foreclosures.  Perhaps my error was one of not understanding the totality of the system.  I suspect there has been a wave of defaults the data may not show yet; however, they are not foreclosures and the wave probably won’t be seen because of “system bandwidth“.

What at first glance may have seemed a slam dunk may not be so.  Looks like BoA has some wiggle room in the characterization of the bad faith argument the government will need to prove.  As has been noted, it’s likely BoA will settle rather than risk the tricky argument and the triple damages the government could claim.

I would rather see a forced path out of this mess (in terms of requiring short sales, etc.) than a monetary settlement.  Here’s to hoping the consumer wins in this mess.

The folks who’s business it is to track trends say they have no idea.  Here’s my two cents: if you’re buying for the long term, rates are incredibly favorable.  However, make sure the market you’re in is the right one.  E.g., Colorado Springs not Las Vegas.  The former has a high occupancy rate and homes are selling in under 24 hours.  The numbers have been stable, too.  The latter has a massive overhang of houses and a lot of underwater homeowners which can only translate to downward trends in prices.

some supporting data. All markets are local but taken as a whole, it’s going to be a while before we see prices rise.  There are two other points that bear repeating: 1) your home is NOT an asset unless it is generating revenue and 2) the historical appreciation on housing is ~ 3%.  Keep these things in mind when buying.

Most people who have done any analysis on the topic of the government’s (and industry’s) response to the housing crisis would say that it has been…lacking…to say the least.  They will probably categorize the response as terrible.  I am sure I have done so, too.  However, the truth is (IMHO) a bit more nuanced.   I think the response has been both lacking and terrible…on purpose. 

I say all that to say the bottom is nowhere in sight.  While I am not a conspiracy theorist, I do think that many individual actors acting at the same time in accordance with what they perceive to be their best interests will appear to be a conspiracy.  Along those lines, the end is nowhere in sight because “they” don’t want it to be.  Until such time as positive, direct action is taken to alleviate the toxic debt referenced in the preceeding link, nothing will change.

…Sita Slavov thinks we should fear the predatory borrowers, not the lenders.   Are there predatory borrowers?  Absolutely.  What I find ironic is these borrowers are mirroring the behavior of…lenders.  And they are to blame for this? 

I think not.  Banks are not victims in the ongoing housing crisis.  Neither are predatory borrowers.  The real victims are those who were talked into mortgages they could not explain nor afford.  The real victims are those who trusted the agents, appraisers and lenders to fulfill their fiduciary duties and are now tens or hundreds of thousands of dollars underwater, with no hope for a solid sale and are facing the loss of social mobility.

It continually boggles me we are years into this thing and the powers that be are doing everything in their power to not fix it.

An interesting idea that this author does not like.  His counter arguments are not invalid but are tantamount to letting the free market do its thing.  The problem is…we are not a free market.  All talk of moral hazard is, at this point, largely irrelevant.  We crossed that rubicon $2 trillion dollars ago when the first dollar was given to the banks. 

Should the “free market” be allowed to work?  Sure, if we stop all handouts to the banks.  If corporations are people, then to bankruptcy with them, too.

Looks like Fannie and Freddie are taking steps to do the right thing. Six years too late for most, but it will help a few.

 

Via BrokenCredit. Short sales under HAFA will now be reported as paid in full. That’s a great step forward in achieving equilibrium…of course, its just under this program and it’s taken six years to get even this much.