Nov 262014
 
Housing Forecast: Principal Forbearance in Loan Modifications Dupe Homedebtors with False Relief

Participants in loan modification programs pawn their futures. Overextended borrowers overpay for their cost of housing and promise any future equity to a lender for the privilege of continuing to use and overpay for the family home. The Coto Housing Blog recently featured an excellent post on lo… – Principal Forbearance in Loan Modifications Dupe Homedebtors with False Relief

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Nov 262014
 
Bubble News: Mortgage Equity Withdrawal is a Cultural Pathology

Mortgage Equity Withdrawal or MEW is the process of obtaining cash through refinancing residential real estate using the accumulated equity as collateral for the loan. This is a cultural pathology because it is not sustainable. Many people became addicted to using their houses as an ATM machine,… – Mortgage Equity Withdrawal is a Cultural Pathology

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Nov 262014
 
OCHN: Why do lenders and politicians promote HELOC abuse?

Lenders profit from consumer debts, politicians gain finance industry donations, and borrowers run personal Ponzi schemes. What could go wrong?

Macro-economists focus on their financial models and behavior in the aggregate, and they intentionally ignore the incentives and moral implications of… – Why do lenders and politicians promote HELOC abuse?


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Nov 252014
 
Mortgage Refinance: Are Mortgage-Backed Securities Dead?

One can argue that structured finance creates greater efficiency in our financial system because capital is freed to pursue other objectives. Although, it can also be argued, as Warren Buffet has, that derivatives, the product of structured finance, are “financial weapons of mass destruction.” Bo… – Are Mortgage-Backed Securities Dead?


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Nov 252014
 
Mortgage Foreclosure: Can the Fed reflate the housing bubble without negative side effects?

Economists say there is no free lunch. Apparently, those economists don’t work at the federal reserve. Interest rates are near record lows, and the federal reserve has been printing money to buy $40 billion a month in mortgage-backed securities to reduce mortgage rates further and provide… – Can the Fed reflate the housing bubble without negative side effects?


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Nov 252014
 
OCHN: Mel Watt is doing a surprisingly good job

Mel Watt receives criticism from both political parties, demonstrating he balances the competing ends, a competent replacement for Ed DeMarco.

I was wrong about Mel Watt. Despite my concerns he would use his position to advance a left-wing agenda, at least so far, he’s proven a capable… – Mel Watt is doing a surprisingly good job


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Nov 252014
 
Residential loan delinquency rates very high at major banks

Shadow inventory is primarily a problem for major commercial banks. The GSEs have been processing their foreclosures, and although delinquencies at the FHA are increasing, these are fresh delinquencies, not long-term shadow inventory. The too-big-to-fail commercial banks have been endlessly can-kicking to delay what I believe are inevitable write downs. For as long as records on delinquencies were kept, rarely did the rate exceed 2%. Currently, it is over 10%! To make matters worse, the delinquency rate for commercial banks is not declining as fast as delinquencies overall. Over the last two years, the rate dropped from from a peak [Read More…]

Nov 242014
 
USA Foreclosure: New report may kill the home mortgage interest deduction

Home ownership hurts the economy. That’s the startling conclusion of a new report that demonstrates a strong correlation between high rates of home ownership and high rates of unemployment. While correlation may not be causation, the correlation is too strong to be ignored. Whether or not… – New report may kill the home mortgage interest deduction


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Nov 242014
 
The weak case against strategic default

Today’s featured article is a commentary from Housing Wire’s Kerri Panchuk. Apparently, she does not accept the wisdom of strategic default. For a variety of reasons, I believe strategic default is a wise course of action for underwater loan owners who are paying more to own than the… – The weak case against strategic default

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Nov 242014
 
OCHN: Short sale tax relief is free money to HELOC abusers

Many borrowers spent their home equity during the housing bubble, and now they want income tax relief on the money they spent as income.

Mortgage equity withdrawal feels like free money. When this money comes from home-price appreciation on a primary residence, the borrower did nothing to earn… – Short sale tax relief is free money to HELOC abusers


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Nov 232014
 
Loan Mod Default: How to game the system with FHA loans for maximum advantage

Our current housing finance system is a mess. It’s laden with moral hazard, and likely to implode with enormous losses to be absorbed at taxpayer expense. All our current policies are geared toward saving our banking system from financial ruin and making loan owners comfortable with their… – How to game the system with FHA loans for maximum advantage


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Nov 232014
 
USA Housing: The real reason the NAr affordability index is completely worthless

The National Association of realtors is dedicated to advancing the interests of listing agents who dominate the organization. Their primary focus is to generate real estate sales and commissions that provide income for its members. It spends enormous sums promoting real estate sales with the… – The real reason the NAr affordability index is completely worthless


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Nov 232014
 
OCHN: Shevy Akason awarded Top Producer six years in a row

Shevy Akason, exclusive agent for OC Housing News, is named a Top Producer for his great work with OC Housing News customers and others.

FOR IMMEDIATE RELEASE

Shevy Akason, exclusive agent for OC Housing News, is named a Top Producer in Orange County, California, real estate sales.

Shevy… – Shevy Akason awarded Top Producer six years in a row


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Nov 222014
 
Ponzi Debt: Everyone Wants To Live Here… Not!

The Great Housing Bubble witnessed many foolish ideas and beliefs about real estate. Among the most foolish was the idea that prices went up because everyone wants to live wherever they are. When rational arguments fail to explain something, it is only natural that people will start making… – Everyone Wants To Live Here… Not!


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Nov 222014
 
RE Ruin: In a Buyer’s Market the First Offer is the Best Offer

This is the most counter-intuitive part of buying in a buyer’s market. Ordinarily sellers, or more accurately the seller’s realtor, try to create a sense of urgency to buy the house. They want the buyer to think other people are looking, there is going to be a bidding war, and the buyer needs to … – In a Buyer’s Market the First Offer is the Best Offer

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Nov 212014
 
OCHN: Existing home sales decline 5% in West despite low rates

Plagued by affordability problems, the Western US endured a 5% decline in home sales in October 2014.

Ever since mortgage interest rates suddenly and unexpectedly rose from 3.5% to 4.5% in May of 2013, the market has been weak. For almost a year prices were flat while sales volumes declined…. – Existing home sales decline 5% in West despite low rates


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Nov 202014
 
Real Estate Loan: Home Interest Tax Savings Are Always Overestimated

When a borrower takes out a home loan, the interest is tax deductible up to a certain amount. For borrowers in the highest marginal tax bracket, the savings can be significant, and this can make a dramatic difference in the true cost of ownership. However, this benefit diminishes over time as… – Home Interest Tax Savings Are Always Overestimated


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Nov 202014
 
OCHN: Robo-signer redux: first the house, now the money

Fannie Mae attempts collection on old bad debts, which were often associated with robo-signed foreclosures.

Many people borrowed money to buy a house and quit making payments. Lenders attempted to foreclose on these properties and found the volume overwhelming and their bubble-era paperwork… – Robo-signer redux: first the house, now the money


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Nov 192014
 
Housing Forecast: FHA financing and loan assumption

From my first post at the Irvine Housing Blog I am IrvineRenter, I have provided housing market analyses to help people make sound financial decisions with regard to real estate. To date, most analyses have pointed to renting rather than owning, but as conditions change, I will point out the… – FHA financing and loan assumption

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Nov 192014
 
Bubble News: They Aren’t Making Any More Land… Not!

All market pricing is a function of supply and demand. One of the reasons many house price bubbles get started is due to a temporary shortage of housing units. This is a particular problem in California because the entitlement process is slow and cumbersome. Supply shortages can become acute,… – They Aren’t Making Any More Land… Not!

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