Jul 292014
 
Mortgage Foreclosure: Short sales damage house prices just like REO

Many market pundits claim lenders should focus on short sales rather than foreclosures. They contend short sales offer better capital recovery than foreclosures and they are less harmful to market pricing. This is not an accurate assessment. First, not all foreclosures become REO. About a third… – Short sales damage house prices just like REO


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Jul 292014
 
Rising home prices stopped strategic default

Just as buying a home is an emotional decision, defaulting on the mortgage and giving up a home is too. Any borrower who is deeply underwater and making payments in excess of a comparable rental would benefit financially from strategic default. That’s the math. However, defying the logic, very few loanowners are actually defaulting. People cloak their reasons with intellectual rationalizations, but it’s an emotional decision based on the desire to keep their family home and the ethical considerations that go along with the decision. As with any emotional decision, it may be right, or it may be wrong depending [Read More...]

Jul 292014
 
OCHN: Suprisingly, Mel Watt is not forgiving principal on underwater loans

In apparent recognition that principal reduction is a bad idea, Mel Watt is not forgiving debts on underwater loans owned by the GSEs.

Principal reduction is the worst policy option. The economy is weighed down by excessive mortgage debt, causing borrowers to pay money to lenders that would… – Suprisingly, Mel Watt is not forgiving principal on underwater loans


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Jul 282014
 

By Jim the Realtor Zillow and Trulia went and got married over the weekend. The idea of them becoming a brokerage is another topic, and they would be swinging for the fences there – it’s probably not going to happen, at least not in the short-term. But their marriage does set up the Big Showdown: Consumers, Top Producers, and Transparency vs. […] …read more Source: bubbleinfo.com

Jul 282014
 
USA Foreclosure: California recorded over one million foreclosures

Everyone active in the real estate market today laments the lack of available inventory. Orange County housing market prices are rising due to the restricted inventory. Banks go “all in” betting on success of loan modificationsto resolve their prior bad loans. In the interim, delinquent mortgage … – California recorded over one million foreclosures


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Jul 282014
 
Pent up housing supply far larger than latent demand

Ordinarily, housing market pricing gets pushed up to the limit of affordability. Chronic shortages of housing keep prices high, and homebuilders respond by providing new homes to meet the demand. In short, demand nearly always outpaced supply. In the aftermath of the housing bubble, that is no… – Pent up housing supply far larger than latent demand

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Jul 282014
 
OCHN: New home sales plummet in June 2014

Stymied by high prices amidst weak job and wage growth, new home construction fell dramatically in June.

This wasn’t supposed to happen. Reflating the housing bubble was supposed to lift distressed loanowners above water, stimulate building (and construction employment), and create… – New home sales plummet in June 2014


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Jul 272014
 

By Jim the Realtor Enough of this wild speculation about the future – let’s sell some houses! Both Richard and I will be conducting open houses in the same neighborhood tomorrow – two for the price of two! http://www.zillow.com/homedetails/7109-Manzanita-St-Carlsbad-CA-92011/16657386_zpid/ …read more Source: bubbleinfo.com

Jul 272014
 
Loan Mod Default: How Washington enables Wall Street to ransack Main Street

By encouraging asset bubbles and permitting Wall Street to extract undue gains from the volatility, policymakers in Washington encourage bad behavior on a large scale. I recently opined that quantitative easing and mortgage interest rate stimulus bail out Wall Street, not Main Street…. – How Washington enables Wall Street to ransack Main Street


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Jul 262014
 

By Jim the Realtor If the Zillow purchase of Trulia comes together, and Zillow wants to further their dominance without creating a standard brokerage, how could they do it? There are 17,488 dues-paying agents who are members of the MLS in San Diego County. There are at least another 5,000 assistants, admin people, supervisors, managers, escrow and title people, […] …read more Source: bubbleinfo.com

Jul 262014
 
Ponzi Debt: Woman wins lottery, buys house, HELOCs $2M+, and spends it all

I have profiled many stories of the capricious nature of the housing bubble and how it impacted people for better and for worse. The daily HELOC abuse posts have covered the odious behavior of borrowers from all walks of life. Usually I relegate those stories to the bottom of the daily posts… – Woman wins lottery, buys house, HELOCs $2M+, and spends it all


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Jul 262014
 
RE Ruin: Housing Bailouts are False Hopes

One of the more interesting phenomena observed during the bubble was the perpetuation of denial with rumors of homeowner bailouts. Many homeowners held out hope that if they could just keep current on their mortgage long enough, the government would come to their rescue in the form of a mandated… – Housing Bailouts are False Hopes

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Jul 252014
 

By Jim the Realtor If Zillow and Trulia join forces, could they take over the industry? The real estate-selling industry will need to concede, either formally or informally. Informally, we have already given up. We are not a union, and there is no real leadership among realtors. We are independent contractors spread all over the map, literally and figuratively, so trying to get […] …read more Source: bubbleinfo.com

Jul 252014
 
Debt Default: The Moral Hazard of Market Supports and HELOC Abuse

Have you ever stopped to ponder the issue of moral hazard? At its most basic, moral hazard is any change in behavior that comes about when people believe their actions have no consequences. The housing bubble was built on moral hazard. None of the parties to the real estate transaction believed… – The Moral Hazard of Market Supports and HELOC Abuse


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Jul 252014
 
OCHN: Zillow believes rising mortgage rates will slow home sales

In the absence of rising wages, when mortgage interest rates go up, one of two things will happen: either sales will fall, or prices will fall.

I recently wrote that higher mortgage interest rates would either slow sales or cause house prices to drop. Since most real estate analysts still… – Zillow believes rising mortgage rates will slow home sales


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Jul 252014
 
Housing Market: The distinction between good debt and evil debt

I make no secret of my disdain for the behavior of bankers during the housing bubble. I’m not so extreme that I consider all borrowing and lending to be evil; however, I draw a clear distinction between what I consider good debt, useful for economic efficiency, and bad debt, useless and… – The distinction between good debt and evil debt


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Jul 242014
 

By Jim the Realtor There’s a rumor about Zillow and Trulia merging: http://www.inman.com/2014/07/24/zillow-and-trulias-share-prices-surge-on-merger-rumors/ http://www.bloomberg.com/video/why-zillow-would-want-to-buy-rival-site-trulia-meCu5DI0SkqsPqojyuGlXw.html Hat tip to Joe who sent in this take on it too: https://news.ycombinator.com/item?id=8081176 Realtors aren’t going to like it, but there is nothing anyone can do to stop it. That it is even possible that an outside entity will be attracting 90% of the eyeballs looking for […] …read more Source: bubbleinfo.com

Jul 242014
 
Real Estate Loan: Mortgage lending standards remain prudently restrictive

realtors, homebuilders and others who profit on real estate transactions hold the false belief that lenders are holding back the market with tight lending standards. It’s an easy position to hold for those who have no risk of loss when loans go bad. The reality is that lenders are not… – Mortgage lending standards remain prudently restrictive


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