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1  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: 2016 Presidential on: August 28, 2015, 09:06:11 PM
Trump nailed the CNN reporter tonight. Thousands of people for Trump and CNN wanted to ask him about a couple of protesters present.

Cantor endorses Bush.....Bush should have said "don't do me any favors".

2  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: 2016 Presidential on: August 28, 2015, 04:57:42 PM

Pro abortion at one time. BFD.  The abortion issue is a ruse designed to keep the country divided. Abortion will never be banned in the US. it is now too ingrained. So why the continued controversy? Both side use abortion through special interest groups to keep the donations coming in to fund their own pockets.

His new tax plan is coming out in 4 weeks. We see what that is and then if it warrants complaint. But, I go with what he wrote in his 2012 book, and I am comfortable with his stand.

As to Kelo, I guess I am going to have to look at the entire decision, arguments, the reasons for the ED before I comment on it. It will all depend upon the facts.

Money to Hillary...........come on............a business man is going to donate to each side at that level.  His donation to the Clinton one knew at the time what they were really doing.

Why not talk about the other things that Trump has done that no one hears about.

1. A couple of months ago, a young girl in CA needs to go to New York for major medical reasons. The airlines refused to sell her a ticket because to transport her, seats would have too be removed, as well as some specialized equipment being boarded. What happened? Trump heard about it and sent his private jet to pick her and her family up and transport them to NY for the medical care. No expense to them at all.

2. Remember the Marine who was held in Mexico for several months on the weapons charge? Obama and the other DC politicians did nothing. After the marine was released, Trump gave him a significant amount of money to restart his life.

3. Back in the late 1980's, a husband and wife were losing their farm in Texas. Just before the foreclosure, the husband committed suicide. Trump heard about the foreclosure and the suicide. he contacted the local bank and got the foreclosure postponed. Then he worked with other businessmen to buy out the loan and then eventually forgave the amount owed.

Bet you never heard about any of this. The only way these stories come out is because the people affected tell others what happened. Trump doesn't talk about it.

How many of the current politicians running for office would do things like this?  Hillary? She would steal the money. Bush? He would "no habla anglais" if she called. Rubio? i don't have any money to help?
3  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: 2016 Presidential on: August 28, 2015, 03:32:40 PM
Let's see. Will has condemned all who would support Trump as vulgar, uneducated and much more. He is a damned elitist who has lived in the Beltway far too long. BTW, his wife is on the Walker team.

As for me, I am a  "Vulgarian" and proud of it.  Thank you very much, George Will.
4  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: 2016 Presidential on: August 28, 2015, 03:29:03 PM

I loved the Peggy Noonan article. She is beginning to pick up on what the "commoner's" are thinking.

"Since Mr. Trump announced I’ve worked or traveled in, among other places, Southern California, Connecticut, Georgia, Virginia, New Jersey and New York’s Long Island. In all places I just talked to people. My biggest sense is that political professionals are going to have to rethink “the base,” reimagine it when they see it in their minds."

The professionals and the elites do not and cannot understand what is going on across the US. They don't have the interactions with those outside of their "class" so they cannot conceive of the anger, distrust, and the longing for a true leader, no matter what is going on.

For at least the last decade, the US is perceived to have been leaderless, and likely much longer. Obama did not show the qualities of a leader, and that has been shown by the state of the country now. 43 was no better, except in his initial response to 9-11. He squandered that beginning in 2003 and lost it completely soon after.

Clinton turned out to be no leader who could motivate the masses. He did a bit within his party, but that was lost as well. 41 could never produce real leadership qualities.

Among those who have run for President and lost, neither Gore or Kerry for the dems, nor McCain or Romney on the right. And currently, Hillary, Jeb, Rubio, or the others inspire others, so they are lacking as well.

Leadership is the ability to engage and pull together people from across all sectors of the population. It involves being able to communicate to the people that there is hope for improvement of their lives, and their futures and it inspires people to believe that there can be a positive outcome.

Since FDR, there has been only Reagan who could inspire the masses to believe in something better. Reagan brought together people of all stripes into the Reagan coalition with his "shining city on the hill", a belief that we could turn around the failures of the 70's.

Trump is doing the same with his "Make America Great Again". He is offering a vision that no politician has offered since Reagan. Instead of condemning America, he is praising America and offers hope that we can return to the days of yore.

This is what leaders do. They offer a hope that all can embrace and offer a road map to get there. Their appeal comes from all corners and are not just limited to one sector.

The GOP and the media do not understand the concept of leadership. They think that just being elected means leadership, and that is not so. Leadership must inspire, but the GOP candidates outside of Trump show no clear indication of leadership qualities. Carson could offer such in the future, and Cruz might as well. But they need to grow to the task.
Carly, not likely, and the others, not at all.

5  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Housing/Mortgage/Real Estate on: August 28, 2015, 12:13:43 PM

My only remark to inflation is this....

Does anyone really know how to calculate inflation? The government uses an  inflation measure designed to show low inflation so as to keep down Cost in Living raises, SS increases and much else.

Ask any middle class person who has to work for a living and worries about where the money will come from to meet costs and expenses monthly whether they believe that inflation is under 2%. Ask them about food costs, utility costs, health care and all the other things that they have to buy. They certainly have another viewpoint that is NEVER considered by anyone.
6  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Donald Trump on: August 28, 2015, 12:08:18 PM

My replies to you.  

a) I don't really see someone as a homeowner if they have zero equity or less.   Equity levels change as values change. In 2006, everyone who had bought the year before had over 15% equity, even if they used a 100% loan to value. So zero equity could be simply a "temporary" condition. (Of course, that does not address risk level.)

b)  There is a difference between underwater and being delinquent or in default.  Underwater, I guess, is none of my business as long as they are making the required payments.  I think you deal with situations where they are not. Herein is the problem with that. Underwater "begs" delinquency. At 140% LTV, strategic defaults come into play. At 120% LTV borrowers who are financially stressed behave differently and will make mortgage payments based upon the perceived future. For example, prior to the Crisis, borrowers made sure to pay the mortgage first and let other debt go delinquent. Once the Crisis hit, borrowers began to pay the other debt and to let the mortgages go delinquent, especially if Negative Equity existed.

c)  The central problem with delinquent, underwater properties in default is that government rules make it difficult and sometimes impossible for a lender to take back a property. This is actually not true. HAMP and other programs did delay the foreclosure process timeline, but all one needed was a Negative NPV Test result, and the foreclosure could continue. In reality, for the servicers, delaying foreclosure was profitable compared to foreclosing. As well, the terms of Trusts and even the GSEs caused delays, not government regulations.

d)  That the lender took a bad risk and made a bad loan and the property won't cover their costs is not my problem or concern. But there is another problem with this statement. In most cases, it was government programs designed to encourage housing that caused a large part of the problem. Granted, by 2005, things had gotten totally out of hand, but if lenders did not make loans to sub standard borrowers, there could be liability from Government Regulatory actions like discrimination and disparate impact. So it is not a yes/no decision.

e) A mortgage IS the right to take back a property in default.  If it can't be taken back in a reasonable time, process and cost, it is an unsecured loan.  When the collateral means nothing, that is when loans don't get made, hurting everyone.  Again, the rules of foreclosure are the problem, not market fluctuations or anything else. Not true. The loan is not unsecured at that point. Losses are incurred, but there is still recovery of funds no matter how long the foreclosure action has gone on. So it is not unsecured. (Courts have not ruled on that except in the case of 2nd mortgages, and there are now cases overturning that argument in the BK courts.) As to your when the "collateral means nothing" statement, you are making the assumption that collateral has no value based upon your preceding statement. But loans don't get made if there is no collateral. So how can people otherwise be "hurt"?

f) Instead of fixing the central problem caused by government rules, we establish new government powers. Agreed. Dodd Frank needs to be revamped or repealed and the CFPB disbanded.

g) Assuming you cannot change the rules tying the hands of lenders to get back their rightful collateral and the strategy you suggest is perfectly executed, I can see how a bad situation is dealt with and resolved. I will cover this and the rest below.

g)  On the flip side of giving government the power to take private property for private purposes without limits are all the moral hazards that come with that and eventually take down all great, centrally planned economies:

    1.  With expanded government power comes expanded government corruption.  Without a doubt.
    2.  Large industrial and economic players can buy that power for their own benefit.  And they do.  The richest counties in the United States are mostly in the DC area.  Buying power isn't a small industry; it has become our largest industry.
    3.  Government officials can sell that power for their own benefit.
    4.  People without power get Trumped on, like of Suzette Kelo in New London, Vera Coking in Atlantic City, and Nancy MacGibbon in Minneapolis.
    5.  When victims of eminent domain get 'fair market value' for what is taken from them, they don't get fair market value.
    6.  And when government powers have no limit, well, we don't know and can't even imagine all of where that will lead...

Donald Trump is a great "negotiator", (he says). The victim examples listed above did not consent to entering into "negotiations with Trump or Trump-like entities.  Assuming they owned their property, paid their taxes, followed the laws, kept up their homes, paid their mortgages and all that, do they have a right of privacy?  Do they have a right to be left alone?  Are these rights what the constitution calls unenumerated rights that areprotected by the 9th amendment in the constitution?  Of course they are.  Is this a small matter?  No.

Now back to the 5th amendment:
" If such “economic development” takings are for a “public use,” any taking is, and the Court has erased the Public Use Clause from our Constitution, as Justice O’Connor powerfully argues in dissent. Ante, at 1—2, 8—13. I do not believe that this Court can eliminate liberties expressly enumerated in the Constitution "
    - Justice Clarence Thomas in dissent on Kelo

And if you feel the opposite, you believe the Court can eliminate liberties expressly protected in the constitution.  You are President Trump appointing judges who will do just that.

Each case must be examined and determined upon the merits of the claim. There is no one rule of law that can cover every situation. (I have not read the cased of ED that you cite in depth, so I don't have an opinion on them specifically.)

As to Richmond, I do have specific knowledge of this.

When I first heard about ED and Richmond, I was viscerally opposed to the idea. I was astounded by the claim like you are with ED. But that did not last.

On a Saturday morning about two years ago, Martin Andelman of Mandelman Matters and I had a long phone conversation. He wanted to discuss ED and Richmond with me.  He supported the concept and I was totally against it. Towards the end, I agreed to look at the issue closely.

Since I lived about 40 miles away, I took a drive to Richmond, going into the different areas where ED was being considered. As I looked around, while literallly in fear for my life, I saw how the Crisis had totally destroyed the city in many ways.  After this look, I began to really consider alternatives.

Richmond, which has always been a "hellhole", was even worse then. Incredibly high unemployment, 20% of homes were vacant and awaiting foreclosure. Home values dropped to under $200k and often $120k, 65% of the city was severely underwater. Gangs everywhere. The common person could not leave. Heavy delinquency on loans about 25%. Anything that a person could conceive, was happening in Richmond. (Camden NJ and other cities also.)

I began to run financial and default algorithms to see how bad it really was. The results were stunning:

Essentially, all of the vacant homes were "gone". A foreclosure on the property, considering what was needed to bring the home back to livable status and to sell afterwards meant that there would be very little "recovery" of funds. In most cases, the loss on the loans would be greater than 75%, yet the servicers would not modify the loan. The loans in delinquency and default were in the same situation. Losses were such that an investor would lose the majority of money invested and would recover little.

I then ran the numbers based upon ED and paying 80% fair Market Value to the Investor. (The rest would be for new loan costs, commissions, and 5% equity to the homeowner.) In every case, the Investor would recover more money than what would be achieved through foreclosure. Plus they would not have to try and find buyers for homes in a "dangerous" area.

An additional advantage for the Investor was he was now out from under a loan in a bad area. This was something that could not even be accomplished with a modification,  so for the Investor, all would be great.

The new Investor would be taking a loan whereby they knew all the risks. It would be fully disclosed, and the loan would be underwritten to a strong standard with the homeowner having a true ability to repay the loan. Both would benefit greatly.

The city then would benefit from a cleaning up of the foreclosure crisis. Tax bases would increase. Crime would decrease. city costs would decrease from the associated problems. Businesses and employment could even increase.

This was a win-win situation for all. But the Big Banks, the Mortgage Banker Association and other groups wanted nothing to do with it. They feared that it would trickle down to other cities, even ones that did not have all the problems of Richmond. (There were reasons for why this would not happen.) So they go to Congress and get legislation enacted to prevent ED in Richmond and other cities.

What I am trying to present is that every case of ED is specific to the facts and must be viewed in that manner. Yes, there is a chance of government going too far, but with a legitimate government, this can be countered if the government is not "bought and paid for" by lobbyists.

Trump admits to "using" government programs and laws to benefit himself. If it is legal, why not if the facts of the case show a clear benefit to the community of the action? If it is just about "greed", then that is different. But the difference is that Trump admits that he does this, but he also realizes that there are ways to prevent the abuses.

FYI, in 1964, I lived in San Bernardino. I remember the home we lived in and thousands other being taken under ED for a freeway to be built. Probably Fair Market Value was paid. The new freeway did serve a great benefit to the city and economic conditions. Yet today, it would be fought to the bitter end.

7  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Donald Trump on: August 28, 2015, 11:01:25 AM

Here is one thing to consider about Trump revealing full details of programs.

If you are fighting against an opponent, are you going to reveal what moves you will make in detail so that your opponent can be prepared to counter?

If you are Eisenhower and prepping for D-Day, are you going to reveal that you are using Patton as a deception so that you can attack elsewhere?

You only provide enough details to win the nominee. Too reveal too much opens you to more aggressive attacks.
8  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Donald Trump on: August 28, 2015, 09:15:27 AM
You are much more positive about things than I am. The GOPe and the Media are looking for anything to stop Trump and this would provide them much attention.

Now to go walk the dog. He needs to do a Bush and Hillary.
9  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Housing/Mortgage/Real Estate on: August 28, 2015, 09:07:52 AM
Agreed CD. But if not for the massive manipulation of Interest Rate, QE and other Fed programs, where would we be?

Sure, the Stock Market is up, but only because of the Fed actions. Yet, the middle class is not getting better.

The Housing Market is "up" only after massive amounts of QE buying MBS, both Private Label pre-existing toxic loans, and then most of the new GSE originations. Add in the low interest rates and this is all it got?

Home values have "increased" but this is only the result of a housing market that is on life support. Values have increased solely because of the lack of inventory and "hot money" buying up inventory. Now that the hot money has gone, values are increasing at a much lower rate. (Hmmm, something else to add to the "recovery" chapter. That money is replaced by private investors, often engaging in occupancy fraud.

What happens when Interest Rates increase? Home values fall. Loans become more expensive. The ARMs being taken out now and the legacy ARMs will go nuts and drive more foreclosures. Home Sales will fall because of the higher payments needed.

BTW, why is inventory so low in many of the hardest hit foreclosure states? It is because lenders are still not foreclosing. Loans are being modified with terms that will cause re-default within a year or two. Lenders are not listing their foreclosure inventory because it would be like China dumping products in the US. Lower prices, hence more losses.

Sorry, but I don't "buy" artificial manipulation of market factors as being a "meaningful" recovery of either Housing, the Market, or other parts of the economy.

10  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Donald Trump on: August 28, 2015, 08:51:25 AM
"Ted Cruz Attorney General, Ben Carson the Sec of HHS to handle health care, and Carly Fiorina to something that calls upon her considerable talents."

Let's assume that Trump makes an announcement like this today. What is the response?

1. Cruz, Carson and Fiorina all three denounce Trump and saying that they are running for President and not a Cabinet post.

2. The rest of the candidates and the GOPe all accuse Trump of trying to bribe his competition to not run any longer.

3. The media goes nuts, accepts the GOPe claims, and then jumps on Trump and his "Cabinet Choices", claiming that this would be harmful to liberals and minorities. The uproar would be more harmful than good.

11  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Housing/Mortgage/Real Estate on: August 28, 2015, 08:43:29 AM
Like Jeb Bush?   grin
12  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Housing/Mortgage/Real Estate on: August 27, 2015, 09:21:12 PM
Yep, I am yanking CD's chain for the fun of it..

Had two cases today that I have been working on, trying to bail an attorney and a homeowner out of trouble.

1. Borrower is given a modification. The attorney files a lawsuit that alleges violations in CA Homeowner Bill of Rights and other allegations for processing the modification. The problem is that once the modification was given, all violations no longer applied. Even worse, he missed that 3 months after the mod was given, the servicerr changes the terms, entailing a breach of contract.

2. A homeowner with three properties contacted me two months ago. He has not made payments in 5 years on one property. Now he is engaged in a lawsuit with his brother and a known scammer. Allegations include Elder Abuse. Anyway, he got his Notice of Trustee Sale this week. Now he wants me to come to the rescue, but he wanted to set up a payment plan. Screw him, all upfront or nothing. And being a rush job, it is even more money.

Homeowners are their own worst enemies.....
13  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Donald Trump on: August 27, 2015, 09:09:23 PM

What makes you think that he would not get the best for each area? That is what he says he would do, and I believe him there.

As another point to DMG,

People are looking at Trump not for his "detailed" positions, they are looking at him for a reason that escapes most. They are looking for leadership. For so long, we have had no leadership. Politicians have taken a position of getting along or or just acting, often out of spite. None show true leadership capabilities like Reagan, and even JFK for a period of time.

As well, I don't know how old you and others are, but there is something else going on that should be considered. For those who are old enough and worked though this period of time, go back to 1975 through 1980 and think of the economy and what we were go though. Some points about that time:

1. Ford presents his program for reducing inflation. WIN. Whip inflation now. A slogan which meant nothing. ( I don't remember the inflation rate, but it was poor.)

2. 1975 with Ford, the Tax Rebate of $200 (maybe $300 but my memory is not so good). I remember being in a meeting with Senator Tunney, Dem from CA. He was touting how great an idea this was. It would help the middle class. I got up and challenged him about it, stating that the money meant nothing. it would not help the middle class and it would only be spent on food or bills. Needless to say, he had no response. (His brother was the fighter. May he got it too many times fighting his brother and it addled his brains.)

3. 1973, Gas rationing. We had to buy gas on alternative days and you waited in line for an hour or more. If you ran out of gas on the no buy day, you were SOL.

4. Jimmy Carter, a President who had no leadership ability. Control freak who actually filled out the White House Tennis Court Usage schedule. He was voted in simply as a reaction to Nixon and an incompetent Ford who stated in a debate that Poland was not a satellite of the USSR.

5. Under Jimmy Carter, the Misery Index of 19.72%

6. The Iranian Hostage situation. 

(BTW, here is an interesting factoid. When the hostages were taken in Nov 2008, I was stationed at RAF Bentwaters. There, we had 67th Air Rescue which had evacuated US personnel from Iran in the year before. When the hostages were taken, my squadron was recalled for possible action in hostage recovery. At the same time, Airborne and other Army troops were in Germany for the Reforger exercises. We could have sent Airborne from Germany and our own squadron from Bentwaters with C 141 and C 130 aircraft, supported by 5 Bentwater A10 squadrons, F-15s out of Bitburg, F111s from Mildenhall and other support aircraft  to get the hostages within the first few days. Even in April of 1980, we could still have gone, but Carter wanted to use Navy choppers which it was well known would have had problems with the sand getting in their engines. But Carter did not have the guts to do what was needed.)

7. A National Election in 1980 where the GOP tried for the second time to keep Reagan from being the nominee. Instead, they want the Senior Bush to be the nominee. Yet the 'commoners" wanted Reagan.

The conditions of 1980 match what is occurring today in all too many ways. We have a populace looking for leadership and a bunch of politicians that offer no leadership. Even worse, they continuously ignore or insult those who disagree, calling us vulgar, low information votes, idiots, and who knows what else. They are the Elitists who know what is best for us and they are not to be challenged.

To hell with them all. As far as I am concerned, the professional politicians can go to hell. BURN IT DOWN!!!!!
14  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Housing/Mortgage/Real Estate on: August 27, 2015, 08:35:16 PM
So you are buying homes as rental properties because home values always go up? Correct rents and appreciation?   evil
15  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Donald Trump on: August 27, 2015, 06:14:37 PM

Yes, I am hard on the other mortals, but why should I not be? They are all professional politicians except for Carly and Carson. And look what professional politicians get us. Nothing good.

There is a deliberate GOPe strategy going on with this election. They are all in the tank for Bush and will do anything to get him elected, but they know that he is not well liked by the "commoners" in the party. So they have engaged in a deliberate strategy to get him nominated. That strategy involves getting enough candidates in the key states to dilute the vote against Bush so that no one will have a majority, and therefore the delegates go to Bush. And this plan was going to work except for one one counted on Trump.

Now the GOPe is trying ways to stop Trump. One is in Virginia, North and South Carolina. The potential candidate must take a "loyalty oath" to not run as a third party if they lose, or they do not get on the primary ballot. Now, the RNC is talking about any candidate who does not win at least 8 primaries cannot be nominated at the Convention. What this does is ensure that if anyone not meeting this criteria but has won states, those delegates are now freed up to go where "they" want.

Now people are picking on Trump on the immigration plan. He cannot deport 11m people. Doesn't anyone realize that Trump is a "negotiator"? He throws this out, but you can bet he has "fall back" positions for when he wins. Never give out your bottom line position at this stage.

Kelo is an issue, but if eminent domain is available and there is benefit, why not?

FYI, I was originally completely against ED, but the housing crisis changed my opinion. In cities like Richmond CA, Camden NJ, and many others, there can be no housing recovery because the homes are underwater still and the people cannot afford the mortgages. Lenders are not working with the people. Why not use ED to take the homes, pay the Investors fair market value, and then get someone in to rework the loans for the people? It is possible and I know it is because I have been involved in discussions among a major investor who would rework the loans, a servicer willing to go along with it, and a local government ready to engage the ED. But guess what? The damned Congress and Obama enacted legislation that if a city did ED to help the crisis locally, the homes involved could never again be eligible for GSE or FHA funding. Wells Fargo and the other banks win again.

What Trump is doing is bringing all these issues to the light, but that is exactly what the GOPe and the Dems do not want. it threatens their own interests and that is heresy.

We are at a crossroads in the US. This election is likely the most critical election since 1860. The fate of the US hinges on it, but if we have a GOPe candidate, it matters not whether the new President and Congress is controlled by either party. They will all do the same as now. So we have to consider all alternatives.

16  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Housing/Mortgage/Real Estate on: August 27, 2015, 05:48:28 PM

Of course you do!! We know better.....every time Webury writes, you read and then do a purchase on

Some of the things that I will be posting will be done so as to formulate my own thoughts for the book. I can use this as a sounding board to either make things clearer, or to refine my ideas and statements.

There is just so much going on in the industry that people would be shocked. Now that the crisis has "passed", things have returned to business as usual. For example:

Fannie is going to allow non-occupant co-borrowers on high Loan to Value loans. And also income from "boarders". I can see it now. The new fraud is going to be rampant. There will be people "renting" rooms for $1000 per month, and Fannie will approve the loans.  Yet, there will be no real people boarding. 

These will be some of the highest default risk loans made.
17  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Housing/Mortgage/Real Estate on: August 27, 2015, 11:53:13 AM
HOPE NOW is the government program for "stopping" foreclosures. Every month, they put out the current "statistics" of Home Retention.  Key points:

1. Since 2007, 24m workout plans and 6m proprietary mods. Another 6m in foreclosures occurred.  Here is the problem with this.  In 2007, there were 51m homes in the US with 1st mortgages. That would be 70% of all homes with mortgages in the country.  Being really conservative, lets assume that 50% of the plans were on 2nd mortgages. That is still 35% of all homes with mortgages. Oops.......

2. There have been about 1.5m HAMP mods. Add this to the 6m proprietary mods, that is 7.5m.  Already, HAMP has had about half of all mods re-default, and this is before the Mod Interest Rates begin to increase after 5 years. So of the almost 900k HAMP mods still in effect, how many are going to re-default?  Most expect that more than 75% will do so.  Another oops...

3.  The proprietary mods, 6m, have already had at least 40% to re-default. The rest are going to fail when Interest Rates increase also.

4.  Non-foreclosure solutions of 411k v 89k in foreclosures. 137k were short sales or mods. The rest, except for a handful of "repayment plans" were homes that were "lost" and the homeowners ended up losing the home.  Most distortion.

(BTW, repayment plans are a joke. I have two that are going to litigation done by WF. The first plan required that the homeowner pay $78k the first month, and then $5k for the 2nd and 3rd month of which both were equal to the regular monthly payment. The borrower had only $26k in his business account, most of which would cover business expenses. There was $500 in personal accounts. He had no ability to make the $78k first payment since he did not have the income or savings, yet Wells made this offer. What a joke. And this is typical of repayment plans.)

I could go on and on about all the issues involved in the full report, but this gives you an idea of how the government HOPE data is manipulated to make things look better than what is actual. Just like what the NAR and Census Bureau do in reporting Sales and Start numbers.

HOPE NOW: Mortgage industry achieves 24M solutions and 6M loan mods
411,000 non-foreclosure solutions for homeowners during 2Q

In the second quarter of 2015, approximately 411,000 homeowners received non-foreclosure solutions from mortgage servicers, according to HOPE NOW, the voluntary, private sector alliance of mortgage servicers, investors, mortgage insurers and non-profit counselors.

Since 2007 the mortgage industry has completed a total of 24 million workout plans and six million proprietary loan modifications for homeowners — reaching another milestone in its efforts to assist families with troubled mortgages.

This compares to just over six million foreclosure sales completed in the same time period.

From April through June 2015, non-foreclosure solutions outpaced completed foreclosure sales by a margin of more than four to one (411,000 solutions, vs. 89,000 foreclosure sales). For every one foreclosure sale, mortgage servicers offered 4.6 solutions.

This is due to the fact that there are several long term and short term solutions available to at-risk homeowners when facing delinquency or foreclosure.

Permanent loan modifications in the second quarter of 2015 totaled approximately 113,000 and short sales totaled 24,000. Other non-foreclosure solutions (including repayment plans, deeds in lieu, other retention plans and liquidation plans) made up the rest of the total number. When homeowners do not qualify for long term permanent loan modifications, mortgage servicers continue to look for short term options that, in many cases, lead to a permanent solution.

Of the 113,000 loan modifications completed for the second quarter of 2015, about 78,000 homeowners received proprietary loan modifications and 35,738 homeowners received loan modifications completed under the Home Affordable Modification Program.

      Q2 2015 vs. Q1 2015 – Loan Mods Decrease 2%, Serious Delinquencies Decrease 6%, Foreclosure Sales Decrease 7%
      During the second quarter of 2015, there were an estimated 113,000 loan modifications completed, compared to 116,000 during the previous quarter – a slight decrease of   
      Serious delinquencies of 60 days or more declined from 1.85 million in Q1 2015 to 1.74 million in Q2 2015 – a 6% decline. (Delinquency data is extrapolated from data
      received by the Mortgage Bankers Association for the Q2 2015)
      Foreclosure sales also decreased from the previous quarter – 89,000 in Q2 2015 vs. 96,000 in Q1 2015, a decrease of 7%.

Comparing the second quarter to the first quarter of 2015:

      Total non-foreclosure solutions were approximately 411,000 in Q2 2015, compared to 444,000 in Q1 2015 – a decrease of 7%.
      Foreclosure starts were approximately 176,000 in Q2 2015, compared to 212,000 in Q1 2015, a decrease of approximately 17%. ?Q2 2015 vs. Q2 2014.

The 89,000 foreclosure sales in the second quarter of 2015 compares to an estimated 117,000 completed during the second quarter of 2014, representing a significant decline
year over year.?Here are some other key metrics for Q2 2015 vs. Q2 2014:

     Total solutions for Q2 2015 were approximately 411,000 vs. 456,000 for Q2 2014 - a decline of 10%. ?
     Loan mods for Q2 2015 were approximately 113,000 vs. 125,000 for Q2 2014 – a decline of 10%. ?
     Foreclosure starts for Q2 2015 were approximately 176,000 vs. 203,000 for Q2 2014 – a decrease of 13%. ?
     Short sales completed for Q2 2015 were approximately 24,000 vs. 35,000 for Q2 2014 – a decrease of 31%. ?
     Deeds in lieu for Q2 2015 were approximately 5,400 – a decrease of 28% from Q2 2014 (7,500). ?
     Delinquencies of 60+ days were approximately 1.74 million for Q2 2015, compared to 1.98 million for Q2 2014 – a decline of 12%. ?
18  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Donald Trump on: August 27, 2015, 11:17:17 AM
Answer me this...............

Is there anyone else who could be elected (and this is the key criteria) that would change things?

Carly is a closet liberal who supports amnesty, cap and trade and health care.

Bush is amnesty, global warming and commoncore.

Rubio is Bush lite and supports amnesty and commoncore.

Cruz can't win. He will be Tea Party papered with all the derogatory comments destroying him.

Walker is falling apart. On immigration, in a 30 minute speech, he flipped flopped 3 times.

Carson would be good, but otherwise cannot win. His lack of knowledge and experience would get him bounced out quick. Plus being a black conservative would really go against him.

This country needs a radical change from where we are now. But there are no "leaders" that can do so among the political elite. Sure, Trump has his bad points, but you are not going to find a true conservative anywhere that can get elected. Purity and the ability to be elected does not exist.

All I know is that if Bush or Rubio is the nominee, then I am sitting the election out and for the first time since I could vote in 1972.
19  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Jul Pending Home Sales on: August 27, 2015, 10:09:26 AM
Before anyone posts Wesbury and Pending Home Sales, I thought that I would get this in.

 Seasonally Adjusted Index                     Non Seasonally Adjusted Index

Jun 2015   110.04                                               136.8

Jul 2015    110.09                                               121.0

Increase         0.5%                                            -11.5%

Let's manipulate the data with Seasonal Adjustments so that it looks better than what it is.

It will be "fun" to see what Existing Sales for Aug & Sep show. Pending for Jul will show up in those months.
20  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Donald Trump on: August 26, 2015, 10:26:42 AM
Loved what Trump did with Ramos last night in Iowa. Can;t wait to see Black Lives Matter try their act on Trump.

Trumps support will increase to 40% now and if he does the same to BLM, then it is over 50%.
21  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Donald Trump on: August 25, 2015, 09:38:57 PM

I spend most days doing consulting work for attorneys. The work mostly involves developing arguments on foreclosure and lending law, but it frequently crosses over into the realm of fraud and other subjects. To do this work, I have had to develop a firm understanding of how to read and understand statutes, regulations, and case law. This has been especially important since I am often retained to be an Expert Witness in various cases.

Since the subject of Anchor Babies arose, I have been reviewing the Constitution, 14th Amendment, the Intent of the legislation and of course, SCOTUS case law. Based upon my own non-professional observations and readings, I believe:

1. As has been represented by Levin and others, the 14th did only address the issue of Slavery. It did not expand further rights to other parties.

2. The fact that in 1924, Congress passed additional legislation giving all Indians the right of citizenship that did not exist prior thanks to SCOTUS rulings is further proof of the 14th Amendment intent.

3. The 14th Amendment does not need to be repealed. From the wording,  Congress can enact laws to either expend or shrink the scope of the Amendment.

Now, talking with friends who are legal immigrants currently, some Green Card and others who have been awarded Citizenship, I have yet to hear any say that illegals and anchor babies deserve Citizenship. More over, most like the idea of Trump sending them back, and this includes two who have their own businesses and who actually employ illegals.

On a more personal level:

1. My wife is first generation from El Salvador. Her mother and father came over in the 1930's legally. 7 sisters also immigrated legally.  All support Trump and his policies.

2. My son-in-law is first generation from Italy. His father, mother and grandparents all came over during WW2, legally. They support Trump.

3. My son married a Canadian. She came into the US and went through all citizenship requirements. The cost was incredible for them but she did it. They support Trump.

I can go on ad on, but you get the idea.......
22  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Donald Trump on: August 25, 2015, 05:02:44 PM
All the email group that CD and I are in, they are not discussing Trump.  Maybe I can get it going here. Here is why I am supporting Trump.

1.  I am fed up with the GOPe throwing "electable" candidates at me that lose. I have had to hold my nose or take disinfecting showers in every election year starting in 1988. All GOP candidates have been jokes.  (1976 also.)

2. I remember the GOP taking the same type of negative position with Reagan. He did not turn out too bad.

3. I watch RINO politicians like Boehner and McConnel throw away every advantage that they have in the House and Senate because they are afraid to make Dems mad.

4. I look at JEB and he is pro amnesty, big government, Commoncore and global warming.  Enough of the Bushes.

5. Fiorina is man made global warming, Cap and Trade and Amnesty driven. Rubio is Bush lite.

6. Cruz is better but he cannot win. He will be destroyed by the Dems for Tea Party support.

7. Walker can't win. And the other dwarfs are no better, nor can they win.

As I go around my more "liberal" middle class neighborhood, I cannot believe the support that Donald is drawing. People, unless they are far left, are really getting behind the Trump campaign.  Simply put, Trump is echoing their concerns.

A good part of my neighborhood is Hispanic. They are overwhelmingly supporting what Trump is saying, especially about anchor babies. They want illegal immigration to end. They also believe that he will not be bought, give in to the political parties, and can help the economy.

IMO, this election is the most critical election since Lincoln. The country faces obstacles that are driving conditions, financial and social, out of control. If we do not get a grip on the problems, then the country will not survive as a republic much longer. Yet, if we have either the Dems or GOPe selecting the nominees and ignoring the people, then we cannot attack the issues of concern. This is because the "elites" only care about themselves, power retention, and money. They care nothing for the values that made this country great.

If Bush is the nominee, I and large numbers of conservatives will sit out like what happened in 2012 with Romney. Better to have a Dem in and know I will get screwed than to vote for a GOPe praying that the nominee will win, while knowing that even if he does win, he will go RINO.

Can Trump do anything if he wins?  Who knows? But at least he is not a weasel politician..............

23  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Housing/Mortgage/Real Estate on: August 25, 2015, 04:37:53 PM
See the GREAT NEWS about New Home Sales?  Up 5.4% over Jun and 25.8% Year over Year!!!!

507k yearly vs 480k in Jun.  And 507k vs 403k Year over year!!!!

These are Seasonally Adjusted Numbers. Let's see what the non-manipulated numbers say.

43k Sales in Jul 15 vs 45k in Jun 15.  (Can't be right!  If so, then there were less sales in Jul than in Jun. Where did the 5.4% increase come from?  Common Core Math?)

43k in Jul 15 vs 35k in Jul 2014.  (That is "better". 23% up.)

Fun with Seasonally Adjusted Numbers. But let's take a look at a couple of graphs from Calculated Risk......

Doesn't look like much of a recovery to me.  Now let's look at the Non Seasonally Adjusted Monthly numbers from 2005 on.

This did not impress me either.  Maybe I don't know how to read graphs..........
24  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Housing/Mortgage/Real Estate on: August 20, 2015, 11:01:42 AM

Notice that the NAR never reports actual Pending Sales numbers? They only do it on an Index. That is because they do not want to report how many Pending Sales cancel, or how long the sales take to close. This way, they can continue to manipulate the numbers.
25  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Housing/Mortgage/Real Estate on: August 20, 2015, 10:52:11 AM
Let's see...........Existing Home Sales were the "highest" since Feb 2007. Up 2% at an annualized rate of 5.59m. Am I supposed to be impressed by this?

For cripes sake...........interest rates are still the lowest on record and sales cannot get above 5.59m or cannot get higher prior to the Crash?  (The Crash actually began in 2007 with the collapse of subprime lending in Jan 2007 and then with Alt A in Mar 2007.)  Also, most of the contracts for Jul were written in May, a high month for pending sales, with the NAR reporting that the "Index" was at 112.3, up from Apr at 111.6.  Since the Jun Index was 110.3, think that Aug will show a significant decline? I do......

U.S. Existing Home Sales Hit Prerecession Pace
Sales rose 2% in July, highest since February 2007, National Association of Realtors says

WASHINGTON—Existing home sales in July climbed for the third straight month to hit their highest pace since before the recession, buoyed by strong sales in single-family properties.

The pace of existing home sales increased 2% last month from June to a seasonally adjusted rate of 5.59 million, the National Association of Realtors said Thursday. Last month’s sales pace was the highest since February 2007, and 10.3% higher than a year earlier.

Sales for June were slightly revised down to 5.48 million from an initially reported 5.49 million.

Economists surveyed by The Wall Street Journal had expected July sales would dip 0.7% to a pace of 5.45 million.

Tight inventories have driven prices up, keeping some buyers out of the market. Lawrence Yun, NAR’s chief economist, noted that first-time buyers declined to 28% of all buyers, the lowest share since January. Rising rents across the country are also eating into the savings that people might put toward a down payment.

“We have to recognize that we have a broad-based housing shortage,” said Mr. Yun. “Home builders have been essentially out of the game or underproducing for the past decade.”

According to mortgage company Freddie Mac, the average rate for a 30-year fixed-rate mortgage rose in July to 4.05% from 3.98% in June.

Mortgage rates are still low by historical standards, but could rise in the fall if the Federal Reserve raises interest rates.

Sales of existing homes account for roughly 90% of all purchases in the U.S. At the current pace of sales it would take 4.8 months to exhaust the supply of homes on the market, down from 5.6 months a year ago, the NAR said Thursday. Total housing inventory fell 0.4% at the end of July to 2.24 million existing homes available for sale, 4.7% lower than a year ago.

The median sale price for a previously owned home slipped slightly to $234,000 from June’s $236,300, but it is still 5.6% higher than a year earlier. July’s prices mark the 41st straight month of year-over-year price gains.

Distressed property sales fell to their lowest share of the market since October 2008, when the NAR started tracking them. They comprised 7% of the market, a fall from 8% in June.
26  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Housing/Mortgage/Real Estate on: August 19, 2015, 04:01:32 PM

The Fed "had" to worry about the value of real estate from their wrong headed perspective. Here are the reasons why:

1. Homeowners underwater by 125% or greater had higher rates of default. Over 140%, strategic defaults became the norm.

2. Banks who held the loans in portfolio lost money on underwater foreclosures. To break even, Loan to Values had to be under 80%.

3. Using Mark to Market, banks were insolvent as long as values remained depressed.

4. Without Equity in the homes, there was no Move Up Market, which is the key factor in resales.

5. Without Equity, PMI groups would lose more money on foreclosures.

6. No refinance market existed for underwater homes until HARP.

7. The loans and properties that supported MBS were held by Wall Street and Investors. Underwater loan foreclosures resulted in greater losses to those entities.

8. Positive Equity provides hope to homeowners that housing will recover, so they try to keep the home payments current.

Pundits are proclaiming about how great it is that home values are almost back to 2007 values. What a bunch of crap! Home values are once again outstripping the ability of the middle class to buy in the Sand States and the West. As well, the increased values drive up rental rates which makes the lower income groups that much more disposable income restrained.

Keep a watch out. After the 2016 election, Foreclosure Crisis 2.0 begins. Defaults, recession, job loss,  dropping values, increased interest rates on adjustable rate 1st and 2nds, credit cards and lines of equity, modification re-defaults, increased living expenses, inflation for food and utilities, obamacare and medical and who knows what else is going to return us to 2008 and 2009.

27  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Housing/Mortgage/Real Estate on: August 19, 2015, 02:57:33 PM
Hi GM,

Finally “dropping by”. Been engaged in several projects of late that are taking considerable time, not including the normal attorney consulting business on foreclosures that I do.
I can’t tell you just how “tired” I have grown of trying to correct the idiots like Wesbury. I just cannot believe that they write the crap that they do and in fact believe what they write.

For Wesbury, his comments on the Jun Existing Sales is just plain taken out of context. To cite that Existing Sales are up without consideration of what the May and Jun markets have done in Pending Sales is just plain irresponsible.

Existing sales are home resales that have closed for the month cited, in this case Jun. Yes, they were up 3.2% over the previous month and 9.6% year over year, but that is not representative of the issue.

Existing Sales is a lagging indicator of Pending Sales. Pending Sales are when the contracts are written and Existing Sales are when they close. So in this case, Existing Sales reflect contracts written in Apr and May, with most being in Apr and fewer in May. (A few Feb or Mar contracts might be included and some Jun contract cash sales as well.) Since Apr & May Pending Sales were up, then Jun Existing Sales were going to be up. But to see the trend, we have to look at Pending Sales for Jun.

After 5 months of increases during the hottest part of the selling season, Jun Pending Sales dropped 1.2% over May. And the drop can be expected to continue in Jul and Aug, then really falling off in the autumn and winter months.

Additionally, the rate of Existing Sales is at 5.49 million per year, seasonally adjusted. Pray tell, how is it possible that with such improvements, we are still under 6 million Existing Sales per year when the normal prior to the crash was over 1 m, and at times 1.5m? These numbers continue with interest rates at record lows, and sales have not reached a breakout point.  So if the Fed increases rates, then sales will again drop. (BTW, an increase in interest rates will cause less affordability issues, leading to more potential buyers being priced out of the market. Then values will again fall, from 10 to 15% after about a 1% to 1.25% interest rate increase. That means more negative equity and less sellers.)
We having been hearing regularly from Wesbury and others about how the market continues to improve with new home starts. Why are Housing Starts still stumbling along with most of the increases in multi-unit and apartments and not Single Family homes? Why haven’t they reached a breakout point as well? They remain at historical lows like Existing Sales do. (When there are “rapid” increases in monthly Housing Starts, you have to look at the area where the increases have occurred. Each time, you find that the month before has shown some type of event and reduction in starts that has then caused the following month to be greater than normal which caused the “increased”.

Here is something that is very telling and is occurring with Home Sales each month, yet no one is bringing it up:

21% of all home sales are vacation/second home sales.   These are levels last seen in 2006. And during that period of time, the vacation homes were largely fraudulent. They were investment property purchases which were claimed to be second homes for the lower interest rates and add ons. (The percentage growth over the past three years is 21%, 57%, and 140%, unheard of before.) In other words, occupancy fraud has returned again.

To understand this, one looks at two criteria. The first is the all cash sales in vacation homes. It has dropped from 50% to 30% in just 4 years. Why pay cash when you can finance, just like from 2002 to 2007?

By itself, an argument can be made that this is not relevant, but then one must look at the mileage difference in vacation homes from the owner occupied property. With this, we see that the Median Distance in 2014 has plunged in three years from 435 miles to 200 miles. (In 2006, median distance was 200 miles, down from 390 miles in 2003.)
Next, we look at the Median Price of vacation homes. In 2014, it was $150,000, down from $168,700 in 2013. This was at a time when home prices were rising 5% or greater nationally.

The NAR is making excuses for these numbers and the drop in prices of vacation homes, but they are the same excuses as in 2006, and we saw what happened there.
I could get into the real technicals at this point, but the bottom line is that once again, the small time homeowner is buying investment properties cloaked as second homes. This will not end well for them.

Wesbury and others fail to look at the inside numbers to make a true evaluation of what is going on in the industry. Maybe they don’t have the time to spend in truly evaluating the situation, or they just don’t understand housing with its many components that affect its.  When one dwells down into the many factors, all is not well and no improvement is really going on.

One of the projects that I have been working on is the writing of a book on the Housing Crash and what caused it. I am trying to take into account the significant factors that contributed to the Crash, not just blaming it on lenders, sub-prime borrowers or the Community Reinvestment Act. Someone must tell the story of why things occurred as it did, and why it was inevitable that such would occur.

Also, I am trying to present the causes of why the Foreclosure Crisis remains, the failure of HAMP and other programs, and why Housing is not recovering and why it won’t for another decade at the very least and likely two decades. (A major reason is that the move up buyers no longer exists. With HARP and the low interest rates, the majority of people now have loans from 3 to 4% and are happy to remain in the homes that they currently own. Who the hell would buy a home with the inflated prices again occurring and expecting another fall in values, and if the Fed increases rates, with interest rates that will be substantially higher than what they have now?)

Finally, I will end with what needs to be done to revitalize the housing and lending industry, beginning with the repeal or reform of Dodd Frank.

Just more fun and more things to do........
28  Politics, Religion, Science, Culture and Humanities / Politics & Religion / New Home Sales Jan on: February 25, 2015, 09:58:42 AM
Wow.........I am impressed with the New Home Sales Recovery

29  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Housing/Mortgage/Real Estate on: February 23, 2015, 08:45:31 PM
Absolutely Bubble Mentality at work.

BTW, see the Housing Starts for Jan and also the Existing Home Sales.  Certainly there is no Housing Recovery ongoing, contrary to what people think.  Looks like a downward trend from Jun on. And looks like levels are equal to 1999 activity.  (Don't forget, these are seasonally adjusted.)

30  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Looking for Modification Scenarios on: February 20, 2015, 09:51:36 PM
I am now heavily involved in a False Claims FHA action regarding  HAMP modification issues. We are looking for people who have:

1. Been in active modification processing or an actual modification or trial modification and who were foreclosed upon.

2. People who have been in active modification efforts for over 2 years and keep getting denied.

3. People who were given Trial Modifications and after making the payments, were denied for modification.

4. People who were given modifications, but began missing payments shortly after because the terms were so bad.

All applicable cases will go to the Department of Justice to be used as evidence of wrongdoing. The DOJ is targeting the largest servicers, including Nationstar, Ocwen,  B of A,  Chase, Wells, IndyMac, SPS, SLS, HMSI. I will be personally reviewing the facts and documents of each case to determine whether it meets the parameters of what we are looking for.

There is no guarantee that it will benefit the specific homeowner. However, each case sent to DOJ by me will show evidence of wrongdoing. Worst case, a homeowner could use the DOJ having the case to influence the servicer to consider modifying the loan.

This evaluation is of no cost to the homeowner. If you know of anyone that could be applicable, they can email me at for more details.
31  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Housing/Mortgage/Real Estate on: February 20, 2015, 09:36:51 PM

I have problems with this analysis.  Here is why:

1. The authors cite Debt to Income being a 2 and use the formula of Gross Debt to Gross Income. This alone shows that they know not what they speak. Debt to Income is Monthly Debt Payments to Monthly Gross Income. This is the standard calculation for mortgages. Under traditional guidelines DTI would be no more than 28%  for housing and for total 36%. During the Housing Boom, it became 45% and then up to 55% or more.

2. There was another method that was always considered optimal and was similar to what the authors said, and that was a 3.5 ratio, Price to Income. Using that formula, everyone under bought in their scenario.

3. They write that "First, mortgage lending wasn't aimed mainly at the poor". True, but it was aimed at non qualified borrowers after 2003. By late 03, qualified borrowers no longer existed that loans could be sold to. So lenders dropped standards, issued state income loans, and if you had a detectable breath in the last 24 hours, you were qualified.

4. Borrowers were assumed to reflect the average characteristics of residents in these neighborhoods. But the new study examined the actual borrowers and found this wasn't true. Comparing borrowers to residents.....did they account for the fact that in poorer neighborhoods investors were heavily buying?

5. Third, the bulk of mortgage lending and losses — measured by dollar volume — occurred among middle-class and high-income borrowers. True, but they are looking at people buying much more expensive homes. The reality is that homes in the Midwest, South and most areas were far less expensive than in the Sand States. So this would distort things measurably.

6. Specifically, they question the notion that the main engine of the bubble was the abusive peddling of mortgages to the uninformed poor. In 2006, the poorest 30 percent of borrowers accounted for only 17 percent of new mortgage debt.  At this point, I get totally pissed off. The reason is that the homes they bought were far less expensive than in Ca and elsewhere.

I have reviewed over 5000 defaulted mortgages in depth. I have also done statistical analysis on over 10 million GSE loans. I can tell you that lower middle and lower income people bore the brunt of the damage (think $50k or less). They were targeted with products that they did not understand, and could not afford.

As I learned in the past two years with people I was working with, statistical analysis is only as good as the assumptions you make. And when you go into a project with preconceived ideas, the work you do will have a bias towards the conclusions that you are trying to determine.

Damned academics should go back to their ivory towers and hide. They should not be seen or heard.

32  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Housing/Mortgage/Real Estate on: January 30, 2015, 04:09:56 PM
Make that 5 - 6% defaults on the GSE loans based upon 180 day defaults.

BTW, the reason that Basel went 180 days is that when a loan defaults, the lender has to carry greater amounts of regulatory capital and loan loss reserves. So using 180 instead of 90, the lender reduces reserves on these type loans by about 50%.
33  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Housing/Mortgage/Real Estate on: January 30, 2015, 02:48:42 PM
Ed Pinto is a sharp guy. He nails it with this article.  For a timeline of events with the GSEs leading to their fall, check out the following link to a pdf.

Pinto also does a Monthly National Mortgage Risk Index where he evaluates the Risk of loans defaulting. The methodology was similar to what I have developed in Phase 1 of my work, using FICO, LTV and DTI to determine default but he used 180 days late as the default measure. Using these measures, he finds that default risk for GSE 2014 originations is at 11%, and for FHA, about 23%.  (This is the pdf link to describe how he does it.

This is the link to the current report.

I do have problems with his methodology.

1. He uses 180 day delinquency for his measure, a Basel 3 designation. I would use 90 days. The reason is that 90 days is the standard for a loan being considered and in default. Once a loan goes 90 days late, the cure rate without any type of modification is less than 5%. So, using 180 days results in rates that are much less severe than 90 days, and in my opinion, are misleading.

2.  He used DTI for the income portion of the risk measurement. I used it initially and found problems with DTI when I started to consider actual cash flow and ability to pay/residual income measures.

What happens with DTI is that borrowers who have larger loan amounts have a greater residual income that lessens default risk. For example, a $400k loan, 43% DTI,  would feature a guy with much greater income and ultimately larger residual income after all debt service and living expenses, than those who have a 43% DTI on a loan amount of $200k or less. In fact, the guy who has the $200k loan amount or less, dependent upon family size, could have a negative residual income. And if your are talking about a family of 4, with 43% DTI and a loan amount of $150k or less, negative cash flow becomes an almost certainty.

The problem for Pinto calculating Residual Income is that the  available data did not have the data needed, so assumptions on income, debt and living expenses had to be calculated. I did so, and then ran the statistical analysis and found that the use of Residual Income for default was much more effective as a default indicator than using DTI.
Of course as I mentioned previously, lenders would have to deny loans using my methodology, so they did not want it.

The great part is that the new QM loans have ability to pay determination requirements. They can use either DTI or ability to pay, and will jump on using DTI so they do not have to deny doing loans and earning that profit. Meanwhile, I sit waiting for the defaults to mount, especially with FHA. Then I hit them hard.

34  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Housing/Mortgage/Real Estate on: January 08, 2015, 05:30:08 PM
Just a few comments:

Where the housing pundits miss the boat is that they just look at charts and graphs and then make assumptions. There is no underlying analysis of the factors that contribute to the housing "recovery" nor analysis of factors that will affect it in the future.

1.   With DougMacG’s graph, notice that about 1991 the beginning of the upward trend. Coincidently, that is when Bush 41 began the idea of increasing homeownership from about 64% to 70% or more.  Clinton then followed that up with programs designed to get maximum ownership.

2.   1993 saw a huge push by the GSE’s to begin to control the mortgage market. Banks, especially after the S&L crisis were considered risker for loans than the GSE’s.

3.   1991 saw the first real successful MBS issuance since about 1985 with Ameriquest securitizing a $61m offering.  By 1993, other Wall Street firms and Mortgage Bankers began to approach the MBS market. The target loans were those that the GSE’s would not buy.

4.   1993 saw the creation of a “working group” to create the methodologies that would be needed for future lending. The Banks, Wall Street, GSE’s and Mortgage Banker Associations were the major part of the working group. In 1995, its findings were complete and led to the creation of MERS. 1996 saw the first loan registered under MERS.  The beginning of large scale securitizations was set in place.

5.   About 1993 and later began the loosening of Leverage Ratios for Wall Street firms.

6.   1998 saw the repeal of Glass Steagall and now commercial banks could now engage in Wall Street type actions.

7.   Mid 1990’s saw greater emphasis on the Community Reinvestment Act. DOJ and other regulatory actions to promote “Fair Lending”.

8.     With the 2000 Market Crash and then 9-11, the Fed actions to loosen credit which promoted greater housing sales.

9.     Jun 22, 30 year interest rates hit 4.25% for one day, and the following day the Fed announces that they will begin to increase rates again. Jul 2005 saw the market top in "sales activity" with values falling in many areas and in some areas, continuing to increase at about a 5% yearly increase until the summer of 2006, when things went "dead".

10.   Dec 2006, the first Mortgage Bankers begin to fail. "Say goodnight to housing and hello to foreclosures."

When you look at the combined history of what occurred to facilitate the Housing Boom, then it becomes readily evident that what the Fed and the government has done since has been a total failure.

Fed actions have not been about stimulating a recovery. It has been about keeping the banks afloat with QE, getting the toxic assets off the books of the banks and out of Investor hands.  Right now, 75% of all Private MBS have been retired or else foreclosed. What is left is probably mostly held by the Fed.

Much of the hot money used to provide investors the ability to buy foreclosures and at risk homes was a deliberate action to prop up values. The reason is that Negative Equity was a key determinate in foreclosures when it hit 120% LTV or greater. At 120%, stressed homeowners began to look at home ownership as a negative. Why be finally stressed if values would not recover for years? As the stresses mounted, a homeowner was more likely to default.

At 140%, default became much more likely for stressed homeowners. Additionally, 140 saw a new motivation for default to occur. Homeowners who could make the payments began to buy more desirable homes, paying less than what they owned on their "smaller" and "less desirable" home. After the purchase, they moved into the new home and let the old home go into default.

At 160%, wholesale strategic defaults occurred.

The Fed needed to prop up values, so they have lowered rates, engaged in QE and attempted many other things to prop up values by stimulating housing. It has not worked.

Now, the GSE's and FHA are going to 97% LTV and lowering credit requirements. They are also allowing  more down payment assistant programs. At 97% LTV, default rates are 15.96% from the 2002 to 2008 years. They know that defaults will increase, but at one banker told me, if 85% of the loans do not default, then they are ahead of the game. 15% is not a big deal if they have reserves for losses.  (BTW, 81% LTV is the "break even point" for foreclosures. Above 81% and lenders begin to lose money on foreclosure sales.

What happens when rates increase? Payments go up, so to offset the payments, home values will drop.  Oops, that means more Negative Equity which will lead to more defaults. Also, credit lines increase in payments, living expenses increase, and disposable income goes negative. More defaults follow.

Currently 4m loans are delinquent. 800k plus loans have been modified by HAMP and the payments are beginning to increase. (400k other HAMP have already re-defaulted.)  2.5m lines of credit are now "resetting" with higher payments. ARM loans will have payment increases again when interest rates increase. More delinquencies and foreclosures to follow.

How is the Fed going to counter this?

BTW, I am no longer involved with the people I had been working with to bring to market new Underwriting and Ability to Pay evaluations. What happened is that we were told by Mortgage Bankers and Banks that using my model, they would have to either decline loans, or else the sellers would have to accept less of a sales price to sell the home, or else the buyer would have to find cheaper homes to buy.  Additionally, they did not want to know the risk of default with borrowers because it increased their liability if borrowers defaulted under the new Dodd Frank.

The solution for my "partners" was to take the system and "hide" the risk. Risk evaluations would be done and the lender could turn them on or off as desired. However, our system would still record it.  At this point I left them. They are now marketing the system as they revised it, and apparently have a couple of trial clients.

What the idiots do not realize is that by hiding the risk and allowing it to be turned or off by the lender, for every loan that is funded and sold to the GSE's or FHA, or any other party, they and the lenders are now "engaging in a conspiracy to commit fraud". These fools never learn........

35  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Housing/Mortgage/Real Estate on: December 28, 2014, 12:21:21 PM
New home sales are so great per Wesbury and others .............this really shows the truth.

36  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Housing/Mortgage/Real Estate on: October 02, 2014, 02:13:35 PM
Notice that Wesbury does not mention his data sources............just that the sources are believed to be accurate and reliable.  I would suggest that he look at other measures to determine whether Mortgage Credit is loosening or not.  The MBA has one such measure.  it does not show any real change in overall.

Also, the MBA Purchase and Refinance Index continue to reflect poor finance activity.  Here is the link to it.

IMO, Webury remains full of shit...

Mortgage Credit Availability Index (MCAI)

Mortgage Credit Availability Unchanged in September

Higher Index=More Credit Available
Lower Index=Less Credit Available

Mortgage credit availability remained unchanged in September, according to the Mortgage Credit Availability Index (MCAI), a report from the Mortgage Bankers Association (MBA), which analyzes data from the AllRegs® Market Clarity® product.

The MCAI remained unchanged at 116.1 in September. A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of a loosening of credit. The index was benchmarked to 100 in March 2012.

Last month, MBA began reporting on two additional measures of credit availability as part of the monthly MCAI release: the Conventional Mortgage Credit Availability Index and the Government Mortgage Credit Availability Index, with historical data back to 2011.

The Conventional and Government MCAIs, which are component indices of the Total MCAI, are constructed using the same methodology, and are designed to show relative credit risk/availability for conventional and government (FHA/VA/USDA) loan programs. The difference between the component indices and the total MCAI is first, the population of programs they examine, and second, the "base levels" to which they are calibrated. Using data from the MCAI and our Weekly Applications Survey, MBA calibrated the Conventional and Government indices to better represent where each index might fall in March 2012 (the "base period") relative to the Total= 100 benchmark.

Although the Government MCAI decreased slightly and the Conventional MCAI increased slightly, both the Conventional MCAI and Government MCAI changed less than one percentage point.

The Total MCAI has an expanded historical series which gives perspective on credit availability going back 10 years (expanded historical series does not include new Conventional or Government MCAI). The expanded historical series covers 2004 through 2010, and was created to provide historical context to the current series by showing how credit availability has changed over the last 10 years - this includes the housing crisis and ensuing recession. Data prior to March 31, 2011, was generated using less frequent and less complete data measured at six-month intervals and extrapolated in the months between for charting purposes.

MBA has partnered with AllRegs® to produce monthly MCAI, which feeds current mortgage underwriting parameters into a single index number to capture whether overall mortgage credit is more or less available from month to month.

The MCAI provides the only standardized quantitative index that is solely focused on mortgage credit.
37  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Aug Pending Home Sales on: September 29, 2014, 10:23:42 AM
Thought I would post the Pending Home Sales for Sept.  Once again, we see it falling.  Some key points:

Approximately 35-40% of the Pending Sales will be cancelled due to either Appraisal Issues or else loan denials, etc.

Yan states: “Fewer distressed homes at bargain prices and the acknowledgement we’re entering a rising interest rate environment likely caused hesitation among investors last month,” he said. “With investors pulling back, the market is shifting more towards traditional and first-time buyers who rely on mortgages to purchase a home.”

Distressed homes are down only because of government modification programs that are only temporary fixes for up to 5 years, at which time when payments increase the problems begin anew for those homeowners which number about 7 million loans. Plus 4 million loans are currently delinquent or in default. 2.5 million 2nd Lines of Equity are beginning to reset with payments hundreds of dollars higher, and when interest rates increase, this gets even worse. 2 million plus adjustable rate mortgages left over from the crisis which when rates increase, those loans will begin to re-default.

Add to home conditions that higher interest rates will depress home prices which creates more Neg Equity loans and which increases likelihood of default. Add in the fact that incomes have fallen for people with mortgages, (though Yan says otherwise) the financial stresses will lead to more defaults.

First time borrowers have been falling to about 22%. Increased interest rates will cause further decline in the ability to qualify until values begin to drop. Even then, this will not significantly impact purchases except to drive investors back into to market.

It is being reported that among first time buyers, over 50% are having down payment help from family members. Over 30% of down payment assistance loans default. FHA is the haven for first time home buyers with and without down payment assistance. Expect defaults to increase.

The major lenders are pulling back on FHA due to the risk of defaults and buybacks, even with QM standards. Many lenders are running from QM loans as well for the same reason, as well they should. There is an "unseen" trap with QM that is waiting to nail lenders doing QM on defaulting loans.

BTW, how does Yan expect first time buyers, or others for that matter, to be able to afford 5% yearly increases in home values if they can't afford homes now?  Also, how can he ignore the current delinquency conditions of homeowners, the re-default risk on modifications, and the 2nds and Adjustable Rate loans that will default?

It is nice that one can live in a "tunnel vision world" where you can ignore any negative factors that do not support the perspective that you want to sell. For this, Yan earns the idiot of the day award, which will then go to Wesbury when he comments on this.

BTW, when I mentioned above about the banks walking away from QM and FHA loans, the shift is to Mortgage Bankers doing the loans instead. Their goal is to do the loans as long as they have QM approval. They do not care about the Ability to Repay provision. As defaults occur with the riskier loans, many of the MB will fail because they do not have the asset base to repurchase defaulted loans.  (When a loan defaults, it loses approximately 50% of its face value minimum, unless it is severely modified. Add in the legal costs and borrower damages, and it is not going to be "pretty".)


Pending Home Sales Fall Slightly in August

WASHINGTON (September 29, 2014) – Pending home sales slowed modestly in August but contract signings remain at their second-highest level over the past year, according to the National Association of Realtors®. All major regions experienced declines except for the West, which rose for the fourth consecutive month.

The Pending Home Sales Index,* a forward-looking indicator based on contract signings, fell 1.0 percent to 104.7 in August from 105.8 in July, and is now 2.2 percent below August 2013 (107.1). Despite the slight decline, the index is above 100 – considered an average level of contract activity – for the fourth consecutive month and is at the second-highest level since last August.

Lawrence Yun, NAR chief economist, says contract signings are holding steady and fewer distressed sales and less investor activity is likely behind August’s modest decline. “Fewer distressed homes at bargain prices and the acknowledgement we’re entering a rising interest rate environment likely caused hesitation among investors last month,” he said. “With investors pulling back, the market is shifting more towards traditional and first-time buyers who rely on mortgages to purchase a home.”

According to NAR’s Profile of Home Buyers and Sellers, 81 percent of first-time buyers in 2013 who financed their purchase obtained a conventional or FHA loan. Overall, first-time homebuyers have been less prevalent from the housing recovery, representing less than a third of all buyers each month for the past two years.

Yun says first-time buyer participation should gradually improve despite tight credit conditions and the inevitable rise in rates. “The employment outlook for young adults is brightening and their incomes finally appear to be rising,” he said. “Jobs and income gains will help repay student debt and better position first-time buyers, setting the stage for improved sales growth in upcoming years.” 

The PHSI in the Northeast slipped 3.0 percent to 86.5 in August, but is still 1.6 percent above a year ago. In the Midwest the index fell 2.1 percent to 102.4 in August, and is 7.6 percent below August 2013. 

Pending home sales in the South decreased 1.4 percent to an index of 117.0 in August, unchanged from a year ago. The index in the West rose for the fourth consecutive month (2.6 percent) in August to 102.1, but still remains 2.6 percent below August 2013.

Existing-home sales are expected to be stronger in the second half of the year behind improved inventory conditions, continuously low interest rates and slower price growth. Overall, Yun forecasts existing-homes sales to be down 3.0 percent this year to 4.94 million, compared to 5.09 million sales of existing homes in 2013. The national median existing-home price is projected to grow between 5 and 6 percent this year and 4 and 5 percent next year.
38  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Aug New Home Sales Soar on: September 24, 2014, 01:54:21 PM

I have a confusing puzzle for you.  You probably saw this.  (Remember, this comes from the Census Dept)

Sales of US new homes soar in August

WASHINGTON (AP) — U.S. sales of new homes surged in August, led by a wave of buying in the West and Northeast.

The Commerce Department said Wednesday that new-home sales climbed 18 percent last month to a seasonally adjusted annual rate of 504,000. The report also revised up the July sales rate to 427,000 from 412,000.

Newly constructed homes sold at the fastest clip since May 2008. It's a clear sign of improvement for a real estate market that has been muddled in recent months, as the rebound in sales following the housing bust began to slow.

Sales of new homes are up 33 percent over the past 12 months. Median prices for new homes have risen nearly 8 percent during the same period to $275,600.

"All is not perfect in the housing market but things are certainly better today than they were about one year ago," said Dan Greenhaus, chief strategist at BTIG brokerage.

In the West, August purchases of new homes soared 50 percent compared to the prior month. Off the sharp August increase, sales in the West have nearly doubled in the past 12 months.

Between August and July, sales grew 29.2 percent in the Northeast. Buying increased 7.8 percent in the South and remained flat in the Midwest.

The housing market has been sputtering for much this year. A nascent recovery in sales and prices began to struggle toward the middle of 2013. Ferocious winter weather delayed construction and limited sales at the beginning of 2014. Buying did pick up over the summer. Yet the pace of sales has been depressed by sluggish wage growth and the price surge last year that put homes out of reach for many Americans.

While new-home sales did show greater strength in August, they are significantly below the 1990s pace of more than 700,000 sales a year, said Tom Showalter, chief analytics officer at Digital Risk, a mortgage analyst company.

"We're well below historic norms," Showalter said.

There are signs that another housing uptick may be in the works.

The National Association of Home Builders/Wells Fargo builder sentiment index climbed in September to 59, the highest reading since November 2005. Readings above 50 indicate more builders view sales conditions as improving.

But greater builder confidence has yet to translate into more construction.

In August, homebuilding fell 14.4 percent compared to the prior month to a seasonally adjusted annual rate of 956,000 houses and apartment complexes, according to the Commerce Department.

Much of that decrease was in the volatile apartments sector. Homebuilders started single-family houses at an annual rate of 626,000 last month, slightly below the pace of 631,000 in August 2013.

Existing home sales have also eased back compared with last year's pace.

Purchases of existing homes fell 1.8 percent to a seasonally adjusted annual rate of 5.05 million in August, the National Association of Realtors said this week. Sales fell from a July rate of 5.14 million, a figure that was revised slightly downward. Overall, the pace of home sales has dropped 5.3 percent year-over-year.

Here is the puzzle for you.

seasonally adjusted

Total                     Total        Northeast           Midwest         South         West               
July Sales              427k           24k                    58k             243k           102k
Aug Sales              504k           31k                    58k             262k           153k   

non seasonally adjusted

Total                     Total        Northeast           Midwest         South         West               
July Sales              38k               2k                    5k                22k             9k
Aug Sales              41k               3k                    5k                20k            13k 

Interesting Puzzle, isn't it?  The South has decreased sales, but adjusted numbers show a 19k gain. Total Actual Sales across the country increase by 3k, but perthe adjusted numbers, this amounts to yearly gains of 77k and not 36k.

Once again, we see the government manipulating the data to make things look better than what they are.  Wesbury and others will claim how great things are, but will not have even enough sense to look at the raw numbers.

Can anyone explain?

39  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Housing/Mortgage/Real Estate on: August 20, 2014, 09:16:35 AM
Now, for the comments on housing from a guy I am starting a joint venture with.....for much better understanding of reality, you read this guy and not Wesbury.....

I Don’t Care What the Media Says, Housing Market is Horrible, and Homeowners Still Suffering through the Loan Mod Process

I know what sorts of headlines run rampant through the media these days. It’s nothing new… it’s been going on non-stop since at least 2008. It’s also utter and complete nonsense.

Housing market horrors…

Now, I said this would happen so many times last year, that it’s annoying to have to repeat myself, but the housing market has been hit by yet another foreseeable perfect storm. To begin with, ever since the president’s Making Home Affordable program was announced, we’ve been refinancing the same people over and over again, this last time around at rates as low as 3.5 percent fixed.

So, that ended last July and won’t return because even the almost-all-powerful Fed can’t get rates low enough to pull the same trick again, so although there will always be some that refinance, any sort of refi boom is DOA.

And then there’s all them new-fangled rules, supposedly put in place to right the wrongs that caused the mortgage and housing meltdown… Dodd Frank, the CFPB, TILA, RESPA… and anyone who thought these new rules wouldn’t suppress home sales was simply delusional.

Of course, all of these things are on top of the rest of the problems we’ve neglected to fix for the last six years. Underwater homes are still a huge problem.
The national average is only 20 percent, but no one sells their home to break even, so when you factor in sales commissions, moving expenses and the need for a 20 percent down payment, the percentage of homes underwater is… I don’t know… HIGH. Like, it wouldn’t surprise me to find out it’s over 70 or 80 percent, not that anyone has any incentive to find out. And most of whoever is left probably likes their home and doesn’t want to move.

The evidence is abundant…

During the fourth quarter of 2013, Black Knight reported that origination volume dropped below 400,000 mortgages for the first time since 2011. And by year-end, we were at the lowest point since mid-2008 when volume plummeted to around 300,000, and it felt like the world might not make it through the bloodletting.
However, mortgage originations during the first quarter were pathetic, down some 70 percent year-over-year at Citi and Chase, and its safe to assume elsewhere as well. Then the second quarter was similarly bad… originations were down 66 percent year-over-year at the end of Q2.

Now, the American Enterprise Institute (AEI) has reported that, “potential default rates remain nearly double the 6 percent maximum AEI says is conducive to a stable market, suggesting there’s been no “discernible impact from QM [Qualified Mortgage] regulation.”

Unnamed AEI researchers were quoted in DS News as saying: “Risk in the mortgage marketplace remains perilously high.”

So, that’s all very encouraging in terms of pointing to the obviously bright future ahead, as I’m sure you’d agree.

All done waiting for the kids to come home?

Zillow and Puulseonomics, whoever they are, just published the results of their study of why “millennials” are still not buying homes like no one thought they would.
Apparently, “a panel of economists, real estate experts, and market strategists” has finally found the courage to agree publicly that “the median age of first-time homebuyers is likely to keep moving up in the next decade,” because they’ve all concluded at long last that the millennials have decided to sit out the carnage and not buy homes until later in their lives.

You know, later in their lives… like maybe the times of their lives when they have jobs, can qualify for loans, and aren’t still watching their parents, aunts and uncles losing homes every year, because those sorts of times would seem to be worth waiting for as far as house hunting is concerned.
Hey, maybe some of the millennials are simply waiting to buy their own parent’s home after foreclosure as an REO. What? It could happen.
The National Association of Realtors said that the typical first-time homebuyer in 2013 was 31 years old, but a significant number of “experts’ sais they think the average age will go up to 34 or even older in the years to come.

Homeownership in the United States today is at a 20 year low, and the Zillow/Pulse study reported that the largest declines are among “younger and early middle-aged Americans,” which could mean that many of the older folks have already lost homes to foreclosure, like maybe over the last six years, or that the older homeowners have become too much of a pain in the neck to foreclose on, I’m not sure which is more likely.

Of course, student loan debt and bleak prospects for good jobs were cited as the only culprits, which just shows me that they think that collectively we’re dumber than a stump.

Household formation is still down at levels never before seen in this country, and there’s simply no need to buy a home until you’ve got a household to put in it. And household formation is likely to be down in part because of student loan debt, but also because fewer people want to get married when they’re poor.
And as to the big picture, the survey concluded that, “it’s way too soon to conclude that the market has healed and returned to the old normal,” thus establishing for all to see that it is they who are dumber than stumps. (Does that last sentence make me something less than a serious journalist, or just someone who tells truth to power?)
Triple Celebrity Foreclosurcide…

And speaking of power, Burt Reynolds has lost his motion in a Florida court to have his foreclosure thrown out, instead the judge told Bank of America to proceed with the foreclosure on his waterfront Hobe Sound home known as Valhalla. Merrill Lynch filed the foreclosure action in 2011, after Burt fell behind on his payments.
Witnesses on the scene said that Burt, asking that the court call him “Lewis,” turned to them and said: “Sometimes you have to lose your house ‘fore you can find anything.”

Actress Mischa Barton, former star of “The O.C.” is officially in foreclosure, after the bank filed a Notice of Default this week on her Beverly Hills property. Barton is said to have bought the place for $6.4 million in 2005, when presumably she was still a famous movie star. Now $100,000 behind, reported that she’s been trying to unload the place since 2010.

Her mortgage is approximately $4.25 million, so it would seem that she’s down over $2 million since she bought it, and couldn’t sell it for what she owed. She even tried renting it out for $35,000 a month, but couldn’t find another member of the nouveau riche crowd to over-pay to live in the place.

Just further evidence of how red hot the Beverly Hills housing market has gotten over the last couple years as home prices have reportedly skyrocketed to 2006 levels… apparently everywhere but in the 90210.

Rounding out the celebrity trifecta is former heavyweight boxing champion, Evander Holyfield, whose failed business ventures, two divorces and hefty six-figure annual child support bills, have lad him to recently lose his 54,000 square foot mansion complete with 109 rooms, bowling alley and in-home theater, to foreclosure.

It took nearly four years for JPMorgan Chase to take ownership of the shopping mall size home in Fairburn, Georgia for $7.5 million. Holyfield reportedly owed north of $14 million. So, is that another example of home prices recovering? Georgia mansions are still down by 50 percent? How low were they?

Sources say that Holyfield never applied for a loan modification, but if he had, my advice to Chase would have been that they place armed guards, motion sensors, and video surveillance all around the Holyfield file 24 hours a day in a fire proof environment in order to make sure that his paperwork could not be lost under any circumstances. I would not want to be the guy that lost his paperwork, would you?

Loan modification madness…

With all of this swirling around us every day, the news continues to report only that economic recovery is sweeping the nation. That anyone still listens to such fanciful tales, let alone believes them, is amazing to me. The only explanation I can come up with is that optimism is a very hard thing of which to let go.

But we all know the real deal, we can feel the truth about the economy, we know what recovery feels like and this is not it.

Every month, foreclosures are supposedly down or coming to an end, until they’re up in Illinois, or breaking records in Connecticut… the numbers are always manipulated, and there’s no money in telling the truth about the whole mess, so no one does.

Although I couldn’t prove it, because I don’t keep track of the specific numbers, I think Mandelman Matters is a valid barometer for what’s going on with foreclosures and loan modifications. I hear from homeowners everyday from all over the country and those I can help in some way, I help. So, if the news about foreclosures were true, I’d know it.

Yes, for some homeowners loan modifications are easier to get than they have been in the past, but that’s not to say the process is easy or fun by any means. The people who have it the easiest are those with W-2 income and one home, who aren’t more than a year behind.

But, for the self-employed with a rental property who are more than a year behind… it’s like playing Pin-the-Tail-on-the-Donkey barefoot in a pitch black room filled with dangerous objects and broken glass all over the floor. It’s not impossible, by any means, I see these sorts of cases get approved every week, but it’s next to impossible without some sort of real expert guidance.

I wish I could do more to help more people, but I’m just one person and I can’t really afford to do what I do now. And the problem is, it’s obvious that our government, both state and federal, have essentially given up on doing anything more to make anything better. So, I fear this is it.

If you’re reading this and need help, especially if you’re with Bank of America or Ocwen, but also if you’re with Chase and/or a few others like SPS, SLS… maybe even Nationstar, you can contact me at And if I can help you in some meaningful way… I certainly will.

People ask me why I continue to do what I do all the time now… and I wonder about the same thing myself every few hours on some days. The reasons are below… from one homeowner I spoke with just a few days ago… and another I’ve never spoke with, but who I apparently helped anyway.
40  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Housing/Mortgage/Real Estate on: August 20, 2014, 09:09:57 AM
Once again, Wesbury is promoting a poor analysis.  Here is why.

1. Raw data has Multi Unit up by 11.6k units for the month.  Multi units are mostly apartments.  This does not help single family which is the real area of importance for a housing recovery.

2. Single Family increased 2.9% over the Jun numbers. 

Jun was 606k seasonable adjustments (for the year)
Jul was 656k

Stupid dumbshit is basing it on numbers with seasonable adjustments.

3.  Real Single family number show

62.2k for Jun
61.6k for Jul

So let's promote the seasonably adjusted numbers while we ignore the raw data which does not meet the message we want to project.

What a joke........
41  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Housing/Mortgage/Real Estate on: July 31, 2014, 10:11:39 AM

To go with your Collections post about the 35%, here is some more numbers to put things into a better perspective. Per the Fed

33% of all people have no revolving debt.
33% of the people have less than $1000 in revolving debt.
The remaining group has all the rest of the revolving debt.

Dependent upon the source, the "average" revolving debt in the country is from $8k to $15k.  (The differences are based upon what is considered revolving debt.)  So if 66% of all people have $1000 or less in revolving debt, imagine what the real numbers are for those who hold all the debt.

42  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Housing/Mortgage/Real Estate on: July 24, 2014, 04:44:02 PM

Such rubbish from Wesbury.

Why are people deciding to rent rather than buy? 

1. They can't afford the homes and the loans.
2. Income growth is stagnate except for the upper class.
3. 50% of current homeowners cannot sell due to low or negative equity.
4. 25-34 age group doesn't have the money to buy thanks to student debt.
5. Home construction is bouncing on the bottom still, even with poor analytics to derive the numbers.
6. Homeownership is still higher than traditional norms.  We should be no more than 63% and not the current 65%.

Yes, financing is still more difficult that the past, but does anyone seriously want to go back to the go-go lending of 2005?  Also, check out FHA.  15-20% default rates within the first two years of origination.  That is huge.  And that is what idiot Wesbury wants to go back to.

Wesbury, you are out of the game. Go to the locker room and play with your buddy Krugman.......
43  Politics, Religion, Science, Culture and Humanities / Politics & Religion / New Home Sales plummet on: July 24, 2014, 09:41:48 AM
Will Wesbury and others start to believe that the party is over?  Or is this the result of potential buyers deciding to go on a June vacation after school ended.  Waiting with baited breath for the excuses.......

New Home Sales Plummet

WASHINGTON (AP) — Sales of new U.S. homes plunged in June, a sign that real estate continues to be a weak spot in the economy.

New home sales fell 8.1 percent last month to a seasonally adjusted annual rate of 406,000, the Commerce Department said Thursday. The report also revised down the May sales rate to 442,000 from 504,000.

Buying of new homes fell 20 percent in the Northeast, followed by less extreme declines in the Midwest, South and West. The modest sales caused the inventory of new homes on the market to increase to 5.8 months, the highest since October 2011.

The median sales price was $273,500, up 5.3 percent over the past 12 months.

Home sales had been improving through the middle of 2013, only to stumble over the past 12 months due to a mix of rising prices, higher mortgage rates and meager wage growth.

The pressures from mortgage rates have eased since the start of 2014 and the pace of price increases have slowed. Still, other indicators suggest that home-buying has stalled after rebounding from lows reached during the Great Recession.

The National Association of Realtors reported that sales of existing homes increased 2.6 percent in June to a seasonally adjusted annual rate of 5.04 million homes. It marked the first time that sales have been above the 5 million-mark since October.

Economists were encouraged by the second straight monthly gain in existing home sales, though those sales are still hovering below the recent peak of 5.38 million sales hit last July.
44  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Jun Existing Home Sales on: July 22, 2014, 01:59:17 PM
Happy times are here again. NAR cites Existing Home Sales up

2.6% Month over Month

Seasonally Adjusted Rate of 5.04 million homes per year.  (Of course, take the Seasonally Adjusted Rate for Jun and multiply by 12.  Ignore what the amounts were in previous months because that would offer a different set of facts.)

I am  probably not allowed to say this according to NAR rules, but Year over Year Sales are down again, for the 8th month in a row.  (Damnable facts.)

If we take actual sales for the first 6 months of the year, it is 2,319,000 total sales.  Seems that this number is much under the 5.04 annual rate that NAR cites. 
And don't forget that the Buying Season is pretty much over and total sales monthly will begin to decline again no later than August.  Guess that 5.04 rate is not going to hold up for the year.

45  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Housing/Mortgage/Real Estate on: July 18, 2014, 09:10:25 AM
At least Wesbury admits that Single Family have been flat for the last two years.......

But single family is the key to housing recovery. Multi units are apartments and condos for the most part. They do not stimulate Single Family actions in any meaningful manner, except for condo purchases which are generally people who could not buy single family.

BTW, Chase is bailing out on FHA lending. Too much risk as I have been saying all along. Chase represents just over 2% of FHA lending and dropping down to probably 1.5%.

Mortgage bankers are now up over 50% of all lending activity, if current reports are correct. But that is in an environment where mortgage lending has dropped 72% from last year levels.

First time buyers are now about 20% of activity, down from traditional levels of 35-40%.  And most are FHA, of course.  Moveup buyers are lacking in traditional numbers like first time buyers.  And with the hot money investors leaving the market, watch out.

Pay attention to Phoenix. The party is over there.....again.....Homes sales are down considerably and home values are falling again.  Vegas will be next.
46  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Housing/Mortgage/Real Estate on: July 17, 2014, 10:32:36 AM
I am sure he has already thought of it.

Here is another article about what is happening with mortgages.  In this piece, the writer is speaking about the mortgage banker.  In 2007, the mortgage bankers were the companies who failed because they could not repurchase all the defective mortgages. So, the potential for the same pattern exists again.

Combine this with what I wrote about having their heads buried in the sand on QM mortgages and not wanting to know the risk, and things will heat up quickly.

I have already prepared the homeowner arguments to be filed in lawsuits alleging that lenders did not adequately consider ability to repay the loan.  The way the arguments are set up, Safe Harbor will not protect the lenders. I will be releasing this to attorneys in the next couple of weeks.

The banks and the GSEs are not going to change their practices. I have reached the point where I now believe that the only way they will respond is to make it truly painful for them.  The Regulatory Lawsuits being settled do not offer pain. When you look into the details, the pain is actually on the investors who own the MBS. The required principal reductions and modifications are where the bulk of the fines go.

Fannie, Freddie making risky deals with small lenders: watchdog
WASHINGTON (Reuters) - U.S. housing finance companies Fannie Mae and Freddie Mac are making riskier deals as they increasingly purchase mortgages from smaller lenders, a federal watchdog said on Thursday.

The government-owned companies do not lend money directly, but underpin the U.S. housing market by guaranteeing most new mortgages in the country.

The Federal Housing Finance Agency Office of Inspector General said in a report that the purchases from smaller lenders raises the exposure of the two companies.

"Smaller and non-bank lenders may have relatively limited financial capacity," the watchdog said. "The enterprises face an increase in the risk that those counterparties could default on their financial obligations."

Fannie Mae and Freddie Mac, which were seized by the U.S. government in 2008 during a housing market implosion, purchase loans from lenders and package them into securities that are then sold to investors.

In the past, the two companies bought most of their loans from the country's largest banks. Small lenders generally dealt with larger banks, who in turn sold them to Fannie and Freddie.

However, tighter regulations have made big banks such as Bank of America Corp and Wells Fargo & Co reticent to buy loans from other lenders, so more small banks and non-bank enterprises now sell directly to Fannie and Freddie.

Freddie Mac's top five mortgage sellers provided 70 percent of its loans in early 2011, but only 44 percent in late 2013, according to the report.
47  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Jun Housing Starts on: July 17, 2014, 09:12:37 AM
Hey Wesbury and you other idiots bulls:

What happened to Housing Starts?  Here was the most positive spin I could find to post.  Maybe Wesbury can use it to draw up his latest report.

Apr, May and Jun are supposed to be the best months for housing, and this is all we get?  Interesting that this happens as housing inventory is increasing, existing sales are down year over year, pending sales are weaker than expected and new home sales are not that great.  Maybe Obama can restart housing by offering all the new illegal children new homes free to live in, and then bring the families in.

Going to be a fun second half of the year.

Housing starts hit slowest pace in nine months

WASHINGTON - U.S. home construction fell in June to the slowest pace in nine months, a setback to hopes that housing is regaining momentum and will boost economic growth this year.

Construction fell 9.3 percent last month to a seasonally adjusted annual rate of 893,000 homes, the Commerce Department said Thursday. That was the slowest pace since last September and followed a 7.3 percent drop in May, a decline even worse than initially reported.

Applications for building permits, considered a good indicator of future activity, were also down in June, dropping 4.2 percent to a rate of 963,000 after a 5.1 percent decline in May.

The worse-than-expected June performance reflected a big drop in activity in the South, where construction plunged by 29.6 percent last month.

Analysts, however, said that the June decline in construction may have been influenced by temporary factors such as heavy rain in parts of the South which could have held back housing starts in that region.

Jennifer Lee, senior economist at BMO, said it was too soon to conclude that the housing recovery has stalled. "After all, job growth continues, mortgage rates are near their lows for 2014 and homebuilder confidence has been increasing," she said in a research note.

"In short, much weaker than expected, but the data are volatile and the plunge in starts was all in one region. We view the homebuilder survey as more of trend-setter over time -- it suggests that the weakness in this report be discounted," said Jim O'Sullivan, chief U.S. economist at research firm High Frequency Economics.

The overall weakness reflected a 9 percent fall in construction of single-family homes, the biggest part of the market, and a 9.9 percent drop in construction of apartments and other multi-family units.

All of the June weakness was confined to the South, where about 40 percent of home construction occurs. Construction was up 14.1 percent in the Northeast, 28.1 percent in the Midwest and 2.6 percent in the West.

Home construction has struggled to gain traction this year, limiting its ability to contribute to economic growth. Part of the weakness reflected an unusually severe winter which hampered construction. But rising home prices, a rise in mortgage rates from historically low levels and tighter lending standards imposed since the financial crisis have also been a barrier, especially for potential first-time buyers.

There still is hope that housing will perform better in the second half of the year although Federal Reserve Chair Janet Yellen told Congress this week that the slowdown in housing is one of the concerns at the Fed and that its forecast for an economic rebound may prove to be too optimistic.

The National Association of Home Builders, however, reported Wednesday that homebuilder confidence surged in July, reflecting heightened expectations that the second half of the year will see rising sales. The builders' sentiment index rose to 53, up four points from a revised reading of 49 in June. Readings above 50 indicate more builders view sales conditions as good rather than poor. The July reading was the first month above 50 since January when the index stood at 56.

New home sales surged 18.6 percent in May to a seasonally adjusted annual rate of 504,000, the highest level in six years, while sales of previously owned homes rose 4.9 percent, the biggest one-month gain in nearly three years, to a rate of 4.89 million homes.

Even with the big May increases, sales of new homes are still running at just about half the pace of a healthy real estate market.

Economists expect there is a lot of pent-up demand for homes after many potential buyers put off purchases during the 2007-2009 recession and the weak recovery since that time. Job growth has accelerated in recent months, with an increase of 288,000 jobs in June. That has helped to push down the unemployment rate to a nearly six-year low of 6.1 percent in June.

There is optimism that employers will step up their hiring further in the second half of this year as they respond to a rebound in overall economic growth following a weak winter.

The economy shrank at an annual rate of 2.9 percent in the January-March quarter but analysts believe growth rebounded to around 3 percent in the April-June quarter and will remain around that level for the remainder of this year.
48  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Our Pat on Mortgage Bankers on: July 15, 2014, 11:09:23 AM
I am going to throw out some industry actions that are simply impossible to believe, but absolutely true.  This part concerns Mortgage Bankers.

A Mortgage Banker is not a bank, but is a lender who generally funds on a Warehouse Line of Credit and which will be sold to the GSEs in the end.  Prior to funding, the loans will be run through the GSEs automated approval systems. Once approved, they are funded.  These are the QM loans that you hear about.

A QM loan comes with a Safe Harbor provision whereby a lender is "protected" from Ability to Repay and Duty of Care provisions in Dodd Frank. So the perception is that the loans have no problems.  

The key Ability to Repay component is the Debt to Income Ratio. As long as Debt to Income is 43% or less, or the loan is GSE approved, the Ability to Repay provision is presumed to be met.

Since the QM regs came out, I have been studying the 43%  DTI extensively. Turns outs that DTI is effective only 53% of the time in predicting defaults. Further research revealed that with a 43% DTI, more than 25% of all loans will have a Negative Cash Flow, so unless a borrower changes habits, they will likely experience first year defaults.  (Think FHA with 10% rates.)

Now, Safe Harbor is not really Safe Harbor. Under Dodd Frank, a lender can be sued for Unfair and Deceptive Acts and Practices (UDAP). UDAP can be used even if a practice is legal.

We created a model to identify the Default Risk on any loan, and it has an 82% reliability right now, without having access to a complete loan file.  We have been presenting the model to Mortgage Bankers.  Here is the response.

They argue that if they know the risk of any one loan, then their liability increases. But with Safe Harbor, as long as they don't know the risk, they are protected.  So they don't want to use the model.  

Here is their real problem. Under UDAP, if they fund the loan and it defaults, the borrower can sue them regardless of Safe Harbor. But, if it defaults, they must buy the loan back from the GSEs. And the CFPB and DOJ can come after them for funding loans a borrower could not repay.  However, if they deny the loan, since the loan was approved by the GSEs, they could be sued by the borrower for discrimination or under Fair Lending Laws and also UDAP. And the DOJ and CFPB can go after them for discrimination and Disparate Impact.  

IOW, they are screwed if they do, or if they don't fund the loan.

But here is what we knew and were recently able to confirm. The Mortgage Banker is going to fund the loan no matter the risk. If they don't fund the loan, they decrease their earnings.  (Each loan generally makes about $1500 in total profit.)  So it is do the loan whatever the risk, and make the money. And pray that the loan does not default.

BTW, the banks are of the same attitude.......and the GSEs as well.

49  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Housing/Mortgage/Real Estate on: July 10, 2014, 07:34:46 PM

Let's take Scott's chart and long at it a bit further.

1. Notice the upsurge in Purchases in 2009 and 2010, and then the fall back?  That was due to the Obama Tax Credit of about $8500 per home purchase, if I remember the amount correctly. It simply brought housing demand forward, and the second the incentive stopped, housing sales fell again.

2. Sales start rising again in 2011 with the introduction of QE 2 and QE 3. Now they are bouncing again as QE is pulled back with year over year sales dropping.

3. Interest rates during this latest increase were at the lowest that they have every been on mortgages, and yet you only get that little push upwards. What happens as rates increase.  (BTW, a 2% increase in rates will drop home values about 18%, as historical research has shown.)

4.  With existing inventory as low as it was in 2011 - 2013, buyers went to purchasing new homes............and this is all they got as increases?

5.  BTW, even last year, it was about the 6th lowest year on record..........even worse that when the US population was under 200 million.

Now, you really have to look at the report each month to understand something else going on, and that is the methodology used to arrive at these numbers.  They use statistical sampling from different regions. The reports have a 90% confidence level, meaning that there is huge room for errors.

More important, they round off the numbers.  In each of the 4 regions, they take the estimate sales and round to the nearest thousand.  So, if you have 501 sales, they round to 1000.  How accurate is that?

Plus, the error rates per region are from 12.5% to about 25%.  This means the data is statistically "worthless".  Yet, we are to believe that this is a "successful" recovery.

Right now, the lending standards are so screwed up, it is pathetic.  One of my partners does mortgage loans still. He has a client wanting to buy a home, and it will have a 60% LTV.  Debt to Income is 25%.  His and the wife's income is VERIFIED at $423k per year. 823 Credit Score.  $800k in the bank after the loan closes.  He cannot get a loan because he does not have three credit lines over 2 years old.  He pays cash for everything but this, but that is not being credit worthy.

Meanwhile, FHA is giving out loans at up to 55% Debt to Income, with credit scores as low as 600.  And that is credit worthy?

Unless people pay attention to this stuff daily, and are really in the industry, they have not a clue what is really going on.
50  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Housing/Mortgage/Real Estate on: June 24, 2014, 05:45:14 PM
You also have to look where all the activity was.......

Total increase in actual units sold...........9000 for the month

Increase in the South .....6000 units
Increase in the West ......3000 units
Midwest.....broke even
Northeast.......1000 units

Now, these numbers are rounded............501 is rounded up and 499 is rounded down.  We don't know actual numbers so this could be very deceptive....Law of Small Numbers....

These are also Sampling Surveys with estimated numbers.........could this be subject to the same frauds as the Employment reports on surveys?

Additionally, the "sale" is either contract signed or deposit taken.  That is a lot of room for the sale to "fall out".

Relative Standard Error Rates for


Would you put money on such Error Rates?

Confidence levels are just as pathetic.

BTW, the banks own internal studies are not optimistic.
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