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ppulatie
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« Reply #550 on: September 01, 2015, 08:21:34 PM »

On VA, I should have said that the defaults are lowest of all.

Now, with all of this, you also have to add in Baby Boomer demographics. At least 65% of boomers have mortgages. Few will be paid off by their retirement. As they retire, income drops and ability to pay decreases significantly. Additionally, they have equity problems and many remain underwater. Unless the Boomer can downsize to a home that they can afford or else obtain a reverse mortgage, the Boomers will be increasingly "financially stressed" to the point whereby defaults will increase.

For too many Boomers, the Greenspan years were criminal. Greenspan advocated using the home as a personal ATM, spending on toys and not paying off loans. Now this is going to bite the Boomers badly.

Add in another housing collapse which is going to happen within the next handful of years, (I expect beginning somewhere in 2017) and things will get ugly again, and very quickly.
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PPulatie
ppulatie
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« Reply #551 on: September 02, 2015, 10:40:12 AM »

I have mentioned many times about New Home Sales and the population issue, and how Sales do not match population.  Here is a graph that I found perfectly illustrating my point.

People discuss a recovery occurring, but this really shows the "depth" of any recovery. With interest rates at the lowest point in history, this is "all" we get?  Add in the lack of home affordability, artificial increase in values due to lack of inventory and increasing living expenses with income declines, there is no way that a real "organic" recovery can occur.



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PPulatie
ppulatie
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« Reply #552 on: September 04, 2015, 10:54:45 AM »

Here is something relevant to the Foreclosure issue.  Fannie Mae just extended foreclosure timelines for all of their loans.  Also, the GSEs and FHA are promoting how their foreclosures are down. They omit two pieces of data.

1. Under the new modification  rules, if a borrower is between 90 and 720 days late, they ask for a modification and they get it automatically. They do not need to submit any documentation, etc. No one is checking to see if they can afford a modification.

2. Loans over 720 days late are being sold to private investors.

So of course foreclosure rates are falling.

http://www.housingwire.com/ext/resources/files/Editorial/Documents/foreclosure-timeframes-compensatory-fees-allowable-delays.pdf

Fannie Mae extends foreclosure timelines in 33 states


Fannie Mae announced that it is increasing the maximum number of allowable days for “routine” foreclosure proceedings for much of the country.

In total, Fannie Mae increased the maximum number of allowable days for a foreclosure sale for 33 states, effective for foreclosure sales on or after Aug. 1.

Fannie Mae made the announcement Thursday in an email to its servicers.

According to the announcement, Fannie Mae increased the maximum number of allowable days for the following jurisdictions: Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Kansas, Kentucky, Louisiana, Maine, Maryland, Michigan, Nevada, New Mexico, New Hampshire, Oklahoma, Oregon, Pennsylvania, Puerto Rico, Rhode Island, South Dakota, Tennessee, Texas, Vermont, Washington, West Virginia, Wisconsin, and Wyoming.

As part of its servicing guide, Fannie Mae establishes time frames under which it expects routine foreclosure proceedings to be completed.

According to Fannie Mae, the maximum number of allowable days takes represents the maximum allowable time lapse between the due date of the last paid installment and the completion of the foreclosure sale.

The allowable time frame also signifies the time typically required for what Fannie Mae calls a “routine, uncontested” foreclosure proceeding.

The allowable time frame reflects the legal requirements of the applicable jurisdiction, and takes into consideration delays that may occur outside of the control of the servicer, Fannie Mae said.

If the number of days to complete a foreclosure sale exceeds stated maximum number of allowable days and the servicer does not provide an adequate explanation to Fannie Mae as to the reasons for the delay, Fannie Mae requires the servicer to pay a “compensatory fee.”

According to Fannie Mae, the list of “reasonable explanations” includes:

Bankruptcy

Probate

Military indulgence

Contested foreclosure

The mortgage loan is currently in review for HAMP

The mortgage loan is in an active mortgage loan modification trial plan or unemployment forbearance

Recent legislative, administrative, or judicial changes to existing state foreclosure laws, provided that the servicer is diligently working toward resolution of the delay to the extent feasible

Fannie Mae noted in its announcement that there is currently a compensatory fee moratorium for Washington D.C., Massachusetts, New York and New Jersey and stated that the moratorium will last, “at a minimum,” until Dec. 31.

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PPulatie
Crafty_Dog
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« Reply #553 on: September 04, 2015, 12:35:03 PM »

 shocked
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ppulatie
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« Reply #554 on: September 04, 2015, 02:05:55 PM »

Didn't mean to "shock you".

Wonder what Wesbury would say?   
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PPulatie
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« Reply #555 on: September 04, 2015, 03:02:21 PM »

 grin
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ppulatie
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« Reply #556 on: September 08, 2015, 06:07:45 PM »

This is absolute incredible.  I am shocked, I tell you....just shocked... Here is the real story of what is going on, but the reporter was too stupid to understand.


http://www.bloomberg.com/news/articles/2015-09-08/liar-loans-redux-they-re-back-and-sneaking-into-aaa-rated-bonds][url]http://www.bloomberg.com/news/articles/2015-09-08/liar-loans-redux-they-re-back-and-sneaking-into-aaa-rated-bonds[/url]


Liar Loans Redux: They're Back and Sneaking Into AAA Rated Bonds

The pitch arrived with an iconic image of the American Dream: a neat house with a white picket fence.

But behind that picture of a $2.95 million home in Manhattan Beach, California, were hints of something darker: liar loans, those toxic mortgages of the subprime era.
Years after the great American housing bust, mortgages akin to the so-called liar loans -- which were made without verifying people’s finances -- are creeping back into the market. And, like last time, they’re spreading risks far and wide via Wall Street.

Today’s versions bear only passing resemblance to the ones that proliferated in the mid-2000s, and they’re by no means as widespread. Still, they reflect how the business is starting to join in the frenzy that’s been creating booms in everything from subprime car loans to junk-rated company bonds.

The Manhattan Beach story -- how the mortgage on that house was made and subsequently packaged into securities with top-flight credit ratings -- recalls a time when borrowers, lenders and investors all misjudged the potential danger.

The story begins earlier this year, when a TV producer bought the cream-colored home. His lender, Velocity Mortgage Capital LLC, says it writes mortgages for people buying homes only for business purposes, such as renting them out, and requires all customers to sign documents stating their intentions.

Soon Velocity was bundling the $1.92 million mortgage and hundreds of other loans into securities through Wall Street’s securitization machine. Kroll Bond Rating Agency featured a picture of the house in a report on the $313 million deal, most of which was rated AAA. Marketing documents for the offering, which was managed by Citigroup Inc. and Nomura Holdings Inc., characterized the buyer as an “investor.”

No Rental Plans

But when a reporter recently knocked on the door in Manhattan Beach, the buyer answered and said he never planned to rent out the place. Nor, he said, had he signed documents stating he would. He was living in the house with his family.

The apparent discrepancy isn’t nearly as worrisome as the kind that first brought liar loans to widespread attention. During the housing bubble, countless borrowers fibbed about their income, often with lenders’ encouragement. For lenders and investors -- let alone knavish borrowers who might get in over their heads -- the potential for trouble is real this time, too.

That’s because federal regulations put in place following the crash effectively outlawed liar loans. Under so-called ability-to-pay requirements, lenders must take specific steps to ensure homebuyers actually can afford the mortgages. If they don’t, homeowners can sue and potentially win damages that can dwarf the value of the homes.

Avoid Paperwork

But in a throwback to subprime times, Velocity and other specialty lenders routinely offer certain mortgages with limited reviews, if any, of borrowers’ finances. That’s because the rules exempt mortgages made for “business purposes.” The setup lets borrowers avoid typical paperwork, in return for paying higher mortgage rates.

Velocity, for instance, sends mortgage brokers e-mails with subject lines like, “Stated? Really??” -- a reference to stated-income loans, which became known as liar loans.
Chris Farrar, Velocity’s chief executive officer, says his company takes steps to ensure customers really are buying homes for business purposes. These include having every borrower hand write and sign letters testifying to their plans.

“Our goal is to never make a consumer loan,” Farrar said. Velocity’s lawyers have advised the company, previously known as Velocity Commercial Capital, that its processes would put it on solid ground even if it somehow failed to weed out inaccurate applications, he said.

First to Suffer

Velocity, based in Westlake Village, California, also keeps skin in the game by retaining the parts of its bond deals that would be the first to suffer losses, Farrar said. He declined to comment on the buyer in Manhattan Beach, citing privacy laws.

As Velocity and others hunt for profits, the question is also how carefully these lenders are vetting customers and loan brokers.

In Velocity’s recent bond deal, an outside due-diligence company reviewed about 30 percent of the loans. The post-crisis standard in residential transactions has been at least 90 percent. The review revealed at least one other questionable loan, and Velocity removed it from the deal.

In assigning AAA grades, Kroll partly relied on Velocity’s promise to buy back any loans that fell short of the standards, said Nitin Bhasin, a Kroll managing director.
“That’s a question for Velocity, I think: How do they make sure when they’re making a loan that it’s not owner-occupied,” Bhasin said.

Representatives for Nomura and Citigroup declined to comment.

Other players in this game include Citadel Servicing Corp. and Athas Capital Group Inc., both based in California.

Fair-Lending Rules

At Athas, the company has discovered less than a handful of instances in the past eight years when buyers moved into homes after saying they wouldn’t, CEO Brian O’Shaughnessy said. But he also suggested that fair-lending rules can make it risky to turn down customers “because I think you’re a liar.”

Dan Perl, the CEO of Citadel Servicing, said savvy underwriters and careful documentation will protect lenders and investors. Like the others, his company demands borrowers put their intentions in writing.

“If they say, ‘you should have known what my intent was,’ we’re going to hold up that document,” Perl said. “It’s a sad state of the world, but we’re looking to make sure we’re not going to be harmed on it.”

It’s difficult to say how far the problems might go, but industry experts agree that mortgage lending is nowhere near as sloppy as it was during the last go-round, which created a bust that produced about 6 million foreclosures.

Even so, the costs could be significant. If a homeowner sues and wins, claiming lenders violated ability-to-pay rules, lenders might have to pay three years of finance changes, legal costs and “actual damages,” which could include down payments and myriad other costs, according to Jeffrey Naimon, a partner at BuckleySandler LLP.
As in the past, some borrowers might claim -- rightly or not -- that they misunderstood documents or were hoodwinked by mortgage brokers or lenders.
“The consumer could argue, ‘They told me I had to mark that box or I wouldn’t get that loan,”’ said Scott McNulla, a vice president at Clayton, a unit of Radian Group Inc. that does diligence work for lenders.

To Naimon, the real danger would be if unscrupulous mortgage brokers once again encouraged homebuyers to get in over their heads.
“I’m much more worried about a case involving unsophisticated borrowers that get tricked by a broker into doing it,” he said.
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PPulatie
ppulatie
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« Reply #557 on: September 08, 2015, 06:36:39 PM »

Here is the skinny on Velocity.

1. The loans are being done as "business loans".This is a crock. They claim that the loans are business loans because such loans are exempt under TILA/RESPA  and Dodd Frank. But they do not have a clue what they are doing. Rentals avoid certain disclosures, but they do not meet the business standards in most cases when residential properties are involved.  (Velocity is doing a lot of 1-4 unit residential properties. This will not fly.)

2. Stated income would not be covered by a business loan, so they can try to avoid verifying income. But if it is a regular rental, then TILA/RESPA and Dodd Frank should apply, requiring verification of income, etc. There is no way I would want to try and defend it as commercial.

3. The issue of people buying to rent and then moving in can be easily attacked. The lender claims that they get the borrower to sign "intent letters", but that will not protect the lender. They want protection, do a residency check 2 months after the purchase to show whether the occupancy fraud was committed or not. And if the investor checks and finds more than a couple of occupancy fraud loans, then Velocity has their ass hanging out to dry.

4. As to the homeowner saying he never signed the occupancy documents, bet there is fraud present, either by the homeowner, or by the broker.

5. The goal is to never do a residential loan. LOL. Then they had better stick with retail or commercial properties. How I would also defeat their arguments? Look at the zoning for the property. If it is for residential, then I got them nailed.

6. The company doing the due diligence is paid by Velocity. Anyone think that they are going to do real due diligence and risk losing the business? Also 30%? We learned long ago about those problems.

7. So Velocity is taking "first loss" position on the Tranches. Ask Lehman Bros how that worked out for them.

Velocity is scamming and trying to see how far they can push the regulations. They will probably be okay up until the time that the loans begin to default in significant numbers. Then here comes the Investors and the CFPB.
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PPulatie
ppulatie
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« Reply #558 on: September 09, 2015, 03:46:25 PM »

 So it is insufficient supply of new home building that is causing higher prices in addition to lack of distressed properties and lack of turnover (move up buyers). And construction is not keeping up with the improving job growth.

1. Job growth sucks. Look at all the people out of work and no longer looking. Plus all the people who have now gone to Part Time due to Obamacare. Then there is the Job Growth mostly being in Part Time positions to make up for all the Full to Part Time positions.

2. Move up buyers don't exist because no one trusts the market, or cannot afford to move up. Many don't have enough equity to sell, pay the commission and have enough left over to buy a new home with 20% down..

3. The higher prices are caused by all the Hot Money from Wall Street and Fed actions. That has priced people out of the market.

4. Wages are not growing with the jobs. In fact wages are declining overall.

5. Home builders will not build if they cannot sell.

But to Yan, it is all about inventory and being able to build new homes whether a market exists or not.


http://www.realtor.org/news-releases/2015/09/nar-study-new-home-construction-trailing-job-growth-in-majority-of-metro-areas

NAR Study: New Home Construction Trailing Job Growth in Majority of Metro Areas

WASHINGTON (September 9, 2015) — Despite positive improvements in the labor market in recent years, new home construction is currently insufficient in a majority of metro areas and is contributing to persistent housing shortages and unhealthy price growth in many markets, according to new research from the National Association of Realtors®.

NAR measured the volume of new home construction relative to the number of newly employed workers in 146 metropolitan statistical areas1 (MSAs) throughout the U.S. to determine whether homebuilding has kept up with the steadily improving pace of job growth in the past three years2. The findings reveal that homebuilding activity for all housing types is underperforming in roughly two–thirds of measured metro areas.

Lawrence Yun, NAR chief economist, says low inventory has been a prevailing headwind to the housing market in recent years. "In addition to slow housing turnover and the diminishing supply of distressed properties, lagging new home construction — especially single family — has kept available inventory far below balanced levels," he said. "Our research shows that even as the labor market began to strengthen, homebuilding failed to keep up and is now contributing to the stronger price appreciation and eroding affordability currently seen throughout the U.S."

NAR’s study analyzed job creation in 146 metro areas from 2012 to 2014 relative to single–family and multifamily housing starts over the same period. Historically, the average ratio for the annual change in total workers to total permits is 1.2 for all housing types and 1.6 for single–family homes. The research found that through 2014, 63 percent of measured markets had a ratio above 1.2 and 72 percent had a ratio above 1.6, which indicates inadequate new construction.

According to Yun, with jobs now being added at a more robust pace in several metro areas, the disparity between housing starts and employment is widening. In 2014 alone, the average ratio of single–family permits to employment jumped to 3.7, while the ratio for total permits increased 50 percent to 2.4.

"Affordability issues for buying and renting because of low supply are already well–known in many of the country’s largest metro areas, including San Francisco, San Diego and New York," says Yun. "Additionally, our study found that limited construction is a widespread issue in metro areas of all sizes."

The markets with the largest disparity of jobs versus home construction (single–family) and currently facing supply shortages are San Jose, Calif., at 22.6; San Francisco, 22.4; San Diego and New York, at 13.9; and Miami, 11.1.

"While construction is limited in some markets — such as Trenton–Ewing, N.J. and Rockford, Ill. — they aren’t facing inventory shortages despite having high ratios because their job gains are more moderate," adds Yun.

Single–family housing starts are seen as nearly adequate to local job growth (a ratio of 1.6) in Jackson, Miss.; Colorado Springs, Colo.; Chattanooga, Tenn.; Amarillo, Tex.; and St. Louis.

Looking ahead, Yun says there’s no question the homebuilding industry continues to face many challenges, including rising construction and labor costs, limited credit availability for smaller builders and concerns about the re–emergence of first–time buyers. However, the strong job growth seen so far in 2015, and only muted gains in single–family housing starts, suggests that sustained price growth will continue to put pressure on affordability.

"The demand for buying has drastically improved this year and is propelling home sales to a pace not seen since 2007," says Yun. "As local job markets continue to expand, the pool of homebuyers will only increase. That’s why it’s crucial for builders to begin shifting their focus from apartments to the purchase market and make up for lost time. If not, severe housing shortages and faster price appreciation will erode affordability and remain a burden for buyers trying to reach the market."
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PPulatie
ppulatie
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« Reply #559 on: September 09, 2015, 07:57:09 PM »

I just got asked about this website and if what is written is correct.  I get calls or emails about this crap a couple of times per month. You will get a kick about the conspiracies out there regarding mortgage lending and then foreclosure. The pathetic part is this guy is making money off of people and just causing them to lose their homes.

http://stopthepirates.blogspot.com/
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PPulatie
ppulatie
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« Reply #560 on: September 11, 2015, 09:49:22 AM »

This is the absurdity of the Housing pundits.  The author is the President of homes.com. In the article, he cites the reasons that Housing is only set to improve, prices are up near or over 2007 levels and going to rise further; for sellers, it means equity to sell and buy another property; for buyers, confidence in future appreciation.

The President took over in Sep 20144. The company sells information and valuation services. His prior jobs had nothing to do with real estate. So he is obviously well prepared to evaluate housing.
 
http://www.housingwire.com/blogs/1-rewired/post/35037-were-about-to-reach-the-halfway-point-of-recovery-but-whats-next

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PPulatie
ppulatie
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« Reply #561 on: September 21, 2015, 12:06:37 PM »

Back in August, I posted about the Pending Home Sales report for Jul. Here is what I did.

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.


Notice that the report showed Pending as .5% up, Seasonally Adjusted, and 11.5% down, Not Seasonally Adjusted.  Just what I expected occurred.

For Aug, Existing Sales ended up 4.8% down, apparently seasonally adjusted numbers. Non Adjusted numbers would be much worse. This shows that paying attention to the Non Adjusted numbers is critical to understanding what is going on.

Yan tries to blow it off, stating that tight inventory was likely the problem, but the good news is that Price Appreciation is moderating from unhealthier rates of growth earlier in the year.  What? Earlier in the year, he was orgasmic over the increasing rates of price appreciation.

Now, he is saying that when the Fed begins rate increases, it will not affect sales because the public will be able to handle slowly increasing rates due to future wage increases, and new home starts increasing. Duh.....where is the wage growth? What about builders not adding too much to housing stock and that we are now entering the slow down phase of the year for building.

And people wonder why I hate Economists, Politicians, Realtors, Pundits and just about everyone else.................



From the NAR:

Following three straight months of gains, existing–home sales dipped in August despite slowing price growth and a positive turnaround in the share of sales to first–time buyers, according to the National Association of Realtors®. None of the four major regions experienced sales increases in August.

Total existing–home sales, which are completed transactions that include single–family homes, townhomes, condominiums and co–ops, fell 4.8 percent to a seasonally adjusted annual rate of 5.31 million in August from a slight downward revision of 5.58 million in July. Despite last month's decline, sales have risen year–over–year for 11 consecutive months and are 6.2 percent above a year ago (5.00 million).

Lawrence Yun, NAR chief economist, says home sales in August lost some momentum to close out the summer. "Sales activity was down in many parts of the country last month — especially in the South and West — as the persistent summer theme of tight inventory levels likely deterred some buyers," he said. "The good news for the housing market is that price appreciation the last two months has started to moderate from the unhealthier rate of growth seen earlier this year."

The median existing–home price for all housing types in August was $228,700, which is 4.7 percent above August 2014 ($218,400). August's price increase marks the 42nd consecutive month of year–over–year gains.

Total housing inventory at the end of August rose 1.3 percent to 2.29 million existing homes available for sale, but is 1.7 percent lower than a year ago (2.33 million). Unsold inventory is at a 5.2–month supply at the current sales pace, up from 4.9 months in July.

"With sales and overall demand higher than a year ago and supply mostly unchanged, low inventories will likely continue to limit options for those looking to buy this fall even with the overall pool of buyers shrinking because of seasonal factors," adds Yun.

The percent share of first–time buyers rebounded to 32 percent in August, up from 28 percent in July and matching the highest share of the year set in May. A year ago, first–time buyers represented 29 percent of all buyers.

"When the Federal Reserve decides to lift short–term rates — likely later this year — the impact on mortgage rates and overall housing demand will likely not be pronounced," says Yun. "With job growth holding steady, prospective buyers can handle any gradual rise in mortgage rates — especially if today's stronger labor market finally leads to a boost in wages and homebuilding accelerates to alleviate supply shortages and slow price growth in some markets."





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PPulatie
ppulatie
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« Reply #562 on: September 21, 2015, 08:38:12 PM »

Harvard just came out with a study of the Housing Industry at this time. It confirms many of the issues that I have pointed out for several years, everything from demographics, to move up buyers, lack of equity and poor affordability.

Well work the read, if you are interested in the Housing Market.


http://www.jchs.harvard.edu/sites/jchs.harvard.edu/files/jchs-sonhr-2015-full.pdf
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« Reply #563 on: September 24, 2015, 10:22:20 AM »

New Home Sales just released. 

Sales of new single-family houses in August 2015 were at a seasonally adjusted annual rate of 552,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development.  This is 5.7 percent (±16.2%)* above the revised July rate of 522,000 and is 21.6 percent (±18.7%) above the August 2014 estimate of 454,000.


Non Seasonal Adjusted Sales

Jul 2015    -  44k in sales
Aug 2015  -  45k in sales

1000 additional sales...............bfg.



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« Reply #564 on: September 25, 2015, 05:28:38 PM »

Here is a good article for you on Housing and Lending from the well known political pundit, Steven Moore.

http://www.washingtontimes.com/news/2015/aug/23/stephen-moore-mortgage-woes-of-the-middle-class/

In this, Moore is bemoaning the fact that he got denied for a mortgage loan from PNC and then Wells Fargo. He blames it on the new Lending Regulations, since 8 years ago you could have got approved with 25% down.

From the article:

The main reason I was denied a loan was because of a below-average credit score. This was infuriating on several levels. First, I have had two previous mortgages and in 25 years I’ve never missed a payment. How can I be a high-risk borrower? The answer is twice in 30 years I was 30 days late paying my credit card bill — and paid the hefty late fee. Even more ridiculous, I, Steve Moore, have $300 of unpaid parking tickets. The horror. How does that data point provide any useful information to a bank about whether I’m going to pay my mortgage?

This prompts another obvious question: Why in the world does any financial institution put any credence in credit rating agencies today? They were the most derelict institutions of all during the housing meltdown. These were the buffoons who were giving triple A credit ratings to mortgage-backed securities only weeks before the whole house of cards collapsed. They were the ones who ignored every warning of the subprime overload. They were the ones who gave Enron, Countrywide, Bear Stearns and others a clean bill of health right before these institutions famously crashed. And banks still listen to their advice on which homeowners are likely to pay off their loans?

But here is why I really want to pull my hair out. While I’m making a 25 percent down payment, the government insurance underwriters — the Federal Housing Administration (FHA), Fannie Mae and Freddie Mac — are backing with taxpayer dollars hundreds of thousands of low down payment loans of as little as 3 percent. These are the loans that will likely default. And taxpayers are on the hook for hundreds of billions of more loans.


My comments:

If Moore is as knowledgeable in politics as he is in mortgage lending and credit, he should find another career. He knows nothing about lending and credit.

1. Moore was denied for a below average credit score. He blames the low score on 2 credit card lates over 30 years. Either he does not understand credit scoring, or he is a liar.

Any credit card late drops off after 7 years. Before that, after even 2 years, it has very little effect upon the score. So if we assume that only 1 late was reported, this would only have dropped his score about 20-30 points at the first reporting, and within 2 years, there would likely be no effect.

Something else is going on to have such a low score. Probably, he is totally maxed out on his credit lines, which would drop the score significantly.

2. Moore mentions $300 in late parking tickets, and blows it off.  What do you want to bet that he had a lien placed upon him for those tickets? This would have driven down his credit score as well.

3. To show how stupid he is, he equates his credit scores and the bureaus with the Rating Agencies for doing Mortgage Backed Securities, etc. They are separate companies with separate products. The Rating Agencies do not supply credit scores, etc.

4. Moore rails against the GSEs and FHA for 3% down payments, when he was putting up 25% down. He has a point with FHA risk on the low down payments, but for the GSE's, at this point, credit standards and other credit criteria are keeping down default risk to under 6.5%. (I  would raise standards even further to get it down to 2-3%.)

5. And his 25% down, I have done analysis on loans that default with various down payments. The simple fact is that the loan under normal circumstances must have at least 19% down payment, or the lender suffers losses in foreclosure. And the longer the foreclosure continues before resolution, the greater the down must be to prevent losses. And this does not include a drop in home values.

6. Moore finally rails about how with the GSE's and FHA, the taxpayers are on the hook for the 100's of billions being lent, assuming that losses will be that high. Again, he is way off base. For the GSE's, the less that 20% down loans carry PMI which the homeowner pays for and which pays the losses up to the 20% down payment. FHA does "self insurance" which the homeowner pays through increased fees, but that offsets most losses.

As I said, I hope that Moore is a lot smarter with politics than he is with lending. If not, he is a real idiot of the first magnitude.


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« Reply #565 on: September 30, 2015, 04:52:49 PM »

Thought I would give people some idea of what I am getting on the Modification front.

1. One person who has not made a payment in 8 years just got modified. 3.5% interest rate. New 40 year term. Loan to Value 147%.

2. One person who has not paid in 5 years just got modified. 3.5% rate. Had 5% equity in home.

3. One person got denied. 6 months late, all caused by the modification process. If he got 3.5% for an interest rate, he could make the payment. Currently at 6.75%.  Had under 80% Loan to Value and was told that because he had 20% plus equity, he would be denied.

So if you don't make payments for years and are underwater, you can get modified. But if you are only a few months late, caused by the Mod process, and you have equity, you do not get a mod.

This stuff is so screwed up.......
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« Reply #566 on: September 30, 2015, 08:28:43 PM »

Rewarding bad behavior will get you more....

Thought I would give people some idea of what I am getting on the Modification front.

1. One person who has not made a payment in 8 years just got modified. 3.5% interest rate. New 40 year term. Loan to Value 147%.

2. One person who has not paid in 5 years just got modified. 3.5% rate. Had 5% equity in home.

3. One person got denied. 6 months late, all caused by the modification process. If he got 3.5% for an interest rate, he could make the payment. Currently at 6.75%.  Had under 80% Loan to Value and was told that because he had 20% plus equity, he would be denied.

So if you don't make payments for years and are underwater, you can get modified. But if you are only a few months late, caused by the Mod process, and you have equity, you do not get a mod.

This stuff is so screwed up.......
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« Reply #567 on: September 30, 2015, 10:00:47 PM »

Of the two loans that were modified, the one that had not been paid for 5 years called me to find out how they could file a lawsuit for a Predatory Modification. They wanted better terms than what they got. It took about 20 minutes to get them convinced that they had no case, and if they wanted to appeal the mod, they would lose.  BTW, their payment dropped from $850 per month to $690 per month.  They also wanted to see if they could file a lawsuit based upon Truth In Lending violations from the loan origination in 2004. They were not happy when I told them about the Statute of Limitations.

The one that had not paid for 8 years just wanted me to determine whether there were any loopholes in the Modification Agreement where the servicer could deny making it permanent. They were happy with what they got. And, they will be able to repay from here.
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« Reply #568 on: October 01, 2015, 12:25:39 PM »

Just got a call from a client about his mother.  She went into default and was threatened with foreclosure. She got the money together and paid off the loan entirely. (It was a small amount.) This happened several months ago. The lender still does not acknowledge that the loan was paid off.

Tomorrow, the lender is holding the Trustee Sale, meaning that the home is being foreclosed on tomorrow, come hell or high water. Client wanted to know options.

This is clearly a case of unlawful foreclosure. Told the client to have his mother contact the Trustee doing the sale, and send them the cancelled check. They can stop the Sale and contact the lender to resolve. If this does not work, to protect her home, she goes to the courthouse for the sale, and when the property is announced, scream at the top of her lungs that the loan has been paid off, provide the person conducting the sale a copy of the cancelled check and then have him call the Trustee right there. This does two things:

1. Puts the company doing the auction and the Trustee on constructive notice that it is an unlawful foreclosure.

2. Puts any bidders on notice that the loan was paid off, the foreclosure is unlawful and that they would not be "bonafide purchasers" so they are not protected, and can be included in any lawsuit for unlawful foreclosure.

Just another normal day for me.............................

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« Reply #569 on: October 17, 2015, 08:08:22 AM »

http://www.zerohedge.com/news/2015-10-16/theyre-back-own-0-money-down

I'm sure this will end well.
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« Reply #570 on: October 17, 2015, 09:55:44 AM »

The zero money down option must be either VA or else non GSE/FHA lending. 

I want every one of these no VA type loans for a client when they default. They are non Qualified Mortgages and will be subject to far greater liability than the QM loans. Each default lawsuit will be a slam dunk if the default occurs within 18 months. Underwriting standards will have to be very restrictive, making qualifying very difficult to avoid defaults.
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« Reply #571 on: October 17, 2015, 01:08:35 PM »

A zero money down purchase would make sense IF the title could automatically revert back to the lender quickly and cheaply upon default.  What if we had enforceable contracts voluntarily entered into by consenting adults?!  In other words, not possible in an over-regulated, litigation-happy, non-free market America.

There used to be a car dealership ad running up in the suburb where Jess Ventura became mayor that went something like this:
"Bad Credit?"    "We don't care."
"No Down Payment?"     "We still don't care."
"Miss a payment??"  A pro wrestler body slams the poor buyer right through the hood of the car on the TV.    "Now we care."

How about a having consequence for default on a collateralized loan, like losing title in a matter of days/weeks, not years or litigation, unless the facts are in dispute.

In a Colorado eviction (as I understand it), the Landlord files and serves the allegation of owing rent.  The Tenant must deny the allegation and file a response in order to get his or her day in court.  If you don't deny the facts alleged, what is the point of a hearing?

If you promised to pay for something and do not pay, then it isn't yours!  If you want partial credit for making partial payments, put that in the contract.

The further we get away from free markets, the more screwed up things get, until it brings down the whole economy.
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« Reply #572 on: October 17, 2015, 01:53:15 PM »

What you are talking about with regards to a quick and easy reversion of the property to the lender is actually the basis for Non-Judicial Foreclosures. With Non-Judicial Foreclosures, there is a "set timeline" that exists for a foreclosure action. This process is codified in law.

For California, this is Civil Code 2924. It describes how foreclosures will be done. A homeowner misses three payments and is 90 days late, then the servicer files a Notice of Default. If the borrower does not reinstate, then after another 90 days, the Notice of Trustee Sale is filed. The borrower has 20 days to reinstate. On the 21st day, the foreclosure auction is held. If no one bids, then the property reverts to the lender.  At least, this is how it works in theory and did so up to 2007.

(BTW, different states have different time lines, but all are essentially using similar processes for Non Judicial Foreclosures.)

When you have a Mortgage and not a Deed of Trust, it is a different process. The lender files a lawsuit to foreclose. The homeowner responds to the lawsuit, and then the Court rules either yes or no. Then, a Right of Redemption exists whereby the homeowner can reinstate if possible. If not, then at some future date, the foreclosure occurs.

Under these various schemes, foreclosures can take place in anywhere from 5 months to a year.

The problem is that when the crisis began in 2008, two things happened.

1. The government decided to slow foreclosures through HAMP and other type prevention programs. New regulations were created that mandated a homeowner be considered for a modification. This has led to literally years to foreclose.

2. The internet and crooked attorneys came up with all types of allegations of improper actions. This included things like securitization was illegal, MERS had no authority to act, robosigning, and the note and deed were split so a foreclosure could not occur. It has taken years to sort this mess out legally, and even now, courts are still dealing with MERS and Securitization lawsuits, of which they all end up in the appeals court whereby the homeowner claims are finally declared invalid.

What is important to understand is that the government did not want to resolve the foreclosure crisis. They only wanted to delay it. Tim Geithner admitted that HAMP was not designed to save homes. Instead, the government believed that over 10 years, the lenders could absorb about 10 million  foreclosures without significant harm to the country. So they set up a plan that would stretch out foreclosures over 10 years to resolve the problem. And once again, the government screwed up.

Also, look at HAMP and the National Mortgage Settlement. Each of these programs mandated that servicers take specific steps in modification and foreclosure actions. Certain actions were banned. But what the programs did not do is provide the homeowner a "right of private" to litigate for violations. So the lenders and servicers could do what they wanted without fear of homeowner reprisal.

This problem could have been resolved years ago. Simply it would have made sense to evaluate the loan and if the homeowner could not handle the payments even if modified, then foreclose fast.

With the GSEs, offer to sell the loans to private investors for discounted rates and let them handle modifying the loans or foreclosing. This would have been far cheaper than QE and other programs that have cost the government trillions.

For bank held loans, use the Good Bank/Bad Bank scenario from the S&L crisis. But the government did not want to do that either.

Much of what has gone on has  been about propping up the banks. Engaging in actions whereby the loans would not have to be written off, no mark to mark accounting, QE buying of toxic mortgage assets, heavy Fed Reserve Accounts have all been about keeping the banks "solvent" has been the real reason behind the actions.

We have another 15 years minimum of this mess at the least. And with Foreclosure Crisis 2.0 around the corner, look out.
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« Reply #573 on: October 20, 2015, 10:46:40 AM »

In anticipation of CD posting a Wesbury comment on New Home Starts, I present the following.

From the Census Report

Single-family housing starts in September were at a rate of 740,000; this is 0.3 percent (±9.6%)* above the revised August figure of 738,000.  (Seasonally Adjusted)

Non Adjusted, meaning actual Monthly results were

Aug 2015  -  66,800 single family units
Sep 2015  -  64,800 single family units

Looks to me like this was a 3% drop over the previous month and not .03% increase.  (Notice the ±9.6% error rate)

Wesbury is going to proclaim that all is well and moving forward.

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« Reply #574 on: October 20, 2015, 10:49:08 AM »

The visual evidence of our wonderful housing recovery.

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« Reply #575 on: October 20, 2015, 11:08:09 AM »

Very telling graphic.  I am very tired of hearing about the slight uptick since rock bottom as part of how great things are.

If we ever engineer another economic growth period, watch how small these Obama era numbers look in comparison.
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« Reply #576 on: October 20, 2015, 12:05:38 PM »

Doug,

If only somehow I could explain all the things I have heard and experienced since 2007 and the beginning of the collapse, it might go to explain why I have given up and resorted to Trump.

The conversations I have had and/or listened in on have been frightening. Whether it is the banks, Wall Street firms, CFPB or Treasury, the attitudes are frankly "I don't give a frick about anything but myself". It is all about the money.

The housing industry was doomed from the time that Lewis Ranieri was tasked with creating the Mortgage Bond Trading Desk with Salomon Bros in the late 70's. Ranieri and those he brought in to create the market were the worst sharks of all time. When they created the bonds by buying loans from the S & L's, they lied, cheated, misrepresented and stole to do nothing but make commissions. There was no concern for their clients and the harm that they would cause to others. They set the stage for crash in 2007 because the attitudes never changed.

When I was working with the other group two years ago, the former Bank Chief Risk Officer told me time and again about how the bank traders were the worst sharks of all. They would cut throats to make even 5 basis points in commissions. Over a period of time, I began to understand what he was talking about, but did not realize that he was one of those same traders, hiding behind a facade.

When we went into meetings with our products designed to actually help out the lending industry, reducing risk and defaults, I experienced just how bad things were and then realized that the banks and Wall Street would never change. These firms did not want to reduce or eliminate risk of default. Doing so meant that they would lose business denying loans. Then when they went to do securitizations, the risky loans that were included and even misrepresented in the bonds allowed them to make even more money.

I am torn right now. IMO, the GSEs must be disbanded and lending practices totally changed. The 30 year loan should be discontinued and instead replaced with 5 or 10 year loans only, similar to the system in Canada. But this cannot be done without bringing either portfolio lending back into play or else Wall Street securitizations back. Yet bring back Wall Street, and in another 15 years, we will experience another financial crisis.

IMO, all we can hope for is a complete financial collapse and complete rebuilding of the system. But that will fail because the same people who caused the problem and then enabled it will be the same people to "rebuild it".

Sorry for rambling but I just don't have the words to really explain it all. But I am sure you can read the frustration that I am experiencing......

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« Reply #577 on: October 20, 2015, 01:08:16 PM »

Okay, more stupidity from Fannie Mae. Let's loosen standards so more unqualified people can qualify.

1. Use Equifax data to verify employment and income.  And who expects Equifax to have correct data? What about changes in hours and other things? That will not reflect on Equifax data. The data will be a lagging indicator and not up to date. Income is dynamic and changes all the time. What b.s.

2. Ease the qualifying for people without a credit score. People don't have a credit score for a number of reasons. Mostly this is because either they are not credit eligible or else in the past they have lost their credit in some manner and never applied again. I have seen people who don't have credit scores for another reason, they are illegal and can't get it. Show me a person with no credit and the risk of default goes up tremendously.

3. Use income from non-borrowers living in the household. In other words use kids income, grandparents, other family members, etc. Another absurd program that increases risk significantly. (Probably to be used by ethnic groups who have several families living in the same home.

We never learn....


http://www.wsj.com/articles/need-a-home-mortgage-fannie-says-forget-the-pay-stubs-1445333580?mod=yahoo_hs

Fannie Mae on Monday said it would allow lenders to use employment and income information from a database maintained by credit bureau Equifax to verify borrowers’ ability to handle a loan, rather than relying on the traditional documentation process of collecting physical copies of pay stubs and tax data.

Fannie announced other changes it said could broaden mortgage access for some borrowers. The mortgage giant will ease the lender process for granting loans to borrowers who don’t have a credit score, a key issue for advocates for certain minority groups that are less likely to have traditional credit histories. Likewise, Fannie in mid-2016 also will require lenders to begin collecting “trended” credit data from Equifax and TransUnion, which includes longer-term borrower credit histories.

In August, Fannie rolled out a new program that let lenders count income from nonborrowers within a household, such as extended family members, toward qualifying for a loan.

In August, Fannie rolled out a new program that let lenders count income from nonborrowers within a household, such as extended family members, toward qualifying for a loan.
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« Reply #578 on: November 06, 2015, 01:52:33 PM »

Posting this also to 'Housing' thread

Share of First-Time Homebuyers Falls in U.S., Now at 28-Year Low
http://www.bloomberg.com/news/articles/2015-11-05/share-of-first-time-homebuyers-falls-in-u-s-now-at-28-year-low
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« Reply #579 on: November 06, 2015, 02:47:33 PM »

This is not good news for the market. First timers support the market and provide the impetus for move up buyers. Eliminate first time buyers and move up buyers are similarly affected. Now, add in the expected beginning of rate increases in Dec, and it gets even worse.

I did not post the latest sales figures, but I will do so now.


From the National Association of Realtors

Total existing–home sales, which are completed transactions that include single–family homes, townhomes, condominiums and co–ops, increased 4.7 percent to a seasonally adjusted annual rate of 5.55 million in September from a slightly downwardly revised 5.30 million in August, and are now 8.8 percent above a year ago (5.10 million).

While current price growth around 6 percent is still roughly double the pace of wages, affordability has slightly improved since the spring and is helping to keep demand at a strong and sustained pace."

Additional Notes:

58% of sales have prices below $250k.
30% between $250 and $500k. 
Using Non Seasonal Adjustments, Sales fell 6.5% from Aug to Sep.

Seasonal Single Family Starts for Oct were up 4%
Actual Single Family Starts dropped from 66,800 to 64,800

The bottom line is that Housing Starts and Existing Sales remain in a bouncing along the bottom mode. There is no "break out" yet to indicate any chance of a real Housing Recovery. Instead, if rates begin to increase, expect Starts and Sales to drop further.

On the loan origination front, though the GSEs are loosening standards, there are still no indications that any significant increases in originations is occurring. In fact, as rates increase, expect originations to fall based upon a lack of affordability.

The reality is that the low interest rates over the past five years have totally screwed up the market and made refinances a thing of the past as rates increase. Purchase originations will fall as well.


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« Reply #580 on: November 08, 2015, 09:48:55 AM »

http://www.nytimes.com/2015/11/08/nyregion/real-estate-shell-companies-scheme-to-defraud-owners-out-of-their-homes.html?emc=edit_th_20151108&nl=todaysheadlines&nlid=49641193&_r=0
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« Reply #581 on: November 08, 2015, 11:27:12 AM »

CD,

This has been going on across the country since 2008. The fraudulent deeds are actually just a small percentage of the various schemes that have been utilized by these criminals.
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« Reply #582 on: November 12, 2015, 11:39:52 AM »

Great article, though general in nature, about Housing and its coming end. Fully agree with the author.

http://www.theburningplatform.com/2015/11/11/housing-bubble-part-deux/
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« Reply #583 on: December 10, 2015, 02:31:14 PM »

http://scottgrannis.blogspot.com/2015/12/strong-mortgage-applications.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+blogspot%2FtMBeq+%28Calafia+Beach+Pundit%29
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« Reply #584 on: December 10, 2015, 03:41:00 PM »

You trying to get me going again? You know Scott and I disagree totally on this.  You are so  evil

Here is an industry website that covers Mortgage Apps on a weekly basis. Seems that they are not so excited about things.

http://www.mortgagenewsdaily.com/12092015_application_volume.asp

My comments:

1. Why are the apps up over the last couple of weeks? Try the consensus opinion that the Fed will increase short term rates next week. Each time this threat has presented itself, applications immediately shoot up, people jumping in for loans and getting the last of the lower rates.

2. Securitized Mortgages have increased by about 10% in the past two years after being flat from 2009 to 2013.  Duh, does anyone think that the "increase" in home values and financing had anything to do with this increase? Look at the last two years, and average increased was just about that number. Also, don't forget increases in allowable LTV.

3. Yes, mortgage debt has pretty much bottomed for now. But that is a result of foreclosures having bottomed for the moment. New foreclosures are increasing again, and after a year, the first of these will end in foreclosure and mortgage debt will begin to drop again.

4.  Why is mortgage debt increasing a great thing? Especially when the new QM loans have a huge defect that will bite the lenders in a couple of years. And why are Chase and the other larger lenders bailing out of mortgage lending, especially FHA, and leaving the business to Mortgage Bankers? They know what is about to happen.

5.  Financial markets are lending again? Only in GSE and Ginnie Mae loans where government guarantees exist. Is this "good" lending? Private lending will once again be less than $10 billion for this year.

6.  Single Family Housing Starts are still pathetic. They remain among the 10 worst years since 1963 and even then, the population was 178m.  Multi units are holding up the rest of the Construction Market, but even then the numbers are  pathetic for the population growth.

7. Loan demand might be the result of returning confidence and prosperity of homebuyers?  Wow, I can give Scott a list of a hundred realtors just out of memory who will argue with him on this point. Confidence? People don't expect things to hold, especially with increasing rates. (Most are expecting a full 1% over the next year.) Prosperity? 50% of the people have less buying power than the early 1990's. And with rising costs of goods and medical insurance, this will go much higher. Add in the increasing rates and prices of homes, and everything worsens.

8. 5m new jobs?  Okay, but where are those jobs? Service sector, and with large numbers of them part time. 

The reality is that most people in the industry, the realtors, loan officers, banks, all will tell you off the record that things suck and they are going to get worse before they get better.

But then, I am not a PHD economist..........

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« Reply #585 on: December 10, 2015, 04:10:40 PM »

Pat,  I am in sunny south Florida this week (actually cloudy) studying the condo market close to the water.  An older guy in the hot tub last night explained to me why the values stay so flat.  People are dying.  Older people, often younger than us, come down here to enjoy the good weather, live out their years, and don't reproduce.  When they die, and all do, the heirs put it on the market. (Oops, guilty.)  The housing along and near the Ocean in this area is almost one continuous city; the developments are large and seem to go on forever.

This market is odd to me.  Every kid my age in my neighborhood growing up lived there all of k-12.  No one moved in and no one moved out.  As you grow older you see a larger time frame, things are very much changing.  Immigrants and migrants come in and the demographics keep changing.

Without immigration, this area would have to replace every aging person lost with a new aging person leaving the midwest and northeast.  Besides escaping the cold and the income tax they can escape Minneota's ruthless estate tax.  But for every American migrating, south Florida (or Scottsdale or wherever) covers for one thy lost, the state up north has lost a person and all his money.

I'm not heading to some profound point, just saying the birth rate in a lot of places is not covering for the people we are losing, and most of the people coming in can't afford the housing where the people at the top of their economic life were living.  (End the good immigration and we are REALLY screwed.)

Your advice on housing here:  Sell?  Hold, then sell?  I'm not even getting rental ad responses.
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« Reply #586 on: December 10, 2015, 05:22:43 PM »

Housing is local for sure.  And that dictates what to do.

I did an article in about 2011 on factors facing the Housing Recovery and Age Demographics was a key part of what I wrote. It went straight to what you are saying. (Florida where you are is different for their demos.)

1. For people over 65, about 50% have mortgages with most having very little equity. When they retire, most do not have the funds to pay the mortgage and other expenses as they age. For them, it is sell, downsize and use the equity to live out their days.

The lucky ones can get a reverse mortgage to have added cash. The mortgage will be paid out until they die, but they will still have insurance and tax payments. So for many, this is not an option.

2. For those who have a home with no mortgage, they can continue to live well. But there is a certain segment where health events will occur and at that point, it is assisted living which would require selling the home. So it is another stress on home ownership.

3. Legal immigration has run typically about 720k per year, up to over 800k. Since this includes family members, there is very little offset to the loss of homeownership of the elderly.

4. The Boomers was the largest generation seen, except maybe it has been outdone by now. Add in the WW2 generation and living longer, there exists a huge demographic of homeowner "ending" over the next 20 years.

The Gen X generation is in its peak buying years. But Gen X did not have near the population of the Boomers. So replacement homeowners have been lacking. Add to this that Gen X was probably the hardest hit age demographic in the foreclosure crisis, and replacement homeowners are severely restricted.

5. The Millennial Generation suffers a different fate. 1/3rd of all are living at home. They can't afford homes with what they are making. Add to that the lack of well paying jobs, and the replacements just don't exist. Then factor in housing costs, and it is even worse.

Millennials have also seen what happened in the foreclosure crisis. So they are very leary of going forward with owning a home.

What is the solution? Therein lies the real problem.

1. Home values and affordability are just not "good". Prices have risen again and priced 50% of the people out of the market. And until values drop, this segment cannot rebuy.

2. 8 million people were foreclosed upon. Another 6m have had modifications, so their credit is suspect as well. That is 14m removed from ownership, probably permanently. It does not seem like much, but there are 50m homes with mortgages and about 21m without. So taking that into consideration, 14m is a significant problem.

3. Low interest rates have kept mortgage payments down on ARMs and on LOE's. As these rise, potential up to 15m loans again are at risk of default. And as defaults go up, home values go down causing more negative equity positions. And as Neg Equity and Money Crunch issues hit, foreclosures increase, which causes more Neg Equity and more defaults.  This is the Housing Death Spiral that we just managed to avoid last time by dropping rates to nothing.

4. Decreasing income and increasing living expenses just exacerbate the problem.

5. Private lending no longer exists. It is all GSE and Ginnie. Until Private Lending resumes, then nothing will improve.

So what do we do?

I have been considering this since Oct  2010, trying to develop a strategy to bring back housing.  Unfortunately, there are few people who even want to consider what needs to be done.  Here is my solution.

1. Homeowner defaults must be stopped. This involves early intervention and true attempts to mitigate the defaults. It involved principal reductions, forbearance and other changes to the note to make payments affordable. Each and every loan must be evaluated with a true Ability to Repay Model and Default Risk Scoring System. (I have the thing built, but no one so far wants to use it. Though I may have my first customers coming in the next month or so.)

Many will argue that the homeowners got themselves into trouble as so they should lose the homes, but at a certain point of lender and servicer malfeasance and government stupidity, and with the problem not going away, then this argument has little validity left.

2. Homeowners who defaulted must be "rehabilitated". This involves putting them into programs that will solve problems, whether it is heavy debt, credit scores or other problems that prevent them from returning into the housing market in the future. Incredibly, the needed programs are available but no one has indicated an interest in working a comprehensive program. (I also have that developed.)

3. Many former homeowners are actually in a position that they could afford to make mortgage payments again and they have reduced Default Rates with their new circumstances. But they are prevented from getting back in because the new guidelines still penalize them since most have reduced credit scores. This is the Good Loan/Bad Loan Scenario or False Positives and False Negatives.

A False Negative Loan is a loan that appears in underwriting to be "bad" but is actually a good loan. A False Positive Loan is one that looks good, but is bad. Identify which is which and the buyer market can be significantly increased. Plus it brings back in the Private Lending Market for the False Negatives. But no one has an ability to determine which is which.  (Except me. I have spent since 2012 perfecting the model. It may get used finally in the next couple of months on some litigation issues.)

This addresses the homeowners who have lost homes, but we also have to look at how else to stimulate the market.

1. We have to return rates to a market normal. 3.5% on a 30 year loan is absurd. That is why the GSEs exist. They are the only ones who will accept that return.  Let the rates go to a market level and let home values fall to meet an equilibrium. This will create more affordability and open up more first time buyers.

2. We have to create viable and transparent methods for evaluating loans in MBS pools. This provides an incentive for Private Lending to resume.

3. We have to establish a true methodology for determining default risk and ability to pay. (Again, I have it ready.) This eliminates the False Positives and False Negatives.

4. 30 Year programs must be changed. We need to go back to pre Depression lending. Loans were done for then as Interest Only or even regular amortization, but they would be from 5 to 15 years maximum. The loans would be refinanced or paid off upon maturity.  (Canada uses this system.)

5. Dodd Frank must be repealed and new regulatory practices created.

6. The TBTF banks need to be broken up. Get rid of the problem and get more regional and local banks back into business.

7. Stop the Homeownership programs like CRA. These "warp" the system and do no good. Good underwriting practices and guidelines would solve this problem.

8. Eliminate the GSEs.

9. Turn loan officers into Financial Professionals and hold them to a Fiduciary Duty. A home is the biggest purchase of a person's life. It is  not realistic to have "used car" salesmen selling loans to unprepared buyers. Make them hold to a true standard like CPA's, etc.

10. Reimpose Glass Steagal. Make Commercial and Wholesale Banks different again. Don't let them intermingle.

There is much more needed, but this would go a long ways towards solving the problem. We still have the elderly demographics to deal with, but that will be reduced since we are building upon the buyer market.

As to Florida, I just don't know enough about it. I would not want to advise what to do because since I am usually wrong about things, I would probably put you in the homeless lines. Of course, you can join me there......we can drink our pruno and get pleasingly wasted.
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Crafty_Dog
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« Reply #587 on: December 10, 2015, 06:28:01 PM »

But look at all the great commentary I got out of you  evil grin
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ppulatie
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« Reply #588 on: December 16, 2015, 01:06:35 PM »

It begins!!!

Fed raised .25%.  I shall be watching the 30 Year Fixed.

If she continues, rate could be at 5% by end of 2016.
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DougMacG
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« Reply #589 on: December 24, 2015, 10:53:06 AM »

It begins!!!
Fed raised .25%.  I shall be watching the 30 Year Fixed.
If she continues, rate could be at 5% by end of 2016.

Fed raised rates and mortgage rates dipped (slightly). 

http://hosted.ap.org/dynamic/stories/U/US_MORTGAGE_RATES?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2015-12-24-10-07-04
The drop (to 3.96%) is a reminder that the Fed has only an indirect influence on long-term mortgage rates, which more closely track the yield on the 10-year U.S. Treasury note. And that rate, in turn, tends to stay down as long as inflation remains low...


Some say Feds don't set interest rates; it is more like they follow them.  Economics at this point in history is an inexact science.
But PP's prediction above still seems reasonable and likely to me.
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ppulatie
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« Reply #590 on: December 24, 2015, 11:55:35 AM »

10 Year bill is at 2.24, which was about equal to what it was prior to the rate hike. So there is little change in the 30 year market. More increase will be needed there.

For the ARMs and Lines of Equity, that is where the first impacts will be felt. Most Lines of Equity were tied to the Prime Index. Prime has been raised by .25% to reflect the rate hike. So over the next couple of months, LOE's will see the first increase.

Most ARM's are tied to the 6 Month LIBOR, 12 Month LIBOR, CMT and MTA Indexes. These indexes take the monthly Index average for the last 6 or 12 months to calculate what the Index  is at any one time. So it will take a full year for the complete effect of the rate hike to apply and increase the ARM rates.

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PPulatie
ppulatie
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« Reply #591 on: December 24, 2015, 12:01:43 PM »

 grin grin grin

Zerohedge just caught the Commerce Department and their "fun with numbers" on Housing Sales. Home Sales are not as good as claimed.  (Commerce learned for the NAR how to play the game.)

http://www.zerohedge.com/news/2015-12-23/housing-recovery-was-just-cancelled-again-due-5-months-downward-revisions
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Crafty_Dog
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« Reply #592 on: January 05, 2016, 08:47:18 AM »

https://www.youtube.com/watch?v=Yga7TlsA-1A
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DougMacG
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« Reply #593 on: February 08, 2016, 08:38:24 AM »

Some good facts in here along with liberal bias.  Inequality causes high prices?

(The 'conservative' answer too high rent and unaffordable homes is to put a 16% tax on rent and houses.  ??
Perhaps smart economics, but dumb politics.)
http://www.thedailybeast.com/articles/2016/02/08/this-is-why-you-can-t-afford-a-house.html

Maybe if Trump wins New Hampshire, Pat will come back...   )
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DougMacG
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« Reply #594 on: April 05, 2016, 12:04:30 PM »

Previous post in this thread:  Maybe if Trump wins New Hampshire, Pat will come back...
-----------------------------------------------------------------------

I heard Dem economist Austan Goolsbee argue that CRAp did not factor in the crash and that banks don't make mortgages.
http://mediamatters.org/video/2016/03/29/listen-to-an-economist-shut-down-hannity-for-bl/209611

Now this:
Obama administration pushes banks to make home loans to people with weaker credit

https://www.washingtonpost.com/business/economy/obama-administration-pushes-banks-to-make-home-loans-to-people-with-weaker-credit/2013/04/02/a8b4370c-9aef-11e2-a941-a19bce7af755_story.html
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DougMacG
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« Reply #595 on: June 24, 2016, 01:03:05 PM »

Putting this in housing but thinking of cognitive dissonance of his glibness and the left.  Who did they say they want to help and who did they hurt the worst.  Same groups.

Homeowners are thriving while renters are struggling, year 8 of the Obama administration, year 10 after Democrats took over Washington. 

The richer get richer and the poor, the working and the struggling get squeezed under their policies.  Just extly what they accused Republicans when they were in charge, except then homeownership and incomes were increasing.

http://www.realclearpolitics.com/articles/2016/06/20/decade_after_housing_peaked_owners_richer_renters_hurting_130937.html
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