Larry Roberts real estate writing blog: August 2014

Sunday, August 31, 2014

Loan Mod Default: Will loan amortization solve the underwater borrower problem?

Many housing market analysts erroneously believe loan amortization will rescue underwater borrowers. Many loan modifications don’t amortize, so those borrowers are not reducing their debts.
Will loan amortization solve the underwater borrower problem?

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USA Housing: It"s official: Housing bubble has reflated

Language has a powerful influence on our perceptions and beliefs about reality. The current meme on the housing market is that prices have “recovered.” Financial recovery suggests the return to a natural equilibrium from and undervalued state. In the case of housing, this suggests...
It"s official: Housing bubble has reflated

Saturday, August 30, 2014

Ponzi Debt: The FHA is giving loans to Ponzis to reenter the housing market

Do we really want to let Ponzis back into the housing market? There is a large group of people who’ve proven to be completely irresponsible with mortgage debt as evidenced by my daily debtor debacles. I wrote yesterday that Pent-up demand from boomerang buyers may not materialize, but...
The FHA is giving loans to Ponzis to reenter the housing market

Friday, August 29, 2014

Debt Default: After Eight Years of Squatting, Who Absorbs the Losses?

Mortgage Mess: Shredding the Dream The foreclosure crisis isn’t just about lost documents. It’s about trust—and a clash over who gets stuck with $1.1 trillion in losses October 21, 2010 — Peter Coy, Paul M. Barrett and Chad Terhune In 2002, a Boca Raton (Fla.) accountant ...
After Eight Years of Squatting, Who Absorbs the Losses?

Housing Market: How the new mortgage rules will impact the housing market

When Congress took on the task of regulating the excesses of the mortgage industry, it ostensibly wanted to prevent a recurrence of the housing bubble. To that end, they passed the Dodd-Frank finance reform. One of the provisions of Dodd-Frank was to establish a “qualified mortgage”...
How the new mortgage rules will impact the housing market

OCHN: Are low house prices better than low mortgage interest rates?

Both low mortgage interest rates and low house prices reduce ownership costs for financed buyers, but which one is better?

Whether low house prices or low interest rates are better is a matter of perspective. From a lender’s point of view today, low mortgage rates and high prices are...
Are low house prices better than low mortgage interest rates?

Thursday, August 28, 2014

Real Estate Loan: Has FHA increased their fees so high they are now a predatory lender?

Just in case you didn’t know FHA is a government insurance program for lenders. FHA has front-end Mortgage Insurance and regular Mortgage Insurance and it’s paid by the borrower. These rates have greatly increased since 2007. Now a new question is being asked. Is FHA now one the l...
Has FHA increased their fees so high they are now a predatory lender?

OCHN: What if Millennials and boomerang home buyers never materialize?

Housing bulls continue incorrectly predicting the return of Millennials and boomerang buyers. It’s time to consider what happens if they never come back.

As home ownership rates plummeted with waves of foreclosures in the aftermath of the housing bubble, real estate pundits pinned hopes f...
What if Millennials and boomerang home buyers never materialize?

Wednesday, August 27, 2014

OCHN: Coastal California housing least affordable in US

Persistent shortages of housing in Coastal California inflates both rent and home ownership costs relative to incomes, making housing an economic drain.

Despite the rapid home price increases from March 2012 to July 2013, I’ve consistently maintained we are not in a new bubble — at...
Coastal California housing least affordable in US

Tuesday, August 26, 2014

Mortgage Refinance: Ravings of an entitled whiner struggling to keep a house she can"t afford

The housing bust is littered with sob stories about people losing their family homes. As I noted Responsible Homeowners are NOT Losing Their Homes. To see the truth in this statement, one needs to have a clear definition of “responsible homeowner.” A “responsible homeowner” is a buyer who, if the...
Ravings of an entitled whiner struggling to keep a house she can"t afford

Mortgage Foreclosure: New families find the houses lost in foreclosure

People get caught up in their empathy with those losing their family homes to foreclosure. Its easy to get sucked in to the emotional stories of victimhood and believe that perhaps we should stop foreclosures. We all forget that the distressed debtor who rented money from the bank to occupy the...
New families find the houses lost in foreclosure

OCHN: Sign of housing market top: high-end home flipping soaring

Headlines of house flipping and increased novice investor participation of signs of a top in the housing market for high-end homes.

Contrarian investing is the art of selecting and timing investments by directly opposing the actions and attitudes embraced by the crowd of enthusiastic but...
Sign of housing market top: high-end home flipping soaring

Monday, August 25, 2014

USA Foreclosure: How lenders liquidate legacy loans will lift or lower house prices

The housing bust is over. Struggling borrowers found new high-paying jobs, cured their delinquent loans, and eliminated the temporary stress on the housing market brought about by the Great Recession. … Well, at least that’s what the mainstream media wants everyone to believe. If...
How lenders liquidate legacy loans will lift or lower house prices

OCHN: Chinese government policy change kills Coastal California housing market

Coastal California housing demand from Chinese nationals surged in recent years; however, Chinese officials abruptly shut down this source of demand.

The people who deny a real estate bubble in China are wrong, and the deflating Chinese property bubble could destabilize the world economy, but...
Chinese government policy change kills Coastal California housing market

Sunday, August 24, 2014

Loan Mod Default: Banks faced legal challenges from their bubble-era misconduct

Major banks were bailed out during the financial crisis of 2008. Ever since then, they have been scrambling to avoid financial responsibility for their imprudent lending practices that precipitated the crisis. The banks entered into a large settlement with the attorneys general across the...
Banks faced legal challenges from their bubble-era misconduct

USA Housing: B of A prevented qualified borrowers from obtaining loan modifications

Banks don’t want to modify borrower’s loans. They would far rather be paid back the money they borrowed with interest at the terms originally negotiated in the promissory note. The only reason banks are even considering loan modifications is because the collateral backing behind the...
B of A prevented qualified borrowers from obtaining loan modifications

Saturday, August 23, 2014

Ponzi Debt: Southern California"s cultural pathology (redux)

I began writing about the housing market back in February of 2007. Over the last five and one half years, I’ve covered a lot of ground. Many of my earliest posts serve as a foundation for my philosophy that comes through my daily posts. I know many of you who read this blog have been with...
Southern California"s cultural pathology (redux)

Friday, August 22, 2014

Housing Market: Lenders Are More Culpable than Borrowers (redux)

Apportioning blame for the housing bubble has become a polarized political issue. The Left wants to portray the evil banks as taking advantage of hapless borrowers thus entitling these borrowers mortgage relief or absolution for strategic default. The Right points out the responsibility...
Lenders Are More Culpable than Borrowers (redux)

OCHN: Chronic shortages of housing supply inflates California house prices

Empowered by State regulations, local development opposition groups prevent construction of much-needed home supply creating shortages that inflate prices.

When any commodity is in short supply, prices tend to rise; houses are no exception. Beginning in the 1970s, California produced more high...
Chronic shortages of housing supply inflates California house prices

Thursday, August 21, 2014

Real Estate Loan: Lender propaganda campaign extolls adjustable-rate mortgages

What is the price for your soul? What would you have to be paid to advocate for something you knew was harmful? Would you feel comfortable creating ads for cigarette companies? Would you work for a lender making subprime loans or HELOCs? How dangerous does a product have to be before you...
Lender propaganda campaign extolls adjustable-rate mortgages

OCHN: Loan modifications destroyed the move-up market for a generation

Loan modifications for underwater borrowers preserves the debt so appreciation that ordinarily supports a move-up housing market instead flows to lenders.

Lenders limit financed homebuyers based on borrower income, yet many houses sell at prices prices far above the limits of borrowing power...
Loan modifications destroyed the move-up market for a generation

Wednesday, August 20, 2014

OCHN: Despite industry spin, mortgage lending standards are not tight

Real estate industry lobbyists foster the false impression mortgage lending standards are tight. They are not.

Real estate industry lobbyists appeal to lawmakers for policies the real estate industry believes will promote more transactions at higher prices. Most often this lobbying is short...
Despite industry spin, mortgage lending standards are not tight

Tuesday, August 19, 2014

Mortgage Foreclosure: Strategic default consequences minor and likely to decrease

There is an art to strategic default. There are many options, and some have stronger consequences than others. Does the borrower want to maintain some lines of credit? Will selectively defaulting on certain debts hurt their credit score more than others? Will strategic defaulters need to declare...
Strategic default consequences minor and likely to decrease

OCHN: Housing recovery hopes crushed as July home sales plummet

Dashing hopes for a second-half recovery, existing home sales in Southern California steeply declined in July 2014.

Do you remember all the happy talk and wishful thinking that dominated financial reporting over the last few months? Weren’t we lead to expect a better second half of 2014?...
Housing recovery hopes crushed as July home sales plummet

Monday, August 18, 2014

USA Foreclosure: Are delinquent mortgage squatters victims of intransigent banks?

People who aren’t paying their mortgages are portrayed as victims of evil bankers, but if people aren’t paying their mortgages, can we really say they are victims?
Are delinquent mortgage squatters victims of intransigent banks?