Larry Roberts real estate writing blog: January 2015

Friday, January 30, 2015

Housing Market: Lender manipulation of MLS inventory is remedy for housing bust

When lenders make loans, they far prefer borrowers to repay those loans; in fact, their entire business plan relies on it. As long as borrowers are current with their payments, lenders are happy and making money. When borrowers don’t make their payments, the end result is a distressed ...
Lender manipulation of MLS inventory is remedy for housing bust

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OCHN: Will the reflated housing bubble buoy the move-up market?

The move-up market will not get the hoped-for boost from the reflated housing bubble because the move-up equity flowed instead to the banks.

In past real estate boom and bust cycles, lenders were forced to write down bad loans, foreclose on the houses, and liquidate their inventory for whatever...
Will the reflated housing bubble buoy the move-up market?

Thursday, January 29, 2015

Real Estate Loan: "Fiscal Cliff" deal favors reflation of housing bubble

One of the many misperceptions that emerged from the housing bubble and its associated collapse is the idea that house prices during the bubble were normal and sustainable and that the lower values today represent a depressed value from which the housing market must “recover.” In the...
"Fiscal Cliff" deal favors reflation of housing bubble

OCHN: Republican lawmakers warn of housing bubble 2.0

The Republicans are correct and appropriate to point out that the policies of the GSEs have potential to put the American taxpayer at risk.

Nobody wants to see a repeat of the previous housing bubble. Lenders, loanowners, and the politicians that pander to them all celebrate the reflation of...
Republican lawmakers warn of housing bubble 2.0

Wednesday, January 28, 2015

Housing Forecast: We Haven’t Learned the Lessons of the Great Housing Bubble

Did those people who lost their homes during the Great Housing Bubble learn any important lessons? Did people learn that certain financial management techniques don’t work very well? Or did people learn that building a Ponzi Scheme is a great way to manage their finances except during ...
We Haven’t Learned the Lessons of the Great Housing Bubble

Mortgage Refinance: Loanowner bailouts were designed to benefit banks, an insider"s view

The bubble collapse was rife with denial caused by false rumors of homeowner bailouts. Many homeowners held out hope that if they could just keep current on their mortgage long enough, the government would come to their rescue in the form of a mandated bailout program. Many such programs were ...
Loanowner bailouts were designed to benefit banks, an insider"s view

OCHN: Are Orange County homebuilders over-supplying the market?

Rising mortgage rates will reduce sales volumes on new construction and prompt builders to offer more incentives and prevent them from raising prices.

Homebuilding usually leads the economy out of recession. The Great Recession did not end with a building boom largely because of overbuilding...
Are Orange County homebuilders over-supplying the market?

Tuesday, January 27, 2015

OCHN: CFPB launches new mortgage interest rate checker

Consumer Financial Protection Bureau launched a controversial mortgage interest rate checker to protect customers from rate-gouging lenders.

The more information consumers have, the better decisions they make. When I launched the new system on this site that provides detailed cost of ownership...
CFPB launches new mortgage interest rate checker

Monday, January 26, 2015

USA Foreclosure: California home sales plummet 8% in May 2012, spring rally slumps

Quite predictably, pending home sales have declined precipitously due to the lack of available inventory. Lenders have a variety of reasons for withholding inventory right now, but among the biggest reasons is their desire to cause house prices to bottom. Lenders make the false assumption that...
California home sales plummet 8% in May 2012, spring rally slumps

Renter News: Strategic default is moral imperative to prevent future housing bubbles

The fear of strategic default is a necessary deterrent to foolish lending. Without it, lenders are emboldened to make all manner of bad loans because they believe they will get paid back. Lenders will make nearly any loan if they believe they will get their money back with interest. It’s...
Strategic default is moral imperative to prevent future housing bubbles

OCHN: Six factors that could weaken housing in 2015

Several factors could weaken the market, but the forced repatriation of foreign investment has the potential to really flatten house prices.

With mortgage interest rates dropping below 4%, and with an improving economy, the housing market starts 2015 with a small boost as compared to the dismal...
Six factors that could weaken housing in 2015

Saturday, January 24, 2015

OCHN: Las Vegas Investment Fund Opportunity

Established fund with fully-rented properties is reopening for investment.
A number of investors have asked to redeem their shares in my Las Vegas fund. Rather than sell properties, I am looking for replacement investors to take their place.
Expected 8% to 10% yearly returns; 4%-5% cash, 4%-5%...
Las Vegas Investment Fund Opportunity

Friday, January 23, 2015

Debt Default: DeMarco prepared for final shutdown of GSEs

Of all the people who’ve played a role in the housing bubble and its aftermath, the one who continually impresses me is Edward DeMarco, conservator for the GSEs. He is a career bureaocrat who was placed in charge of the GSEs when they were taken into conservatorship in 2008. He has ...
DeMarco prepared for final shutdown of GSEs

Housing Market: What is the minimum level of housing quality people are entitled to?

If you ask many middle-class loanowners in coastal California, and they will tell you that they are entitled to a 2,000+ SF detached single-family home pimped out with pergraniteel — and they will really mean it. The sense of entitlement in coastal California is appalling to anyone viewing...
What is the minimum level of housing quality people are entitled to?

OCHN: Did Obama reverse 100 years of housing policy by saying nothing?

The US needs to rethink it’s policies toward home ownership and housing subsidies. Some are suggesting Obama’s silence signals a radical change.

Every presidential administration of the last 100 years has promoted home ownership. The ideal of homeownership has become so sacrosanct ...
Did Obama reverse 100 years of housing policy by saying nothing?

Thursday, January 22, 2015

Real Estate Loan: Credit availability will get even tighter in 2013

Credit standards are not tight by historic standards. Compared to the complete lack of enforced standards of the housing bubble, credit is very tight, but compared to what preceded the housing bubble, credit standards have merely reverted to what was normal. Prior to the housing bubble, lenders...
Credit availability will get even tighter in 2013

OCHN: Why do homebuilders consume so much optimistic bullshit?

Homebuilders believe the feel-good nonsense printed in trade journals and industry media outlets and often rely on this information to make bad decisions.

“Freedom is the right to tell people what they do not want to hear.”
George Orwell
As someone who worked in the homebuilding...
Why do homebuilders consume so much optimistic bullshit?

Wednesday, January 21, 2015

Housing Forecast: Failed Bailouts and the Neverending Mortgage Crisis

At the core of every con is a dream. A con artist tempts a victim with dreams of riches or power to come in order to get them to do something today. It wasn’t long ago it was only realtors and mortgage brokers who sold the dream. Now, our own government is joining the choir. Over two years...
Failed Bailouts and the Neverending Mortgage Crisis

OCHN: Mortgage insurance companies sue former homeowners

Mortgage insurers have the right to collect from former homeowner on losses the mortgage insurer incurred in a foreclosure.

Whenever a purchase or refinance transaction amount exceeds 80% of the value of a property, the lender will force the borrower to purchase private mortgage insurance...
Mortgage insurance companies sue former homeowners

Monday, January 19, 2015

USA Foreclosure: FHA foreclosures increase 73%, mostly from 2008 and 2009 bad loans

FHA has always been the lender of last resort. It was started in 1934 during the depths of the Great Depression to provide mortgage lending at a time when private money wouldn’t do it. Of course, by then the housing market had bottomed, so the FHA loans from the Great Depression...
FHA foreclosures increase 73%, mostly from 2008 and 2009 bad loans

Renter News: Democrats as Robin Hood: steal from renters, give to loan owners and banksters

Has fairness been a casualty of the housing bubble? At times it looks that way. The government keeps implementing policies to benefit one group over another not because it is the right thing to do but because it buys them votes. Last year, I wrote about The Policy of Screwing Prudent Renters to...
Democrats as Robin Hood: steal from renters, give to loan owners and banksters

OCHN: Bullish on economy, cautious on housing

2015 will finally be the year the economy recovers to near full strength. The only weak point will the ongoing slow growth in housing.

I recently made a series of bold California housing market predictions for 2015. I don’t believe housing will do poorly this year despite high prices...
Bullish on economy, cautious on housing

Friday, January 16, 2015

Debt Default: Never forget the bulls and bubble deniers were completely and totally wrong

Now that prices are going up again, the bulls are regaining some of their previous smugness, and some are trying to revise history about how wrong they were over the last six years. Today I want to take a look back at the insanity of the housing bubble and remind everyone that when they hear the...
Never forget the bulls and bubble deniers were completely and totally wrong

Housing Market: REO-to-rental is superior to principal forgiveness

REO-to-rental hedge funds are latest bogeymen touted by the political left. The evil Wall Street money grubbers are profiting from the disaster created by the Banksters. It’s a narrative Matt Taibi popularized, and now others are jumping on the bandwagon. The latest diatribe from the left...
REO-to-rental is superior to principal forgiveness

OCHN: Lingering debt from the housing bust weakened the economy

Excessive debt created during the housing bubble is preserved on banker’s and homeowner’s balance sheets providing a deflationary overhang to the US economy.

The US economy is generally very resilient. There are always bearish prognosticators concocting doomsday scenarios that never...
Lingering debt from the housing bust weakened the economy