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"Easy Money" Mel Watt Loosens Lending on Mortgages
Here we go again. Last week, the country’s biggest mortgage lenders scored a couple of key victories that will allow them to ease lending standards, crank out more toxic assets, and inflate another housing bubble. Here’s what’s going on: On Monday, the head of the Federal Housing Finance Agency (FHFA), Mel Watt, announced that Fannie... Read More
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Government Backing for Toxic Mortgage Securities?
The leaders of the U.S. Senate Banking Committee, Sen. Tim Johnson (D., S.D.) and Sen. Mike Crapo (R., Idaho), released a draft bill on Sunday that would provide explicit government guarantees on mortgage-backed securities (MBS) generated by privately-owned banks and financial institutions. The gigantic giveaway to Wall Street would put US taxpayers on the hook... Read More
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Get a load of this chart from DataQuick’s National Home Sales Snapshot. It’ll tell you everything need to know about housing. (Note: MSA=metropolitan statistical area) As you can see, prices are flatlining or drifting lower while sales are sinking like a stone. That’s the whole ball of wax, isn’t it? Sure, sales will increase in... Read More
NY Fed's Dudley Warns that "Firesales" Could Trigger Another Financial Crisis
Ask your average guy-on-the-street ‘what caused the financial crisis’, and you’ll either get a blank stare followed by a shrug of the shoulders or a brusque, three-word answer: “The housing bubble”. Even people who follow the news closely are usually sketchy on the details. They might add something about subprime mortgages or Lehman Brothers, but... Read More
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Plunging Sales in SF, LA, Vegas and Phoenix cast doubt on Housing Recovery
Higher rates, higher prices and weak fundamentals have sent home sales crashing in last year’s hottest markets casting doubt on the sustainability of housing recovery. In the San Francisco Bay Area, home “sales plunged to a six-year low”…. while prices dropped 4.3 percent from a month earlier. (Los Angeles Times) Additionally, sales of new and... Read More
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The Tipping Point
-John Maynard Keynes, The General Theory of Employment, Interest and Money It’s too bad Keynes isn’t around today to see how the toxic combo of financial engineering, central bank liquidity and fraud have transformed the world’s biggest economy into a hobbled, crisis-prone invalid that’s unable to grow without giant doses of zero-rate heroin and mega-leverage... Read More
While Housing Sales Slow
10-year Treasuries veered into the danger zone on Friday as yields broke through the crucial 3 percent barrier signaling a slowdown in housing sales due to higher mortgage rates. Fixed rate mortgages are expected to edge higher even though the rate on the 30-year loan increased to 4.48 percent just days earlier. The Fed’s announcement... Read More
"4,594,000 Mortgages Going Unpaid in the United States."
Buying a house is a lot like buying a car. If you don’t look under the hood, you could wind up with a lemon. Only with housing, it’s not as simple as checking the dipstick or looking for oil under the rear axle. No, smart home buyers check the data to see what’s really going... Read More
Another Slump Ahead
“Slumping asset prices show a recession is probably on its way. … Stocks tend to fall more frequently and further than property values, so they are better recession-predictors.” - IMF research paper by economists John C. Bluedorn, Joerg Decressin and Marco E. Terrones.Bloomberg News The fact that stock prices have been drifting lower, doesn’t prove... Read More
Bernanke's Smoke and Mirrors
Mortgage rates are rising and the housing market is getting weaker. In May of 2013, the 30-year fixed rate mortgage was 3.59%. Today it is 4.71%, more than a full percentage point higher. That means that the payment on a $200,000 loan is 15 percent more than it would have been just two months ago.... Read More
A Giant Sucking Sound
According to a report by Goldman Sachs, approximately 57 percent of the homes that were purchased in the first quarter of 2013 were all-cash deals. In 2005, the peak of the bubble, all cash buyers represented a mere 19 percent of all transactions. The amount of investor capital pouring into housing is unprecedented. Moneybag speculators... Read More
Time to Run Up the Red Flags!
The mood on Wall Street has changed dramatically since the Fed announced it planned to scale-back QE by the end of 2013. Although the Central Bank continues to purchase $85 billion of US Treasuries (UST) and Mortgage-Backed Securities (MBS) per month (as it has since the program was launched nearly a year ago), the expectation... Read More
Because They Did Such a Good Job Last Time
The Obama administration is working on a plan to liquidate Fannie Mae and Freddie Mac so that future profits from housing sales and secondary market activity flow exclusively to privately-owned banks and financial institutions. President Obama made the announcement last week in a speech in Phoenix saying that he wanted to “wind down” the two... Read More
A Whirlpool of Speculation
Here are a few headlines you might want to mull-over before you plunk 20 percent down on that $500,000 Tudor in Rancho Mirage: “Mortgage Applications Drop for Seventh Straight Week”, “Homeownership slides to 18 year low”, “Investors start to move out of housing”, “Sellers Worry Rising Rates Will Lower Demand”, “PE Scrambles To Exit Housing... Read More
Spiking Rates Trigger Mortgage Apps Freefall
On Friday, the rate on the 30-year "fixed" mortgage soared to a two-year high of 4.51 percent. That's more than a full percentage point higher that 6 weeks earlier when rates touched bottom at 3.35 percent. The sudden spike in rates has triggered a bloodbath in mortgage applications which have dipped for 4 weeks straight... Read More
Soon the Foreclosure Floodgates Will Open and Prices Will Plunge
Anyone who buys a house in today's market should be aware of the risks. They should know that current prices are not supported by fundamentals, but by unprecedented manipulation by the Fed, the Obama administration, Wall Street Private Equity investors, and the nation's biggest banks. If any of these main-players withdraws or even reduces their... Read More
The NYT Finally Discovers Housing Boom is a Big Fat Fraud
Well, look who finally figured out that the "housing recovery" is a big, fat fraud? The New York Times, that's who. Check out this clip from the Times June 3 edition: Whoa! So investors are driving the market, you say? Who woulda' known? If Times reporters spend a little more time perusing the housing blogs... Read More
Pandering to the Bankers
What a load of malarkey. The truth is housing is in a shambles. Starts are down, inventory is tight, demand is weak, mortgage originations are flat, household formation has fallen off a cliff, (The homeownership rate is now at levels last seen in the mid-1990s), and the entire industry is precariously propped atop artificially-low interest... Read More
Wall Street Owns Obama
Why are housing prices rising when the homeownership rate has dropped to its lowest level in 18 years? Actually, it's not as confusing as it sounds. The Fed's low interest rates have triggered a flurry of homebuying by Private Equity firms and other speculators which has reduced already-tight supply and pushed up prices. Of course,... Read More
Reasons for Skepticism
Housing is back. Prices are rising, sales are strong, inventory is low, and according to a recent survey, 82 percent of real estate agents believe that it's "a good time to sell a house." Also, a new report prepared by the ULI Center for Capital Markets and Real Estate confirms "renewed optimism for growth in... Read More
Speculators Chasing Yield
There's no doubt that housing prices are going up. According to Corelogic, home prices have risen nearly 10 percent in the last year. And sales have been improving, too. In fact, in the last year alone, sales for new "single-family" homes are up 28.9 percent (437,000 homes) while sales for existing homes have increased by... Read More
As Many as 90% of Foreclosed Properties Held Off the Market
"I still worry about further price declines. There’s no really concrete reason for an upturn now. A recent survey of home buyers didn’t find any sudden change in optimism and there seems to be a souring on the idea of home ownership. That might reverse again as the crisis ends, but I suspect that it’s... Read More
Another Giveaway to the Banksters
For those who missed President Obama's latest giveaway to the Bank Mafia, we'll repeat what he said here. This is an excerpt from Tuesday's State of the Union Speech: First of all, whenever you hear a politician talk about "streamlining the process", run for cover. The term is a right-wing formulation that means "remove all... Read More
Rampant Speculation Drives Prices Higher
There's a lot confusion about the recent uptick in housing prices, which--according to CoreLogic-- have gone up 7.4 percent year-over-year. Many analysts think that that the "bottom is in" and the market is about to roar back to its bubble-era highs. Nothing could be further from the truth. Housing prices are likely to remain flat... Read More
Canadian Housing Edition
Canada's housing market is in the opening phase of a historic collapse. According to the Canadian Real Estate Association (CREA) sales of existing homes dropped 17.4 percent year-over-year in December, while sales in Vancouver plunged an eyewatering 31 percent in the same period. While prices have held firm so far, it's only a matter of... Read More
The "Qualified Mortgage" Rule
The US Consumer Financial Protection Bureau's rule defining a "qualified mortgage", which was announced on Thursday, creates vast new opportunities for the nation's biggest banks to engage in predatory lending practices with impunity. While the mainstream media describes the rule as an attempt to protect borrowers from the risky types of loans that caused the... Read More
Canada's Housing Bubble and the New Economic Order
Canada's housing bubble has burst and prices have started to fall. Sales have dipped for 8 straight months as buyer interest has begun to wane. Housing sales in November dropped 12 percent from the same month last year, while previously-hot markets of Vancouver and Toronto saw declines of 28.6% and 16% respectively. Despite the media's... Read More
In the Dumps
There's a terrific video at Bloomberg News that will tell you everything you want to know about housing in just under 3 minutes. Unfortunately, the video hasn't gotten much attention, probably because it veers from the MSMs fairytale about a housing recovery. Even so, I have transcribed the interview below so that readers can judge... Read More
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Housing Up, Home Ownership Down
The rebound in housing is now in full swing. Housing starts are up, existing home sales are gaining pace, inventory is down, and prices are on the rise. According to a recent report by Corelogic "House prices are up 6.3% year-over-year in October, the largest increase since 2006 and the eighth consecutive increase in home... Read More
What You Should Know About the FHA Bailout
The Federal Housing Administration (FHA) needs a bailout, but don't expect the media to tell you why. Instead, they'll give you some baloney about how the agency was used to "stabilize the housing market" following the government takeover of mortgage giants Fannie Mae and Freddie Mac in September of '08. While there's some truth to... Read More
Handouts for Honchos
Housing prices are rising fast. According to CoreLogic, home prices increased 5 percent nationwide on a year-over-year basis from September 2011 to September 2012. The new data is the strongest sign yet that the housing bust is over and a recovery is underway. The reason economists watch the housing market so closely is because housing... Read More
A Social Counter-Revolution
Sagging prices and droopy home sales in Vancouver have set off alarms across Canada. These are the first signs that the country's overheated real estate market has begun to cool. Homes sales have plunged 33 percent year-over-year, while prices have tagged close behind dropping 11 percent from their peak in April 2011. At the same... Read More
You Call It Recovery, I Call It Bollocks
Well, what do you know; mortgage applications have fallen off a cliff. According to the Mortgage Bankers Association (MBA) loan applications decreased by 12 percent on a seasonally adjusted basis from one week earlier "registering the biggest percentage decline in a year as demand for both purchase loans and refinancings tumbled." But how can that... Read More
Drag Them Off to the Hoosegow
So now we know why the banks fought tooth-and-nail to prevent Elizabeth Warren from heading the Consumer Financial Protection Bureau (CFPB). It's because they were already planning their next big coup and didn't want Warren in a position where she could make waves. Here's the story from the Wall Street Journal: Why is this an... Read More
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The Data Doesn't Lie
The housing market is getting better. It's getting better all the time. Foreclosure activity is down, sales are picking up, shadow inventory is shrinking, and prices are rising for the first time since President Obama launched his First-time Homebuyer Credit program in 2009 which juiced the market for a couple of months before demand fizzled... Read More
Bernanke's Monkeywrench
Now there's something you don't see every day. On Friday, the rate for a 30-year fixed mortgage plunged to an all-time low of 3.4 percent. At the same time, the rate on a 15-year fixed mortgage sank to an eye-watering 2.73 percent. The Fed's $40 billion per month QE3 is pushing mortgage rates to record-lows... Read More
Red Alert in the Great White North
Canada's housing bubble is about to burst, and when it does, hundreds of billions of dollars in equity will be wiped out, unemployment will spike, and the economy will sink into a protracted slump. We know this will happen, because the same scenario unfolded in the US, Japan, Ireland and Spain. Housing bubbles always end... Read More
The Great Pretender
The New York Times believes that Barack Obama is responsible for today's sputtering economy. In an article titled "Cautious Moves on Foreclosures Haunting Obama", Times journalist Binyamin Applebaum says that Obama's failure to seriously address the housing crisis has left the economy weaker than it should be at this point in the recovery. According to... Read More
Discounts for Speculators, Foreclosures for Mom and Pop!
Private Equity firms are piling in to the housing market to take advantage of bargain basement prices on distressed inventory. The Obama administration is stealthily selling homes to big investors who are required to sign non-disclosure agreements to ensure that the public remains in the dark as to the magnitude of the giveaway. Aside from... Read More
Back Into the Shark Tank
The nation's biggest lenders are doing everything they can to reverse the slide in housing prices and put the market back on solid footing. And they've had some success, too. In Maricopa County, for example, where prices on some homes dropped more than 60 percent, a housing revival is underway thanks to the persistent manipulation... Read More
Why are Housing Prices Going Up When Demand is Getting Weaker?
Housing prices are going up, but demand for housing is getting weaker. How can that be? Typically, when demand is weak, prices fall, but that is not what's happening now. According to the latest Case-Shiller report, that was released on Tuesday, average home prices in the nation’s 20 biggest cities rose 2.2% in May from... Read More
A Bottom in Housing? No Way!
According to a recent report by Clear Capital, "The nation’s home prices rebounded with quarterly and yearly gains of 1.7%." The Home Data Index (HDI) report, which was released on July 10, shows that "Regional performance improved across the board", and that "Home price forecast through 2012 shows continued growth for the nation..." Hooray! Housing... Read More
The Canada Edition
There's no question that Canada's gigantic housing bubble is going to burst. It's just a matter of when. Housing prices in Canada have more than doubled in the last 10 years, and in cities like Toronto and Vancouver, prices are up more than 140 per cent. But the soaring prices have nothing to do with... Read More
The Banks New Shell Game
Have housing prices hit bottom? Many analysts are saying, "Yes". Economist Bill McBride is one of the yea-sayers. Bill runs Calculated Risk, the Number 1 economics's blog on the Internet. Here's what McBride said in a post on February 2, 2012: McBride is a very disciplined analyst who doesn't make off-the-cuff remarks he can't back... Read More
When Pigs Fly
The housing market is in terrible shape. Prices have dropped 35 percent from their peak, 1 in 5 mortgage holders is underwater, and another 2 million people will face foreclosure this year. And, as bad as things are now, they're going to get a whole lot worse if the banks suddenly dump their inventory of... Read More
The Housing Doldrums
It all gets down to supply and demand. The banks have been keeping millions of homes off the market until a settlement was reached in the $25 billion robosigning scandal. Now that the 49-state deal has been finalized, the banks are preparing to put more of their of distressed homes up for sale. That will... Read More
The Foreclosure Surge
Foreclosure starts surged 28 percent in January, according to Lender Processing Services (LPS). Now that the banks are confident that a settlement will be reached in the $25 billion robo-signing scandal, they've started aggressively processing the mountainous backlog of delinquent mortgages on their books. As the process gains pace, a deluge of REOs will be... Read More
Another Obama Fleecing
The reason that housing prices have dipped only 33.6 percent in the United States instead of 60 percent as they have in Ireland, is because the big banks have been keeping inventory off the market. If the millions of homes--that are presently headed for foreclosure--were suddenly dumped onto the market, prices would plunge and the... Read More
The Banks Want to Dump Millions of Risky Mortgages Onto FHA
Barack Obama's new housing refinance plan has nothing to do with "lowering monthly mortgage payments so responsible borrowers can stay in their homes". That's all public relations bunkum. The truth is the banks want to offload their garbage mortgages onto Uncle Sam to avoid hundreds of billions of dollars in losses. That's what this refi-ruse... Read More
The Banks Need to Offload Millions of Unwanted Homes. Guess Who's Going to Buy Them?
Why are housing prices falling when the number of houses on the market continues to decline? Usually, when supply shrinks, then prices rise, right? So, why isn't that happening now? The reason is that housing market never completely cleared, which is to say that the Fed's interventions and the manipulation of inventory by the banks... Read More
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