Archive for November, 2011

The banks finally are getting serious about foreclosing on the delinquent mortgage squatters living in shadow inventory. Even though delinquencies are declining, they are still elevated well above historic norms, and they have been so high for so long that the banks have a huge backlog they must work through.loan_qualification

Fewer mortgages going bad but foreclosures expected to increase

The Mortgage Bankers Assn. says it could take three or four years to return to a normal pattern of delinquencies and foreclosures.

November 18, 2011 --  By E. Scott Reckard, Los Angeles Times
Fewer home loans are in trouble these days, but despite some improvements, the nation is not even halfway through cleaning up the foreclosure mess, industry experts said. It could take three or four years to return to a typical pattern of delinquencies and foreclosures, the Mortgage Bankers Assn. said in releasing its quarterly[READ MORE]

The legions of hopelessly underwater loan owners are all praying for a write down on their mortgage. It's a false hope, but with falling prices and little prospect of a recovery any time soon, false hope is all many of these borrowers has left.4.2.7

US House Democrats press for mortgage write-downs

Reuters -- WASHINGTON | Tue Nov 22, 2011 4:33pm EST
Nov 22 (Reuters) - More than 20 Democrats in the U.S. House of Representatives on Tuesday called on the regulator of Fannie Mae and Freddie Mac to help underwater borrowers by allowing their loan principal to be reduced. The regulator has faced increasing pressure to permit the write-down of principal by the two government-controlled mortgage finance providers as a way to help some of the millions of Americans who owe more than their homes are worth. The Federal Housing Finance Agency, however, has[READ MORE]

Borrowers who quit paying thier mortgages is nothing new. Historically, delinquency rates on mortgages have hovered between 3.5% and 5.5% in good times and in bad.walk_away What is new and unprecedented is the 11% delinquency rate we saw during the collapse of the housing bubble. For the last two years, this rate has been slowly declining, but it is still elevated well above historic norms. Personally, I was not surprised to see the delinquency rate go back up as prices resumed their downward spiral. The weak economy was bound to cause an increase in delinquency, and coupled with strategic default from falling prices, higher delinquency rates are to be expected. Apparently, other economists completely missed these obvious signs.

Mortgage payments show surprising rise in delinquencies

By Eileen AJ Connelly, Associated Press -- November 9, 2011
NEW YORK – While lawmakers in Washington debated the debt[READ MORE]

Most often blaming others is a way to dodge taking personal responsibility. realtors are suffering right now. Transaction volumes are off and prices are well below what they were a few years ago. Since realtors have disavowed any responsibility for the role their amoral sales practices played in inflated the bubble, they are now blaming banks for failing to inflate a new one.dont_pick_realtor It's a low risk position for realtors to take. It isn't their money at risk. Lenders must put their money at risk to make loans which results in a real estate transaction and realtor commission. Since lenders don't want to lose any more money, they are being careful about who they loan it to. realtors don't understand that. Or worse yet, they probably do understand, but they just don't care. They just want another commission.

Realtors blame banks for[READ MORE]

To be underwater with a cost of ownership exceeding a comparable rental is to be trapped in a debtor's prison. Loan owners in these circumstances have few good options.underwater_loanowners

  • If they move and rent the house, they lose money each month until rents rise enough to allow them to break even. In a weak economy with stagnant wage growth, it may be a very long time before these owners get back to even on a payment basis.
  • If they sell, it will be a short sale. They will endure a decline in their credit score, and they may have to arrange repayment with a lender as a condition of the sale.
  • If they can't negotiate a short sale, and they decide to move, they will have to walk away from the debt and endure the consequences of that decision. Their credit score will decline,[READ MORE]

For the first time in the nearly five years I have been writing for this blog, prices across most of Irvine are trading at or below rental parity. There are significant market headwinds which will likely prevent house prices from moving higher, so relatively affordable prices may be with us for a while, and I think that is great news. Today, we are going to take a detailed look at the Irvine data. This is the same data I present in our monthly OC housing market presentations. We will be taking December off, but we will be back in January to provide a live presentation of the current market data.pay_mortgage_or_children_rental In October and November, months of supply typically increases. Many sellers keep their homes on the market hoping for a late-year sale, but the demand dries up. With low demand and large supply,[READ MORE]

The Chinese have long known they have a problem with real estate values. Over the last several years, the Chinese government has enacted a series of half-hearted policies aimed to slow the increase in real estate prices. Unfortunately, the Chinese housing bubble is a runaway freight train heading for an awful crash.high rise hell

Shanghai Homeowners Smash Showroom in Protest Over Falling Prices

October 25, 2011, 4:17 PM HKT
A weekend scuffle in Shanghai over a drop in apartment prices adds to increasing evidence that China’s efforts to tame a surging property market are having an impact – even as it offers a hint of what could happen if the measures go too far. A group of around 400 homeowners in Shanghai demonstrated publicly and damaged a showroom operated by their property developer after the company said it cut prices. Home buyers had wanted[READ MORE]

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