Archive for June, 2014

Previous loan modifications and old HELOCs face reseting to higher rates and recasting to full amortization likely leading to further loan modification. Lenders don't want to modify loans. They would far rather have the borrower pay in accordance with the promissory note they both signed when the loan was originated. Ordinarily, if a borrower is unable or unwilling to pay in accordance with the original terms, the lender would simply foreclose, get their loan money back, and loan that money to someone who will pay in accordance with the promissory note. Unfortunately, with so many borrowers underwater, lenders can't foreclose and get their money back, so instead they modify loans to buy time until the resale value is higher than…[READ MORE]

The housing market under performed by nearly every measure from economists expectations in 2014 for a variety of reasons. The housing market rebounded strongly in 2012 from a six-year decline, and in early 2013, the market sustained the momentum it gained in 2012. Economists succumb to their optimism bias and failed to correctly forecast the interaction of negative circumstances that caused sales volumes to decline significantly in 2014. Most economists were predicting an increase in sales volumes and price as the market supposedly achieved "escape velocity" in 2012 and 2013. It hasn't worked out that way. Today's post examines the top 10 reasons the housing market underperformed in 2014. Notably absent from this list is the favorite laughable excuse of…[READ MORE]

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