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Author Archive: Irvine Renter

The benefits of using home equity lines of credit are large, and the costs are minimal. Get your free money today! If someone offered you free money, would you take it? If you didn't suspect a hidden agenda, I believe you would. Most people would accept financial help from family or friends because people who give gain tremendous emotional benefits from giving. It's incumbent on everyone to gracefully accept any gift offered to them because it pleases the givers. Ten years ago, lenders embarked on the biggest gift program of all time when they began making "loans" to people who had no ability or inclination to pay them back. The recipients of these gifts, affectionately known as Ponzis, accepted this…[READ MORE]

Tens of thousands of delinquent mortgage squatters may be awarded free housing if attorneys prevail with their statutory claims. "In law, unjust enrichment is where one person is unjustly or by chance enriched at the expense of another, and an obligation to make restitution arises, regardless of liability for wrongdoing," according to Wikipedia. In terms of delinquent mortgage squatters, they are clearly being enriched at the expense of the lender who provided a loan in good faith on the assumption the loan would be repaid with interest. Our real estate finance system functions because lenders believe they will get their money back either through repayment or foreclosure if the borrower becomes delinquent. If lenders didn't have this assurance, they simply…[READ MORE]

Curbing the power of NIMBYs at local government is essential to providing more housing to alleviate shortages in California. California house prices are high relative to the rest of the nation for two reasons, one fundamental, and one not. First, California wages are higher than most of the rest of the nation, so people who live in California qualify for larger loans and use those loans to bid up prices -- the fundamental reason. Second, California has a chronic shortage of housing, which forces buyers to compete with each other for the available housing stock -- a reason that is not fundamental, but political. The market for housing in most of the United States is much more stable, and house…[READ MORE]

Wealthy real estate investors will move their money out of ultra-high-end properties when better investment opportunities become available. Rising mortgage rates hurt properties priced under $1.5 million directly because rising mortgage rates reduce the amount financed buyers can borrow and bid. What most people don't realize is that rising interest rates (not necessarily mortgage rates) hurts the ultra-high-end real estate market too. The market for properties priced over $1.5 million depend less and less on mortgage financing and more on the opportunities the wealthy have to park money and preserve asset value. The cash buyer of a $5 million property isn't affected by mortgage rates at all, but that buyer is greatly impacted by the desirability of competing asset classes…[READ MORE]

Sometimes people who feel they have something to say communicate far more by their actions than their words. Bernice Ross, CEO of, is a national speaker, author and trainer with over 1,000 published articles and two best-selling real estate books. She recently wrote about her experience obtaining a loan modification, and it contains many valuable lessons for anyone considering following her path. Riding the loan modification merry-go-round What it takes to climb out of a credit mess by Bernice Ross, Feb 16 When you or your clients find yourself in a financial mess due to circumstances beyond your control, you have a number of options. Do you walk away from your home when your mortgage exceeds its value? Do…[READ MORE]

Chinese house prices fell considerably in February. Is this the first leg down in what will become an epic financial catastrophe? The Chinese government and central bankers ran a Ponzi scheme to accelerate real estate development to help China catch up to the rest of the world. Unfortunately, since it was a Ponzi scheme, they couldn't figure out a way to unwind it without devastating their economy, so they kept putting more and more money into it, hoping desperately that it would work itself out. At some point long ago, China developed enough housing stock and commercial properties to meet the needs of its citizens, but since they depended so heavily on continued development to sustain their economy, they kept…[READ MORE]

Assuming we don't have another recession, homebuilding will take another two or three years to regain full strength. I reported in 2012 that the same policies that served to eliminate distressed inventory from the MLS also served to revive homebuilding. Homebuilders provide must-sell inventory, so they need a vibrant resale market with a chronic lack of supply to sell into. A glut of foreclosures and weak demand is not a favorable set of circumstances for homebuilding. At first low MLS inventory was a boon to homebuilders, but housing market manipulations give homebuilders false signals, so Orange County homebuilders oversupplied the market, and as it turned out, reflating the housing bubble hurts homebuilders, rather than helps them. It wasn't until early…[READ MORE]

Rumors of a surging real estate market are greatly exaggerated. I recently asked, Did the OC housing market come alive in February 2015? Anecdotal reports of surging buyer demand looks similar to the frenzy at the beginning of 2012 -- or so local agents would like everyone to believe. The fact is the market was very weak in January, and the anecdotal reports of a resurgence in February may be more wishful thinking than market reality. If the market is so hot right now, why is for-sale inventory up 45% while sales are down 3.6%? Wouldn't the opposite be the case if demand were surging and days on the market were declining? Many of these new listings will be cloud inventory…[READ MORE]

What would you do if you were really, really angry at your bank? Losing a home in foreclosure really makes some people angry. I realize that's not exactly a news flash, but the manifestations of that anger are truly remarkable, particularly when you consider the borrower has some responsibility for this negative outcome. I contend that Lenders Are More Culpable than Borrowers in the housing debacle. 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 borrowers have for their own behavior and wants to bail out…[READ MORE]

Bidding wars in an environment of weak demand are a sure sign of restricted inventory, a problem intentionally engineered by lenders. When I wrote Must-sell shadow inventory has morphed into can’t-sell cloud inventory, I outlined how lenders removed inventory from the MLS by denying short sales and by modifying home loans rather than foreclosing on delinquent borrowers and selling the resulting REO. Lenders schemed to reduce the MLS inventory enough to engineer an artificial shortage of homes available and force buyers to pay higher prices. They were successful. But other than rising home prices, what evidence do I have that these policies contributed to rising prices? We know from the graph of purchase mortgage originations that demand for housing hasn't…[READ MORE]




In Memoriam: Tony Bliss 1966-2012