Author Archive: OCHN Contributor

Last week I published a post that predicted that the Federal Reserve will start bailouts by performing principal reductions for underwater homeowners. I wanted to detail exactly how did we reach that stage. So, I wanted to briefly detail the last five years of housing bailouts.  It was just an impossible task to sum up in a few paragraphs due the sheer number of programs. If fact I should have have created this list first, would have made writing easy.   I will attempt to name the program, the beneficiary of the program, and a brief description of the program. California local programs are not listed here, because I'm sure that there are dozens if not hundreds of local and state…[READ MORE]

This the final logical step of the housing bubble and the bailouts that followed.  The banking losses have slowly been transferred to the taxpayers, then from them to the Federal Reserve.   It's been a long process and below is brief explanation the slow of transfer of losses to private banks all the way to the Federal Reserve with assistance the Federal Government over the course of five years.  We need to review a little bit to see how exactly did we reach this point and why the Federal Reserve bailout(s) will occur. A long crazy road When the housing bubble first started to burst, the first entities to feel it were local banks or mortgage bankers like Downey Saving…[READ MORE]

Home prices have been increasing, mortgage rates are at all time low, and the cost of ownership is below the cost of renting in some market places.  So, why isn't private banking lending money to borrowers?  After the federal government took over Fannie Mae/Freddie Mac and then greatly expanded the scope of FHA there were reassurance that private lending would be reintroduced into the mortgage industry.     Currently, federal government insures or guarantees 95% of all newly originated mortgages.   Wouldn't this be a good time for private lending and private mortgage insurance to get back into the market.  Here are some news articles that indicates this will not occur any time soon. FHA FHA has a large market…[READ MORE]

Many of the Generation X (me) and most of the Baby Boomers where sons or daughters of parents that their highest level of eduction was high school. In fact none of my grandparents completed high school.  In contrast, the baby boomers attended college in record numbers leading to explosion in the number of higher education institutions and this trend continued in sequent generations.   Just look at how many colleges were founded after 1945 and huge increase of enrollment at existing institutions.  However, something happened with the knowledge transfer between generations.   The more educated generations have a worse financial track record when it comes to homeownership.  Didn't college make people more educated and wise concerning their future financial decisions? The Greatest…[READ MORE]

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In Memoriam: Tony Bliss 1966-2012
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