Our real property system functioned well for centuries with very little change. Prior to the housing bubble, it was widely accepted that people borrowed money to buy houses and if they didn’t pay it back according to the terms of the promissory note, the mortgage agreement allowed the lender to call an auction to get their money back. Housing was an earned reward, not an entitlement.
The basic dilemma is simple, most people don’t have the cash to buy a house, and it would take them most of their adult lives to save for one, so lenders designed loan programs to allow people to occupy and “own” a house while they were working and earning to pay for it. Without modern lending, demand for housing, as measured by actual dollars and not mere desire, would be far too small to accommodate population growth and household formation. The result would be either government owned housing or privately funded rental units and extremely low home ownership rates. Houses would be far less expensive, probably hovering around replacement costs, but ownership would be available only to the very few with the cash to pay the construction cost of a house.
In modern politics, Progressives want to make every human want and need an entitlement, and Conservatives want people to earn everything. Progressives want a compassionate society whereas Conservatives want an industrious one. There is a relentless push by Progressives and Conservatives fight an ongoing but losing battle to hold back the tide. The latest battle lines between Progressives and Conservatives relates to housing. Shelter is a basic human need, and Progressives have sound arguments why this should be an entitlement; however, shelter comes in many forms, and fee-simple ownership of a private dwelling unit is a form of shelter Conservatives argue should not be an entitlement, and I for one, agree with Conservatives on this point.
Home ownership requires vast sums of money. As this is generally borrowed money, we need a functioning system where private lenders can earn a profit commensurate with the risk they assume when they make the loan. In the pre-bubble system, lenders could easily limit and evaluate their risk because they had certainty regarding the contingencies if the borrower defaulted on their loan. That certainty which existed for hundreds of years is gone. Private lenders face little or no certainty on what rules they will face and what costs they will incur to recover their capital if a borrower defaults. When investors or lenders are uncertain, they become conservative and demand either higher interest rates or they stop lending. Only the backing of the US government is sustaining the housing market due to this uncertainty.
Further, providing certainty is not the final resolution. If legislators create onerous waiting periods and excessive costs for lenders to recover their capital, lenders will factor this into the price they demand for their money. In other words, expensive foreclosure processes will drive up interest rates, cause down payment requirements to rise, and curtail lending. Right now, lenders operate in a void of uncertainty, and they face the real prospect of increasing costs as loan owners gain entitlement status. If we are to return to a private lending market, these uncertainties must be resolved, and lenders must reevaluate the cost of their capital. As a nation dependent upon borrowing to sustain the housing market, we face a stark choice: either we nationalize housing finance, or we will face higher borrowing costs in the future.
Insight: Evidence suggests anti-foreclosure laws may backfire
By Tim Reid — Wed Jun 27, 2012 4:45pm EDT
(Reuters) – State and federal laws enacted to protect homeowners from eviction in the wake of the 2008 housing crash may be extending the slump, according to a growing number of economists and industry experts.
Foreclosures have all but ground to a halt in Nevada, which passed one of the stiffest borrower-protection laws in the country last year. Yet the housing market is further than ever from recovery, local real estate agents say, with a lack of inventory feeding a “mini-bubble” in prices that few believe is sustainable.
The bulls, realtors and those who recently bought homes, assure us the recovery is solid, but the shadow inventory bulls want to ignore foretells another story. The dramatic spikes some markets like Phoenix have witnessed can only be sustained if shadow inventories never come to the market. Perhaps these future sales can be metered out at a rate which doesn’t push prices below previous lows, but perhaps not. Either way, it’s unlikely current gains will be sustained and rapid appreciation is forthcoming.
A recent U.S. Federal Reserve study found that in states requiring a judicial review for foreclosure, delays associated with the process had no measurable long-term benefits and often prolonged the problems with the housing market.
Delinquency is not part of a healthy housing market.
Until we return to normal, small delinquency rates, the problems with housing are not resolved, and since cure rates through loan modification are dismal, the only way these delinquencies are going to be cured is through short sale and foreclosure. 
And since short sales require a willing participant who isn’t planning on living free until a foreclosure, lenders are either going to have to increase short sale incentives or ramp up foreclosures again to clear out the trash.
Data from housing market researchers points to similar conclusions.
“Many state laws that stretch out the period for legitimate foreclosures result in no added benefit for the homeowner and produce harm to the housing finance system and to neighborhoods,” said Alfred Pollard, general counsel to the Federal Housing Finance Agency, at a House of Representatives oversight hearing in March.
Some people who have been able to stay in their homes despite failing to pay their mortgages may disagree,
You think?
but it may be a different matter for the neighborhoods where they live.
An overhang of properties that the banks want to foreclose, but have not dared to, not only can hold back a sustainable recovery in prices but also might encourage blight as the defaulting borrower has less incentive to keep the property in good condition.
“Folks with negative equity can’t sell their home and are less likely to invest in improvements or repairs, or pay their property taxes,” said Sean O’Toole, chief executive officer of ForeclosureRadar.com, which tracks foreclosures.
The houses I have taken from long-term squatters in Las Vegas all required numerous small repairs. Every little thing that broke went unfixed because the loan owner had no incentive, and there was no landlord to call to do it for them.
The increasing doubt about the impact of anti-foreclosure laws on the long-term health of the housing market calls into question a basic principle of the Obama Administration’s approach to the housing crisis.
… In the latest expression of this philosophy, the California legislature, at the urging of Attorney General Kamala Harris, is poised to pass a “homeowners bill of rights” that would mean new requirements for lenders looking to foreclose.
… But conservative and free market economists have long been passionate in their belief that the foreclosure process should be allowed to work efficiently. Delays in clearing the huge backlog of distressed properties will only push back a meaningful recovery of the housing market, they say.
Halleluiah!
CRIMINAL PENALTIES
According to the National Conference of State Legislatures, a bipartisan organization serving the legislators of all 50 states, more than 400 foreclosure laws were enacted across the United States in 2011 alone, and most slowed down the process.
The Nevada law, passed in October, may be the most stringent: It imposes criminal penalties on lenders that try to foreclose without the proper paperwork. That has led to a dramatic drop in foreclosures in a state that was among the hardest-hit by the housing crash.
In September, banks filed nearly 5,000 foreclosure notices in Nevada. By February, just 460 were served, according to online foreclosure property marketplace RealtyTrac.
Many of you may have noticed that I have removed the investment properties tab from the blog. I have no product to sell to cashflow investors. I am struggling to keep my small fund invested in properties because so little inventory is available. My fund has benefited by the increased value of all its holdings, but making profitable flips is difficult when so few properties come to market.
Ricky Beach, a real estate agent in Reno, Nevada, said the new law, AB 284, “has pretty much killed the market here.” The lack of foreclosure activity has led to a dearth of inventory, he said, with the number of homes for sale in the area down to 778 today from more than 1,700 in September.
This has triggered a “mini-bubble” in housing prices because the few properties available are receiving multiple bids. The only problem: No one thinks the gains are sustainable.
“The bill did nothing to solve the crisis – it’s just prolonged it,” Beach said. “Sooner or later the banks will work out how to deal with the law. And then foreclosures will hit the market, and prices will crash back down.“
For as much as I would like to celebrate the Las Vegas recovery, I think Mr. Beach is right. There are still tens of thousands of delinquent mortgages in Las Vegas which must be resolved, and for reasons mentioned above, most of these will likely be MLS sales through short sale or foreclosure REO.
Malik Ahmad, a Las Vegas foreclosure defense lawyer who has spent the last six years trying to help vulnerable borrowers deal with unscrupulous banks, said the law had completely changed his view of the nature of the crisis.
“This law has become a mockery,” Ahmad said. “I am now turning down clients every day who I know have no intention of ever trying to pay their mortgage. They just want to stay in their homes for free. And that is a bad situation for everyone, lenders and homeowners.” …
This isn’t news to anyone who has read this blog, but the fact that delinquent loan owners are gaming the system for free housing is not a common meme in the mainstream media. Most reports focus on the supposed victims of the housing bust to promote a bailout agenda. Those of us pointing out the problems with these policies are widely ignored. I hope this news article is the beginning of a new trend. I suspect it will be because lenders are going to have to start foreclosing to force out the committed squatters. 
COURT APPROVAL
A study by three Federal Reserve economists compared the foreclosure processes and outcomes for borrowers in the 20 “judicial” foreclosure states – where banks must seek court approval before they can foreclose – and the 30 “nonjudicial” ones, where such court oversight is not required.
…Their conclusion? States with judicial protection over the foreclosure process or the arrears system “indiscriminately” slowed down the foreclosure process, but with no measurable benefits. In fact, delinquent borrowers were more likely to make good on their arrears in nonjudicial states than in states where they had more time to do so. These borrowers were also just as likely to be repossessed in a judicial state than in a nonjudicial one – it just took longer.
Progressives have pushed their agenda of bailouts and foreclosure delays without acknowledging the incentive to squat this creates. Rather than resolving delinquency as they hoped, their policies quite predictably created more delinquency because it rewarded borrowers for doing so.
Mitt Romney, the Republican presidential nominee, has expressed a different view. “Don’t try and stop the foreclosure process,” he said while campaigning in Nevada last year. “Let it run its course and hit the bottom.”
Since then, he appears to have moderated his stance, stating that banks should provide more help to borrowers “who have circumstances that would justify renegotiation” of their loans.
Unfortunately, Mitt Romney lacked the courage to stand behind is completely correct and appropriate stance. Perhaps this was a gaffe (a politician inadvertently telling the truth) and telegraphs what he might do if elected.
The bottom line is that however well intentioned foreclosure prevention laws are, the end result is harmful to the housing market. Foreclosure prevention laws promote squatting to game the system for free housing, and they drive up the costs to banks who will ultimately pass those costs on to consumers through higher interest rates and fees. These problems will inhibit lending, delay the recovery, and hurt future pricing. All these laws should be opposed.
They sold it to the bank
Each foreclosure has a story. I found this one interesting because it was another long-term homeowner who overborrowed. Most of these cases are Ponzis who display a pattern of HELOC abuse leading inevitably to foreclosure. However, some are like today’s featured property where the former owners put the property to the bank with a single refinance at the peak of the bubble.
This property was purchased for $229,000 on 9/22/1993. the owners used a $206,100 first mortgage and a $22,900 down payment. They did nothing for the entire housing bubble, then on 6/29/2007 as prices began to fall, they refinanced with a $518,000 first mortgage and put the house to bank. They locked in a $300,000 profit and let the bank take the risk of future price declines. Smart move — for them.
Mission Viejo Overview
Median home price is $418,000. Based on a rental parity value of $561,000, this market is under valued.
Monthly payment affordability has been improving over the last 1 month(s). Momentum suggests unchanging affordability.
Resale prices on a $/SF basis increased from $236/SF to $237/SF.
Resale prices have been falling for 12 month(s). Price momentum suggests falling prices over the next three months.
Median rental rates increased $18 last month from $2,309 to $2,327.
Rents have been rising for 12 month(s). Price momentum suggests rising rents over the next three months.
Market rating = 7
Proprietary OC Housing News home purchase analysis 
24332 North AUGUSTIN St Mission Viejo, CA 92691
$425,000 …….. Asking Price
$229,000 ………. Purchase Price
9/22/1993 ………. Purchase Date
$196,000 ………. Gross Gain (Loss)
($18,320) ………… Commissions and Costs at 8%
============================================
$177,680 ………. Net Gain (Loss)
============================================
85.6% ………. Gross Percent Change
77.6% ………. Net Percent Change
3.3% ………… Annual Appreciation
Cost of Home Ownership
——————————————————————————
$425,000 …….. Asking Price
$14,875 ………… 3.5% Down FHA Financing
3.62% …………. Mortgage Interest Rate
30 ……………… Number of Years
$410,125 …….. Mortgage
$107,265 ………. Income Requirement
$1,869 ………… Monthly Mortgage Payment
$368 ………… Property Tax at 1.04%
$0 ………… Mello Roos & Special Taxes
$106 ………… Homeowners Insurance at 0.3%
$427 ………… Private Mortgage Insurance
$0 ………… Homeowners Association Fees
============================================
$2,771 ………. Monthly Cash Outlays
($281) ………. Tax Savings
($632) ………. Equity Hidden in Payment
$18 ………….. Lost Income to Down Payment
$126 ………….. Maintenance and Replacement Reserves
============================================
$2,002 ………. Monthly Cost of Ownership
Cash Acquisition Demands
——————————————————————————
$5,750 ………… Furnishing and Move In at 1% + $1,500
$5,750 ………… Closing Costs at 1% + $1,500
$4,101 ………… Interest Points
$14,875 ………… Down Payment
============================================
$30,476 ………. Total Cash Costs
$30,600 ………. Emergency Cash Reserves
============================================
$61,076 ………. Total Savings Needed
——————————————————————————————————————————————-
We're sorry, but we couldn't find MLS # S702960 in our database. This property may be a new listing or possibly taken off the market. Please check back again.
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$439,900 24831 DAPHNE |
0.55 miles 4 bd / 2.5 ba 2,189 Sq. Ft. |
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$599,900 23741 SINGAPORE St |
0.65 miles 4 bd / 2 ba 1,975 Sq. Ft. |
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$540,000 24925 SARA Ln |
0.79 miles 4 bd / 2 ba 1,902 Sq. Ft. |
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$469,900 26592 NACCOME Dr |
0.91 miles 3 bd / 2 ba 1,531 Sq. Ft. |
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$510,000 25432 ESROSE Ct |
1.21 miles 4 bd / 2.5 ba 2,072 Sq. Ft. |
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$599,000 26771 CALLE MARIA |
1.31 miles 4 bd / 3 ba 2,200 Sq. Ft. |
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$499,000 23381 VIA BURRIANA |
1.45 miles 3 bd / 2.5 ba 1,600 Sq. Ft. |
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$525,000 27232 VIA SAN PEDRO |
1.59 miles 4 bd / 2.25 ba 2,230 Sq. Ft. |
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$565,000 26792 CALLE ALCALA |
1.59 miles 3 bd / 2.5 ba 2,124 Sq. Ft. |
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$525,000 23241 DUNE MEAR Rd |
1.65 miles 3 bd / 2 ba 1,755 Sq. Ft. |
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24 Responses to “Foreclosure prevention laws extend the slump, experts agree”
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[...] Boom Over? – CNBC President Obama, Bored With the Foreclosure Crisis – ML-Implode Foreclosure prevention laws extend the slump – O.C. Housing News It’s the printing press or the euro – Fleckenstein, MSN Money [...]
“Foreclosure prevention laws promote squatting to game the system for free housing, and they drive up the costs to banks who will ultimately pass those costs on to consumers through higher interest rates and fees. These problems will inhibit lending, delay the recovery, and hurt future pricing. All these laws should be opposed.”
Well said. These laws give the idiot politicians that passed these laws short term votes in the next election cycle. They would sell their mom to get to the next office!
Calif. becomes hotspot for housing battles
The state of California is quickly become the nation’s hotspot for housing battles. Two major issues happening right now may change the landscape of mortgage markets in the Golden State.
Nearly 20 financial services trade groups issued a joint letter late last week protesting a proposal in San Bernardino, Calif. to use eminent domain to seize mortgages from private investors.
They say the program would result in massive prepayment risk for mortgage-backed security holders and impose losses on whoever holds the credit risk on the mortgages.
“Our expectation is that the market would demand a much higher risk premium going forward if eminent domain catches on as one would now have to assume that there is massive prepayment risk whenever a loan is underwater,” the letter states. “That means higher mortgage interest rates.”
Opponents of the idea feel down payment requirements would rise as lenders would want to ensure there is little risk that a loan results in negative equity and is thus subject to eminent domain.
The idea is in an exploratory stage at this point. Along with two other counties in California, San Bernardino recently created the Joint Powers Authority to consider ideas brought forth. The JPA will have its first meeting in late July and then issue a request for proposal in August for ideas on how to erase some of the negative equity in the area.
A new study just released by industry groups, authored by research and consulting firm Beacon Economics, concludes that if the Homeowner Bill of Rights were to be signed into law they will ultimately harm the vast majority of California homeowners.
Two central provisions of the Bill of Rights passed through a conference committee last week, sending the bills to expected votes early this week in the state assembly and senate. If the provisions are approved, they’ll go to the governor’s desk for signing or veto.
The bills impose stricter rules on mortgage servicers seeking to non-judicially foreclose on homes with mortgages in default and expose mortgage servicers to substantial new legal liability. These rules, Beacon says, have the effect of slowing the foreclosure process and increasing fines on mortgage servicers for various transgressions within the foreclosure process.
Beacon concludes that the bills would reduce home values as a result. Housing markets with longer length foreclosures see greater discounts on foreclosed units when mortgage servicers eventually sell them — relative to non-distressed transactions. These discounts, Beacon says, pull the whole market down with them.
The research and consulting firm also argues that the bills could add to the financial burden of distressed homeowners: “The non-judicial foreclosure process is more efficient compared to the judicial foreclosure process, and it comes with an important caveat: when using non-judicial foreclosure, lenders…cannot seek compensation for their mortgage losses out of the borrower’s other assets. If the non-judicial route is lengthened and made more costly, many lenders may decide to pursue a judicial foreclosure…and thus pursue remedies like deficiency judgments, ultimately costing the borrower more in the long run.”
“Opponents of the idea feel down payment requirements would rise as lenders would want to ensure there is little risk that a loan results in negative equity . . . .”
Aren’t we already seeing higher downpayment requirements in the private lending markets?
In the truly private market, mostly jumbos, 20% down is the norm. I haven’t heard of any lenders going with less than that. Plus the 20% down is only available to people with stellar credit scores.
“Foreclosure prevention laws promote squatting to game the system for free housing, and they drive up the costs to banks who will ultimately pass those costs on to consumers through higher interest rates and fees. These problems will inhibit lending, delay the recovery, and hurt future pricing. All these laws should be opposed.”
IMHO this is the dumbest shit ever said, no doubt in the interests of those bankers and underwater home owners wanting to blow another housing bubble.
Squatting depresses values as those who would normally be forced into the housing or rental markets are living for free, rightfully so in some cases like mine.
Free housing for consumers would normally prevent banks for raising fees due to the lack of loan demand which fees originate. However, because banks receive free money from the Fed in which they can loan back at interest they are none to willing to enter the residential mortgage business, this is why there is no demand.
Furthermore future price increases mean future housing inflation, which means future debt inflation. Yep. Remember, low home prices help housing formation and allow young families increased consumption which spurs economic expansion.
Don’t feel bad. I was brainwashed too, until I walked start reading this blog. I am now going through the most recent order of possession on my 5th and last walkaway in lieu of the 2012 deadline for mortgage tax forgiveness.
Production and underconsumption (savings) is the only way an economy truly grows.
Think of it in terms of an individual. Between a saver and a spender, who will be in better shape 20 years from now? Economies are no different.
Google ‘Bastiat Broken Window Fallacy’.
Lenders Taking Longer to Begin and End Foreclosures: Survey
After conducting a survey with current and former clients, YouWalkAway.com reported that lenders are taking longer before beginning the foreclosure process. The agency surveyed underwater homeowners it has or is working with and found that from January to June of this year, respondents who received a foreclosure start notice were 11 months behind on their payment.
Last year, it took an average of 9 months of nonpayment before the foreclosure process started.
Receipt of a Notice of Default, Foreclosure Complaint, and Notice of Trustee’s Sale all counted as foreclosure starts for the survey.
In 2010 and 2009, the average number of months before foreclosure began was 7, and in 2008, it was 4 months.
According to the foreclosure agency, the data indicates lenders are now only beginning to attend to delinquencies from the first and second quarter of 2011. This means strategic defaulters have been given a longer time period in which they could reside in their home rent free before the foreclosure process begins.
The survey also revealed that so far this year, the foreclosure timeline is longer compared to previous years.
In the first and second quarter of 2012, properties averaged 16 months of delinquency before getting foreclosed on. Based on the survey results and other data, YouWalkAway.com said this reflects an increase in the number of months a borrower is delinquent before foreclosure starts are filed and foreclosures are completed. This implies lenders and servicers are processing older foreclosures and homes that have been in default for over a year.
Jon Maddux, CEO of YouWalkAway.com, questions if this delay on the lender’s part is intentional.
“Waiting so long to even begin the foreclosure process is detrimental on a personal, local, and national level. It affects the borrower, their credit and financials, their neighborhoods, the housing market and economy in general,” said Maddux.
With the lengthening not only at the start of the foreclosure process, but also at the end, Maddux said it could suggest lenders are beginning to address the backlog that was created during the robo-signing debacle, but it may be too soon to tell the actual rate of of foreclosure filings in 2012.
“Once this shadow inventory hits the market, housing prices may lower and create a new wave of strategic defaults and foreclosures,” said Maddux.
This is the biggest incentive to strategic default. I agreed to borrow the principal amount and I should be able to refi soon cutting my mortgage payment and interest costs in half – albeit after draining two years’ of savings. Strategically defaulting just to escape this debt just isn’t sufficiently attractive.
However, if you can assume that you’ll be able to live rent-free for 12+ months AND escape the debt, then the proposition is much more compelling. In that case, I can keep my savings and save the equivalent of an additional year’s worth.
I know a few people that are looking for a house in Vegas and they’re pissed the banks are holding back so much inventory.
There are times when delay is the only option. This is one of them.
As it turns out, the old saying you don’t get something for nothing still rings true, as home owners are now going to be ATM machines for govt, instead of themselves…..
Tucked away in the new healthcare program — a new investment tax. There is a 3.8% surcharge on investment income that will go into effect on January 1, 2013. If you have Adjusted Gross Income in excess of $250,000 (married couple; joint) from the following sources, you are subject to the tax:
Applies to dividends; rents; royalties; interest,( except muni-bond interest); short- and long-term capital gains; the taxable portion of annuity payments; income from the sale of a principal home above the $250,000/$500,000 exclusion; a net gain from the sale of a second home; Schedule C income from businesses; and passive income from real estate and investments in which a taxpayer doesn’t materially participate, such as a partnership.
“If you have Adjusted Gross Income in excess of $250,000 (married couple; joint) from the following sources, you are subject to the tax:”
Do you know if the AGI is adjusted for inflation? If an inflationary environment, more and more people get covered until it’s like AMT.
pertains to AGI total on your form 1040.
My question wasn’t worded right.
You know how certain tax laws are adjusted to inflation. For example, qualified contributions to retirement plans like 401(k) increases $500 every time CPI has increased to allow an increase of $500. I also think the Roth IRA AGI income limits are also adjusted to inflation. so over time the top (or limit) AGI for Roth IRA contributions is on the increase.
So, I wondering if they did that same for this new tax? If AGI is $250,000 for couples in 2012 for this new tax, will it be the same for couples in 2045?
If this tax limit is not adjusted to inflation, then this revenue from this tax will greatly increase over time. Especially, if have a 1970′s style inflation…printing money.
In our current political environment, few are going to complain about a small tax on those making over $250,000 per year.
Fair enough, but this “small tax” added to Obama’s desire to increase these households’ marginal income tax rates 3-5 additional points, and Jerry Brown’s desire to add another point, all adds up.
He He, I know I wished I had that problem.
Now, the big tax question for housing will be elimination of Mortgage Interest Deduction for mortgages greater than $500,000 on your primary residence. Actually, in the long run I don’t have a problem that deduction being phased out for all mortgages on primary residences over a period time. It’s just a feeling, but with the federal government owing $16 trillion it will be get passed in 2013 for mortgages greater than $500,000 as part of deal to cut welfare programs.
Mike, you gotta think they have to tackle this. The MID is huge for higher-earners (i.e. higher-taxed) households. It vastly disproportionately benefits the people everyone wants to label as “rich” and it’s a huge expense. I’m not counting on the MID continuing to be so beneficial in the years to come.
One last comment and sort of interesting housing topic. When to fire at your repair man.
Deltona man holds air conditioner repairman at gunpoint, sheriff’s officials say
By LYDA LONGA, Staff Writer July 2, 2012 10:30 AM
Stan Nguyen was unhappy with the job his air conditioner repairman did on the unit at his residence, so Nguyen decided to hold the worker at gunpoint until the job was done right, sheriff’s officials said this morning.
But the repairman — unharmed — was able to call for help at about 9 p.m. Friday, said Volusia County sheriff’s spokesman Brandon Haught.
Repairman Sean Hickman had gone to Nguyen’s house at the 2300 block of Statler Terrace on Friday to repair the unit, a report shows. When Hickman began explaining the unit’s problem to Nguyen, the homeowner became angry and refused to pay Hickman, the report shows.
Nguyen, 54, claimed Hickman ruined the unit, the report shows.
Hickman said he attempted to give Nguyen an invoice for the work; on the 9-1-1 call made by Hickman, the repairman also told Nguyen that he would be hearing from his attorney.
At that point, Nguyen pulled out a gun and pointed it at the ground, attempting to fire the weapon, the report shows. The safety was on the weapon though and it did not fire.
But then Nguyen removed the safety and that’s when Hickman took cover behind his van. Hickman called for help and said Nguyen was pointing the gun in his direction and threatening to shoot him if he tried to leave, the report says.
A few minutes before Hickman telephoned for help, Nguyen’s son Stephen Nguyen, called 9-1-1, saying the repairman had “fried” the air conditioner and was refusing to leave their residence.
Nguyen was arrested and charged with aggravated assault with a deadly weapon
Makes complete sense for private lenders to start charging higher rates and fees going forward to cover their risk exposure and the uncertainty of any financial project. If they don’t, then they’ll fail, as well they should. Govt lenders won’t ever think to do this kind of risk assessment since their financeers are federal income tax payers who either pay the bill or pay huge fines and go to prison. So here’s the match up: private lenders accounting for risk vs. government lending which doesn’t. Gee, I wonder who’s going to win that one.
http://www.aei-ideas.org/2012/07/now-this-is-the-mother-of-all-housing-bubbles/ If you think the US has it bad. Hope we aren’t forced to bail them out too.
IR,
” The lack of foreclosure activity has led to a dearth of inventory…” That’s just history repeating itself. During the depression, the prices were maintained while decreasing the inventory (and unintended consequence of keeping unemployment high). The debt was partially reduced on the backs of the consumers and luckly in European and Asian wars caused increased demand for US food, raw material, steel and war goods. FDR was no fool. He collected money from the foreign government for the war goods — unlike the the current adminstration having the US taxpayers buy the war goods for the foreign powers.
The government plan for housing is working exactly as planned.
Perhaps our politicians did learn the lessons of history. Of course, prices did drop 30% during the depression, so they weren’t entirely successful in supporting them.
Yes prices dropped 30% for the great depression and is similar to housing dropping. It take some time for the govt to set up the mechanisms for price support (commissions, regulatory agencies, etc. for the great depression) to combat deflation. For today the first and second bailouts, HAMP, QE1, QE2 CARP, EU bailout 1, EU bailout 2, and other CRAP to keep up the Ponzi scheme until the banks’ liabilities are transferred to the govt/taxpayers. It’s the best of corporate socialism — privatize the profits and socialize the losses.