Last Friday, I posted an opinion piece about bailing out California debtors. The post was more about moral hazard than about the details of the bank settlement. Now that I have had time to review the bank settlement, I see the issues raised in Friday’s post were completely wrong. From what I now understand about the agreement, it only pertains to the big commercial banks, and it really doesn’t bail out anyone other than the banks. The moral hazard I [Read More...]
What is a Mello Roos tax? The Community Facilities District Act (more commonly known as Mello-Roos) was a law enacted by the California State Legislature in 1982. The name Mello-Roos comes from its co-authors, Senator Henry J. Mello (D-Watsonville) and Assemblyman Mike Roos (D-Los Angeles). The Act enabled “Community Facilities Districts” (CFDs) to be established by local government agencies as a means of obtaining community funding. When California Proposition 13 passed in 1978, it restricted the ability of local governments [Read More...]
Banks dramatically increased their scheduled foreclosure auctions in November 63% over October. They appear serious about clearing out shadow inventory and getting what capital they can out of the loans secured by houses occupied by delinquent mortgage squatters. Scheduled foreclosure auctions soar in California Banks set the clock for forced sales of more than 26,000 homes in the state in November, a 63% increase from October. Overall foreclosure notices nationwide fell last month. By Alejandro Lazo, Los Angeles Times — [Read More...]
I don’t have any political ax to grind with the left. In fact, on many issues, I lean more left than right, but on the issue of giving away free houses, I think the extreme left has it wrong. In their interest in pandering for votes, they are calling up the troops in the Occupy wherever movement and sending them to foreclosure auctions to disrupt the activities. Perhaps we should just stop all foreclosures and let everyone who occupies a [Read More...]
California recently pulled out of the settlement talks with the major banks. Does anyone miss California? Foreclosure Talks Push Ahead Absent California NOVEMBER 23, 2011 — By RUTH SIMON And NICK TIMIRAOS Bank representatives and government officials are working on a broad settlement of most state and federal foreclosure-practices investigations that could move forward without the participation of California, long considered a key to any deal, people familiar with the negotiations said. The terms of the deal remain fluid. Banks [Read More...]
Housing bubbles are catastrophes. Like the Hindenburg or the Titanic, house prices had an aura of invincibility that came crashing down and sunk to an (under)watery grave. If a mortgage product were to inflate a housing bubble, the pump and hose that primes the first stages are adjustable rate mortgages. These risky products give the market ability to weather interest rate shocks, but they also provide the air that inflates prices 10% to 15% above stable prices set by using [Read More...]
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