realtor to presidential candidates: do no harm… to our commissions

 IRVINE, NEWS
Nov 022012
 
realtor to presidential candidates: do no harm... to our commissions

In the lead up to our presidential election, I noted that the housing bubble creates no-win political situation for either presidential candidate. As a result, both Obama and Romney have been largely silent on this important issue. It was absent from the debates, and with the exception of a sketchy housing plan that lacks fresh ideas from Romney, housing has been ignored by both candidates. In a final effort to bring pressure on the candidates to acquiesce to his wishes, a prominent realtor (if there is such a thing) has released a scathing attach on both candidates for failing to [Read More...]

Tighter mortgage standards for GSEs will encourage private lending

 HUNTINGTON BEACH, NEWS
Nov 012012
 
Tighter mortgage standards for GSEs will encourage private lending

After the collapse of lending caused by skyrocketing delinquency rates which ultimately brought down the housing market, lending was taken over by the US government. The FHA, which was an existing government program, saw its share of mortgage origination balloon from 4% to 25%. The government sponsored entities of Fannie Mae and Freddie Mac were taken into conservatorship by the Department of Treasury and injected with about $150 billion to keep them solvent. With takeover of the GSEs and the increase in FHA lending, the government insured the loans on as much as 98% of the housing market. The current [Read More...]

Did the Homeowner Bill of Rights make California a judicial foreclosure state?

 LAKE FOREST, NEWS
Oct 102012
 
Did the Homeowner Bill of Rights make California a judicial foreclosure state?

The law concerning foreclosures in California is set to change on January 1, 2012. Many are concerned this will complicate the foreclosure process and grind the foreclosure machinery to a halt. So far the banks have taken little notice. Some speculated there would be a last-minute push to get foreclosures done before the change took effect. That isn’t happening. The banks are in no hurry to process their backlog of foreclosures, and if the changes in the law complicate the process for them, they will grin and bear it. Calif. hands trial lawyers ‘nuclear weapon’ to use against mortgage industry: [Read More...]

The debt forgiveness tax break may not be extended

 IRVINE, NEWS
Oct 012012
 
The debt forgiveness tax break may not be extended

Ordinarily, if a borrower has debts forgiven outside of a bankruptcy, the amount of the forgiven debt is taxable income. This makes perfect sense if you think about it. If one party gives another money, it is either a gift or it’s income. Even if it’s a gift, if it’s over a certain threshold, the government taxes it as income, largely to prevent wealthy people from avoiding inheritance taxes. When a borrower gets a large amount of money from a lender, it’s not income because the money is repaid. If it isn’t repaid, it’s either a gift or it’s income. [Read More...]

Is the home mortgage interest deduction really at risk?

 COSTA MESA, NEWS
Sep 202012
 
Is the home mortgage interest deduction really at risk?

Do we really need to give high wage earners a huge tax break as an encouragement to take on excessive debts? That’s what the home mortgage interest deduction really does. If the deduction were eliminated, home values in areas like Orange County populated by high wage earners would drop to establish a new equilibrium, but nobody would go without. In fact, the home mortgage interest deduction does little or nothing to increase home ownership rates because the low wage earners at the fringe of affordability don’t use the deduction anyway. Studies have show home ownership rates are just as high [Read More...]

Debt-to-income ratios must be limited to prevent future housing bubbles

 COSTA MESA, NEWS
Sep 102012
 
Debt-to-income ratios must be limited to prevent future housing bubbles

In The Great Housing Bubble, I wrote about how we could prevent the next housing bubble: Loans for the purchase or refinance of residential real estate secured by a mortgage and recorded in the public record are limited by the following parameters based on the borrower’s documented income and general indebtedness and the appraised value of the property at the time of sale or refinance: All payments must be calculated based on a 30-year fixed-rate conventionally-amortizing mortgage regardless of the loan program used. Negative amortization is not permitted. The total debt-to-income ratio for the mortgage loan payment, taxes and insurance [Read More...]

Romney’s housing plan lacks fresh ideas while Obama is boosted by bottom callers

 HUNTINGTON BEACH, NEWS
Sep 072012
 
Romney's housing plan lacks fresh ideas while Obama is boosted by bottom callers

I recently wrote that the housing bubble creates a no-win political situation for either presidential candidate. Despite the political minefield housing policy creates, Mitt Romney has published a very brief and vague plan he hopes will excite voters. It won’t. Housing: Fulfillment of the American Dream Overview For millions of Americans, homeownership is about more than just a place to live. For many, owning a home is the fulfillment of the American Dream. Yet today, the dream of home ownership is out of reach for many Americans as a result of President Obama’s failed policies and stalled economy. Owning a [Read More...]

Housing bubble creates no-win political situation for either presidential candidate

 DANA POINT, NEWS
Aug 272012
 
Housing bubble creates no-win political situation for either presidential candidate

President Obama’s housing policies have been as successful as the circumstances would allow. Back in June I quipped, Obama’s housing policy succeeded wildly by failing spectacularly. Personally, I would have preferred he let the banks go bankrupt, nationalize them, fire management, recapitalize the banking system, and sell them off the bank’s stock when the economy recovered. Unfortunately, the flash-point of the crisis occurred while Bush was still in office, and these institutions were deemed too big to fail. Obama continued Bush’s flawed policies and looked for solutions that did not bankrupt the banks. This left few good options. Once bank bankruptcy [Read More...]

More government policy changes to impact the housing market

 NEWPORT BEACH, NEWS
Aug 232012
 
More government policy changes to impact the housing market

The housing market is anything but stable. Decisions by banks, government regulators, the federal reserve, congress, and Treasury department officials have tremendous impact on house prices. For example, decisions at the federal reserve regarding interest rates have imbued the market with such high payment affordability that buyers can finance the still-inflated prices of the previous bubble. Banks decided early this year to slow the rate they took back properties at foreclose auctions thus reducing MLS inventory of REO significantly. Government regulators changed accounting rules in 2009 to allow banks to keep delinquent mortgage squatters in place with delayed millions of [Read More...]

Obama’s housing policy succeeded wildly by failing spectacularly

 NEWS, YORBA LINDA
Jun 222012
 
Obama's housing policy succeeded wildly by failing spectacularly

President Barack Obama’s housing policy has been assailed by both sides of the political spectrum. The Right criticizes him because any government involvement in the housing market is socialist meddling (I happen to agree with the Right on this issue). The Left criticizes him for not going far enough to give free money and other perks to loan owners. Personally, I think Obama has navigated the political waters very well on housing. He has done enough to placate the critics in his own party, but he hasn’t done enough to actually matter. In other words, Obama’s housing policy has succeeded [Read More...]

California realtors buy politicians to lobby against lost commissions from bulk sales

 DANA POINT, NEWS
May 252012
 
California realtors buy politicians to lobby against lost commissions from bulk sales

NAr couldn’t care less about the greater good. They lobby for their own narrow interests, irrespective of the impact it will have on the housing market, the rental market, or the broader US economy. Their latest self-serving battle is against bulk REO sales. Obviously, they don’t want to lose MLS commission sales to bulk transactions which generate no commissions to them. There is no other reason to oppose these bulk sales. Bill would stop bulk REO sales in California NAR backing sponsor Gary Miller’s reelection bid By Inman News, Friday, May 18, 2012. California Rep. Gary Miller — who’s getting [Read More...]

Obama extolls HELOC abusing Ponzis as “responsible” homeowners

 NEWS, RANCHO SANTA MARGARITA
May 142012
 
Obama extolls HELOC abusing Ponzis as "responsible" homeowners

President Obama has lost his mind. I guess I shouldn’t be too surprised that Obama would embrace HELOC abuse as a good idea. After all, Obama HELOCed his home in Illinios before he became president. Personally, I find this outrageous. Our commander-in-chief, the leader of our nation, has embraced HELOC abuse as a noble behavior that should be encouraged by a taxpayer bailout. The dipshits who lose their home from excessive borrowing should be given a pass, and everyone who chose not to participate in the madness should pay for it. I think that sucks. Obama’s ‘Responsible’ Reno Homeowners: Are [Read More...]

federal reserve economists still don’t understand the housing bubble

 LAKE FOREST, NEWS
May 112012
 
federal reserve economists still don't understand the housing bubble

As the author of The Great Housing Bubble, I am an authority on the housing bubble. As someone who has written daily about the myriad of circumstances and consequences of the bubble, I have examined this phenomenon from every conceivable perspective. One of the great features of blogging is the constant exposure to other points of view on these issues. If there is something I miss, a reader usually points it out. The astute observations have greatly increased my understanding of these issues. For all these reasons, I would compare my understanding of the housing bubble with anyone, and from [Read More...]

The fear of homelessness is the basis of America’s economic system

 LAKE FOREST, NEWS
Apr 232012
 
The fear of homelessness is the basis of America's economic system

Modern American culture can trace its roots on the North American continent to pioneering English settlers. Life on the frontier is harsh, and each family unit is self-reliant. In a frontier society, if people didn’t work, and if they didn’t produce their own food and shelter, then they died. Fear of death from starvation or exposure was very real, and anyone who wasn’t motivated to produce something of value to themselves or others faced the near certainty of painful death. In a frontier society, there are no bailouts. We have made much progress over the last four centuries, and the [Read More...]

What California can learn from Britain’s housing bubbles

 ANAHEIM HILLS, NEWS
Apr 112012
 
What California can learn from Britain's housing bubbles

California and Great Britain have much in common with regards to its real estate. California has witnessed three catastrophic bubbles over the last forty years as has Great Britain. Each bubble had different causes, but the timing was similar. California has strict land-use controls which creates artificial shortages of housing, and so does Great Britain. California’s economy has become dependent upon rampant HELOC abuse to fuel unsustainable booms and heart-wrenching busts. Great Britain endures the same real estate borrowing cycles of boom and bust. In this latest bust, lenders have not foreclosed on California’s mid- to high-end real estate keeping [Read More...]

Why should we prevent housing bubbles?

 NEWS, SAN JUAN CAPISTRANO
Apr 042012
 
Why should we prevent housing bubbles?

Part of living in California is deciding whether or not to play the California housing lottery. If you win, you could gain hundreds of thousands of dollars. If you play, you could spend hundreds of thousands of dollars and endure the consequences. If you lose, you could lose hundreds of thousands of dollars and end up homeless, destitute and bankrupt. But just like gamblers flock to the casinos, everyone believes they can be a winner, and now with our bailout culture, nobody believes they can lose either. In the Great Housing Bubble, I noted this about bubbles: Why should anyone [Read More...]

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