Archive for June, 2011

Back in March, I wrote about the future of IHB news and real estate analysis. In that post, i made the following observation: Data is important, isn't it? It's a shame the NAr has gone down the path it has. Few reliable sources of real estate analysis and information exist, and few signs the NAr is going to become one of them. That leaves a void. Uncharted waters buyers must navigate without a reliable guide. It's a void we seek to fill here at the IHB. We are in the process of assembling our own private database of housing and related economic statistics. Over the next several weeks as I have time to digest the new information, I plan on…[READ MORE]

Lenders and borrowers are stuck with each other. Lenders know everything about their borrowers, and most lenders believe their borrowers are capable to making their mortgage payments. Unfortunately, when they are severely underwater and paying more than a comparable rental, borrowers don't want to make their payments. A poor compromise is a loan modification. They haven't worked out very well. Why is housing market stuck? This family offers one answer By Bob Sullivan -- June 27. 2011 CHICAGO — Ron and Cheryl Schmalz think they know one reason the U.S. housing market is stuck. They just spent more than two years and created about 50 pounds' worth of paper trying to get a $300-per-month modification to their mortgage. Whoa! Wait…[READ MORE]

Last September I noted the GSEs were expediting their foreclosures and REO sales and this behavior was going to threaten the banking cartel. The GSEs are still at it, and they are undercutting bank REO pricing to sell their inventory. Take the property as is, or take nothing at all. Foreclosures for sale, all homes sold as is By Kenneth R. Harney, Friday, June 24, 8:21 AM Looking for a deal where the home seller pledges in advance to contribute potentially thousands of dollars to your closing costs? If so, check out the summer sale terms available from two of the largest and most motivated sellers of foreclosed homes in the country: Fannie Mae and Freddie Mac. You may know…[READ MORE]

The investors who financed the Astoria at Central Park West lost their grip on financial reality. When prices hit the floor, they wanted to leave with their money, but they couldn't find the door. Now, they are stuck with a loser investment, and they have few good options to get out. High density real estate costs High density residential construction costs are the biggest variable in determining the type of construction a specific project can support. The income must be sufficient to provide a return relative to those costs for a project to go forward. The first major cost barrier comes when a project goes from three stories built on grade to four stories over parking (aka podium construction). A…[READ MORE]

Strategic default is often the wisest course of action for a family to take. Lenders are hoping to escape disaster while borrowers and attorneys partner to leave their mark on lender's balance sheets. In the future, the threat of strategic default should make lenders more reluctant to make stupid loans with payments greatly exceeding comparable rents (more on that soon). However, after a strategic default, what is the borrower to do? I think they should get out and move on with their lives because once they quit paying, it is only a matter of time before they must leave. This lingering uncertainty takes an emotional toll on families that isn't necessarily offset by the savings. Most borrowers in default don't…[READ MORE]

There is a new scam in real estate that can only be accomplished by an agent, most often a realtor because most real estate agents are realtors, but there are likely some independent brokers caught up in this as well. The realtor must shirk their fiduciary responsibility to their client and knowingly tell lies to that client, usually a lender but sometimes a short-seller, to get them to sell property for less than it's really worth in the market in order to get some form of kick-back from the buyer. The following article details how this is done. Real-estate scam that’s devastating prices Lew Sichelman -- June 10, 2011 WASHINGTON (MarketWatch) — Question: My neighbor in Palm Springs, Calif., who…[READ MORE]

The little people behind the complaint against me obviously want to silence my free speech. Their latest response letter demanded my silence, and failed to explain the charges against me. Again, they seek to suppress free speech and circumvent due process like a communist regime. Why is OCAr so insistent on silencing free speech? Do they really believe if I stop telling uncomfortable truths that people won't be wise to their games? Is my voice so powerful and my message so devastating to their goals that they believe my silence will suddenly lead to a turnaround in the real estate market and increased business for the members of OCAr? Do they believe they can return to their deplorable methods of…[READ MORE]

The Orange County Association of realtors is after me. They claim I am a liar. Today, I will present the facts and let you decide. Realtors go after blogger who says they lie June 6th, 2011, 12:00 pm -- Marilyn Kalfus, real estate reporter The Orange County Association of Realtors has filed a grievance against an Irvine real estate broker who writes a blog that takes critical looks at the housing crash, homebuyers and real estate agents. . Larry Roberts, who writes the, freely admits going “over the top” in his posts, which are particularly harsh on homeowners who default on loans. He frequently shows MLS photos of properties that have gone into foreclosure. He also has accused real estate…[READ MORE]

Most people would agree that preventing financial bubbles is preferable to cleaning up the mess in the aftermath. The ups and downs of housing prices must end. The housing bubble shattered the dreams and aspirations of a generation. Some of the wealth lost was an illusion, but those who lost their family homes lost something tangible and real. Great Britain is trying to recover from its fourth housing bubble in the last 40 years. That rivals California's three bubbles during that span. They too are looking for answers to prevent bubble number five from wiping out their wealth and their economy. 'Cap mortgages at 90% of value' to prevent bubble Price stability should be government priority Bloomberg -- June 3,…[READ MORE]

Many people leave Las Vegas broke. Most of them lost their money in games of chance, but the latest casualties of Las Vegas were ordinary home owners who bought homes. Unlike many markets where only the most indebted late buyers and HELOC abusers have been washed out by falling prices, in Las Vegas, prices have fallen so low that ordinary buyers from before the bubble who paid down their mortgage find themselves deeply underwater, unable to move, and hopeless. Those owners are the true victims of the housing bubble because they didn't do anything foolish. They happened to buy in the wrong place at the wrong time purely by chance. Now these ordinary citizens are trapped in their underwater homes…[READ MORE]

In Memoriam: Tony Bliss 1966-2012