Category Archives: Real estate

Beware Private Equity Guys Bearing Gifts: Eminent Domain Mortgage Scam Hit with Well-Deserved Lawsuit

The private equity firm Mortgage Resolution Partners looks to be well on its way to getting the good uses of eminent domain torpedoed by getting some not-too-swift municipalities to sign up for its self-serving scheme. One indicator of how dubious the MPR program is that investors who have been complacent in the face of all sorts of abuses by originators and servicers, have roused themselves to act in a unified manner and push back against the MRP plan, in the form of a suit filed in Federal court in California on Wednesday.

Four Headwinds to the US Housing Recovery

Yves here. This post from MacroBusiness describes three risks facing the American housing recovery, and I thought I’d add a fourth, which is the open question of how much longer private equity funds and other speculators will continue to bid up housing prices.

China’s Most Famous Ghost City Busts

The Chinese government, as has been widely reported, is trying to cool growth, in large measure to take the hot air out of its shadow banking sector. But can it engineer its hoped-for soft landing?

Bill Black: What if Bernanke Had the Character to be Candid?

Yves here. I suspect NC readers can go even further will Bill Black’s question!

Quelle Surprise! 38% of Prospective Home Buyers Halt Search Due to Rate Shock

We’ve been warning that the sudden rise in mortgage rates was going to create a great deal of buyer sticker shock. It’s already virtually halted refis. Further confirmation comes from the Urban Turf website:

Banks Outbidding Private Equity Funds at Foreclosures, Believing They Can Beat Them at the Pump and Dump Game

It’s conventional to deem local journalism to be dead, but Josh Salman at the Sarasota Herald-Tribune has written well-researched investigative story on bank bidding at foreclosures in his neck of the woods, Big lenders bidding to keep homes, that has national implications.

It’s Time to Levy the Land

Yves here. While some of the concerns in this post are specific to Australia, they can be readily translated to other property regimes. The part that is missing, however, is that the US relies on “real estate taxes” which includes the value of the buildings on the land. Michael Hudson has advocated taxing land much more heavily, since unlike taxing capital or labor, it does not burden the economy with higher costs . As he explains in a 2009 interview:

Michael Hudson: From the Bubble Economy to Debt Deflation and Privatization

Michael Hudson looks at the implications of ending QE in the context of the past 30 years of bubble blowing.

David Dayen: A Revealing Episode in DC Groupthink

So this week I got an education in the mentality of “official” Washington.

Last week I was asked by a DC-based publication to give a comment on Corker-Warner, the flavor-of-the-month proposal to abolish Fannie and Freddie and reform mortgage finance. I basically take the same position as Yves on this issue: all of these GSE 2.0 plans assume a private label MBS market the way the proverbial economist on a desert island assumes a can opener.

US Mortgage Rates Skyrocket

Yves here. So what is the Fed going to do, now that it has delivered a big blow to the nascent housing recovery? Risk its credibility by beating a serious retreat on taper talk, or keep whistling in the dark and wait and see what happens to July and August home sales (and remember, most housing market data is reported with a nearly two month lag…)?

Misguided Corker-Warner “Kill Fannie and Freddie” Bill Relies on Private Market Sparkle Ponies

Let’s be clear: I’m not a fan of Fannie and Freddie. Subsidizing housing finance is a lousy way to subsidize housing. But the Corker-Warner bill is no solution.

Regulatory Looting, Promontory-Style: Botched Foreclosure Reviews Alone Generate More than Double Goldman’s Revenues per Employee

t’s really hard to convey a sense of how utterly grotesque the looting that Promontory Financial Group conducted on the misnamed Independent Foreclosure Reviews.

Mortgage Rate Shock Likely to Dent the Housing Market

As regular readers know, your humble blogger, along with a lot of investors, was taken by surprise when the typically dovish Bernanke not only started using the taper word a month ago, but then made the demise of Fed heroics sound even more imminent by talking about higher unemployment “thresholds,” namely 7%, than had been voiced previously. And the reading of Fedwatchers like Tim Duy and (even before the FOMC statement) James Aitken is that the central bank wants out of the QE business sooner rather than later.

The impact on mortgage rates already looks very likely to throw a big bowl of cold water on the housing party.

Administration Keeps Pretending Mortgage Servicing Has Been Fixed, Whistleblowers Say Otherwise

It sometimes feels like a Sisyphean task to keep discussing how Americans were thrown under the bus in the various mortgage settlements reached in 2011 and 2012. Needless to say, whistleblowers continue to come forward and describe widespread abuse even though the officialdom would have you believe otherwise.

The Taper is Too Sharp

Yves here. I have to say I’m still gobsmacked by the Fed’s belief that the labor markets are showing meaningful improvement, and the further “clarification” that this means the central bank thinks it’s on track to start easing up on bond buying this year.