Category Archives: Real estate

FHFA Threatens to Kneecap Use of Eminent Domain to Condemn Mortgages

All this talk of firing Ed DeMarco seems to have led him to decide to live up to his reputation.

Robert Shiller Questions Whether Housing Has Bottomed, Sees Possible Bubbles

Robert Shiller of the Case Shiller Index, spoke to Fox Business earlier this week (hat tip Ed Harrison). In this short chat, he stresses that the rise in housing prices so far this year look very encouraging, but could prove to be seasonal. He also points out that he is seeing what may be early bubble behavior in San Francisco and Phoenix, and even in Chicago and Atlanta.

If that is indeed happening, it’s not a bug but a feature.

Another Way Banks Abuse Homeowners and Distort Markets: Refusing to Take Title to Foreclosed Properties

If there’s any way for banks to cut the cake to work to their advantage, they do.

One example that has not gotten attention is that servicers will complete all the steps of a foreclosure, sometimes even scheduling the sheriff’s sale, and then not put in a bid.

Why “Firing Ed DeMarco” is No Solution to FHFA Refusal to Engage in Principal Modifications (Updated)

Today, Acting FHFA Director Ed DeMarco wrote to Congress, after due consideration, reaffirming his position that he will not permit Fannie and Freddie to lower principal balances of mortgages of borrowers that are delinquent. This is despite the fact that the top analyst in this space, Laurie Goodman, has determined that principal modifications are the most effective form of mortgage modification, resulting in much lower refault rates than interest rate mods or capitalization mods. And that makes sense. Why should a borrower struggle to hang on to a home when even if they make all the payments, when they sell they they are stuck with a big tax bill? And as we’ve stressed, private label investors are overwhelmingly in favor of deep principal mods for viable borrowers, and that’s because foreclosure is costly and leaves them worse off.

As much as this blogger is firmly of the view that this is a poor economic decision (deep principal mods are a sound idea, as long as you have a decent approach for vetting borrower income and other debt payments to see if they are viable with a mod), I have to hand it to DeMarco as a bureaucratic infighter.

Is Romney Going to Repeat the Palin Strategy and Choose Florida’s Attorney General Pam Bondi?

Romney may be determined to snatch defeat from the jaws of a possible victory. Business Insider reports that the newest addition to the list of possible VP candidates is…Florida’s Pam Bondi

SIFMA Fires Shot, Excludes Mortgages in Localities that Adopt Condemnation From To-Be-Announced Market

On Monday, the financial services industry association (aka lobbying group) SIFMA said that it would exclude mortgages in localities that had condemned mortgages from the to-be-announced market, which is an important source of liquidity for new Fannie and Freddie loans. The promoters of the program, Mortgage Resolution Partners, issued a wounded-sounding response.

So what does this all mean? The short answer is that on the surface, this looks like a clever bit of banker thuggery.

Existing Home Sales “Unexpectedly” Fall

This Bloomberg story is consistent with our current thesis: that despite the buoyancy of the stock market, conventional wisdom has it that a “recovery” is on and that the economy is on firmer footing than it really is.

RealtyTrac, CoreLogic Confirm Housing Bear Thesis: 85-90% of REO Being Held Off Market, Meaning “Tight” Inventories Are Bogus

We’ve been mystified with the housing bull argument that things really are getting better. While real estate is always and ever local, and some markets may indeed be on the upswing, there are ample reasons to doubt the idea that an overall housing recovery is in. For instance, the recent FHFA inspector general report stated:

The Mortgage Condemnation Plan: Fleecing Municipalities as Well as Investors (Updated)

Beware of financiers bearing gifts.

A scheme proposed by a group called Mortgage Resolution Partners, which is being considered by San Bernardino, CA, to use the traditional power of eminent domain to condemn mortgages, was pretty certain to be a non-starter, so I’ve ignored it. But it’s gotten enough attention to have roused the ire of a whole host of financial services industry lobbying groups, as well as endorsements from Bob Shiller and Joe Nocera, and a thumb’s down from Felix Salmon, so it looked to be in need of serious analysis.

Michael Olenick: The Real Estate Market’s Continuing Data Vacuum

By Michael Olenick, creator of NASTIACO, a crowd sourced foreclosure document review system (still in alpha). You can follow him on Twitter at @michael_olenick or read his blog, Seeing Through Data

As it turns out, information is not perfect, volatility does not define risk, markets are not efficient, the individual is adaptable.
– Dr. Michael Burry, UCLA Economics Commencement Speech, June 20, 2012

Schneiderman (Technically, Obama) Financial Fraud Task Force Takes Credit for Busting Barclay’s on Libor, Peter Madoff

Normally I try to avoid dumping on the same person twice in a short period of time, no matter how much they deserve it, but a post by masaccio at Firedoglake on the PR exercise known as the Financial Fraud Task Force deserves amplification.

Quelle Surprise! GAO Finds Foreclosure “Request a Review” Materials Too Complicated for a Lot of Borrowers

Readers may remember that one of the outcomes of the robosigning scandal was that mortgage servicers entered into consent decrees with the OCC and other regulators in early 2011.

One component of the OCC program was “independent” foreclosure reviews that would be offered to borrowers to determine if they had been harmed by a foreclosure and provide restitution. The servicers were required to do “outreach” to borrowers who might have suffered to give them the opportunity to request a review. You have to understand that this was never a good faith effort, even though HUD secretary Donovan trumpeted these assessments as an important part of “social justice.”

Is Schneiderman Giving a Pass on Possible Illegal Lobbying on Redevelopment Effort Favored by a Major Donor?

An alert reader pointed to a new post by Norman Oder, who has been following the so-called Atlantic Yards project, a $4/9 billion proposed “redevelopment” for part of Brooklyn proposed by Bruce Rattner of Forest City Development.

How the Fannie and Freddie Could, But Won’t, Cut the Housing Gordian Knot

The ongoing, still unresolved issue of the mortgage mess is that irresponsible, unaccountable, self-serving “agents” called servicers manage foreclosures and mortgage modifications. Pretty much anyone who has looked at the problem argues that mortgage modifications to viable borrowers would lead to lower losses to investors and less damage to the housing markets than the Mellonite “Liquidate real estate” program in place now.

The reason we seem unable to get off this destructive path is servicers are paid to foreclose, and not to modify, hence they have set themselves up pretty much only to foreclose.

Quelle Surprise! State Legislatures Aren’t Buying Bogus Mortgage Settlement

The Obama Administration’s full-bore effort to push a bank-favoring mortgage “settlement” over the line earlier this year has led to a rearguard action that appears to have caught the mortgage industrial complex and its allies flatfooted.