Archive for June, 2009

Maybe They Just Aren't Interested

Politicians have been promising to save the housing market and reduce foreclosures.  A number of programs have been launched to great fanfare, but none have been a rousing success.  Is it possible that there are still folks out there who live under a rock and haven’t heard about these programs?  The Obama administration thinks so:  [Thanks M.R.!] MIAMI – The Obama Administration today kicks off a nationwide campaign to promote the Making Home Affordable Program, a plan to stabilize our housing market and help millions of Americans reduce their monthly mortgage payments to more affordable levels. The campaign starts today…
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Crack of Doom: Twist Is On Vacation

  • Published: June 29th, 2009
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  It’s Monday, and I’m on vacation- sort of.  I’m in New York helping some family move, and the new place is without internet until Friday. If there’s anything that we should know, drop us a line or feel free to post a comment here.  This is an open thread. In the meantime, I’ve got to figure out where I left the packing tape- I’ve got a bunch of boxes to pack!

What's the real crisis here?

Here’s a story from Maricopa, AZ.  Maricopa is on the far fringes of the Phoenix metro area, and hard hit by the housing bust.  One thing that struck me about this story was one of the comments made afterwards.  This story is being told thousands of times across the nation- only the name and place changes: A total of 325 homes in Maricopa were foreclosed during the first quarter of 2009. In 2008, there were 1,055. There are five foreclosed properties alone in Christopher Fortin’s cul-de-sac on Windsor Drive. And Fortin’s home may be next. In August, the house he…
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Marcy's Default Line: Plastic cn b Drastic Regret!

Igor regrets to inform Doomers that the Versus Gang is Back . . . The above homepage link will provide better quality than the following embed for many viewers. .

Attention Barney Frank- Supporting Loose Lending Is Supporting Predatory Lending

  Predatory lending, in my mind, is when a lender encourages a buyer to purchase a loan that they know puts a buyer at risk for default, in order to enrich either the seller or the lender.  Representatives Barney Frank and Anthony Weiner would undoubtedly deny the charge, but they are promoting predatory lending in their support of relaxing borrowing standards for condominium developments: (Reuters) – Two U.S. Democratic lawmakers want Fannie Mae and Freddie Mac to relax recently tightened standards for mortgages on new condominiums, saying they could threaten the viability of some developments and slow the housing-market recovery,…
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Foreign Cenbank Holdings of US Obligations Weekly Update — to 24 June 2009

  • Published: June 26th, 2009
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“The Fed is reminding the hyperventilating bond market that it needs to relax,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. “Inflation will be low for some time because the economic weakness will be with us for a time. They are not about to start to thinking about an exit strategy.” [1] The above is an example of jawboning, the term a wonderful allusion to an Old Testament story. That, combined with an inability to actually do anything is what we at the Castle sometimes refer to as Ben’s state of Flexible Paralysis….
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Parade Of Foreclosed Homes

  Tucson: Five of last year’s Parade of Homes properties have gone back to the bank- and there were only seven of them: [Hat tip M.R.!] Five custom homes featured in last year’s Parade of Homes have now gone back to the Bank of Oklahoma after several months of negotiations. Their failure to sell reflects the sharp decline in the high-end housing market where there are soft prices, a limited number of buyers and plenty of properties to choose from. Of the seven featured properties in the Sonoran Preserve on the Bajada, near Dove Mountain in Marana, only one home…
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Phoenix: The Foreclosures Just Keep On Coming

According to Forbes magazine, Phoenix is the second best metro area in the United States to buy a home.  They used a formula based on sales activity to come to that conclusion. One would think however, that a good housing market would be one with the least possible downside risk and the greatest upside potential.  While individual homes and areas may be holding their value better than others, the Phoenix area in general remains a risky place to purchase a home. Even former permabull Jay Butler, director of Realty Studies at ASU admits the risk: There is increasing hope that…
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Exporting Danish-style Recourse Mortgages

Here’s thoughts on Danish-style mortgages that expand on what I wrote in note [7] to Saturday’s AEI Subprime Danish: (nearly) Complete Annotated Transcript. I originally drafted a version of the following for some private correspondence, but on reflection thought I’d stretch a point on my "retirement" from active comment to share it with Doomers generally. In the March 26th seminar, George Soros associate Alan Boyce described (from appoximately minute :06 to :36 in the transcript) his ongoing efforts to introduce Danish mortgage practice into Mexico, and outlined how it might be applied to the United States. Discussants describe with relish…
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The Latest, Greatest [Dumb] Plan To Fix The Mortgage Market

  President Obama’s got a new plan to fix the mortgage industry, and boy is this one hard hitting: If the Obama plan for simplifying the mortgage process is approved, here’s how it might work: The government would give its seal of approval to a handful of mortgage types — a standard 30-year fixed-rate mortgage and perhaps a few varieties of adjustable-rate loans. For a loan to get the "vanilla" label, the lender would have to verify borrowers’ income and have them set aside money for property tax and insurance. Borrowers would still be able to get mortgages that don’t…
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Will FHA Loans Bring About Housing Bust Part II?

Thank heavens they’ve put a stop to those risky, "no-skin-in-the-game" loans, or have they? [Thanks L!] Think we’re beyond the days of people putting little-to-nothing down for home purchases only to later walk away? Think again … and the government is sponsoring it. For those not familiar with FHA loans, they are loans issued by major banks like Bank of America and Wells Fargo as well as smaller mortgage brokers and the origination arms of builders like Ryland and KB Home. Those loans are then insured against default by the Federal Housing Authority. The rub is that FHA loans allow…
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AEI Subprime V Alfa: Complete Annotated Transcript

Op-Ed Friday: Son of Subprime

It’s Friday, and it looks like mortgage defaults could go from bad to worse:  [Thanks L!] WASHINGTON — Call it son of subprime. Experts warn that a new wave of mortgage foreclosures may be coming soon and could rival the default rates for subprime mortgages and slow efforts to find bottom in a prolonged national housing slump. The mortgages in question are $230 billion of option adjustable-rate mortgages, creative lending products that flourished at the height of the housing boom. In an option ARM, a borrower can opt to pay less than his or her monthly balance due, and the…
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Is This The Quintessential Housing Boom House, Or What?

M sent me a listing awhile back, and I just have to share it.  The home is located in Scottsdale, AZ. Here’s the picture: [MLS #4002657 for everyone with access.]   Nice looking place, isn’t it? Here’s what it says in the remarks though about this property that is listed for $3 million: Any Buyer wishing to make an offer on this home must indemnify owners/brokers against all latent construction defects. 150+ item list of latent defects on record via a construction CORRECTIVE ACTION ORDER issued against contractor by the Registrar of Contractors. WAMU,now Chase Bank, has been notified, and…
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Foreign Cenbank Holdings of US Obligations Weekly Update — to 17 June 2009

  • Published: June 19th, 2009
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This week’s Reuters report [1] saw treasuries buying holding steady, but the sell-off of agencies gained momentum. The report was, as usual, based on the weekly update from the NY Fed’s H.4.1 table site.[2] Here is Doom’s updated CSV version of the agencies and treasuries foreign central bank holdings data set.[3] This week’s healthy $10.648 billion increase in foreign central bank holdings of Treasury Debt was up, but only marginally, from last week. Agency Debt holdings were flat last week, but this week foreign central banks sold off a fairly noticeable $4.254 billion in Agency Debt. The total increase in…
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