Long time readers know that I have reservations about down payment assistance programs.  Buyers that use DPA have been shown to have a higher rate of default.  One of the big barriers to home buying is the lack of a downpayment though, and if we don’t buy homes, banks don’t make money. Wells Fargo has recently announced that they are setting aside billions of dollars for down payment assistance programs in the cities of Phoenix, Los Angeles and Atlanta.  Borrowers in Los Angeles can receive up to $30,000.  In Phoenix and Atlanta, borrowers can receive up to $15,000.  Here’s what…
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Suppose you are underwater on your mortgage, and can’t afford to make your house payments. You don’t want to walk away, and you don’t have the $100K+ over and above what your house is worth to bring to closing. You’ll probably want to try a short sale then, where you can sell a property for less than you owe with lender approval. What do you do though if you can’t close a short sale? This is a big problem in California, where a recent survey of California realtors showed that short sales aren’t closing 43% of the time. Here’s what…
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Anyone who’s spent any time in the Rustbelt has seen their share of vacant boarded up houses.  As job opportunities diminished, folks pulled up stakes, populations dropped and the market for their houses disappeared.  Cities went into decline. Now a new study by James R. Follain, Ph.D., senior fellow of the Rockefeller Institute of Government says that we have a new type of declining city- the cities that went through the boom and bust of the housing bubble: [Thanks L!] [A]nother type of declining city may also be emerging — places that grew substantially during the housing boom and are now…
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Countrywide, the poster child lender for irresponsible lending practices, has settled with it’s shareholders: [Thanks L!] Countrywide Financial Corp., which epitomized the home-loan industry’s boom and bust, has agreed to pay $600 million in the largest settlement yet of shareholder lawsuits stemming from the mortgage meltdown. The agreement, given preliminary approval Monday by U.S. District Judge Mariana Pfaelzer in Los Angeles, would end several class actions brought on behalf of investors in Countrywide stock. This is working out well for their executives:

Yesterday a CNN article said: In many markets, if you want to buy a repossessed property, you better come with your best offer first — and fast. That may be true for homes in the lower price brackets, but rarely for homes in the upper price brackets. The article got me to wondering  what the most expensive foreclosure property currently was in the Phoenix area and I came up with this- 6629 E. Meadowlark Lane, Paradise Valley.  [MLS #4183460] It is currently listed for $4.25 million, but was listed for $6.5 million. [It is actually tied for first place.] The…
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Maybe the whole state of California isn’t going into default, but it’s starting to feel like it: [Thanks L!] About 1 in 10 Californians with a home loan is now in default, and there’s growing evidence that the mortgage meltdown is spreading to commercial real estate. The home mortgage delinquency rate — the percentage of borrowers who have missed several payments and are in the first stage of foreclosure — climbed in June to 9.5% in California and 9.9% in Los Angeles County, according to First American CoreLogic. The staggering number of home mortgage defaults probably will lead to large…
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The rush to move to the Sun Belt seems to be slowing: [Thanks L!] WASHINGTON – Strapped by the nation’s economic crisis, fewer Americans are migrating to Sun Belt hot spots in Nevada, Arizona and Florida, instead staying put for now in traditional big cities. Census data released Thursday highlight a U.S. population somewhat locked in place by the severe housing downturn and economic recession, even before the impact of rippling job layoffs after last September’s financial meltdown. The population figures as of July 2008 show growth slowdowns in once-booming metropolitan areas such as Atlanta, Las Vegas, Phoenix and Tampa,…
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Investors were told last month their money was spent and they won’t get a penny back. A single mother in suburban Los Angeles lost $200,000 and won’t be able to send her sons to private universities. A Los Angeles-area businessman lost a deposit of more than $1 million on four Trump units, including two penthouses. The project’s collapse comes at a delicate time for Trump, whose casino company, Trump Entertainment Resorts Inc., filed for bankruptcy protection last month. He also is embroiled in a lawsuit to avoid paying debt on the struggling Trump International Hotel & Tower in Chicago. [1]…
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Arguably, this process involves sales price fraud, a seller concession (in contrast to the claimed "charitable gift"), unlicensed lending, money laundering, and defrauding the Federal government (the FHA has no way of knowing which loans have "real" downpayments and which are being paid by the seller through markups). The FHA, IRS, FBI, GAO, and Congress itself have all ruled against or reported critically on this practice. It’s enough to make you wonder if the Mob is involved. [1] Hard hitting Doom friend Aaron, founder of the Implode-O-Meter site, like twist here at Doom, has been a long-time critic of residential…
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Many thanks to T.M. for sending me the following article with the comment, "This is why it is taking such a long time for house prices to fall here in California." This is the story of the divorce squabbles of Debbie Matenopoulos, host of E! and her estranged husband. They can’t seem to come to grips with a realistic selling price for their $4.3M home. People magazine is a bit of a change from my usual sources, but if John can quote Vanity Fair, I can use People.  Debbie Matenopoulos’s estranged husband is seeking spousal support from the E! host,…
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There has been a "foreclosure prevention" idea that has been kicked around for awhile now. It is to allow bankruptcy judges to alter mortgage loan terms and even to reduce a borrower’s principal balance. I have not seen a short, concise name for this suggested mortgage "cram down" program so I would like to suggest one of my own:  MALPRACTICE MORTGAGE ALTERING PRINCIPAL ADJUSTING CHANGING TERMS IN CERTAIN EVENTUALITIES An MSNBC article stated yesterday: [Thanks as always to L!] A bill to give judges authority to alter loan terms for primary residences may be the quickest way to arrest the…
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U.S. Treasury debt prices eased on Wednesday as spotty auction results confirmed fears about the market’s ability to absorb a growing need for new issuance, offsetting any safety bid from careening stocks. [1] The last few weeks of the Bush lame-duck term is obviously cloaked in a financial fog of battle, so there’s got to be something heavy going down, but what it is I don’t know. One safe assumption is that the powers-that-be are trying to steer retail investors into decisions that will benefit their rich buddies — not retail investors. What about America’s risk-free sovereign Treasury Debt? Barron’s…
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More "delaying the inevitable" legislation: Los Angeles home foreclosures fell sharply in October from September as a new California law came into effect, while the number of foreclosures in Miami continued to grow at a slower rate, real estate research website PropertyShark.com said Tuesday. The number of newly scheduled auctions on foreclosed properties in Los Angeles county fell 51 percent, the greatest monthly decline in two years. The law, passed July 8, requires lenders to contact homeowners and explore options to avoid foreclosure before initiating the process. Some sections of the law became effective Sept 8. Its implementation accounted for…
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If you are like me, you are having a hard time keeping track of all the billions being handed out to corporations these days.  Remember when we just worried about subprime issues spreading to other types of mortgages?  Oh that it had only stopped with the mortgage industry. Here’s a bailout summary from Mark Hiltzik of the Los Angeles Times: [Thanks L!] So far this year, the federal government has put up nearly $30 billion to avert a major financial default by the investment bank Bear Stearns; committed to investing up to as much as $200 billion in preferred stock…
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  From Bloomberg this morning: Aug. 1 (Bloomberg) — IndyMac Bancorp Inc., the second- largest U.S. independent mortgage lender before it was seized by federal bank regulators three weeks ago, filed to liquidate its remaining assets under bankruptcy protection. IndyMac’s liabilities are between $100 million and $500 million, according to the Chapter 7 filing yesterday in U.S. Bankruptcy Court in Los Angeles. The bank holding company said it has less than 50 creditors, which it didn’t list. IndyMac was seized by U.S. regulators on July 11 after a run by depositors left the mortgage lender strapped for cash. The Federal…
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