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US Economy So Healthy One In Ten Mortgages Delinquent (New Record), One In Twenty In Foreclosure
From Goldman's Jan Hatzius.
Delinquencies and Foreclosures Rise Again
Data just released by the Mortgage Bankers' Assn show that more than one-tenth of all US mortgages are delinquent, a new record high. Homes in foreclosure edge up slightly as well. One caveat: the increases are driven by seasonal adjustment, which should probably be taken with a grain of salt given the huge shifts in this sector over the past few years.
Mortgage delinquencies: 10.06% in Q1 (Q4: 9.47%).
Mortgages in foreclosure: 4.63% in Q1 (Q4: 4.58%).
KEY POINTS:
1. The Mortgage Bankers' Assn Q1 report shows a further rise in delinquent mortgages, even in the 30-60 day range, somewhat surprising given the improvement in the economy and labor market in recent months. The increases are spread among both fixed and adjustable-rate mortgages, both prime and subprime; only FHA mortgages saw a lower delinquency rate than the prior quarter. One issue here is that the delinquency figures incorporate a positive seasonal adjustment, which should probably be taken with a grain of salt given the seismic shifts in this sector over the past few years (in fact, the MBA itself notes this issue; see http://www.mbaa.org/NewsandMedia/PressCenter/72906.htm). Before seasonal adjustment, the figures generally show improvement.
2. New foreclosures continue at a substantial rate of 1.23%, the 9th consecutive quarter where at least 1% of mortgages went into foreclosure. The total inventory of foreclosures (non-seasonally adjusted) rose to 4.63% of the stock of housing in the MBA's survey (just over 2 million homes in foreclosure).
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According to the gentleman I saw last night on TV at 2 AM, this is the best time to invest in real estate!
California Treasurer putting his spin on Cali's perceived default risk:
http://www.youtube.com/watch?v=BEe64dGbz0M&playnext_from=TL&videos=uAt4CdiXVDA&feature=sub
Did you see the microfacial reactions? This guy can't even lie thru his ever calirupt teeth.
Sounds like he was talking his book (ba dum pum) ; )
Sounds like he was talking his book (ba dum pum) ; )
More people electing to not pay mortgage.
Green Shoot.
Frees up money for iPads and 3D tvs!
...and retrofit houses with chinese solar cells
And gold and silver purchases :)
iphones are in a bubble.
Green Shoot: Building permits collapsed last month which means fewer homes will be built which means fewer mortgages to be written which means fewer foreclosures and strategic defaults!!!!
It might even take some existing inventory off the market -bitchin green shoot
These #s will continue to rise as the trend of strategic defaults becomes more and more common. I now know several people personally who are walking away from their mortgage even as they have the means to pay it. Why bother when everyone else is getting bailed out? What a joke.
me too. I know plenty of people who are walking away INTO a new house. WTF???
That is fairly common - buy a new house, new car, default on old house. Very prevalent in non-recourse states like AZ.
Yes...my sister-in-law was one of those common AZ people of which you speak. Lord Almighty, she hit em hard. Her addiction was buy house , leverage to buy bigger house, leverage to buy an even bigger..........
Now she's BK and lives in a 1 bedroom apartment in the desert.
"Why bother when everyone else is getting bailed out? What a joke."
How many are getting "bailed out"? Do you and your strolling "friends" have even a slight clue or some hard facts??? No you don't. It's just the fashionable thing to do now and makes for great cocktail party chatter.
Anyone (and there are not many) who has had current payment amounts reduced get the difference tacked on the back end of the mortgage plus an amount to make the NPV the same or better than the loan that was modified.
Do you think the banks are going to give money back?
Wake the fuck up kiddies.
I think he meant the banks are getting bailed out. But I'm not sure because so many people/companies/countries get bailed out these days I can't keep track.
The bailouts of homeowners is a charade. They will all eventually default. I've seen the terms of some of these mortgage modifications. You could get better from the mafia.
True, many banks are suddenly in the "hard money" business.
2 point fee to modify and 17% rate. Pay Bruno next Friday.
20sMoney was talking about strategic defaults, not loan modifications.
However, the banks/debt collectors can come after borrowers who defaulted if they lived in a recourse state (a majority) for up to 5-10 years. Settling this debt at a fraction still might be economically sound, though.
Here in FL, the bank can chase you around for a looooong time to get their money.
"In states such as Florida, courts give mortgage holders as long as five years to seek a deficiency judgment and, if granted, up to 20 years to collect. Usually, they have the option of renewing the judgment if it’s not paid off within 20 years"
http://www.bloomberg.com/apps/news?pid=20603037&sid=aIf_vUQZFt.s
Is that recourse for primary residence or investment property?
Many people own 7 or 8 primary residences (checked that box because the rate was lower! No one from the bank checked)
According to the article, it's both.
Researched this recently for Florida which is technically a non-recourse state.
Basicly, liability is limited to loss of the house for purchase money, first mortgage, primary residence liens. Anyone refinancing to take out equity, or with a big home equity loan may have a problem. Vacation or second homes... you may be screwed. Consult a Florida attorney specializing in real estate before making any assumptions. This is treacherous stuff.
What do you mean they can come after the borrowers? They can't do shit. They take the house and that is all they can do(as that is the collateral), other than mark your credit report, which they already will have done if they are at the point to take the house. So, folks just go rent somewhere. That simple. Foreclosures are only making the problem worse, attacking credit reports is making the problem worse, and crooked bankers lower people's credit limits who actually pay(which happend to me 3 times already for no reason), and hiking rates up on people's cards and loans from banker greed is making the problem worse. The solution is for the FED to step in and help the homeowners themselves,and leave the banks out of the negotiations, and force the banks to accept what the FED and the homeowner can come to terms on whether the crooked bankers like it or not. They had a fairly decent plan with the modifications, but the problem is they let the bankers run the program and try to set the terms to their benefit, and that is why people are falling right back out of them. I personally, don't blame anyone for making a "business decision" to walk away from a home or credit card debt. You do what you have to do. Businesses file bankrupt all the time and in less than 30 days back to business as usual under new structure, running full credit lines again under great terms, newly issued overpriced stock again, yet when a consumer does it they are labeled a "deadbeat" and get hooked with bad credit for 10yrs and can't buy anything. One sided system is the real underlying problem and has been for years. I say Nationalize the banks period, and probably what should have been done in March '09.
The Fed as a good guy. That's rich.
The Fed is a primary cause of the FIRE bubble, it will never be a solution. And nationalizing the banks will just make it worse.
No. Some of the mortgage terms specify that the banks can sue for the balance after short sale or auction. Fine print.
Sue back on the grounds that they loaned money they didn't have, pooled your loan with fraudulently marked AAA paper resulting in a totally distorted and unrealistic over valuation of your property. In a true arms length transaction there is full disclosure. No buyer would purchase if they knew their mortgage was pooled with non-AAA rated mortgages which had a direct impact on the over inflated valuation of the house.
Mortgages could be crammed down legally, in court with a variation of this counter-claim.
With a grain of salt? Man, this drink is bitter enough!
Moral Hazzard!
Walking away from mortgages.
http://www.cbsnews.com/video/watch/?id=6470184n&tag=cbsnewsMainColumnArea.7
Go figure. Unemployed people can't make mortgage payments. Green shoots and a vodka chaser for all!
The priest in my neighbor just sold his house last month. Another house just put up a sale sign last week after one year of non-payment.
Wait, there's a priest in your neighbor? You really should report that.
Hell, if I had a priest in my neighborhood, I'd report it to the authorities. Priests are far too sketchy.
My neighbor stopped paying his mortgage for 11 months. He was, in fact, an ex mortgage broker and understood the foreclosure process. In any event, JP Morgan filed their last appealable motion with the court and at the last minute my buddy was able to knock his payment down by nearly a third and principle was knocked by nearly 20%.
The reason I bring this up is that I wonder how many of these defaults or foreclosure proceeding will end up like ex mortgage broker guy neighbor man.
"and principle was knocked by nearly 20%"
I seriously doubt that actually happened. Did your "neighbor" tell you this? Do you believe him or her?
I suppose your neighbor made a bag full during the sub-prime boom (probably didn't pay too many taxes on the bag full) and assumming it would never end, bought a big over-priced house that he or she could not afford under "normal" market conditions.
Just a guess
This is according to the docket I pulled from his civil file. I doubted it too. I thought he was going to be long gone from our neck of the woods and back to his last home. Off course, the caveat is that the file still leaves the option of JR to sell the house right out from under his ass. When you dance with the devil...
This is just a way to manipulate the numbers. A made payment is a made payment....despite being less
I work with a few people at my part time job (restaurant on the weekends to help pay for a wedding) that have a) purchased a new home and b)walked away from the mortgage on their second. They don't care, they bought and got a good rate, tax credit, and now they get to dump their massively underwater house/mortgage. Win-win for them, in their minds. The best part is that the bank (Wells Fargo) won't write down the loan because they'll just dump it to one of the F words (Fannie/Freddie). Regular folks can get bailed out too, it seems!
If this is true, I am going to cry. Seriously, this nation is FINISHED.
nah. people will walk away and some knifecatcher will buy the foreclosed property thinking he/she got the deal of the century. then some neighbor in the hood will get pissed at the foreclosure deal and walk away. another foreclosure buy and another knifecatcher will buy in. Viscious cycle. At the end you'll be left with a bunch of underwater investor knifecatchers rental houses, boarded up schools, bankrupt local state governments, and a generation of viscious thugs. But the nation won't be FINISHED, we will solider on!
"At the end you'll be left with a bunch of underwater investor knifecatchers rental houses, boarded up schools, bankrupt local state governments, and a generation of viscious thugs."
Sounds eerily like Cali today.
And Cali futures say the pricing bottom is in '12. That sucks.
www.doctorhousingbubble.com
I used to be in the mortgage business. This has been going on for years. The key is to close on your new house before you stop paying the mortgage for the old one. That way, you can keep your FICO score high until it doesn't matter anymore. Remember to keep those credit cards current too.
happens all the time.
check out www.loansafe.org, plenty of stories of people there doing it.
most buy a new car too, since they know their credit will be trashed for awhile.
And finally the market is starting to reflect this reality in housing and unemployment.
Just tried to eat your brainnnnns. Found vacant spot with a TV in there instead.
Did Harry just make a bearish comment? Holy fuck, the world is about to end.
Remember what Akak said about perma bears...
It means Buy, Buy, Buy!
Harry should change his name to Angel Face. After getting his face bashed in, he has become a great foot soldier for the cause.
I'm VERY upset with you guys. You know Obama's HAMP is making home ownership affordable to everyone. Chicken in every pot. You guys are just a bunch of doom and gloom liars. Obama said BLUE PILL people. DAMN YOU, TAKE IT, OR ITS SUPPOSITORIES FOR EVERYONE
AAAAAAAAAAAAAAAAAAAAAAHH
(Must walk like zombie.....yummm....braiiiiinnsss)
You mean this HAMP? (From HousingWire.com)
Canceled HAMP Trials Jump 80% in April
the HAMP program is being cancelled.
Cali will replace the Fed HAMP program with their HEMP program. Green shoots for all...
WHAT!! You guys destroyed HAMP too!!! Is there no end to your complete evilness!!!?
I actually know people who have strategically defaulted and are still living in their house after 2 years. Not only can I not fathom how they all thought it was ok to take every cent out of their house (cents that turned out to be not real) but have absolutely no concern with walking away. I don't see this stopping for quite some time. Green shoots for retailers, no shoots for banks, but since banks get bailed out it's greens shoots for everyone!
Let's take a look at this data
Mortgage delinquencies: 10.06% in Q1 (Q4: 9.47%).
Mortgages in foreclosure: 4.63% in Q1 (Q4: 4.58%).
Those delinguent mortgages will either be foreclosed or short sold. either way, those houses will be on the market for a while. these numbers are going up at the moment. Did some big mouth just say the bottom of housing in 2011?
Uh... No. Not in 2011....
Tuesday, 16 Jun 2009 Cramer: Housing Has Officially BottomedResidential real estate has finally found a floor, Cramer told viewers on Tuesday. The sector’s long, steep descent is all but over. He had predicted this day would come by the end of June, and he was right – with just two weeks to spare.
Cramer is a junkie, and not reliable. this was established long ago. I think Buffett said something about 2011.
Or limbo: shadow inventory.
Underwater homeowners threaten to flood Bay Area banks
As all eyes watched Europe’s financial woes boil over this week, trouble for the Bay Area’s largest banks was brewing closer to home.
More underwater homeowners are prepared to walk away from their loans, and that’s bad news for Wells Fargo and Bank of America, the nation’s largest mortgage lenders. More than 11.2 million, or 24 percent, of all residential properties with mortgages nationally were in negative equity at the end of the first quarter, down slightly from 11.3 million in the fourth quarter of 2009, according to research firm CoreLogic. Together, borrowers with negative-equity and near-negative-equity mortgages accounted for more than 28 percent of all residential properties with a mortgage.
http://sanfrancisco.bizjournals.com/sanfrancisco/stories/2010/05/17/news...
Prevailing mythology among tech writers in Silicon Valley... lolz
geez. Sometimes I think the SF bay area is going to be the last place on earth to wake up. And what a rude awakening it will be.
Equity made a faustian bargain with employment long ago.
Now the reaper switched off the lights, is all.
1/3rd of mortgages in the east bay are underwater. That's INSANE.
Surprising? He's joking, right?
The only reason there was an improvement in January and February at all was the income tax refunds gave the people enough to make one or two payments and get current if they were not already in the soon to be dead zone. The labor market may have improved but creating a bunch of jobs where people learn the terms "Supersize" and "would you like fries with that" is not how you create any realistic economic growth going forward, much less expand net income growth to the point where payments on mortgages remains relatively current.
I must start drinking the cheap stuff so I can think like these idiots.
yup, every year the same - delinquencies improve/stabilize in feb/mar from tax refunds.
I have seen some April data - already evidence delinquencies are resuming their upward climb.
Wait until the pumpers see the July numbers a month after the 99ers go "aw crap" and realize there is no more government unemployment checks.
Lost Angelese will BURN.
Oh, and defaults will skyrocket.
From a purely political perspective, the absolute dumbest thing the Dems have done is not to extend the home buyer tax credit.
You drinking the same shit as they are? What, pay more people to buy houses? Why not keep the wallet in the pocket and let the market lower the prices to where they should be instead of artificially propping them up? Then, people can afford to buy their houses with their own money like we all did! I know this reeks of, dare I say it, "capitalism", but come on folks take some responsibilty for yourself.
And as someone commented, I also can't believe people think it is ok to just walk away from a previously agreed upon agreement (ie., a mortgage). Geez, I'd really like to do a business deal or two with those people.
"It's all about me, I just gotta be me..." Instead of 'sheeple', these are more like 'me-ple'
You are right in your analysis. But perhaps you should consider that most people never venture outside of their culture. Let me use Californian culture for example. Here we are indoctrinated as toddlers even before we start school by government programs such as "Early Start", where income qualified parents are subsidized for daycare cost if they send their toddlers to a State approved pre-school. Of course the entire public education program is one big programming experience in State worship including the State Universities. I don't think there is anyone I know that doesn't have a friend or family member that depends on the state financially in some form. This only feeds the "me-ple" state of mind you rightly find so disgusting. Trying to deprogram a culture mentality such as this, is like trying to convince a heroin addict that he needs to get off the stuff right after he's shot up. They are in an altered state of mind, without the proper analytical skills necessary to understand the root of their problems. They only recognize negative symptoms and fall at the feet of the State begging, and some times demanding another bowl of porridge, because one, two, three, etc. bowls no longer satisfy.
This culture is a "present-minded" one. Their actions are predicated on the immediate rewards. When they want a coffee, they pull into a drive-thru Starbucks, because they want it NOW. When they want to buy something to make them feel better and don't have the money, they charge it, because they want it NOW. The culture reinforces and thereby grows this need for instant gratification by supplying every desire from instant popcorn for your on-demand movies to an instant hard-on to go with your instant online porn. There is no encouragement for long-term thinking regarding actions anymore, so the delusion of the lack of need for it sets in.
To step outside this culture, would be to step outside the "norm", hence, there is no incentive for the "normal" people in the culture to do so.
Instead of being shocked by actions of people walking away from their mortgages, I'd ask you to step outside your own culture and try to understand how people of other cultures derived their beliefs, even self-destructive beliefs, which dictate their actions. Maybe, just maybe, you might discover a way your understanding of responsibility and long term sustainability as a people can be communicated in a way they can relate to.
I don't mean this judgmentally, as I am just as guilty, even as I write this reply. But that is why I love the ZH community. It offers me alternative views to ponder and opens my mind to glimpses of normalcy that I can relate to that gives me to a more complete understanding of the chaos ensuing before my very eyes.
I lived just like that while in LA. You pinned it well. Its a ritualistic life style. Every one has their pattern and path and lives within their own bubble. Actions become reactive instead of first cause as we become automations.
I love love and freedom more than money and that has saved my bacon.
Gotta have NOW...a 'flag as gold' button. Well-said.
Nice summation
...I also can't believe people think it is ok to just walk away from a previously agreed upon agreement...
Hence the term "moral hazard."
That's why you don't bail out corrupt and bloated companies of any industry under the guise that they're too big to fail. That's why you prosecute blatant fraud and lawbreaking, no matter how white the collar. When you don't, you start getting more and more people who say, "fuck it." Why the hell should they toil and labor and sweat that payment?
Disclosure: I, too, think one should pay what one owes and be responsible. But I'm just sayin', know what I'm sayin'?
P.S. Try to not to get too upset about it all. We're all going down; be the guy who still has a little Jack stashed away and plenty of food. Anger and scorn is over-rated.
http://popup.lala.com/popup/1657606190186895688
(Green shoots, rainbows and butterflies! ZH is such a cheery little blog.)
Along with mortgage delinquencies, there are delinquent taxes which come off the top, before the mortgage. I am seeing a lot more delinquent taxes in the commercial RE market.
Maybe I don't understand strategic defaults. How does the borrower get off the hook and the lender stuck with the loss, short of bankruptcy (or a settlement)?
They don't: http://www.youtube.com/watch?v=ssl5yb7FewA
One example:
Buy a $200k condo, 30yr fixed mortgage, 6.25% interest, actually borrow $215k because federal programs let you borrow your down payment.
Fast forward three years, $200k condo is now worth $140-$150k, borrower still owes $211k.
Condo association fees are $50k behind for the complex because everyone around is getting foreclosures and not paying their dues. Renters allowed in the complex increased from 4 units to 14 so people that want to move can try to avoid foreclosure, since everyone in the complex is underwater on their mortgage. That many renters means no one can buy a condo with an FHA loan, guess what 90% of mortgages these days are FHA.
Now, your choices are:
a) keep making payments on your condo, knowing the association is a disaster and will require a pile of money to prop up. You also know if you want to move in at least the next five years (probably longer) you're screwed by your underwater mortgage.
b) see if the bank will play ball (the vast majority don't)
c) stop making payments, live in your condo payment free for a year or so while they foreclose and then walk away, letting the bank have their $150k property back that you owe $211k on.
If the situation was reversed the bank would be selecting b or c, no question about it, and that's just business.
Is that what you think? Really? It is the bank's property? The lender is somehow going to let the borrower forget about the $61k that is left unpaid?
Thank you for helping me understand the (lack of) thought process that got so many people upside down on their mortgages.
You might want to revisit the concept of a secured loan.
There is no "thought process" with being upside down in a mortgage, its an effect of the credit crisis. At the time the property was purchased, it was bought at a fair price according to the market / appraisal / etc. Naturally, knowing what we know now, neither the borrower or the lender would do the deal again. Each party has various remedies available to them. T
he borrower can keep paying for an asset worth a fraction what they owe and be trapped in the property for the foreseeable future or they can walk away and accept a huge hit to their credit rating.
The lenders get their backdoor billions in bailouts, avoid foreclosure as long as possible to keep from damaging their mark to myth credit ratios, get their mortgage securities paid off at par by the government and sell off the property that gets given back to them over the next 10 years.
A hit to their credit rating? Really?
Tell me this: Who ends up on the hook for the $61k? Not in speculative-theoretical-never-bought-real-estate land, but really, legally? Are you saying that the gov't is actually paying for defaults without any regard to the individual that owes the debt? How do you know this?
In my example, and in my state, what's going to happen is eventually the lender will foreclose. The borrower will get a foreclosure on their credit rating which is very negative of course.
When the property gets foreclosed on, the bank is going to take a hit to their balance sheet, they are going to realize the loss. The only recourse the lender has is to seize the property. When you buy a house, the deal isn't "we're going to take everything you own until you pay this money back", a secured loan, at least in my state, the deal is "you have to pay this money back or we're going to take what's secured (the property)". The lender will hold onto the property until its advantageous to them to sell it. They may turn around and sell it right away or they may not.
Before you pass judgement too harshly on the borrower, read the comment below about the Mortgage Banker's Association. While berating borrowers for being deadbeats, they short sold their headquarters back to their lender. The only essential difference between a foreclosure and a short sale is the quality of lawyers the MBA can afford.
Yes, the bank will foreclose: force a sale of the property. The bank does not take ownership. Any shortfall between the amount owed and the proceeds (after taxes, expenses, commissions, etc.) of the forced sale become the liability of the homeowner (borrower, mortgagee).
In US America, I am pretty sure this still holds in all 50 states.
If you can explain how someone can avoid this, I would like to know the details.
Google your state and foreclosure and poke around until you find the details. What you described is not how it works in my state.
I harangued my valued secretary for years on the reasons that the mortgage buggle would end in tears. Mr. Negative garners no adherents as it goue up until it doesn't. She bought a nice condo at the peak of the local RE bubble. (It was only 26% overpriced as compared to other markets) The condo assn has a deadbeat that has lived there for 17 months without a mortgage payment or condo fees.
I suggested that the assn direct the snow removal operator to dump all of the snow in behingd the deadbeats' Hummer and BMW as a note of appreciation. I would play real hardball with those that refuse to pay maintainence for their share, but then, I would never rely on partners in business or housing either.
Some people are total slime. Perhaps the tear weepers on this forum might finally admit that is the case.
I suppose youd have to declare personal bankruptcy. Good luck getting ANY sort of credit/loan/mortgage/$ from anyone after that. Perhaps its a bit different in the States, but here in Canada that is not an option people would take even if they were underwater on a mortgage.
This will provide a huge income boost to the Treasury.
The USA will need to hire millions more IRS agents to go after the "income" that will be generated by debt repudiation. Considering we're probably looking at 30-50% of the population, that's a huge source of revenue for T Bonds. And think of all the new jobs !!
The Federal prisons will need to hire millions more guards and admin as well.
Think how much better the financial picture of the USA would be if we could just get the foreclosure rate up to 60-70% ...
+1
Walking away from your mortgage obligations is...well...unpatriotic!
You mean there not going to be able to collect property taxes on those homes?
You have to remember that Goldman has used Goldman Sheeplespeak to deliver this communication. "Suprising" in sheeplespeak means "entirely predictable" in native Goldmanese.....
Let me see if I understand the writing on the wall...US home list prices were slashed by $25 Billion in April: http://sanfrancisco.bizjournals.com/sanfrancisco/stories/2010/05/10/dail...
...And mortgage rates are at a year low (near record low): http://sacramento.bizjournals.com/sacramento/stories/2010/05/10/daily40....
...So as rates go up, which is inevitable, housing prices will drop even further.
Default? Uh...yeah. Unless you have already paid the majority of the front loaded interest on your amortized loan, why bother? And if you have an adjustable, you should just poke yourself in the eye and go on disability. Then you'd have a better chance of leasing your home from the gubment: http://www.ibtimes.com/articles/20091105/fannie-maes-new-deed-for-lease-...
It's never a choice of whether you are, or are not a statistic, the only choice is what kind of statistic you are?
Disclaimer: Don't ever take legal or investing advice from me. Get off your but and do your own research.
Here it is bank by bank:
Check out WFC at 17.6% Holy Crap!
http://www.wlmlab.com/bkMet.asp?inst=HC1073757&loan=lnrersfm&met=delq
All of the above explains why housing starts were way up last month.
Ubber Bullish green Shoot !! BUY BUY BUY!!
The only clock speeding faster than the national debt clock is the home mortgage debt clock (but its flying backwards).
http://www.usdebtclock.org/
Looks like people are finally getting smarter: house purchase applications fall to 13 year low over the last month.
http://www.mbaa.org/NewsandMedia/PressCenter/72905.htm
"Purchase applications plummeted 27 percent last week and have declined almost 20 percent over the past month, despite relatively low interest rates. The data continue to suggest that the tax credit pulled sales into April at the expense of the remainder of the spring buying season. In fact, this drop occurred even as rates on 30-year fixed-rate mortgages continued to fall, and at 4.83 percent are at their lowest level since November 2009..."
If you look at Case-Shiller 20, you will see the truth. The massive amounts of Government investment in real estate is what caused the turn around in price.
This blip is stimulus driven market manipulation. It is a false. A temporary measure to help save the banks.
It is amazing how much money was spent on bad debt, and then to see the actual increase in price, it is really dissapointing. Clearly, the FED wanted to re-inflate, but the number one priority was to move bad debt off banks balance sheet. Price was important, but secondary.
Now that the banks are stabilized, to a certain extent, the support will end. Officially with the FED exit from MBS buys. Fannie, Freddie and FHA are the last hope of price manipulation. The last line of defence against deflationary pressure, the last gasp of easy QE liquidity. Without the FED's massive contributions to prop up this market, the other government programs are just busy work.
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How can real estate price increase when we have lost the biggest buyer (FED)?
At current price levels, through garauntees and direct purchases, the Government is the only buyer of consequence.
So when you hear somebody talk about the recovery, just ask a few questions about real estate. There is no recovery in real estate, only liquidity price manipulation.
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What started out as small programs to help people buy homes has turned into a tool of the financial elite in robbing the tax payer. The tax payer has been fleeced and the market destroyed. This is the essence of big government.
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The air will slowly deflation out of this real estate liquidity bubble, and price will continue to drop, wiping out more and more banks as loss works its way up the loan food chain.
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Through all of this Government action we are left with massive amounts of debt. However, you never really get a good explaination from the FED or the CBO in how massive amounts of Government debt can effect real growth. Why?
Is this not a possibility?
Perhaps, what is really seen is an illusion. A masking of debt through the destruction of savings. What are the real effects of FED debasement? Is it essentially just a hidden tax and if so, how will this burden translate into real growth? It cannot.
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At what point does sovereign debt destroy an economy? Growth must suffer if debt is not repudiated. Inflating the currency is not the answer because it will loss confidence long before the debt can be paid and influenced through extreme moves in interest rates.
So in an environment of debt austerity, growth must suffer, it is just a matter of how the bill will be paid.
What if the economy, now subordinate to massive government waste and inefficiencies, does not have the capacity to pay our debts?
What will the effects be on our citizens?
Mark Beck
John Courson, president and C.E.O. of the Mortgage Bankers Association, recently told The Wall Street Journal that homeowners who default on their mortgages should think about the "message" they will send to "their family and their kids and their friends." Courson was implying that homeowners -- record numbers of whom continue to default -- have a responsibility to make good.
Well, this is hypocritical since the Mortgage Bankers Association just did a short sale of their HQ property. The CoStar Group bought the downtown Washington building for $41.3 million, far below the $79 million the trade group said it paid in 2007.
What message is that sending to John Courson's "family and their kids and their friends."?
Here is the scam folks, without a threat of bank default through bankruptcy because of government backstop, they would be happy to foreclose on all the assets in the world, despite being technically bankrupt. They know paper money is just a gambling chip with no real value, the real value is in power. Imagine owning all the property in the world, that's a lot of power. This is a takeover, I've said it before and I'll say it again.
Must watch video:
CIA Officer Explains New World Order's Demise by bloggershttp://www.youtube.com/watch?v=8AIbBGi1gjo
That was good.
Awesome video.
Favorite quote: (after I remove my tinfoil hat) "I don't have a brain, I have a soul."
freestateproject.com
I want this guy to fight Bernanke.
Excellent video. Not sure I agree with him that every part of the government is broken, though. The National Institutes of Health has (for now, and as an example) benefited from the recent trend toward socialism/oligarchy, and they're doing a lot of research, etc., that will actually help people. It's not the same as giving billions to some corrupt banker or insurance scammer who then spends it on hookers and blow, IMHO.
What I see that may happen is that there will be trial balloons let go to see the reaction of the Fed making it law that if you have the means to still pay the mortgage, they will allow the mortgage companies/banks to still come after you recourse or not. How they will do it at first is go after the jumbo loans, and when there is push back and the Republicans don't like it they will say okay we will also go after anyone that has a Fannie or Freddie loan (which is almost everybody) too. And they will keep saying that its going after people who have the means and such when in reality it will be by hook or crook them allowing banks to keep coming after you for whatever they can get rich or poor. They will get it grandfathered in from the beggining of the mortgage fiasco.
If you think it won't happen, think again. As everyone has been saying, most banks have been hiding shadow inventory and that hasn't helped. So however bad this is it's truly alot worse if you add in the shadow inventory.
Joe Biden said that the economy will create 250,000 new jobs starting next month.
Joe Biden said that the economy will create 250,000 new jobs starting next month.
EURUSD buying support is still evident.
Daily chart is now extremely oversold, will post a chart soon.
http://stockmarket618.wordpress.com
http://www.zerohedge.com/forum/latest-market-outlook-1