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Mortgage Applications Collapse To New 13-Year Low

Tyler Durden's picture


Despite yesterday's exuberant spike in optimism from the NAHB sentiment index to 8 year highs, the delusion from reality appears to growing ever wider. This morning's "if we build them, they will buy'em" false headline spike in housing starts (seasonally-adjusted) is yet another delusional divergence as the mortgage applications index collapses (down 60% from 2013 highs) to a new 13-year low.

New 13-year lows in mortgage applications...


but, hey, seasonally-adjusted we'll just keep building...


Charts: Bloomberg


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Wed, 12/18/2013 - 12:11 | 4257270 Everybodys All ...
Everybodys All American's picture

The hollowing out of the American middle class continues unabated. Who will finally put an end to this? I know of no one in the current leadership who will.

Wed, 12/18/2013 - 12:14 | 4257281 catacl1sm
catacl1sm's picture

This bodes well.

Wed, 12/18/2013 - 12:17 | 4257285 Cult_of_Reason
Cult_of_Reason's picture

Current leadership is change you can believe in.

Hitler promised change you can believe in too.

Wed, 12/18/2013 - 12:30 | 4257345 MR166
MR166's picture

Funny you should bring that up.  Hitler was a Socialist too.   The Nazi party was Socialist!!!

Does anyone find it  interesting that this is NEVER mentioned by the progressive media.

Wed, 12/18/2013 - 12:33 | 4257354 Pladizow
Pladizow's picture

NAR all cash buyers dont need no stinking mortgage application!

Wed, 12/18/2013 - 12:40 | 4257387 Cult_of_Reason
Cult_of_Reason's picture

Hitler's Gestapo = Obama’s NSA Gestapo

National Socialist German Workers' Party
or Parteiadler der Nationalsozialistische Deutsche Arbeiterpartei
or Nazi Party

Wed, 12/18/2013 - 13:30 | 4257595 NIHILIST CIPHER

Speaking of Nazis, for those of you who have netflix or just source on the internet the documentary "DARK LEGACY". At the half way point your mind will be changed forever who runs this country. Please do yourself a favor and watch this film before you make the mistake of believing the lie another day. My research four decades ago turned up same info.

Wed, 12/18/2013 - 13:57 | 4257684 Popo
Popo's picture

Oh wow.  That second chart up there just screams "shit storm".   This is going to end EXTREMELY badly.   It's clear that once again (amazingly), "nobody sees it coming".    


Wed, 12/18/2013 - 12:51 | 4257441 MR166
MR166's picture

To blame this mess on the NAR is very short sighted.   They do not set the prices, the government funded buyers do.   That is like saying that your stockbroker sets the price of the market.

Wed, 12/18/2013 - 13:26 | 4257578 Popo
Popo's picture

The NAR does however provide forward guidance.  And they do an enormous amount of economic reporting.  ALL of which is grotesquely biased and dangerous.   David Lereah quietly side-stepped off the scene after he had personally caused billions in aggregate damage to suckered Americans.    So the NAR does indeed share a large portion of the blame.

Wed, 12/18/2013 - 14:00 | 4257695 Blankenstein
Blankenstein's picture

Want to bet they don't set prices?  The local realtards tell the sellers what the asking price should be based on "the comps" while entirely ignoring the economy, likelihood of higher taxes based on rising debts of local, state and national governments, etc.  Next they tell the buyers to lower their expectations and offer close to the asking price as to not offend the sellers.  They are a bunch of price fixers.  And did you see how they treated the FSBO sellers?  Many tried to shut out this competition.  They should change their name to the National Association of Racketeers.  And they DID play a large part in the housing bubble run-up by pushing the "housing never goes down" meme and telling the buyers 15 percent price increases are "in the bag" among many other things.  Think they don't have influence?  They have spent 100 MILLION dollars since 1999 on lobbying.  If you want to spread NAR propaganda take it over to Activerain.

Wed, 12/18/2013 - 14:43 | 4257871 MR166
MR166's picture

I have news for you it is the listing Real estate agents JOB to represent the seller and get him the highest price.  It is the selling agents job to represent the buyer and get him the lowest price.  THAT is the definition of a market.  If you are unhappy with that arrangement perhaps you should continue to rent.

Wed, 12/18/2013 - 13:11 | 4257520 yrad
yrad's picture

Next stop, ghost cities on the Eastern Seaboard. China should be proud of us...

Wed, 12/18/2013 - 13:04 | 4257504 Clark Bent
Clark Bent's picture

Wanna really rub it in? Make sure to mention that socialist Germany made a pact with socialist Russia in 1939. Then together these brave modernist utopias worked out the violent and unprovoked invasions and division of Poland, Estonia, Latvia, and Finland. They promised to work toegher on other issues, like France and England. But whoops, Germany beat France far faster than expected, making the Russian sopcialists very nervous because it upset their plans to stab Germany in the back while it was preoccupied with France. Imagine the egg on socialist progressive Molotov's face when their former co-conqueror invaded mother Russia in 1941. 

The socialist progressive Germans then made it very uncomfortable for Stalin with his new British and Ameircan allies by uncovering in 1942 the mass graves of tens of thousands of innocent Polish officers executed abd buried in mass graves in Katyn, in Russia's socialist half of the new Poland. See the Poles were in Britain trying to fight the Nazis when this little problem came up. Those kooky progressives, they all behave the same. Over and over again. Must be something to do with their malevolent and insane psychopathology that defines mass murder as progress. Fo-ward!

Wed, 12/18/2013 - 14:06 | 4257722 Landrew
Landrew's picture

The word NATIONALIST precedes and has the most meaning. Do more homework.

Wed, 12/18/2013 - 14:25 | 4257807 FL_Conservative
FL_Conservative's picture

Ask ANY revisionary, progressive historian and they will tell you that Hitler was a "right-wing wacko".  But don't confuse them with the FACTS.  They're incapable of dealing with it.

Wed, 12/18/2013 - 12:19 | 4257307 DavidC
DavidC's picture

No Taper! Yay!


(sarc off)

Wed, 12/18/2013 - 12:31 | 4257346 Cult_of_Reason
Cult_of_Reason's picture

No taper is good! It means more free money to the uber wealthy from the Fed and more ♥YELLEN Ferrari and Bentley license plates.

Taper is good, it means the economy is strong.

Buy stocks no matter what for the long term!


Wed, 12/18/2013 - 12:32 | 4257361 kaiserhoff
kaiserhoff's picture

Why does this whole BenYellen thang remind me of lemmings?

Wed, 12/18/2013 - 14:04 | 4257707 Spungo
Spungo's picture

Stansberry said he named his helicopter the "Benicopter" after helicopter Ben. I think he also said he plans to name his boat Yellen.

Wed, 12/18/2013 - 13:14 | 4257535 RSloane
RSloane's picture

....and we made fun of China for building cities no one was living in. Who is taking a page from whose book here?

Wed, 12/18/2013 - 12:36 | 4257350 tarsubil
tarsubil's picture

It is all fantasy land. I spoke with a fantasy lander last night. He's just got to keep his house to get that equity back. Hard to get through to people living in lala land.

Wed, 12/18/2013 - 12:59 | 4257478 ZH Snob
ZH Snob's picture

investment bankers don't apply for mortgages; they pay cash, our cash.  that's how they steal our houses.

Wed, 12/18/2013 - 12:14 | 4257272 Dolus
Dolus's picture

I mean why doesn't the Federal Reserve do something about this like buy the mortgages from the banks so they don't have any risk. We can't let home prices go down. 

Wed, 12/18/2013 - 12:22 | 4257312 101 years and c...
101 years and counting's picture

well, ben can spur housing by letting rates drop.  and the only way to do that is to significantly cut QE.

Wed, 12/18/2013 - 12:21 | 4257316 max2205
max2205's picture

Economics isn't a true science and the markets just vector off every the ball

Wed, 12/18/2013 - 12:26 | 4257336 Bangin7GramRocks
Bangin7GramRocks's picture

Middle class wages are at 1990 levels, but house prices are at all-time highs. They will never let the housing market reach its natural price. The Fed will buy mortgages if thats what it takes to keep the housing market artificially inflated. No Diggity, No Doubt! 

Wed, 12/18/2013 - 12:40 | 4257400 doctor10
doctor10's picture

they have to keep housing propped up-that keeps local tax revenues from property taxes up. They let housing drop to 1990 prices, property tax revenues plummet and the bottom drops out of the muni-bond market

Wed, 12/18/2013 - 13:25 | 4257569 A Nanny Moose
A Nanny Moose's picture

...which decimates pensions.

Unfortunately, that which cannot continue, will not continue.

Wed, 12/18/2013 - 13:11 | 4257519 Clark Bent
Clark Bent's picture

They are bulldozing them in Cleveland to keep the stock low. A perfect example of the broken window theory utilized by that former preogressive titanic failure Franklin Roosevelt who criminally prosecuted producers for lowering prices, and slaughtered millions of animals and burned crops to keep the prices high to save us from the Depression. Back then, we had nothing to fear but fear itself (plus insanely stupid government fantasists with a binary comprehension of reality). Just like today. Rock the vote! 

Wed, 12/18/2013 - 14:10 | 4257740 Spungo
Spungo's picture

But affordable housing would make America's middle class too strong. We can't destroy the middle class until we create a society of renters. We need to get back to the master/serf model that Russia enjoyed before 1917.

Wed, 12/18/2013 - 12:39 | 4257376 wagthetails
wagthetails's picture

although a good point, i say we stop beating around the bush here and just let the fed start buying new homes.  or better yet, the fed buys the house, with a FNM mortgage, and then lets the google robots and amzn drones live in the new houses. 

Wed, 12/18/2013 - 13:12 | 4257526 Clark Bent
Clark Bent's picture

Sounds like you got yerself a sitcom there. How do we introduce some amiable homosexuals into the mix? 

Wed, 12/18/2013 - 13:11 | 4257528 novictim
novictim's picture

The problem starts with gambling and speculation in what has traditionally been a very dull and predictable -family- asset: the single family home.

The solution should involve eliminating the ability of speculators to enter into the housing market in the first place.  The bedrock of home ownership and dependable value is now no more secure than any other asset.  Hence, we see people treating their home as a piggy-bank and then walking away from their spent home equity loans or people buying homes way over their heads in the hopes of "flipping" them for a profit.

When these speculative bubbles collapses, then the Fed rushes in to save the Too Big To Fail banks who gave massive bonuses to one another for having earned huge fees on these speculative and overleveraged transactions.



How you accomplish eliminating speculation and gambling from the housing market and returning it to the prior paradigm has many avenues of approach.  But it does not start with QE1, QE2, or QE3.

Wed, 12/18/2013 - 20:56 | 4259258 bilejones
bilejones's picture

"The problem starts with gambling and speculation in what has traditionally been a very dull and predictable -family- asset: the single family home."


And right there's the problem, the family home is really a consumer durable rather than an asset.

Wed, 12/18/2013 - 12:12 | 4257273 nasdaq99
nasdaq99's picture

this is reflecting the falloff in refis.  two buddies of mine in the mortgage biz say that buyers have moved up.

Wed, 12/18/2013 - 12:59 | 4257475 kito
kito's picture

You are likely right. Not sure why Tyler doesn't break down the percentages of refi/original mortgages. Perhaps we can't admit that housing is better than we want to admit

Wed, 12/18/2013 - 12:14 | 4257275 Reference Variable
Reference Variable's picture

Channel stuffing to stave layoffs, but... it's coming.

Wed, 12/18/2013 - 12:15 | 4257277 Cookie
Cookie's picture


Wed, 12/18/2013 - 12:20 | 4257310 Bay of Pigs
Bay of Pigs's picture

I know, worse news.

Up, up, up.....BULLISH!

Wed, 12/18/2013 - 12:15 | 4257286 CrashisOptimistic
CrashisOptimistic's picture

Buyers aren't using mortgages because buyers aren't families anymore.

It's all bullshit.

Fast forward, btw, a decade or so when this new American renter class tries to retire and pay food AND rent with their $15,000/year Soc Sec check.  At least now they own their house outright by then.  Come the future, they won't.

Wed, 12/18/2013 - 12:33 | 4257364 NoDebt
NoDebt's picture

Best comment of the thread (at least so far).

Wed, 12/18/2013 - 13:39 | 4257626 MachoMan
MachoMan's picture

Isn't that what medicaid, et al, are for???  Won't we just expand the traditional nursing home/retirement community to fit?

Wed, 12/18/2013 - 17:08 | 4258649 Nick Jihad
Nick Jihad's picture

By all means, buy a house as a "family". Your future ex-wife will enjoy the valuable asset that you provided for her, and you will enjoy sweating the rent for a vermin-infested apartment, after child support has been garnished from your paycheck.

Wed, 12/18/2013 - 12:19 | 4257288 EmmittFitzhume
EmmittFitzhume's picture

You will see brand new and half built, never lived in houses decaying in the elements. What a waste of resources.  This is liberalism at it's best, err worst

Wed, 12/18/2013 - 12:43 | 4257410 Bunga Bunga
Bunga Bunga's picture

Yes, we can Chinese.

Wed, 12/18/2013 - 13:14 | 4257532 Clark Bent
Clark Bent's picture

Same diff. 

Wed, 12/18/2013 - 12:16 | 4257292 gafgroocK
gafgroocK's picture




Yikes! Look at that divegence!

Wed, 12/18/2013 - 12:17 | 4257294 Jay
Jay's picture

I thought most new buyers were cash buyers.

Wed, 12/18/2013 - 12:22 | 4257301 LawsofPhysics
LawsofPhysics's picture

In order to have a mortgage, one must have a wage, or a pile of cash, period.

In fact, in order for one to pay rent, they must have an income, that isn't being spent on living expenses, period.

Those with the cash now looking to build more housing and profit from the wageless masses...

good luck with that...

Wed, 12/18/2013 - 12:30 | 4257349 SheepDog-One
SheepDog-One's picture

It's all good as long as FED largesse keeps all bubbles pumped for the .001%.

Wed, 12/18/2013 - 13:16 | 4257545 Clark Bent
Clark Bent's picture

Government spnsored HAMP will ut you in a loan modofication provided you can't afford the mortgage. They require that you spend at least 30% of your monthly gross for the mortgage. Most people would call that a reason NOT to buy, but not the gov. They only want homeowners to be barely hanging on so there is nothing for maintenance or accelerated payoff. Being able to afford the mortgage is a disqualifier. 

Wed, 12/18/2013 - 13:28 | 4257585 A Nanny Moose
A Nanny Moose's picture

Only in government, is more money thrown at failure.

If you like your mortgage, you can keep it.

Wed, 12/18/2013 - 17:18 | 4258685 corporatewhore
corporatewhore's picture

after being eliminated from corporate Amerika in 2008 and wiped out financially from which I will never recover, riddle me this:

why would I ever apply for a mortgage on a debt forever home only to have the home taken away by a slimy lying mortgage company if I was eliminated again?

"never again"

Wed, 12/18/2013 - 12:21 | 4257308 frankTHE COIN
frankTHE COIN's picture

If China can make Ghost Cities, We can make Fake Houses. Besides, if I'm living in a Subway Tunnel why do I have to fill out an Application?

Wed, 12/18/2013 - 12:32 | 4257355 SheepDog-One
SheepDog-One's picture

Hell yea, why go thru all the toil and trouble of actually building ghost cities, and then tearing them down and rebuilding them in 'Murka we just say it's so on a computer screen, and no one even gets a paper cut.

Wed, 12/18/2013 - 12:20 | 4257311 isthatall
isthatall's picture

That would be seasonally adjusted containers. Not really houses.

Wed, 12/18/2013 - 12:20 | 4257315 Cognitive Dissonance
Cognitive Dissonance's picture

Apparently (laundered) cash is still king in housing.

Wed, 12/18/2013 - 12:21 | 4257320 MR166
MR166's picture

"I mean why doesn't the Federal Reserve do something about this like buy the mortgages from the banks so they don't have any risk. We can't let home prices go down. "


So your solution is to repeat 2008.  I have news for you, house prices need to reach a level where the buyer can afford to make the payments.  Otherwise this is just Ponzi II.

Wed, 12/18/2013 - 12:25 | 4257326 Kirk2NCC1701
Kirk2NCC1701's picture

And yet the 1% is living/whooping it up, given the FACT that Commercial RE is busy (sales and refi's).

Trump that! /s

Wed, 12/18/2013 - 12:29 | 4257328 Jayda1850
Jayda1850's picture

Thanks Tyler, another WTF? chart of the day with the new starts vs mortgage apps. The surrealness of the situation is only eclipsed by the sheer ignorance of the mass population who don't have a clue and believes this shit is sustainable. 

Wed, 12/18/2013 - 12:28 | 4257342 SheepDog-One
SheepDog-One's picture

Ooops....somebody's stories are not matching anothers.

Wed, 12/18/2013 - 12:32 | 4257351 BullyBearish
BullyBearish's picture

Drove through Vegas and saw an unbelievable amount of new construction in process...the next Obamaphone?

Wed, 12/18/2013 - 12:35 | 4257363 SheepDog-One
SheepDog-One's picture

They must be stupid in Vegas. They should just claim things are being built and collect the money from the Fed....hello!

Wed, 12/18/2013 - 12:50 | 4257438 Bunga Bunga
Bunga Bunga's picture

Don't forget to report 130% fulfilment of central plan ahead of time to get a medal from Ben.

Wed, 12/18/2013 - 14:01 | 4257693 TalkToLind
TalkToLind's picture

Hell, they haven't even completed the abandoned construction projects from the last boom/bust cycle.  The Las Vegas strip has turned into the most opulent ghetto on Earth.

Wed, 12/18/2013 - 12:40 | 4257358 Hongcha
Hongcha's picture

I took a long, long walk last night up Market Street and through SOMA weaving between Howard, Mission and Mkt,  all the way through the 'Mid-Market Miracle Mile' and the acres of new condos in SF. 

It's like a feverish garden, brand-new restaurants and shops and junkies gibbering in the shadows, drug deals, new places still empty, sleek and vacant and big big billboards covering empty lots with promises.

Several historic old neighborhood bookstores in the Mission got run over by this gentrification; so I am taking it a little personal, yes.  They got the boot and a year later the space is still empty.  Stupid greedy landlords.

A few quaint cunning little shoppes have already failed on 16th Street.  I thought the Social Media NAS 2.0 Bull was supposed to support them.

The iKidz are not getting paid enough to buy these places at a min. of $500k for 700 SQ FT.  They better issue those 50-100/yr mortgages and right soon.

Millions of SQ FT of retail they are trying to fill on Market between 6th Street and approx. Dolores to the West.  This at a time when bricks/mortars are looking phased-out unless you are running a Mexican sub-rosa Mercado.  The area is nowhere near gentrified.  This is where I saw a large human turd with a plastic fork stuck in it, last year, in the middle of the sidewalk.

Feverish, overbuilt.  My take anyway.  I am going to have to fight to keep the cash out of my wife's hands.  She's tired of the commute.  She has seen nothing but bull markets since she started buying in Beijing in the mod-1990s.  She won't get it unless she gets it the hard way.

Any SF-er's out there?

Wed, 12/18/2013 - 12:38 | 4257390 MR166
MR166's picture

"Several historic old neighborhood bookstores in the Mission got run over by this gentrification; so I am taking it a little personal, yes."


Sorry, if you liked the bookstores so much YOU should have bought them.   Property rights are the foundation of our system.  Every time that the government overrides these rights it is just one more step to enslavement!

Wed, 12/18/2013 - 13:12 | 4257416 Hongcha
Hongcha's picture

Not asking for any override whatsoever; except maybe the common sense override.  My point is that these guys timely paid rent for decades and now the LL is holding the bag.  He lost a good tenant amid dozens of empty buildings and we lost a good bookstore!  The storefront looks like bombed-out shit.  Good luck to the LL.

MR166, you politiciized the discussion when I had nothing political in mind.

Wed, 12/18/2013 - 13:30 | 4257586 MR166
MR166's picture

Hongcha one of main tenants of freedom is the freedom to FAIL.  Someone bought all of these properties and very well may go bankrupt.  For all I know some government program may have enabled them to do this.  When governments get involved in the capitalistic system it is doomed to failure.

Crony Capitalism is the 180 degree opposite of real capitalism because the winners and losers  are not determined by merit but on political connections and contributions.

Wed, 12/18/2013 - 14:05 | 4257713 Hongcha
Hongcha's picture

Well then, we are in agreement.  The bookstores failed due to the miscalculation of the landlords; the landlords will fail to fill the space with anything better than a Goodwill Store.  The public lost 2 unique bookstores and has gained two empty shells, canvas for graffiti.

This is not a matter of politics, so we agree there too.

Wed, 12/18/2013 - 14:16 | 4257754 MR166
MR166's picture

Yup, 100% right.  Yes, there are victims of the capitalistic system ( the bookstores owners )  but until a better system is invented we have to deal with what we have.  Progressive Socialism is NOT the answer that we are looking for since it is entirely controlled by the powerful.

Wed, 12/18/2013 - 15:12 | 4258017 MachoMan
MachoMan's picture

let me know when we can accept that capitalism is likewise entirely controlled by the powerful...  its only saving grace is that a few more folks get to compete for a few more scraps, which better coincides with our natural desire for autonomy.

Wed, 12/18/2013 - 15:34 | 4258221 MR166
MR166's picture

Yes, it is controlled by the powerful but unlike government controlled capitalism it is open to competition.  I agree that there must be some government rules that control business but like anything else too much of a good thing is not better.

Wed, 12/18/2013 - 16:21 | 4258456 MachoMan
MachoMan's picture

In a textbook it's open to competition, but the reality is that what control mechanisms the government imposes (e.g. barriers to entry) will simply be privately imposed.  In other words, the government is simply traded for the company store...  or worse.  Rational actors do not seek to compete in the market...  rational actors only compete so long as they have to.

Wed, 12/18/2013 - 15:18 | 4258095 Taffy Lewis
Taffy Lewis's picture

Thanks for the description, Hongcha. In the late 90's, I would take BART to that area from Berkeley for Saturday day trips to walk around. No doubt many of the cool bookstores, shops, and hole-in-the-wall bars are no longer there.

Wed, 12/18/2013 - 15:24 | 4258140 Taffy Lewis
Taffy Lewis's picture

P.S. Hongcha, I apologize for geting pissy with you last week on a thread about Singapore Little India. I was in a really bad mood that day.

Thu, 12/19/2013 - 00:04 | 4259709 Hongcha
Hongcha's picture

No worries and it exposed a major error in my thinking so I'm grateful.

Fri, 12/20/2013 - 22:29 | 4265953 Blankenstein
Blankenstein's picture

You mean like how the government has intervened to keep house prices high for the NAR??

Wed, 12/18/2013 - 12:48 | 4257423 Atticus Finch
Atticus Finch's picture

If you'd have lent him the $500,000, I'm sure he would have bought the store.

Are you for real? Earth to Mr166... Earth to MR166

Wed, 12/18/2013 - 13:02 | 4257490 MR166
MR166's picture

If you cannot see that taking an individuals property rights away from them without paying the  fair market value is a crime, then you are a Socialist. 

The Progressive mentality of today's voters has reduced the US into a welfare state that is incapable of earning a living.   " IT IS NOT MY FAULT"  is the mantra of all the children living in their mothers basement.

Wed, 12/18/2013 - 13:06 | 4257502 MR166
MR166's picture

If you cannot see that taking an individuals property rights away from them without paying the  fair market value is a crime, then you are a Socialist. 

The Progressive mentality of today's voters has reduced the US into a welfare state that is incapable of earning a living.   " IT IS NOT MY FAULT"  is the mantra of all the children living in their mothers basement.

Wed, 12/18/2013 - 12:51 | 4257444 akarc
akarc's picture

"Property rights are the foundation of our system."

Whose system?

Wed, 12/18/2013 - 13:08 | 4257510 MR166
MR166's picture

The US and it's Constitution comrade.

Wed, 12/18/2013 - 15:20 | 4258096 MachoMan
MachoMan's picture

every system...  his presumption being that in the united states there is a more distributed system of property rights relative to our competitor states...  which is mostly true...

Wed, 12/18/2013 - 13:13 | 4257529 roadhazard
roadhazard's picture

I had a book store on 4th and Mission and lived on 29th and Dolores in the 70's. The Alioto Center took the book store and the rent was cheap on the apartment. Ah, for the good old daze. I had to leave before I turned crispy. Now I live so far back in the woods you couldn't find me.

Wed, 12/18/2013 - 13:44 | 4257642 Basia
Basia's picture


We have friends who rent in this area of San Francisco.  Drove to visit them on a Sunday afternoon. When we stopped at  a stoplight, a man on the sidewalk was peeing on the ground.  His penis was eye level. 

Despite the upscale attempt in the area, there are many drawbacks. The recent surge in real estate prices tells me that the bubble will not last forever. For many reasons,  would not live there, ever. 


Wed, 12/18/2013 - 15:22 | 4258132 MachoMan
MachoMan's picture

sounds like an invitation

Wed, 12/18/2013 - 12:32 | 4257360 Glass Seagull
Glass Seagull's picture



Today's volumetric homebuyer doesn't use mortgages, they use non-recourse Fed discount window dollhairs.

Wed, 12/18/2013 - 12:35 | 4257365 rwe2late
rwe2late's picture

Another indicator of a  recovery:

Buyers are paying in cash! 

(don't need any damn mortgage)


So, just who is it has the cash?

Wed, 12/18/2013 - 12:38 | 4257371 SheepDog-One
SheepDog-One's picture

You know you're the one with the cash to buy up mortgages if you're wearing FED cufflinks.

Wed, 12/18/2013 - 12:48 | 4257437 akarc
akarc's picture

Hang on. Let me check my wallet. Nope.

Wed, 12/18/2013 - 13:48 | 4257367 The Big Ching-aso
The Big Ching-aso's picture

I think a lot of peeps miss the obvious regarding about just letting house prices drop further to where millions of buyers can flock in and then clear all the existing inventory.        A lot forget that there are mortgages still attached to most houses.   How can an existing homeowner put his house up for sale less than what's owed on the mortgage including factoring in commissions and fees?   It's called a short sale if it's tried and it can take months for the lender(s) in question to accept the short sale price if they'll even play along to begin with.

IOW if house prices collapse we're still in the same boat.   There is no free lunch.




Wed, 12/18/2013 - 13:49 | 4257662 madcows
madcows's picture

Well, the fucking banks shouldn't have made the bad loans.  I'd like to see them take the hit.  Fucking assholes got the interest, then got bailed out by joe taxpayer.  they should be hanged or tarred and feathered

Wed, 12/18/2013 - 17:20 | 4258696 corporatewhore
corporatewhore's picture

were they really bad loans? or were they loans made to good people who got fucked over by the company they for which they worked--lost their jobs, their homes, their families, their dignity?

Wed, 12/18/2013 - 15:28 | 4258170 MachoMan
MachoMan's picture

Yes, but by what mechanism can banks hold on to nonperforming inventory in perpetuity? 

Conceptually, the market would clear just the same, regardless of existing encumbrances...  albeit the bank would get a home first, before being forced to eat a shit sandwich.  However, the gaping hole that is shadow inventory is being made good through bailouts, saving the institutions at the expense of the rest of the citizenry. 

Wed, 12/18/2013 - 12:38 | 4257375 Bunga Bunga
Bunga Bunga's picture

FED needs to buy more MBS, no way that they can taper.

Wed, 12/18/2013 - 12:42 | 4257402 Atticus Finch
Atticus Finch's picture

The other chart to overlay is the housing price collapse. The price of homes in my neighborhood collapsed after August 2011.

Wed, 12/18/2013 - 12:47 | 4257420 akarc
akarc's picture

Same in my neck of the woods. For sale signs at all time high.

Wed, 12/18/2013 - 12:54 | 4257452 papaswamp
papaswamp's picture

US takes a page from China and begins building ghost neighborhoods. ghost cities next...

Wed, 12/18/2013 - 12:56 | 4257466 Shizzmoney
Shizzmoney's picture
Fed’s low rates may be juicing stock buybacks at the expense of jobs

In the third quarter of this year, as Greenhaus points out, the percentage of S&P 500 SPX -0.09% companies paying dividends — 84% — reached a 17-year high, while the number of companies lifting their year-on-year dividends per share hit the highest in nearly 20 years. As a result, says Greenhaus, the trailing twelve month amount of dividends, at $339 billion, has jumped to 40% above the ten-year average.

But while shareholders may be loving this, the overall economy may not be such a happy camper.

“One might wonder, whether, in a perverse way, the Fed has got it wrong,” writes Greenhaus. “We wonder whether their low interest rate policy is having the unintended result of actually increasing unemployment by encouraging companies to use their capital not to invest and hire, but rather to buy back stock and increase dividends, “unproductive” uses of said capital. “Investors certainly reward companies that do so, but in either event, [Wednesday's] Fed meeting isn’t likely to change that low-rate policy.”

"maybe" - nomination for #lol of the year

Wed, 12/18/2013 - 13:03 | 4257483 spekulatn
spekulatn's picture

Mortgages are so early 2000s. We buy now with cash. In case you haven't noticed the world economies are on fire! 

BTFATHb (Buy The F'n All Time High bitchez)

Wed, 12/18/2013 - 13:10 | 4257508 Quinvarius
Quinvarius's picture

The landscape will be littered with half finished eyesores thanks to the Fed juicing Wall Street into buying real estate.  We will see how long term those rental investments were as the evidence that there is no market to unload them on grows and blance sheets start getting hammered with dropping home values.

Wed, 12/18/2013 - 13:11 | 4257527 1835jackson
1835jackson's picture

What a fucking joke. The mortgage business is over. Esp with the QM rules starting on Jan 10th next year.

Wed, 12/18/2013 - 13:30 | 4257596 WTC-7
WTC-7's picture

+1 1835.  See QM rules, no one mentioning that.  Also seeing lots of posts on this thread about all cash buyers so mortgages don't matter.  Show some numbers to support that claim.

In SoCal YOY cash buyers dropped to 27% (from the peak earlier this year of 36%), which is still abnormally high from a historic standpoint but the winds of change are definitely  blowing.

Overall sales YOY down 10%.  Just takes a trigger and this whole thing will pop...

Wed, 12/18/2013 - 14:14 | 4257630 TalkToLind
TalkToLind's picture

Cash for Shacks, bitchez!  

It goes like this:  Uncle Sugar will give you a rebate if you trade in your current dump for a newer 'safer', 'greener' house.  Then shortly after you trade in your old dump they will come and crush it with a bulldozer!  This activity will help stimulate the housing market and shit.  Now give me a Nobel prize, and get one for yourself too.  

Wed, 12/18/2013 - 13:42 | 4257636 Kasperfx
Kasperfx's picture

Cash buyers is a mith, the only parties that are cash buyers are the funds that received low intrst rates from the banks/fed and their cohorts , it's all smoke and mirrors to inflate the market and now that the funds are relizing it's not working in reality as it did in theory their  this market is toast.

Wed, 12/18/2013 - 13:49 | 4257655 Save_America1st
Save_America1st's picture

I haven't spoke of this issue on here before, but I've been in a 5 years battle with Bank of America over my Countrywide mortgage that they took over.

Zerohedge posted a form letter about 3 or 4 years ago that we could copy and send to our lender requesting them to show proof that they held the original title for the mortgage. 

I had already been refusing to pay B of A$$holes even one more dime in 2008 until they could prove the mortgage wasn't fraudulent...well they got my letter and then they sent back their typical form letter stating that I was not "entitled" to see the proof of title.

Well at that point it was game on, and I refused all their calls, lawyer threats, court threats, foreclosure suit threats, you name it.  I never answered a call, replied to a call or any correspondence from them or their lawyers for 5 years now.  And I never paid those crooks a single dime the whole time going on 60 months now come January.

All I have is a tiny condo...nothing big, expensive or fancy...the mortgage was only 109,000.  But they still kept trying to foreclose on me without proof of title.

Well today I got all the letters from their lawfirm stating that they have given up on the suit.  They sent a letter to the county circuit court judge and requested to drop the suit, dissolve all other claims, and to "realease the original note".

I was also sent the signed copies from the judge approving the request and ordering full dissolution of the foreclosure suit. 

Anyways...just goes to show that if you fight these criminals long enough and don't give in to their threats you just might win in the end.  I'm not totally sure what it really means in terms of who now holds  or some Chinese guy who bought it in some bundled pile of MBS garbage???  Do I own the place?  Can I sell it?  I have no idea yet.  But at least I no longer owe B of A$$holes or anybody else for their ciminal actions. 

I still live in the I guess it's mine...I'll need to speak to a lawyer to have them tell me what it all means and what my next move should be.

But after 5 years they finally gave up.  I guess it wasn't worth it to them to continue fighting me over a crappy little condo that they couldn't prove rights to. 

FUCK YOU, BANK OF AMERICA!  You cesspool of scumbag rats. 

Wed, 12/18/2013 - 13:55 | 4257679 joego1
joego1's picture

Good for you!

Wed, 12/18/2013 - 14:26 | 4257728 Save_America1st
Save_America1st's picture

Thanks!  I hope others can/have done the same thing.

I should have mentioned also that I didn't feel good about doing that...and it was stressful not knowing how it was going to turn out.  There was a lot of back and forth from people on ZH and other forums, and with people I know who had very split opinions on whether it was right or not to do what I did.  But I really felt I was right in holding out and forcing them to prove I owed them anything.  It's not like I was trying to defraud them or something like that.  And I certainly wasn't spending all that saved fiat like some dumb jackass either...I was holding it outside of the banking system just in case things went against me...then I would have it to use in case I had to pay up or move on or whatever.  But I kept it all out of the banking system so that it couldn't be confiscated by them. 

Wed, 12/18/2013 - 16:17 | 4258397 MachoMan
MachoMan's picture

I'd also talk to your accountant about any tax consequences for "foregiveness" of your loan...  however, it just seems like they've given up on the lawsuit, not forgiven the debt or released the lien.  When you go to sell the property, the title company will pick up the mortgage and they'll hold the sale proceeds to pay the mortgagee (whoever that might be...).  If they've released the mortgage (not forgiven the loan as well), then you may be able to sell the home and keep the proceeds [failure to hold out the proceeds from a sale with a lien is likely a criminal offense in your state, which I'm assuming is florida by your facts].  However, the note is still out there...

If BoA is not the real holder, then the real holder should not be prejudiced by a dismissal of the lawsuit (since it's not a party, then the lawsuit shouldn't affect it).  However, there ought to be a statute of limitations on enforcement of the note...  so, if you can figure out how to invalidate the mortgage/lien, then they may have no avenue of remedy against you...  I'm presuming that unjust enrichment/equity is likely a no-go since most of the holders probably have some culpability in the screwed up state of affairs.

Wed, 12/18/2013 - 13:56 | 4257681 TheFreeLance
TheFreeLance's picture

Right after the first of the year, you need to go check your credit score for free, allowed by law. I bet you'll BAC smacked the hell out of it. Well, now that they've dissolved all claims, you can write the credit bureaus and tell them to remove any and all dings. You'll need supporting docs, so don't toss those.

Wed, 12/18/2013 - 14:19 | 4257778 Save_America1st
Save_America1st's picture

Thanks for the advice man...I will do that.  I know my score has been tanked, but I haven't really cared...had other things to worry about all this time.  I was around 750 or so at the end of 2006 after I bought the condo...I think now it's around 500 or something like that...maybe even lower.  Oh well...

Wed, 12/18/2013 - 14:18 | 4257771 WTC-7
WTC-7's picture

Is it possible they just let it slide since your HOA back dues and penalties along with defaulted property taxes are more than what it would cost them to fight over it?  God knows they have the $$$ to cover greasing the legal system to foreclose.

Wed, 12/18/2013 - 14:26 | 4257804 Save_America1st
Save_America1st's picture

Not sure...but I'm thinking they just couldn't prove anything in court and I never went to any court proceedings or acknowledged a damn thing they ever sent me, so they had nothing on me other than that I just wasn't paying.  I don't think it would have been worth it to them to try and supply false documentation in court over a little old condo.  I know they would rather go after people who bought big ass McMansions on nice land, etc.  I actually bought my place thinking it would be a good little deal at the time and it was the first place I had ever bought.  Man was that bad timing! hahaha 

The HOA does also have a lien against it but they haven't done anything about it except send me letters asking to pay twice what I owe them.  Fuck them.  But I'll deal with that after I talk to this real estate lawyer to see what he thinks I should do now.

The property taxes aren't an issue.  I paid them myself until about 3 years ago because they were only like 50 bucks for the entire year!  After that the assessed tax value was and still is actually zero dollars. 

Since 2008 when everything tanked the value of the condo also tanked from 100,000+ down to 25,000.  It's still valued at that much by the county, so there are no property taxes due.  And even before that, like I said, they were only like 50 bucks for the entire year. 


Wed, 12/18/2013 - 16:16 | 4258440 MachoMan
MachoMan's picture

If the condo is worth $25k, then it's not worth their time to dicker over...  the presumption is that you're a turnip, thus any additional expenses are dead ass losses.

Wed, 12/18/2013 - 14:22 | 4257787 dick cheneys ghost
dick cheneys ghost's picture

hope you paid all taxes and Ass fee's..............and good for you......those thieving banks never ''loaned'' you any money to begin with, as such, they have no standing

epic Mako from 2010


''The fiction with mortgages is that there is no mortgage.  They originate a mortgage that never existed, then they pawn that which does not exist to a 3rd party. 

Oh, you don't want to even know how far the rabbit hole goes.

They can't sue for damages they didn't possible have nor could have, well of course they can trick the stupid homeowner into believing that and leaving the keys in the door.''

Wed, 12/18/2013 - 14:52 | 4257918 Save_America1st
Save_America1st's picture

I had never seen that interview, but yep, that pretty much spells it out, doesn't it?  Definitely worth watching so people can get a refresher on what was going on during the heart of that issue 3 years ago. 

The fucked up thing is that it never went away and was never properly resolved.  It's still going on and another bubble has been spawned out of the first one!!!  Unbelievable!!!

Ratigan at the end said he hoped for a start that the Justice Department would start to look into all of that, that was some seriously freakin' naive wishful thinking, wasn't it???  Like dick Holder was ever going to investigate any of that when they could just print and steal more money from the American people to paper over the entire crime.

And not one person has been brought to trial at all much less gone to jail over all of this.  What a travesty...

thanks again for posting.

Wed, 12/18/2013 - 16:01 | 4258376 MachoMan
MachoMan's picture

That's patently false...  I thought we had eliminated this line of reasoning from ZH, but the FED is the only bank vested with the power of money creation...  the creditor bank who lends the homeowner the money to purchase a house is conceptually (legally) required to pay back its own creditor institution, and on up the chain.  Creditors of all walks have standing to foreclose on a mortgage as the mortgagee.  This issue has been put to bed through centuries of precedent.

The issue in "foreclosuregate" is the method in which the lien is recorded and subsequently transferred/assigned among creditors.  It is not the fundamental act of lending that is challenged, rather it is the method of assignment and the fact that the assignee of the mortgage is unknown, has been made whole already, or somehow has unclean hands or has been negligent in the process...  The challenge for standing is that the foreclosing party (plaintiff) does not have authority to foreclose because it was not validly assigned the lien/note, does not have authority to act on behalf of the real holder, and/or that the lien has been abolished through the assignment process.

Wed, 12/18/2013 - 16:25 | 4258476 WTC-7
WTC-7's picture

100% correct machoman savage. It is the assignment that is at issue which is primarily a procedural error (allegedly so) which is why judges have ruled in favor of the foreclosing party in many of these cases. 

Wed, 12/18/2013 - 16:50 | 4258582 MachoMan
MachoMan's picture

It is definitely a procedural error...  which is the law...

However, the issue is also in securitization, which is probably even more practically important than procedural issues...  The thought of putbacks and bond holder lawsuits en masse are probably more troublesome than the original loans...  oh, you want to bust the tax benefits of this mbs trust from a failure to follow procedure and timing rules?  sure, just fork over the difference mr. creditor and make us whole.  Of course, this is why the FED/quasi governmental entities have to buy all the damn things, to save the banks from liability...  once they get the criminal charges settled with the AGs, it's home free!

Wed, 12/18/2013 - 16:20 | 4258447 MR166
MR166's picture

So let me get this correct,  someone lent you money so that you could buy your condo and you do not want to pay it back because there might be some sort of technical error in the paperwork.

You are not any better than the banks that sold your mortgage and failed to file the proper forms. 


YOU are part of the problem in the US.   Your word is worth NOTHING!!!!!!!!


Wed, 12/18/2013 - 16:53 | 4258595 MachoMan
MachoMan's picture

Normally, the process could easily be remedied by naming the entire chain of assignment in a declaratory action...  having a court decide the real holder...  and then having the holder move forward with a foreclosure suit.  However, an admission that they have no idea who the holder is and the prospect that it might not be who they want it to be has serious implications for the securities side of the equation...  which dwarfs the original amount of the loans.

Wed, 12/18/2013 - 17:25 | 4258715 Nick Jihad
Nick Jihad's picture

Yes, it smells like a scam to me too. But you don't want to pay $109K to BofA, only to have some other bank step forward and say "that's nice, but when are you going to pay me the $109K that you owe?"

Wed, 12/18/2013 - 17:38 | 4258754 honestann
honestann's picture

!!!!! BULL !!!!!


If he paid the $109K, and BofA doesn't know whether the title was properly transferred, at the end of paying all that money he could not get title to the property he paid for.  BofA would have ripped him off.


He gave BofA every chance to prove he would be able to get clear title at the end, and they could not prove what they are required to prove.

What you propose, whether you realize it or not, is that if someone sells you stolen goods that they do not own, you say you should pay full price for it... then pay full price again when the real owner appears.  Yeah, right.  Like we believe you're happy to do that - to pay a criminal, then pay the real owner (if they can ever be found, due to nefarious criminality performed by the original criminal).

You are a classic sucker and sheeple.

Wed, 12/18/2013 - 18:16 | 4258850 MachoMan
MachoMan's picture

Let's assume that no one knows who the lienholder is...

First, he is the title holder...  there is no dispute as to the title holder...  he's it...  he owns the home.

Second, what happened to the payments he made on the home prior to strategically defaulting?  Did he get credit for them by the purported loan administrator?  By paying this entity, did he waive his right to contest their authority?

Third, if the house is sold through the normal sale process, then wouldn't a title company pay the mortgagee at closing?  Who is on the hook if the payment is sent to the wrong party?

Fourth, even if he decides to pay off the loan and keep a horribly underwater condo, then what about interpleading the funds?  Or alternatively, if he wants to determine the real holder, then why not a quiet title action or declaratory action?  Does it change the nature of his arguments, or his likelihood of success, if he's the plaintiff instead of a foreclosure defendant?

Fifth, practically speaking, if he is the subject of multiple claims to the proceeds of his sale/loan payoff, then how far do you think the claimants will get in court who: (a) are not the record lienholders; (b) sat on their hands for years and had some involvement in bungling up the assignment process/not doing due diligence; and (c) who are multinational banking entities from out of town versus the hometown boy?  If they can't prove who is the holder, then how are they going to prove they're entitled to the proceeds of the sale?  Likewise, are you really worried that you won't be able to get your money back from a TBTF if they demand you pay them, keep your money, and then you're the subject of a subsequent suit?  Do you think you might add the entity you paid as a third party to the lawsuit and tell whoever sues you that you gave the money to the third party, so collect from them?

PS, the chain of assignment believes it knows who the holder is...  in other words, the chain of assignment has already agreed amongst themselves (by paying money for the assignment) who the holder is...  so the concept that "no one knows the identity of the owner" is a bit disingenuous.  Rather, what has happened is that strategic defaulters have figured out that they can hold a gun to the heads of the real holders due to errors in the assignment process that stand to unwind securities that are many orders of magnitude larger than the single subject loan.  In short, your buying stolen goods analogy is completely wrong.  If he doesn't want to receive a net benefit from the transaction, then he can always give the house away...   

Wed, 12/18/2013 - 20:57 | 4259260 honestann
honestann's picture

Oh, and BofA, who wrote the loan, has no reponsibility to know what the hell they are doing --- when they do millions of these per year?  Sure, I buy that.  NOT.

Anyone who is part of this huge scam is responsible for their actions, and that includes BofA.  The "owner" was perfectly willing to pay given proof the transaction was valid.  End of story.

Thu, 12/19/2013 - 11:35 | 4260703 MachoMan
MachoMan's picture

B of A may not have written the loan...  There were an incredible amount of originators...  more likely than not, B of A simply bought the loan (and the originator knew that B of A would buy the loan, thus had no skin in the game; likewise, B of A knew it could dump the loan on a GSE or other party, so it didn't care either...  moreover, B of A could work out a deal to administer the loan after it sold it!  Good deal if you can get it). 

The problem isn't in the loan writing (fraud/failure of the borrower to meet loan requirements aside)...  the problem is in the securitization and pooling of the loans.

If everyone is responsible for what has happened, then why don't all of these homeowners pay the money into escrow?  Why not deposit that money in the registry of a local court (interplead) and tell the bank to collect it there?  Why not file a declaratory action to determine who actually owns the loan (you can probably recover your attorneys' fees for this)?  The simple fact is that most of these people are in default, can't afford the houses in first place, and have now found a way to live for free (unfortunately on the taxpayers' dime due to bailouts), and give not a single fuck about changing the arrangement.  If they really shouldn't receive a windfall from the process, then why do they keep accepting a windfall from the process?  If they really, really do want to pay, then there are plenty of legal avenues to protect themselves from the liability of paying out multiple creditors for the same loan or, alternatively, to determine the real holder of their loans.

So what's the solution here?  Simple, homeowner gets foreclosed upon and loses the house (probably absurdly underwater anyway and files for bankruptcy) and the bank eats the difference (and goes bankrupt)...  home prices decrease and the former homeowner with damaged credit can again afford the same house he lost to foreclosure...  QE stops, the wealth gap narrows, and the people rejoice.  magic. 

Thu, 12/19/2013 - 22:21 | 4262577 honestann
honestann's picture

Most who are not underwater WILL pay... if and when they can be certain they will own the freaking home.

Of course, that's a joke too, since only about 0.001% of people today own their property (have an allodial title).

Today, virtually EVERYONE is royally scammed by the predators-that-be, and the predators-that-be back up their scams with cops, swat teams, fema camps and a financial industry happy to just take all your bank accounts on a whim or "orders".

Yeah, when you are caged by a bunch of predators, you owe them nothing.

And today, everyone in the USSA most certainly is.

And BTW, it was not the "average individual" who turned the USSA into a tyrranical police state, and created all sorts of artificial scams that drove home prices to several times their natural price.  To expect the predators to NOT comply with ANY kind of ethics, but expect regular folks to do so... is just obscene!

Wed, 12/18/2013 - 17:22 | 4258711 corporatewhore
corporatewhore's picture

you are lucky you live in Florida.  If you lived in a hick state--non judicial foreclosure--the judges are just as crooked as the banks.  No consumer protection.  You are out of your home in 30 days.

Wed, 12/18/2013 - 13:57 | 4257686 TheFreeLance
TheFreeLance's picture

Quite the little in-fill boomlet near me -- $700K and up. I do not have a clue who will buy them.

Wed, 12/18/2013 - 14:08 | 4257737 nwowatcher911
nwowatcher911's picture

So I take the pre qualification letter and tear it up, or wait until Jan 10?? :-/

How to play this...?

Wed, 12/18/2013 - 14:19 | 4257775 22winmag
22winmag's picture

Those lying, stinking NAR pimps are still filling the radio waves and television talk shows with their "everything is great" crap.

Wed, 12/18/2013 - 15:19 | 4258106 MR166
MR166's picture

The NAR is just reporting the facts that the US MSM wants them to report in order to support the administration.   It seem that foreigners trust their monetary systems even less than we trust ours and thus the influx of foreign cash buyers.  Wall Street is also a big cash player in US housing.   This is just a dead cat bounce in housing because the rents that these homes can earn cannot return a positive cash flow unless interest rates remain close to zero.  Housing cannot increase more than a persons ability to pay for taxes and interest.

Wed, 12/18/2013 - 17:57 | 4258815 naughtius maximus
naughtius maximus's picture

This is great news. It must mean that everyone now owns a home because people don't need mortgages any more. Or... Maybe it means that people are so unbelieably rich they don't need to borrow money any more. I bet it must be both everyone is rich and everyone owns a home. I think I'm going to smash some Fabergé egg to celebrate!

Wed, 12/18/2013 - 18:07 | 4258840 honestann
honestann's picture

!!!  Wow  !!!

Talk about a perfect storm.


#1:  Mortgate applications fall to 13 year low.
#2:  Cash buyers are fleeing the market.
#3:  Rate of construction soaring.


The difficult part is figuring out how to play this (?puts on home builder stocks?), and of course the real trick... timing.

Nonetheless, what a setup.

Wed, 12/18/2013 - 22:43 | 4259502 bilejones
bilejones's picture

What's nice about this the deliberately poisoned chalice that the Bernank hands off to Gellin  Yellin.

Whatever he/she/it (who really knows?) does it's fucked.


These fucking Episcopaliens will even even fuck each other over.

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