Bank of America forecloure alternative: famlies can rent the home

March 23, 2012 by · Leave a Comment
Filed under: Real Estate News 

At first I was appalled when I finished reading this article.  This action is something that I have considered “could happen” down the road when the collapse was in full swing.  Now, after contemplating the idea of this happening, I think there could be some value with the right approach.  “If”, they keep the rental rates stable and competitive.   This is a much better option than having displaced homeowners hit their local existing rental markets, sucking up all the excess rental unit capacity thus making rents rise due too the increased demand.

Outside of any legal improprieties, this could be good if more rental units can come to market so rental rates can decline.   For middle and lower income earners, this increases their discretionary cash.  This is a good thing and results in a higher standard of living.  This is good.   I might add, the property owners that are now gasping because the have to service debt at a higher assumed rental rate.   Well don’t worry.   The banks should be compelled to re-finance these properties so we can lock-up the new rental rates.   The problems you see is when relief is only given to one set of parties when there is always at least two parties (even if its yourself).

There is some substance in this proposal if it was expanded and given across the board.  The logically at some point down the road maybe a “lease to own” program could be established to get home purchases to be made at the proper market price.  There are areas where you allow the market to determine the outcome and then and only then, you create programs to give the assistance where it is needed to prevent having major breakdowns.  Balance is the goal and difficult to find when you are dealing with various parties, I do not doubt this.

CNN – Bank of America has announced a program that will let homeowners facing foreclosures stay in their homes as renters.  The “Mortgage to Lease” program will start as a limited pilot program for up to 1,000 homeowners in Arizona, Nevada and New York selected by the bank.

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Wall Street Keys On Landlord Business

March 20, 2012 by · Leave a Comment
Filed under: Real Estate News 

I just wanted to say isn’t it peculiar that the largest financial institutions & banks that were the biggest actors in the our the economic collapse of 2007, have almost all settled out of court without wrongdoing, are now going to bid on these real estate assets from Fannie Mae.   It really highlights the absolute “unfairness” of our system.

By this I do not mean it “should” be fair, but we should not be swayed to believe it to be so.  I still have faith in the people that at some point, enough is enough and we will stop sitting back watching American Idol or the such and “get up” and tell the powers that be that you need to do your job and you can not abuse us anymore.  No Mas.  This I do have faith in.

WSJ – Some of the biggest names on Wall Street are lining up to become landlords to cash-strapped Americans by bidding on pools of foreclosed properties being sold by Fannie Mae.

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Portland home values down 2.2 percent

March 7, 2012 by · Leave a Comment
Filed under: Real Estate News 

Interesting fact that just a tad bit over 20% of the Portland, Oregon real estate market is made of up Real Estate Owned properties.   Real estate prices overall are down around a third from the 2007 peak.

Business Journal (Portland) – Portland area home prices lost 2.2 percent in value over the year that ended in February, mirroring a national trend that a California data researcher finds compelling.

While local and national prices remain one-third below the 2007 peak, the modest declines of 2011 came against rising foreclosure rates. That signals the market could be stabilizing, Clear Capital , a Truckee, Calif.-based data research firm, said Tuesday.

Clear Capital found Portland area home values fell an average of 2.4 percent on a year-to-year comparison but were actually up a modest 0.2 percent compared to the prior quarter. According to the most recent data from the Regional Multiple Listings Service, the average sale price of a Portland home was $249,100 in January.

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Foreclosure abuse rampant across U.S according to expert

February 22, 2012 by · Leave a Comment
Filed under: Real Estate News 

It has been sometime since my last posting.  In that time, I had to undergo a major surgery.  I am recovering great and should be posting with much more regularity.   It has taken a few days to catch up and see whats out there to write about.

I love that the banks are paying $25 BILLION DOLLARS and are still not admitting any wrongdoing.  This is just another way to reward the “bad actors” who committed fraud during the U.S. housing bubble.  In the end, we deserve what we have gotten.  We need to hold our representatives and regulators to account.   We should of never let this deal get offered.   It is quite obvious that “wrong doing” did happen so why do we allow LIES like this to permeate in our political and business culture?

At this point it is much more likely something along these lines will happen again down the line because we did not enforce our laws.   A democracy needs active participation from a large majority of a countries population to be effective.  A better outcome from this crisis would of been to see many executives that allowed this to happen, to be put on trial for these financial crimes.   Banks that were too big to save would of been brought down to a regulatable size and banks that followed the rules would of gain confidence of the markets and customers.  This would of allowed them to prosper and that is a sign of how a market economy would of worked in that situation.  We need to realize that the pain is a good part of the process to shakeout the weak links in your market.   In the end its all about word I have written over a hundred times…..PRECEDENT

 

Reuters: A report this week showing rampant foreclosure abuse in San Francisco reflects similar levels of lender fraud and faulty documentation across the United States, say experts and officials who have done studies in other parts of the country. The audit of almost 400 foreclosures in San Francisco found that 84 percent of them appeared to be illegal, according to the study released by the California city on Wednesday.

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Rate on 30-year home mortgage drops to record 3.88%

January 19, 2012 by · Leave a Comment
Filed under: Real Estate News 

This is great news if you have solid employment, 20% down payment range and good credit.   My from perspective we can have 1% mortgages rates and 100K average home prices and it won’t matter.   People need jobs and income that support these types of debt service levels.  Rates will continue to fall until the market finds a rate the works for our current economic situation.  With more jobs being sent overseas and income stay flat if not declining, I see these rates going even lower.

In the end, it comes back to what I have been writing on Bank REO from the beginning.   We have a debt problem and that will need to be handled in the only manner that people like Walter Bagehot wrote in his seminal book “Lombard  Street”.  You extend credit the the “solvent” banking institutions and let the insolvent banks fail so you can clear the market of the “bad money” as Gresham put it.   Bad money always chases good money out of the market until it is brought out of the market.

What I am saying is that most of our major banks are carrying loans and mortgage on their books that will never be paid off and they need to be written off and at that point you need to increase capital to cover these losses or go out of business (or be acquired).   You would be surprise how quickly we would bounce back if we flushed this debt from the system and started hardcore on re-balancing our major entitlement programs.    If you think that we need these large banks, think about how many regional banks we have that would be able to meet this demand and if that wasn’t enough, I think there might be a few billionaires that would throw their proverbial hat in the ring to make good loans.

We say we want free-markets and capitalism but reject the most important part, letting companies fail no matter what.  Banks will always be needed so we should not worry that they will disappear.   If you agree or not leave comments below and please call your representative.

ABC News & AP – The average rate on the 30-year fixed mortgage fell again this week to a record low. The eighth record low in a year is attracting few takers because most who can afford to buy or refinance have already done so.  Mortgage buyer Freddie Mac said Thursday that the average rate on the 30-year fixed mortgage dipped to 3.88 percent this week, down from the old record of 3.89 percent one week ago.

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