Posted by Larry Doyle on April 19th, 2011 8:51 AM |
Given the recent experience in housing is real estate an asset that should be abandoned? Obviously not but that mentality has grown dramatically within many segments of our nation.
Can you blame people for never wanting to venture back into the real estate market? No. It is understandable but it is not the real estate’s fault. The fact is very regrettably far too many people did not fully understand and appreciate the dynamics at work in the real estate market nor did they appreciate the risks involved in the mortgage finance space. I empathise. That said, real estate ownership should not be abandoned. (more…)
Posted by Larry Doyle on September 21st, 2010 12:02 PM |
What is holding back our economy? Why isn’t there more credit available in our banking system?
I have answered these questions numerous times over the last two years BUT many in Washington pretend not to know the answer and pander to their constituencies in the process. Regular readers of Sense on Cents are well aware that the books of our banks–especially our largest money center banks–remain chock-filled with loans that are being valued far in excess of what they are truly worth. Let’s navigate.
I first addressed issues within the second mortgage and HELOC (home equity line of credit) space in Fall of 2008 (Sense on Cents/Second Mortgages). Here we are a full two years later and America still has not received a straight answer and a full accounting by the banks or their regulators as to this “sinkhole” on their books and in our economy.
Let’s dive into this hole, get a little dirty, and again expose the issues within this sector. (more…)
Posted by Larry Doyle on June 23rd, 2010 2:03 PM |
I was initially reluctant to write about the decline in New Homes Sales reported this morning. Why? Despite all housing reports to the contrary, I have been consistent in remaining bearish on our housing market. I view this report as merely ‘old news’ here at Sense on Cents.
Oversupply, shadow inventories, and limited mortgage credit have merely been disguised by government props and interventions. Ultimately, those props and interventions wear out or expire and the days of cold, harsh reality set in.
Well, today got mighty cool and very real as New Homes Sales plunged by 33%. Am I surprised? No, I am not. Then why am I writing? (more…)
Posted by Larry Doyle on April 29th, 2010 3:34 PM |
Despite all reports to the contrary, markets in general and housing in particular are ultimately a function of supply and demand. On that note, why isn’t the housing market poised to truly do better anytime soon? The overhang of housing supply due to ongoing strategic mortgage defaults is increasing. These strategic mortgage defaults are much more a factor in the prime-Jumbo market segment than the conforming or sub-prime mortgage market. (more…)
Posted by Larry Doyle on March 8th, 2010 11:24 AM |
Banks are increasingly healthy, right? Our nation’s accounting rules promote real transparency and integrity in our financial reporting, right? Housing is bottoming, right? No, no, and no!
Why so pessimistic, you may ask? I am not pessimistic at all. I am merely searching for the truth in the midst of the smoke and mirrors on Wall Street and in Washington.
Thank you to our friends at 12th Street Capital for sharing a recently released letter from Congressman Barney Frank imploring the four largest banks involved in mortgage originations to write off second liens they are holding on their books at inflated values.
Why does Congressman Frank believe these loans need to be written off? (more…)
Posted by Larry Doyle on March 5th, 2010 12:38 PM |
“Let’s see, do you want to go for the prize behind Door #1 or take a chance on what’s in the big box?”
“Well Monty, I’m playing with your money so it doesn’t really matter now, does it?”
1970’s vintage TV may have been entertaining, but is the current deal-making used by Fannie Mae to liquidate housing inventory truly the way to develop a healthy and robust housing market?
Just what is Fannie Mae doing? (more…)
Posted by Larry Doyle on February 26th, 2010 6:22 PM |
Is it any surprise that the next drawdown in a multi-billion dollar ongoing bailout gets posted at 5pm on a Friday afternoon? Not in this economy where Uncle Sam, that’s you and me boys and girls, continues to pay for the woefully mismanaged financial and legislative practices of those in Washington.
The gutless typically prefer to operate under a veil of darkness.
I am referring to the sinkhole that is the organization known as Fannie Mae, as it comes back to the well for another $15 billion. Bloomberg highlights this ongoing bleeding in writing, Fannie Seeks $15 Billion in U.S. Aid After 10th Straight Loss:
Fannie Mae, the mortgage-finance company under federal conservatorship, said it will seek $15.3 billion in aid from the U.S. Treasury after posting a 10th straight quarterly loss. (more…)
Posted by senseoncents on February 26th, 2010 9:32 AM |
All reports to the contrary, the pace of delinquencies will continue to steadily pressure housing — especially in selected markets.
While the Obama administration is dogged by the issues within housing, I continue to believe that their approach is more exacerbating the situation than improving it. What is the crux of the problem within housing? The law of unintended consequences which changes the behaviors of some, given the engagement with others.
Bloomberg provides some insights on Obama’s new proposals toward housing in writing, Obama May Prohibit Home-Loan Foreclosures Without Preview:
The Obama administration may expand efforts to ease the housing crisis by banning all foreclosures on home loans unless they have been screened and rejected by the government’s Home Affordable Modification Program. (more…)
Posted by Larry Doyle on February 16th, 2010 6:56 AM |
I have maintained and continue to maintain that unless and until we see a measurable decline in mortgage delinquencies, we will not truly experience a measurable turn in the tide for housing overall.
In this same vein, new studies project that measures taken to aid delinquent borrowers and to stem the tide of foreclosures are nothing more than fingers in the dike. These measures are merely temporarily holding back a new and eventual wave of foreclosures.
The Wall Street Journal highlights these new studies this morning in writing, Foreclosures Seen Still Hitting Prices:
More waves of foreclosures will keep downward pressure on home prices in parts of the U.S. over the next several years, two new studies project.
The studies—by John Burns Real Estate Consulting Inc. and Standard & Poor’s Financial Services LLC—both conclude that most efforts to modify loans with easier terms will delay, not prevent, the loss of homes to foreclosure.
The Treasury Department is expected to give its latest update this week on government efforts to avert foreclosures. (more…)