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Posts Tagged ‘mortgage finance’

Housing Double Dip Represents ‘Patient’ Opportunity

Posted by Larry Doyle on June 1st, 2011 9:30 AM |

While various and sundry soothsayers have been touting the relative merits of our housing market for the last few years, I did not have a constructive comment about housing until just six weeks ago when I wrote, Is It Getting Time To Buy a House?. Housing price data released yesterday confirmed that our nations’ housing market has, in fact, suffered a double dip.

Is my positive commentary on housing premature and akin to ‘catching a falling knife’? Why was I negative for so long? Why do I think the bottoming process will be prolonged? What do I see as a compelling reason why homeownership is becoming increasingly attractive? Let’s navigate.

1. Why was I negative for so long? (more…)

Is It Getting Time to Buy a House?

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…)

Alternative Housing Finance: How Does “SwapRent” Work

Posted by Larry Doyle on August 24th, 2010 11:58 AM |

Our nation rests on a foundation of entrepreneurial risk taking. I am a strong proponent that our government should work to promote those who have the minds and spirit to take risk and drive our nation’s future economic growth ever higher. That spirit has brought us untold gains over the years. We need to continue to tap into that spirit whenever and wherever we can. On a day in which we just reported that existing home sales dropped 27% in the month of July, I believe it is timely that we tap into this ‘spirit’ and address another alternative housing finance solution.

I referenced the need for real entrepreneurial spirit the other day in writing, A Proposed Solution to the Foreclosure Crisis:

With the Conference on The Future of Housing Finance being held in Washington today, do we really expect the government to propose anything that may help support or fix our system of housing finance?  (more…)

Fannie Mae Plays “Let’s Make a Deal”

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…)

Mortgage Magic or Mortgage Mayhem?

Posted by Larry Doyle on May 5th, 2009 7:02 AM |

Are the largest banks in the land ready to defy the rule of law and self-deal with Uncle Sam’s blessing in the name of providing mortgage relief to homeowners currently strapped by first and second mortgages? The WSJ reports How Big Banks Want To Game The Mortgage Mess

Is this another game of chance in which Uncle Sam wants to prime the pump in hopes of luring private capital into the economy? No, anything but. In fact, this is no game at all. Uncle Sam is proposing legislation which would protect mortgage servicers from being sued for not performing their duty to protect the property rights of mortgage investors (including pension funds, mutual funds, insurance companies). What does all this mean?

Investors in mortgage securities backed by first mortgages are entitled and expect protection of their capital by the performance of mortgage servicers handling the monthly payment of mortgage principal and interest. In fact, if the mortgage servicers do not perform the investors will and should sue. 

The investors or holders of second mortgages will only receive a return if and when the first mortgage is current on its payment.

Will Congress pass legislation which would unintentionally incentivize large banks, which also happen to be large mortgage servicers, to game the mortgage modification process for their own benefit but at the expense of investors holding the first mortgages? The WSJ highlights:

Given the current housing crisis, there is wide support for measures to make it easier for homeowners to modify their mortgages. That is understandable. Nobody likes seeing the wave of foreclosures. Plus, mortgage modifications may help stabilize home values.

But in the rush to do something, Congress is showing a regrettable willingness to adopt constitutionally suspect legislation that runs roughshod over the Fifth Amendment of the Constitution, which prohibits the taking of private property without just compensation. (more…)






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