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HomeIs 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…)
“The Giant Elephant in The Room”
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…)
Ben Bernanke’s “Hail Mary”
Posted by Larry Doyle on August 29th, 2010 11:12 AM |
Hail Mary passes are typically thrown late in a game in an attempt to clutch victory from the jaws of defeat. Ben Bernanke’s statement at the Fed’s Jackson Hole conference this past week is an indication that he is getting ready to throw his “Hail Mary.” The problem that I see, though, is that our ‘game’ is only somewhere in the second quarter.
Have you ever witnessed a football game where one team literally has to scrap its game plan because it finds itself in such a huge hole in the first quarter? That, my friends, is analogous to the state of the U.S. economy going into 2008. While we could debate whether the calls made by our coaching staff in Washington have helped or hurt our recovery, the fact is Ben and his fellow coaches have thrown everything and the kitchen sink at the economy and the results are anything but robust.
For a review of the game to date and the uncertain prognosis going forward, The New York Times’ Peter Goodman provides a wealth of ‘sense on cents’ in his fabulous and comprehensive commentary, (more…)
Housing Decline “Takes Your Breath Away”
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…)
Lew Ranieri: Housing Recovery Is Years Away
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…)
Where is Wall Street Hiding Hundred Plus Billion in Lo$$es?
Posted by Larry Doyle on March 8th, 2010 11:24 AM |
U.S. Rep. Barney Frank (D-MA)
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…)
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…)
Housing Plans Promote Long, Slow Decline
Posted by senseoncents on February 26th, 2010 9:32 AM |
Why do I remain overall bearish on housing?
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…)
Why Housing Will Remain Under Pressure
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…)
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