Real Estate Blog

You gotta love Jon Stewart of the Daily Show. He is making news more accessible to young people (my kids and, of course, me) by delivering it as entertainment. He’s had some interesting guests on the show to cover the housing market. The housing market situation is so ridiculous, it is a natural fit on this kind of show.

John Stewart: People would come in and say “I don”t have good credit, or a job, and my car has been repossessed and I’d like a house, what do you think?

Advertise Here

Lender: Ok

Last night I saw the interview with Richard Bitner who is humping his book, Confessions of a Subprime Lender. I was in a BN a few weeks ago and almost picked it up. I had read the interesting review in Daniel McGuinn’s Newsweek Resident Expert column in the spring but was already OD’ed from subprime talk.

But after hearing the interview last night, and the fact that he speaks with such clarity, I would imagine it’s a fun read. He was a wholesale lender, providing mortgage money to mortgage brokers…and guess what?…underwriting standards eroded.

Looks like another reason to delay reading War & Peace.

See the clip [it starts at 15:00]

Read the original:
[This Just In] There IS Meaningful Housing News On Comedy Central

I think most of us love Google or the idea that we can pretty much query anything at anytime. Two days ago Ray over at Money Blue Book told me this blog, Matrix, was no longer indexed on Google.

Huh?

I reached out to friends like Chris Miles and Dustin Luther to figured out what to do - it’s never happened before and since I didn’t change anything on the site recently, I didn’t know where to start. We ended up poking around and found advertisements for viagra embedded in my sidebar (WordPress). I’d been hacked!

I went to this page My site’s no longer included in the search results. What happened?

…not much help!

I went to my Google Webmaster Tools page and sent a reconsideration letter (allow 4-6 weeks for changes).

Its the “Guilty Until Proven Innocent” law of the Internet - after all, it is only a series of tubes.

See the rest here:
[Big Bang Theory Meets Black Hole] Google De-Indexes Matrix

In an effort to be proactive, the FDIC has created a web site that simply allows a depositor to “select a bank” from a popup list. It seems to be built for maximum scalability.

Expect increased usage over the next few years. Hopefully FDIC won’t actually issue subprime loans in any of lenders:

It turns out that the U.S. government itself was one of the lenders giving out high-interest, subprime mortgages, some of them predatory, according to government documents filed in federal court.

The unusual situation, which is still bedeviling bank regulators, stems from the 2001 seizure by federal officials of Superior Bank FSB, then a national subprime lender based in Hinsdale, Ill. Rather than immediately shuttering or selling Superior, as it normally does with failed banks, the Federal Deposit Insurance Corp. continued to run the bank’s subprime-mortgage business for months as it looked for a buyer. With FDIC people supervising day-to-day operations, Superior funded more than 6,700 new subprime loans worth more than $550 million, according to federal mortgage data.

Read more:
New Scalable FDIC Web Site Built For Easy Expansion Of Bank Failures

Fannie Mae and Freddie Mac are government sponsored enterprises (GSE). Yet they have shareholders and are profit driven. They play a critical role in the stability of the US mortgage market (and housing) by promoting liquidity, helping mortgage rates and availability consistent throughout the country.

One of the things that made them have a competitive advantage over others was their inferred backing by the federal government.

In the New Yorker this week, James Surowiecki writes in his column Sponsoring Recklessness

The two companies have long been required to tell investors that their securities are not guaranteed by the federal government. But in the financial markets everyone has always assumed that this demurral was just window-dressing, and everyone, it turns out, was right. Last week, when fears of a possible collapse of the two companies threatened to spark a major financial crisis, the Treasury Department and the Federal Reserve quickly came up with a rescue package. What had been an implicit guarantee became an explicit one

Fannie was privatized in 1968 so president Johnson could move the debt off the federal books to help sell the Vietnam War budget, not to help the mortgage market.

Help to the consumer in terms of their impact on keeping low mortgage rates may be exagerated.

A paper by the economist Wayne Passmore, of the Federal Reserve, suggests that in fact Fannie and Freddie have only a small effect on the interest rates that homeowners pay, saving them less than one-tenth of a percentage point.

The GSE self-preservation mechanism has been aggressive lobbying using former high placed government officials, very effective in enabling them to grow to $5 trillion in mortgage debt. A blip on the radar could cause more damage than Congress is able to burden the taxpayers with.

More than $10 billion in losses in the past two quarters, the GSEs (and FHA) are looking for more money to capitalize to help bailout the housing market at Congress’ urging.

Holden Lewis over at Bankrate wrote a great post on this last week called The GSEs and moral hazard.

Daniel Gross, my friend over at Slate and Newsweek, makes a better argument for the help GSEs provide to the taxpayer/homeowner suggesting that a bailout of the GSEs would actually be a bargain.

I guess I have a hard time accepting that anything the federal government would do would be a bargain and the long term concept of nationalization of the GSEs would be cost effective, but hey, I don’t have to refinance my mortgage.

View original here:
[GSE Reminder] Hey, There Are No Guarantees

Here’s a collection of phrases that caught my eye for our newfound understanding about our new housing/credit morality/thinking:

Moral Hazard - I have linked to Holden Lewis’ brilliant post before: Moral hazard is when people take unwise risks because they are sheltered from the consequences. For example, if you wear a seat belt and drive a car with airbags, you’re more likely to tailgate.

Rally between Concern Phase and Fear & Capitulation Stage - Comstock Partners has some great commentary about the housing market: Now even Fed Chairman Bernanke has caught on to the dangers of the bursting of the bubble.  He stated in both Tuesday’s and Wednesday’s testimony before Congress, “the housing market is the central element of the financial crisis.  Anything we and Congress can do to strengthen the housing market, or strengthen the mortgage financing market, will be helpful.  We can do this by restoring confidence in the Government Sponsored Enterprises (GSEs).”  We are happy to have Mr. Bernanke on board, but are not too happy about begging Congress to slow down the process by trying to get bills passed that would postpone the inevitable decline and make the eventual decline even worse. We have to let the free market work its way through the housing crises.

Flat is the new up - Daniel Gross of Slate’s column captures the feeling of victory in today’s economy. Last weekend, at a suburban barbecue, I asked a friend who works for an asset-management company how his firm was faring in these turbulent times. “We’re actually doing OK. Keeping our heads above water.” At which point another guest chimed in: “Hey. Flat’s the new up.”

Nexus between fear and greed - I wrote about this one before.

Foreclosure Contagion - Zubin Jelveh’s Odd Numbers blog in Portfolio.com offers a wealth of sharp insight on an array of economic topics: The researchers also find that the negative hit from a foreclosure is strongest right before a lender takes control of the property. They argue “that when foreclosure is inevitable, efforts to speed the foreclosure process would be effective at reducing the contagion effect.”

It’s a good time to buy real estate - housing prices double every ten years - NAR is hard selling and yes, it may be a good time to be real estate in certain markets and for some people. Because NAR says this 24/7, it’s hard not to cast a jaded glance their way.

See more here:
Catch Phrases That Capture Our Housing Hindsight Morality

I have had the pleasure of providing a monthly chart for the Economic Spotlight section of Crain’s New York Business magazine since September 2003. Here is the latest, which appears in the current issue of Crain’s New York Business.

Source: Crain’s New York Business

Go here for a complete archive of my Crains’s New York Economic Spotlight charts that have been published. They are organized by year.

Credit:
Crains New York Business Economic Spotlight Chart - July 2008

Thursday I was on with Kathleen Hays at Bloomberg News, one of the best business anchors on television, to talk about housing starts. I was joined by Beth Pierce, of the California Association of Realtors (CAR) and owner of her own brokerage and mortgage companies. I thought she provided refreshing candor.

At one point I was asked a question about the change in NYC building codes and how it accounted for the surge in starts which helped skew the national numbers. I experienced a senior moment because my answer pertained to the recent expiration of a long time tax abatement program that had stimulated new development rather than talking about building codes. Sigh.

Here’s more info on the NYC building code change.

On the bright side, I got my first ever tv interview teaser earlier in the day. Gotta love Bloomberg News!

See the original post:
[In The Media] Bloomberg TV - On The Economy Housing Starts And Fits

Before dozens of cute shops, before the town-engulfing craft fairs, Occoquan’s history had as many ups and downs as its topography.

Source:
Occoquan’s Old-Time Charm Outlasts Calamity

As you’re preparing to sell your house, don’t overlook the windows.

Read more:
The Squeegee Dividend

Mortgage rates fell this week, with the average interest rate on a 30-year loan dropping to its lowest level in six weeks.

Excerpted from:
Rates Drop Across the Board

There’s always something blooming in the Washington area — even on the hottest days of summer.

Go here to see the original:
A Midsummer Garden’s Blooms

Last week I reported favorably on one part of HUD’s reform proposals. A new and substantially improved good-faith estimate would make it easier for borrowers to shop for loan providers.

Original post:
New Good-Faith Estimate Would Help Rein In Closing Costs

After six months of haggling and political gamesmanship, a massive housing relief bill is heading for final approval.

The rest is here:
A Look at Congress’s Long-Promised, Long-Delayed Mortgage Relief

There are walking trails, swimming pools and tennis courts. The landscape is well-maintained. If you didn’t know better, you might think you were walking the grounds of a resort.

More:
Adapting Community Design to Anticipate Trends

Fast computers and sophisticated software give architects unprecedented ability to generate powerful designs.

More here:
In Architectural Design, Brains and Talent Trump the Best Software