housing crisis: The Other Shoe May Already be in the Air - 07/31/10 08:10 AM
Those hoping for a housing recovery may have to wait a bit longer as the latest numbers seem to indicate the potential for further drops in prices. This is especially troubling for sellers and somewhat disheartening for those who may have recently purchased.
 
With the inventory of existing homes increasing, and expected to rise significantly once the sales numbers for July are released, the increased competition will place additional downward pressure on prices. Should inventory numbers again rise to double digits, which some are predicting, the recent “spring surge” will soon be seen as an anomaly, not a recovery.
 
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housing crisis: Homebuilders Surprised by Drop in Sales Following Expiration of Tax Credit - 07/30/10 11:24 AM
Officials from three of the nation’s top homebuilders, Ryland, Meritage, M/I Homes, ranked as number 9, 11, and 16, respectively, have all reported a drop in sales following the expiration of the Homebuyer Tax Credit. At M/I Homes, second quarter sales fell by 21 percent due to a dramatic drop in the May/June numbers, while the quarter for Ryland was even worse with a sales decline of 44.2 percent. And while some builders have expressed surprise at the extent of the slowdown, stating they did not expect it to be as severe or prolonged, most are making significant adjustments to their … (12 comments)

housing crisis: A Helping Hand To Unemployed Homeowners - 07/24/10 09:17 AM
While the recent Banking Reform Bill was touted as a means to prevent future financial crises, a little-known amendment offers a helping hand to unemployed homeowners. With HAMP and other foreclosure relief efforts intended to help working homeowners, they offered little to the millions of unemployed who fail to qualify for a loan modification.
 
The new program will be administered by HUD, the Department of Housing and Urban Development; and while the details are yet to be announced, the bill includes as much as $1 billion to be used to help those without jobs make their monthly mortgage payments. And … (12 comments)

housing crisis: The Housing Market Has Fallen And Won’t Get Up - 07/21/10 04:03 PM
An article in the Wall Street Journal, Housing Market Stumbles, describes how home sales seem to be deteriorating, but it isn’t just a stumble; the housing market has fallen and won’t get up. The WSJ piece projects the dreaded “double-dip” in housing, a prediction that has grown more popular in recent weeks.
 
What most seem to overlook, however, is that the fundamentals of housing are being rearranged. The overall market was never truly in recovery; the brief periods of upward momentum were, in general, a response to an artificial stimulus applied by government—a stimulus which was neither permanent nor productive.
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housing crisis: Home Builder’s Gloom Increases - 07/19/10 03:31 AM
Home builders, those who are still in business, remain pessimistic about the new home market, and understandably so. In a report on MarketWatch, the NAHB/Wells Fargo housing market index for July has fallen to the lowest level since April 2009.
 
While some pundits have predicted a coming housing shortage, six of seven builders see the realities of the market and believe that recovery is still out of reach.
The Housing Guru: The expert source for all your housing questions
 
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housing crisis: Strategic Defaults Will Eventually Crush HAMP - 07/07/10 02:51 PM
Strategic defaults will eventually crush HAMP, the administration’s homeowner rescue plan, as a new study reveals that the average participant is underwater by more than 50 percent. An article in the Huffington Post provides details of a June 24 report released by the Government Accountability Office.
 
With more underwater homeowners aware that It Will Take Years For Home Prices To Return to previous values, strategic defaults will continue to rise. Studies have shown that as home values reach 50 percent or more in negative equity, such as many of those participating in HAMP, the owners are much more likely to … (51 comments)

housing crisis: Foreclosures And Delinquencies Increasing - 07/06/10 10:10 AM
In an indication of continuing troubles for the housing market, numbers just released from Lender Processing Services (LPS), show the total number of foreclosures and delinquencies increasing. Today’s release of its May Mortgage Monitor report shows a 2.3 percent month-over-month increase in the nation's mortgage delinquency rate with a year-over-year increase of 7.9 percent.
 
The report also shows mortgage defaults beyond 90 days as well as foreclosures experiencing a slight increase, with both rates elevated to historically high levels. As of May 31 there were more than 7.3 million loans delinquent or in foreclosure. Additionally, the numbers showed that the … (19 comments)

housing crisis: Forget Modification And Move Ahead With Foreclosure - 06/28/10 01:39 AM
Since its inception, the Home Affordable Modification Program has been criticized as too little, too late; and the criticisms have come from all sides of the political spectrum. Put simply, HAMP doesn’t work, never could have, and should be abandoned. It’s time to forget modification and move ahead with foreclosure. Foreclosures will happen anyway; only the pain will be extended over a much longer period, like the current oil slick threatening the entire Gulf coast. Unless we can create a magical formula that will provide jobs and restore the assets of struggling homeowners, avoiding millions more foreclosures and a double dip … (16 comments)

housing crisis: HAMP Encourages Making A Graceful Exit - 06/26/10 05:46 AM
In a video entitled, Your Graceful Exit, the government is taking steps to encourage struggling homeowners to take action.  I suspect they are motivated by the sheer numbers of delinquent mortgages and are aware that the economy will not recover until the housing market is stabilized.
Unfortunately for homeowners, producing a video is far less effective than actually taking steps to "save" 7 to 9 million homes from foreclosure.  With HAMP considered a dismal failure by most, and with no relief on the horizon, struggling homeowners should just grab some popcorn and be content that their government has taken time … (2 comments)

housing crisis: Banks Pursuing Deficiency Judgments May Have Something To Fear - 06/16/10 03:21 PM
An article in the Washington Post describes how banks pursuing deficiency judgments may have something to fear. According to the article, some lenders are taking a more aggressive stance in dealing with distress sales that recoup significantly less than the original loan amount.
 
In the past, the cost/reward ratio caused few lenders to seek deficiency judgments, but the practice has become more widespread as lenders incur greater looses due to increasing numbers of foreclosures and short sales. According to the MBA, banks are not pursuing those who lack the ability to repay; and lenders participating in the government’s HAFA program … (53 comments)

housing crisis: Builder Confidence Declines - 06/15/10 04:12 AM
The latest report of builder confidence from the National Association of Home Builders/Wells Fargo Market Index shows that few builders see a near-term housing recovery.  And while politicians may have called a bottoming of the market, those in the business remain skeptical.   
Click HERE for the full report and a graph that tracks home builder confidence.
 
The Housing Guru: The expert source for all your housing questions
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housing crisis: Proposed Senate Bill Extends Deadline For Housing Tax Credit - 06/11/10 06:19 AM
A bill just introduced in the Senate would extend the deadline for the Housing Tax Credit by 90 days, according to an ARTICLE in The Washington Post. The bill, supported by the NAR, would grant those already under contract and extra three months to get their deal closed. Many lenders, suffering from an overload of mortgage applications, had indicated that some loans would not be ready to close by the original deadline of June 30.
 
The NAR has estimated that as many as 180,000 applicants under the original deadline would be unable to close. While the NAR and mortgage lenders … (25 comments)

housing crisis: No Appreciation In Home Prices For Three To Five Years - 06/07/10 03:30 AM
With most economists now predicting a flat, jobless recovery, and with the continued increase in foreclosed properties, there is little hope that home prices may move up significantly for several years. While some pockets remain relatively strong, the overall housing picture is one of foreclosures, short- sales, and prices well below their peak. Click HERE for the details of why we may see little or no appreciation in home prices before 2015.
 
The Housing Guru: The expert source for all your housing questions
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housing crisis: The Precarious Position Of The American Economy - 06/04/10 10:27 AM
I’ve recently been planning a comprehensive blog post on unemployment and how it will impact the economy for years to come; and I had planned another on the explosive impact of the sovereign debt crisis. But the two issues are so inseparable that I will deal with both as well as other serious problems facing our nation.

I believe the U. S. economy to be in the most precarious position of my lifetime; and though I’d like to believe there is a pathway leading towards recovery, I fail to see it. I’m not optimistic about the recovery in the stock … (71 comments)

housing crisis: Trapped—How The Housing Crisis Impacts Employment - 06/03/10 11:02 AM
With approximately fifteen million homeowners owing more on their home than it is worth, employers are finding it more difficult to transfer or recruit from other areas of the country. Held captive by mortgages that are near or exceed their home’s value, large numbers of workers are turning down promotions and forgoing job offers that would require the sale of their home.
 
Companies unwilling to make a substantial contribution towards a “relocation package” may find themselves limited to local talent; but some have begun to adjust their policies to reflect the reality of a housing market going nowhere. An article … (12 comments)

housing crisis: FHA Head Says Housing Market Is On Life Support - 05/25/10 05:38 AM
According to David Stevens, head of FHA, the U. S. housing market is on life support. In an article in Bloomberg Businessweek, Stevens is quoted as saying: “This is a market purely on life support, sustained by the federal government.” He went on to say that the FHA’s monopoly of residential lending is “a sign of a very sick system.”
 

We should all be concerned by the level of lending from FHA and the potential for disaster should large numbers of the loans default. Earlier this year an article in the Washington Post reported that FHA delinquencies had increased … (102 comments)

housing crisis: Requesting A Loan Modification May Be Financial Suicide - 05/23/10 01:13 PM
As U.S. consumers try to dig their way out of the worst recession in decades, many have sought help from their lender; but requesting a loan modification may be financial suicide. Unfortunately, many struggling homeowners often find the “cure” to be worse than the illness. An article in the SF Chronicle points out how a loan modification not only lowers credit scores, but often leaves the borrower owing thousands in fees and penalties if the modification is denied.
 
When a homeowner is accepted for a trial modification, their payment is lowered below the original contract amount, and their lender will … (12 comments)

housing crisis: Mortgage Purchase Applications Have Fallen to a 13 Year Low - 05/19/10 02:56 AM
In a report from the Mortgage Bankers Association, mortgage purchase applications have fallen to a 13 year low. And while the interest rate for 30-year fixed-rate mortgages have declined to the lowest level in six months and remain near historic lows, the low rates are not providing incentive to entice home purchasers.  Expectations that the Homebuyer Tax Credit would only “steal” future sales seem to have been correct.
 
It now seems obvious that the March and April sales “surge” was nothing more than a reaction to “free money,” an incentive that did nothing to stimulate future growth.
 
The … (52 comments)

housing crisis: The Housing Starts Numbers In Context - 05/18/10 06:48 AM
With the Census Bureau’s release of the April housing data, perhaps we should put the housing starts numbers in context. Most of my readers are now aware that I’m neither a housing nor recovery “cheerleader,” that is, I don’t believe that the economy is close to rebounding to the levels of three years ago. And I’m sometimes criticized for my “negativity” and encouraged to put a more positive “spin” on my projections. My intent, however, is to present the most accurate picture possible to help consumers and those in the real estate industry make prudent choices.
 

Certainly there is … (22 comments)

housing crisis: “Kicking The Can,” A Favorite Political Pastime - 05/12/10 10:26 AM
Are we now getting the first indications that the housing tax credit may have done no more than kick the proverbial can a bit farther down the road? With mortgage applications falling last week and home prices dropping in many areas of the country, it appears that the housing tax credit may have done little more than provide a temporary and meaningless stimulus while adding to the growing deficit.
 
And while we’ll not have an accurate picture of the market for several months, first indications don’t appear positive. A CNBC article by Diana Olick seems to confirm my opinion that … (63 comments)