The Last Days of August

Here's the most important reading of the week, hands down: "The Fight Over Foreclosure Fees" What's being discussed, in accurate detail, is the very future of our industry.

"No aspect of the U.S. mortgage business will go untouched by this," said one attorney I spoke with, on condition of anonymity. "It won’t be long until we have a federally-regulated foreclosure industry, where Congress sets allowable fees. We might even operate under a single set of federal statutes when all of this is said and done."

Obviously, this is a big deal and worth paying close attention to, so...here's the link again: print this out and pass it along.

Meanwhile...

Shaun Donovan is probably wishing he never said this...

ED HENRY: Is that housing credit now dead? Or does the administration think you should try to revive it to try to prop this industry up?

DONOVAN: Look, Ed, I think it's too early to say after one month of numbers whether the tax credit will be revived or not. All I can tell you is that we are watching very carefully. I talked earlier about new tools that we will be launching in the coming weeks and we are going to be focused like a laser on where the housing market is moving going forward. And we’re going to do everything we can to make sure that this market stabilizes and recovers.

That's from an interview with CNN last week and his slip-up has been headline news ever since. Everyone has been talking about whether or not this was a signal that the Housing Tax Credit might be coming back. Calculated Risk was skeptical about the possibility, and The Wall Street Journal was even more blunt (declaring "Ignore It") and when those two sources agree on something...it's a safe bet. Economist Tom Lawler wrote an angry rant claiming Donovan "may have just made near-term housing sales worse."

It's not easy being a politician -- actually saying nothing is a very difficult trick. I believe that Donovan was attempting to do exactly that: come up with a paragraph of filler on the spot. It's very unlikely that the Housing Tax Credit will be brought back in 2010. (After November, though, that might become a likely forecast for 2011.)

Does the Real Estate market even want the Tax Credit brought back? CNBC did a poll today, and if these results are any indication, perhaps the NAR would be smart to let this one die...

The Yale economist Robert Shiller recently talked to WSJ about the need for "inspirational ideas" for housing policy. From their summary:

He lamented the fact that the policy responses of the Bush and Obama administrations have so far amounted to reactive “patches and bailouts.”

What’s lacking, he said, have been “forward thinking” measures that would be “more inspirational to the market by creating innovation and progress.”

Where are those ideas? Well, journalist/blogger Felix Salmon has been offering a lot of worthy ideas over the past few years, and this week he wrote a short, excellent article about The Rental Alternative. As we reported last week, PIMCO's Bill Gross was calling for even more aggressive nationalization of the Housing Industry...but of course, Bill Gross also stands to make a lot of money from that outcome, too.

Shiller himself had two suggestions: first, indexing mortgage rates to inflation, in order to protect US homeowners from a "Great Depression" scenario...and second, a "preplanned workout" in all future mortgages to make modifications and defaults into a streamlined, automatic process instead of the hostile negotiation it is now.

So far, though, the song remains the same...everyone knows there's a problem, but nobody is taking accountability. Even the Federal Reserve has been trapped in the same argument for months now. Of course, while the experts argue, RealtyInfusion readers are out making money and doing deals every day. The rest of 2010 will be a real-world test of the Free Market's ability to make things right.

Finally, here's a strange find from the always-interesting Seeking Alpha about Google's recent decision to invest $86 million into...low-income housing? Apparently so!! Looks like it's for tax breaks, but Google has been branching out into every other utility...could this be a sign of Things to Come?