I have argued in prior posts that the Government has created a Housing Cartel which controls the rate at which foreclosed or seriously delinquent homes are liquidated and the requirements to receive a government loan to buy your home. The major banks, which now are the main originators of government mortgages (read virtually all mortgages), are under the government’s regulatory thumb and move not a muscle unless they get the word from the White House that they are “free to … (0 comments)
Many years ago I learned the difference between Risk and Uncertainty. Here’s my take. Risk is the probability of drawing to an inside straight in poker, or rolling 7 in a game of craps. You know the odds and either you win or you lose.
Uncertainty makes a game much more difficult to play. With uncertainty, you don’t know whether you can draw another card or not, or if a card will disappear from your hand, or even if your cards may change faces before your eyes! Or, you may not … (0 comments)
For fix and flip investors, who take virtually unsalable homes, make them new again for consumers and sell them, the last couple of years has presented a challenging environment. The cartel is withholding properties from the market (hoarding!) and declining to sell them at prices that allow them to be properly rehabilitated for a potential homeowner to purchase.
For rental investors, the market is also difficult. While rental demand is very strong, financing is a challenge and suitable homes are slow to come on the … (0 comments)
Face it, the Federal Government has effectively nationalized the housing finance industry. This is true for new loans and for how FNMA, FHLMC and FHA are liquidating their foreclosures and negotiating short sales. The government has acted to make obtaining a mortgage much more difficult, and is holding enormous numbers of Colorado and Denver homes, in particular, in inventory, waiting to sell them at better prices – they hope – in the future. If the big banks were to write down the value of their houses and mortgages to prices at … (15 comments)
Upside down housing pie is about as tasty as eating humble pie, yuk! If you owe more than your house is worth on the Denver market today, you are eating “Upside Down Housing Pie” every month when you make your mortgage payment – making a payment on a loan that is larger than value of your home. Two key factors are at work here: if you have a job and your personal finances are OK, you are likely to keep making the payments simply because you need a place to live for you and … (1 comments)
The current market in Colorado and nationwide relies on this basic stool. The first leg is Distressed Sales v. Foreclosures; the second leg is the folks who owe more than their home is worth; and, the final leg is the rate at which the Government and major banks feed properties onto the market, effectively controlling prices waiting for better times to help them liquidate foreclosed houses from their books. Over the next few days, I will discuss each of these legs. I will also lay out my assessment of … (0 comments)
The Government Housing Finance Cartel – FNMA, FHLMC and FHA - want Stable to Slightly Rising Prices, So Be It!
;)
;)
