Fri 2010-10-08 21:57 EDT

A Mammoth One in Five Borrowers Will Default <<; Real Estate Prices & Mortgages on HousingStory.net

Michael David White

A leading mortgage analyst predicts over 11 million homeowners will default and lose their home if the government fails to take more radical intervention. Amherst Securities Group LP, one of the most respected names in mortgage research, has trumpeted an ambitious call-to-government arms in its October mortgage report. ``The death spiral of lower home prices, more borrowers underwater, higher transition rates (to default), more distressed sales and lower home prices must be arrested.''...

borrowing; default; HousingStory; mammoth; mortgage; net; real estate prices.

PRAGMATIC CAPITALISM Mon 2010-09-20 09:57 EDT

WHITHER CHINA?

Simon Hunt

In all likelihood, China has entered the most critical and taxing period since the country was reopened to the outside world in the 1970s. Domestically, there are a slew of issues, any one of which could create instability...Few can know the full story of what goes on within the State Council, but there appears to be a battle royal being fought over the real estate sector. There are those within the leadership who are concerned that average home prices have gotten too high for most first-time buyers (see our previous visit report). They want to see average prices fall by 10-20% across the country. Against this group are not just real estate developers but local governments and many others within Beijing...In effect, what is being seen is a battle between central and local governments. In our view, this is a fight that central government cannot afford to lose...against a background of cheap money and plenty of credit, house prices across the country have become unaffordable to most first-time buyers...if these price developments continued unchecked the leadership would risk encountering social instability...we doubt there will be any easing of policy until average house prices fall into the 10-20% range. China is transiting into a very difficult period as focus shifts towards sustainable domestic growth and away from short-term measures to defend the 8% GDP mantra. This transition is occurring when the existing leadership is preparing to give way to the new set in 2012, when social stability could be threatened if there are policy mistakes...

China; PRAGMATIC CAPITALISM.

Dr. Housing Bubble Blog Thu 2010-09-16 16:36 EDT

Collapse in Southern California home sales a sign that prices will fall in 2011? The 2005 and 2006 collapse in sales led to prices tanking in 2007. Home prices still inflated after years of bank and government intervention.

drhousingbubble

Southern California home sales have collapsed for July and August. These are typically strong sales months. The summer is usually a solid time for sales but the introduction of government intervention, banks stalling, and toxic mortgages lingering on bank balance sheets have thrown a wrench into the typical home sales patterns. This August was the weakest month on record since August 2007, right when the California housing market was first entering the major price correction phase of the bursting bubble...

2005; 2006 collapse; 2007; 2011; bank; Collapse; Dr. Housing Bubble Blog; Fall; Government intervention; home prices; Inflation; Price; prices tank; sales led; signed; Southern California home sales; years.

naked capitalism Fri 2010-07-23 17:08 EDT

Deficits Do Matter, But Not the Way You Think

L. Randall Wray

In recent months, a form of mass hysteria has swept the country as fear of ``unsustainable'' budget deficits replaced the earlier concern about the financial crisis, job loss, and collapsing home prices. What is most troubling is that this shift in focus comes even as the government's stimulus package winds down and as its temporary hires for the census are let go. Worse, the economy is still -- likely -- years away from a full recovery. To be sure, at least some of the hysteria has been manufactured by Pete Peterson's well-funded public relations campaign, fronted by President Obama's National Commission on Fiscal Responsibility and Reform -- a group that supposedly draws members from across the political spectrum, yet are all committed to the belief that the current fiscal stance puts the nation on a path to ruinous indebtedness...[however] the notion of ``fiscal sustainability'' or ``solvency'' is not applicable to a sovereign government -- which cannot be forced into involuntary default on debts denominated in its own currency...If we can get beyond the fears of national insolvency then there are many issues that can be fruitfully discussed. While inflation will not be a problem for many years, price pressures could return some day. Impacts of exchange rate instability are important, at least for some nations. Unemployment is a chronic problem, even at business cycle peaks. Aging does raise serious questions about allocation of resources, especially medical care. Poverty and homelessness exist in the midst of relative abundance. Simply recognizing that our sovereign government cannot go bankrupt does not solve those problems, but it does make them easier to resolve...

Deficit; matter; naked capitalism; Think; way.

PRAGMATIC CAPITALISM Tue 2010-05-18 15:17 EDT

11 REASON WHY DEFLATION REMAINS THE GREATER RISK

TPC

A nice follow-up here on our earlier piece. David Rosenberg has really nailed the macro picture in terms of inflation and deflation...why deflation remains the greater risk... * Credit is contracting. * Wage rates are stagnating. * Money supply growth is vanishing * The U.S. dollar is strong. * Commodities have peaked. * U.S. home prices are rolling over ... again. * Lumber prices tumbling (down nearly 17% from April 2010 highs) * Wal-Mart is cutting prices on 10,000 items. * Home Depot just cut prices on flowers, fertilizers, lawn equipment and outdoor furniture. * Taco Bell is offering two dollar combo meals. * The April U.S. retail sales report hinted at deflation in groceries, electronics, apparel and sporting goods.

11 reasons; deflation remains; greater risk; PRAGMATIC CAPITALISM.

naked capitalism Wed 2009-11-25 10:14 EST

Ivy Zelman: ``Home prices are going back down''

Edward Harrison of Credit Writedowns

This is a post I wrote overnight about rising delinquencies and shadow housing inventory. I am not convinced house prices in the U.S. are headed higher permanently...The Mortgage Bankers Association is reporting that nearly one in ten households with mortgages are at least one payment behind. That is a record, my friends...Look, the fake recovery is now in full swing. But I expect the recovery to hit a brick wall by 2011, if not earlier. While the proximate cause of my concern is the likelihood of increased taxes and/or reduced spending by the Obama Administration, it is jobs that concern me. See Calculated Risk's post showing the correlation between unemployment and mortgage delinquency and you see the connection. The fact is we have a record number of foreclosures and that is a direct result of rising unemployment. Unemployed people don't have any money, so they don't pay mortgages.

Go; home prices; Ivy Zelman; naked capitalism.

Tue 2008-05-13 00:00 EDT

The Big Picture | Fannie Mae's Home Prices Ex-Foreclosures

"FNM significantly understates home price declines"

Big Picture; Fannie Mae's Home Prices Ex-Foreclosures.

Thu 2007-12-20 00:00 EST

Bear In Mind > Fannie Mae: Systemic time bomb

Bear In Mind > Fannie Mae: Systemic time bomb; half of issued debt bought by non-US investors; risky mortgage exposure 10x capital base; falling home prices drive foreclosures, huge Fannie Mae losses

Bear; Fannie Mae; mind; Systemic time bomb.

Fri 2007-11-30 00:00 EST

Calculated Risk: Florida REO: Priced Below 2002 New Home Price

2002 new 122K, 2006 260K, 2007 foreclosed; asking 100K!

2002 New Home Price; Calculated Risk; Florida REO; Price.