The Collected Works of Author and Blogger Larry Roberts

Archive for 2010

Is shadow inventory all in your head? Is it real? Are there really debt zombies roaming the shopping malls spending the money they should be putting toward their mortgage? Home ownership in California means you gorge on HELOCs when times are good, and squat in luxury when your creditors cut you off. Its a great system for Californians. They get to spend as they please and pass the bills off to the rest of America in taxpayer bailouts. I see no reason to believe it will not happen again soon. Welcome to Zombieland: Ladera Ranch, California By Pat Regnier, assistant managing editor -- December 7, 2010: 4:10 PM ET ORANGE COUNTY, Calif. (MONEY Magazine) -- Joshua and Irene Vecchione are…[READ MORE]

In its obsession with home ownership, the government has been ignoring the one group most needed to stabilize housing prices: cashflow investors. Several weeks ago, I asked the question Should Government Mortgage Subsidies Be Offered to Cashflow Investors? Most readers said no. Personally, I would like to see the government get entirely out of the housing market, but as long as they are determined to support prices, perhaps they should look for policies that will be more effective. As Shadow Inventory Grows, Time for More Subsidy? By: Diana Olick -- Monday, 22 Nov 2010 As of the end of August, there were 2.1 million properties either in the foreclosure process or headed for foreclosure, according to CoreLogic. It's come to…[READ MORE]

Well meaning people are often wrong. The foreclosure process -- essential to the cleansing of consumer debt and the recovery of the housing market -- is very painful for the families that must endure it. Many on the left of the political spectrum are pandering to the masses facing foreclosure and proposing policies that would remove the negative consequence of foreclosure for those who over borrowed. Unfortunately, removing these consequences is the essence of moral hazard: if people don't experience consequences of their foolish actions, they tend to repeat the mistake. John Taylor: Foreclosures Are the Mortal Enemy to Economic Recovery Lori Ann LaRocco -- Monday, 29 Nov 2010 -- (edited for brevity) The foreclosure crisis still divides us into…[READ MORE]

Are you ready to carry your neighbor. Some time ago, I wrote about the problems California HOAs are having with delinquent properties the banks do not foreclose on. The amend-extend-pretend policies of lenders is fraught with unintended consequences. The obvious costs to lenders is lost revenue from squatters who get to stay in their homes without making any payments, but lenders are not the only parties involved who aren't getting paid. Local taxing authorities and Home Owners Associations (HOAs) also are not being paid. The taxes will get paid eventually because property tax obligations survive the foreclosure. Whatever bills the old owners left behind are the responsibility of the new owner. Bills due to HOAs are only paid after mortgage holders are paid in…[READ MORE]

Not long ago I noted, Low Interest Rates Are Not Clearing the Market Inventory. Well, I am not the only one who has noticed. Richard Fisher, President of the Federal Reserve Bank of Dallas, has also noted that low interest rates will not fix the ailing economy, but super low rates will have many deleterious effects not anticipated by others at the Fed. Dallas Fed president: Low interest rates won't spark demand by JACOB GAFFNEY -- Monday, November 8th, 2010, 3:28 pm The environment of exceedingly low interest rates is great for banks, according to Richard Fisher, President of the Federal Reserve Bank of Dallas, but is doing little to help the overall economy get back on track. "Despite their…[READ MORE]

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