The Collected Works of Author and Blogger Larry Roberts

Archive for June, 2011

Back in March, I wrote about the future of IHB news and real estate analysis. In that post, i made the following observation: Data is important, isn't it? It's a shame the NAr has gone down the path it has. Few reliable sources of real estate analysis and information exist, and few signs the NAr is going to become one of them. That leaves a void. Uncharted waters buyers must navigate without a reliable guide. It's a void we seek to fill here at the IHB. We are in the process of assembling our own private database of housing and related economic statistics. Over the next several weeks as I have time to digest the new information, I plan on…[READ MORE]

Lenders and borrowers are stuck with each other. Lenders know everything about their borrowers, and most lenders believe their borrowers are capable to making their mortgage payments. Unfortunately, when they are severely underwater and paying more than a comparable rental, borrowers don't want to make their payments. A poor compromise is a loan modification. They haven't worked out very well. Why is housing market stuck? This family offers one answer By Bob Sullivan -- June 27. 2011 CHICAGO — Ron and Cheryl Schmalz think they know one reason the U.S. housing market is stuck. They just spent more than two years and created about 50 pounds' worth of paper trying to get a $300-per-month modification to their mortgage. Whoa! Wait…[READ MORE]

Last September I noted the GSEs were expediting their foreclosures and REO sales and this behavior was going to threaten the banking cartel. The GSEs are still at it, and they are undercutting bank REO pricing to sell their inventory. Take the property as is, or take nothing at all. Foreclosures for sale, all homes sold as is By Kenneth R. Harney, Friday, June 24, 8:21 AM Looking for a deal where the home seller pledges in advance to contribute potentially thousands of dollars to your closing costs? If so, check out the summer sale terms available from two of the largest and most motivated sellers of foreclosed homes in the country: Fannie Mae and Freddie Mac. You may know…[READ MORE]

The investors who financed the Astoria at Central Park West lost their grip on financial reality. When prices hit the floor, they wanted to leave with their money, but they couldn't find the door. Now, they are stuck with a loser investment, and they have few good options to get out. High density real estate costs High density residential construction costs are the biggest variable in determining the type of construction a specific project can support. The income must be sufficient to provide a return relative to those costs for a project to go forward. The first major cost barrier comes when a project goes from three stories built on grade to four stories over parking (aka podium construction). A…[READ MORE]

Strategic default is often the wisest course of action for a family to take. Lenders are hoping to escape disaster while borrowers and attorneys partner to leave their mark on lender's balance sheets. In the future, the threat of strategic default should make lenders more reluctant to make stupid loans with payments greatly exceeding comparable rents (more on that soon). However, after a strategic default, what is the borrower to do? I think they should get out and move on with their lives because once they quit paying, it is only a matter of time before they must leave. This lingering uncertainty takes an emotional toll on families that isn't necessarily offset by the savings. Most borrowers in default don't…[READ MORE]

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