The Collected Works of Author and Blogger Larry Roberts

Archive for December, 2011

This was a million dollar home. Take a good look at that picture, and tell yourself, that was a million dollar home. It doesn't feel right, does it? I understand that people want to live down by the water, but do they really want to live in a yellow shoebox? Someone thought this tiny ugly house was worth a million dollars in 2005. Crazy! The bank took this back for $825,000, probably the outstanding balance on an 80% loan. This asset manager is not delusional, so he is trying to get out at $640,000. The price is still outrageous, but relative to the competing listings, it will probably sell near asking. Even the beach is seeing 35% declines from the…[READ MORE]

Bankers foster the idea that strategic default on a primary residence is immoral. Bankers want borrowers to continue to repay loans even when it is not in the borrower's best financial interest to do so. I and many others have argued borrowers have a greater moral duty to do what's in the best financial interest of their family. Obviously, bankers disagree. In reality, this isn't a moral issue at all. It's all about money. Bankers want to make money, and making moral arguments is a stigma of convenience. If they were on the other side of the transaction, they would make the opposite point. I know this because they were on the opposite side recently, and they did make the…[READ MORE]

Borrowing costs are likely to increase in 2012 for a variety of loans. The lower conforming limit will push many borrowers to either the FHA or the jumbo market where borrowing costs are higher. The FHA may also raise its borrowing costs again to cover the inevitable losses from the ongoing decline in home prices. Further, the new rules on conforming mortgages will push up costs on loans which do not conform. The result of higher borrowing costs will be greater pressure on home prices. If borrowing costs go up, affordability declines, and it's only affordability which will put a floor beneath home prices. New rules would raise mortgage costs By JEFF COLLINS / THE ORANGE COUNTY REGISTER -- December…[READ MORE]

Prices across most of Orange County continue to decline. The OC Register reports prices have hit a near three-year low. My own analysis of the MLS data shows Irvine teetering on the brink of taking out the 2009 low and setting a new eight-year record low. O.C. home prices hit 31-month low December 13th, 2011, 9:39 am Orange County’s home pricing got hit with autmun’s chill, as builders had a record-worst sales month. DataQuick reported this morning that 2,297 residence sold in November. That is up 1.8% from a year ago. That gain came at a price. Literally. Median selling price was $400,000 — the lowest since April 2009 and off 8.0% in a year. Orange County’s median first hit $400,000…[READ MORE]

The loan limit on FHA loans is now $729,750. The venerable FHA which was founded to provide loans for low to middle income Americans is now being used to subsidize the mortgages and the house prices of high wage earners in places like Irvine. The government should get out of the housing market. Even the government knows this, but when removing its support causes house prices to weaken, so does the resolve of those in government to get out of the housing market. Obama signs extension for higher FHA loan limits by JON PRIOR -- Friday, November 18th, 2011, 10:21 am President Obama signed into law a government spending bill Friday morning effectively reinstalling higher conforming loan limits for the…[READ MORE]

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