The Collected Works of Author and Blogger Larry Roberts

Archive for March, 2012

When subprime borrowers defaulted and lenders foreclosed, the bottom fell out of the housing market. As the distress from toxic mortgage debt worked its way up the housing ladder, each subsequent rung collapsed. Only the upper tiers remain inflated, although probably not for much longer. With the collapse of the bottom of the market, the equity vanished that is necessary to sustain the upper levels of the housing market. In order for the housing market to find a stable bottom, first-time homebuyers must come forward to absorb the distressed inventory. Unfortunately, the typical pool of first-time buyers composed of recent college graduates can't find jobs, and many are burdened with so much student loan debt they can't qualify to buy…[READ MORE]

Last fall I documented Desperate for cash: BofA cuts 30,000 jobs, ramps up foreclosures and Bank of America foreclosure notices increase 116%, spring 2012 rally doomed. It's spring now, and although current bank inventory on the MLS is low, the pipeline of foreclosures is still quite large, and now properties B of A began foreclosing on last fall are already coming to market (see today's featured property). It has begun. Home repossessions set to jump in 2012 By Jon Prior Analysts expect between 900,000 and 1 million homes will move from delinquency into REO in 2012, back to levels seen before the robo-signing slowdown. Servicers moved roughly 800,000 properties through the foreclosure process and into REO liquidation in 2011, according…[READ MORE]

Treasurys plunge as traders, Fed bet on economic strength; mortgage rates may creep up By Associated Press, Published: March 14 WASHINGTON — The bond market is betting on a stronger economy. Prices for U.S. Treasury debt plunged for the fifth straight trading session Wednesday, and the yield on the benchmark 10-year note spiked to its highest level since October. Money poured out of bonds and into stocks after rosy words on Tuesday from the Federal Reserve gave traders confidence that the economic recovery is strengthening. Major stock market averages are at or near four-year highs. Treasury yields — and interest rates that take their cues from Treasury yields, including mortgage rates — remain near all-time lows. So while mortgage rates…[READ MORE]

B of A is working to obtain maximum public relations value from the settlement agreement. Based on articles like this one, it looks like B of A is the most generous (and stupidest) bank on the planet. BofA to slash mortgage balances by $100,000 or more By Les Christie @CNNMoney March 9, 2012: 3:09 PM ET NEW YORK (CNNMoney) -- Bank of America will significantly slash mortgage balances for as many as 200,000 borrowers. As part of the $26 billion settlement reached between the five major mortgage servicers, the federal government and the attorneys general of 49 states and District of Columbia last month, Bank of America (BAC, Fortune 500) customers who qualify could see their mortgages reduced by an…[READ MORE]

Rents have been rising in Irvine and in Orange County since early 2010 when we began to pull out of the recession. The trick is to identify the reason for this increase. If it's due to a recovering economy, then the recent rent increases are normal and sustainable; however, if it's due to another cause, the recent uptick in rents may be a bubble waiting to pop. Some amount of the increase in rents is likely due to improved economic conditions. For as bad as the recession was, and for as weak as the recovery has been, the economy is growing. But why else could rents go up? The plethora of foreclosures in Orange County forced many former loan owners…[READ MORE]

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