The Collected Works of Author and Blogger Larry Roberts

Archive for June, 2012

President Barack Obama's housing policy has been assailed by both sides of the political spectrum. The Right criticizes him because any government involvement in the housing market is socialist meddling (I happen to agree with the Right on this issue). The Left criticizes him for not going far enough to give free money and other perks to loan owners. Personally, I think Obama has navigated the political waters very well on housing. He has done enough to placate the critics in his own party, but he hasn't done enough to actually matter. In other words, Obama's housing policy has succeeded wildly by failing spectacularly. I wrote about Obama's housing policy on two other occassions. Obama’s housing policy has lead to…[READ MORE]

The reports of declining shadow inventory are wrong. Since lenders slowed their processing of REO inventory, shadow inventory stopped getting any smaller. As CoreLogic noted in their recent report, "the flow of new seriously delinquent (90 days or more) loans into the shadow inventory has been approximately offset by the equal volume of distressed (short and real estate owned) sales." In other words, lenders are only treading water, and shadow inventory will be around indefinitely. Shadow inventory liquidation will prevent any meaningful and sustained house price appreciation. Either through short sale or REO, these properties must be sold, and potential buyers know this. Back during the housing bubble, people believed if they didn't buy then, they would be priced out…[READ MORE]

Have you ever gone into a high-end retail store to look at a sale item advertized at 50% off? When you see the asking price you think to yourself, 50% off a WTF asking price is still way, way too high, right? realtors play that game too. And what's really shocking is that they openly admit it. They actually admit to manipulating buyers with false comparables to convince buyers outrageous house prices are reasonable. What do you expect from a profession that trains its salespeople at the Gap? Overpriced 'setup' houses are used to sell other nearby homes Real estate agents are using overpriced properties as negative examples to sell similar homes with lower asking prices. By Kenneth R. Harney…[READ MORE]

I have profiled many stories of the capricious nature of the housing bubble and how it impacted people for better and for worse. The daily HELOC abuse posts have covered the odious behavior of borrowers from all walks of life. Usually I relegate those stories to the bottom of the daily posts because they are so common they no longer rise to the definition of "news." However, when I discovered today's featured property I was astounded at the scale of the HELOC abuse. When I did a search on the name of the owner I came across an interesting back-story of divorce, deceit, and elder abuse. The story is so compelling, I decided to make it the focus of today's…[READ MORE]

Banks are slowing their acquisition of foreclosures to reduce their standing inventory of REO. They are also slowing the rate at which they are selling on the MLS and putting fewer and fewer homes for sale. Delinquent mortgage squatters are not taking up the slack and listing their homes as short sales, primarily because they get a free ride if they simply wait and do nothing until the bank finally forecloses. With both banks and loan owners choosing not to list their homes, the inventory available for sale on the MLS has fallen substantially. Until the incentives change, neither banks or loan owners are going to replenish the MLS inventory. Tight supply is forcing potential buyers to compete for the…[READ MORE]

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