The Collected Works of Author and Blogger Larry Roberts

Archive for October, 2012

Do people who lie, cheat, and steal always do better than the rest of us? Apparently in some professions they do. Obviously, in criminal professions, the people who get ahead are the ones most willing and able to violate the rules. In professions with shades of gray, and real estate sales has some dark fringes, living on the dark side of the shades of gray has financial rewards that seduce many. Real estate sales offers a chance for quick riches with little or no accountability and few educational hurdles to overcome. The profession does attract some good people, but it shouldn't be surprising that such circumstances also attracts the dregs of society. The most odious characteristic of the National Association…[READ MORE]

If there is any justice in our financial system, delinquent mortgage squatters will face negative consequences for receiving their free ride. Right now, millions of people are not paying their mortgages, and the banks are not foreclosing on them. I paid my rent for the last five years and many loanowners struggled to pay their bloated mortgages, but after milking their properties of all the equity, many Ponzis quit making their mortgage payments and have been living payment-free ever since. It's not fair to those who pay for their housing to subsidize those that do not. Delinquent mortgage squatters have been offered every chance to redeem themselves. Lenders and the government are offering loan modifications that have consistently gotten better…[READ MORE]

Spring of 2012 saw a chorus of housing bulls loudly proclaim the arrival of the recovery. All dissent was squelched as the conversation of housing evolved from debating whether or not the market had bottomed to what form the recovery would take. I've never seen such a coordinated effort among journalists to influence public opinion and bolster consumer confidence. Perhaps they think they have a duty to the market. I feel I have a duty to the truth. The bears have not completely gone away. Zero Hedge, Barry Ritholtz, Keith Jurow, and Mark Hansen have remained bearish, and they provide some of the most compelling bearish arguments in the national conversation today. Some of the bulls (like the NAr) dismiss…[READ MORE]

For home inventories to recover, sellers must come back to the market. Since so many loanowners are underwater, particularly at lower price points, very few organic sales occur on below-median properties. Further, since below-median loanowners have a strong incentive to squat until foreclosure, few of these properties are coming to market as short sales. That leaves us with a depleted market that is only be replenished by foreclosures. And as I noted on Monday's post MLS inventory is NOT coming as foreclosure filings dry up, banks are in no hurry to process foreclosures and bring these properties to the MLS. To make matters worse for would-be buyers at these price points, about half of the foreclosures that are processed are…[READ MORE]

What would make a strong foundation for a recovery? First, a housing recovery should be built on solid job growth -- something that isn't happening. Job growth of high-paying jobs would translate to more mortgage originations and purchases by owner occupants. Since job growth stimulating owner-occupant purchases should be the foundation of a recovery -- and since that isn't happening -- the recovery is being built on a shaky foundation.  The recent price rally -- call it a housing recovery if you wish -- is built on two things: 1) lender restricted inventory, and 2) low interest rates. If either of those two factors change, the housing recovery could easily be snuffed out. After all, the real demand behind a…[READ MORE]

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