The Collected Works of Author and Blogger Larry Roberts

Archive for 2012

Everyone can't own a house. We tried that during the housing bubble, and it didn't work out very well. First, by pushing everyone into home ownership, it raised prices to unsustainable levels. Second, doing so by giving unqualified buyers dodgy loan products created instability in the market resulting in a credit crunch and a market crash. Increasing home ownership is a laudable goal, but there is always a segment of the population that isn't cut out for home ownership. Some people need the freedom and flexibility of renting to pursue career opportunities. Some people simply don't have the financial discipline to consistently make mortgage payments to sustain home ownership. The big lesson we should learn from the housing bust is…[READ MORE]

The banking cartel began restricting MLS inventory in 2012 by refusing to foreclose on delinquent mortgage squatters. Instead, they embarked on an aggressive can-kicking campaign of loan modifications to reduce the number of foreclosures overall and spread them over time. As a result of the reduced flow of REOs onto the market, MLS inventories plummeted, and prices began to go up. The policy was so successful in 2012, the banking cartel plans more of the same in 2013. Lenders know they are bagholders, so they hope with restricted supply and a compliant media willing to pour on the kool aid, lenders can raise the value of the sack of shit they hold on their balance sheets. Since we no longer…[READ MORE]

This the final logical step of the housing bubble and the bailouts that followed.  The banking losses have slowly been transferred to the taxpayers, then from them to the Federal Reserve.   It's been a long process and below is brief explanation the slow of transfer of losses to private banks all the way to the Federal Reserve with assistance the Federal Government over the course of five years.  We need to review a little bit to see how exactly did we reach this point and why the Federal Reserve bailout(s) will occur. A long crazy road When the housing bubble first started to burst, the first entities to feel it were local banks or mortgage bankers like Downey Saving…[READ MORE]

Have you noticed that most of the human interest stories from the housing bubble have no heroes? The housing bust has brought out the worst in mankind. Every party involved seeks to avoid any financial responsibility while simultaneously looking for ways to game the system to their advantage. The cast of characters includes lenders, realtors, delinquent mortgage squatters, holdover tenants, mortgage brokers, basically anyone involved with real estate. Today's featured article describes some of the nefarious characters, looks at their motivations and false beliefs of entitlement, and illustrates what happens when everyone is wrong, greedy and stupid. Owner leaves his loft empty — then sees a man living inside The owner had walked away, expecting a foreclosure that never came.…[READ MORE]

The home mortgage interest deduction serves to inflate house prices in high income areas without significantly promoting home ownership. Further, it costs the federal government $100,000,000,000 a year, which makes it a target of deficit hawks in Congress. The deduction has widespread support among taxpayers despite the fact only a select few gain any benefit from it. This support makes it a sacred cow in Washington, but it's starting to look increasingly likely that some compromise in the fiscal cliff debate will curb this benefit. If it does, the so-called housing recovery in high income areas like Coastal California will be stopped dead in its tracks. Long-treasured mortgage interest deduction may face changes 'Fiscal cliff' debate has put home mortgage…[READ MORE]

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