The Collected Works of Author and Blogger Larry Roberts

Archive for January, 2013

Everyone wants to make money for doing nothing. Learning about investing takes time and effort, and the results are far too slow to satisfy most people. Plus, you have to sell the investment and pay taxes on the gains. It's too much hassle. Real estate is so much better. Everyone is already an expert on real estate (or so they think) because they live in a house or condo. No learning is required, and when people get lucky and catch a bubble, they get to pat themselves on the back for their great financial prowess. And best of all, they don't have to sell a house to get the cash. Banks will give them all the money they want with…[READ MORE]

Politicians and bureaucrats proposed many bailouts ostensibly to benefit homeowners that really benefit banks. Loan modifications are a classic example. Politicians crafted these programs to "keep people in their homes" when they merely transferred a few more payments to the banks before the borrower imploded. Each time they bring out a new program or proposal, it's always sold on the merits to "struggling homeowners." The best thing for most loanowners would be to put them out of their misery in a foreclosure, but that would cost the banks billions of dollars, and politicians would have to listen to the sob stories of millions of voters, so alternatives that transfer these losses to US taxpayers are frequently explored. Today we have…[READ MORE]

Everyone is cheering the bottom of the housing market, and the false assumption is that all properties will rise in price at a rapid rate as housing "recovers." Properties priced below the conforming limit will almost certainly continue to rise thanks to restricted inventory and record-low interest rates, but the move-up market is a different story entirely. As I pointed out last week, Delinquent jumbo loans in Coastal California pollute bank balance sheets. But it's not just Coastal California that will feel pain in the jumbo market. The jumbo market is not supported by government-backed loans, and as Mike pointed out over the weekend, these loans are subject to new more stringent regulations regarding amortization, appraisal, and debt-to-income requirements. But…[READ MORE]

Warning! Don't read today's post if you have a weak stomach or a strong affinity for consumer debt. This is your only warning. Hang on, Alice, as we bolt through the rabbit hole on an adventure to financial Wonderland. Come with me on a fantastic journey to the Great Lakes to save fish falling prey to evil bloodsuckers, and along the way we will save borrowers from the evil of debt peddler, Louie the Lender Lamprey. The Sea Lamprey and the Great Lakes Prior to canals of the nineteenth century, the Great Lakes were a thriving fishery. With over fishing and the introduction of the sea lamprey through the canals, the fisheries of the Great Lakes were devastated. According to Wikipedia: The Sea lamprey (Petromyzon…[READ MORE]

These new proposed rules are more than just guidelines, they have liability consequences for the lenders under the new Dodd-Frank.   Qualified Mortgages are much more than just redefined Fannie Mae and Freddie Mac loans. If fact, I thought Qualified Mortgages were only going pertain to GSE loans.  Qualified mortgages guidelines encompass loan products such as prime, sub-prime, government sponsored, private, jumbo and even seller financed second liens.  Appraisals have been targeted too with special conditions for flipping.  There have also been new rules defining compensation and fees, but these are not the confusing rules.  However, lenders are hiring compliance experts to help interpret and conform to these new Qualified Mortgage rules. What makes these rules so difficult to understand is…[READ MORE]

Page 1 of 6123456