The Collected Works of Author and Blogger Larry Roberts

Archive for November, 2013

[dfads params='groups=165&limit=1']I expressed the view that new mortgage regulations will prevent future housing bubbles. These new qualified mortgage regulations forbade the measures lenders employed to inflate previous housing bubbles. One of these restrictions caps debt-to-income ratios at 43% of gross income. While this rule contains an interesting loophole (See: The 43% DTI cap strongly favors those with no consumer debt), this loophole fails to penetrate the rigid ceiling on affordability imposed by the 43% DTI cap on gross income and other ability-to-repay rules. If lenders are unable to find "innovative" ways of circumventing this cap, then future housing markets will be very interest rate sensitive. Small changes in a borrower's debt-to-income ratio make a huge difference in the amount financed…[READ MORE]

I trust you are enjoying your holiday. Thank you for stopping by. I have something unusual for you on this holiday. Enjoy Trpytophan Slow Jam. Thanksgiving distraction: Watch the "strangest" Century 21 YouTube video Buying a home? Meet the Tryptophan Slow Jam November 26, 2013 -- Jacob Gaffney The latest ad campaign from Century 21 may end with their brand, but there's not a single mention of the real estate franchise throughout the unorthodox Thanksgiving ad. Indeed, AdWeek is calling the ad "easily the strangest thing Century 21 has ever done," while also offering some of the other unusual marketing tactics being employed at the firm. However, the Tryptophan Slow Jam takes the cake when it comes to ad engagement…[READ MORE]

The mainstream media spins financial reporting to put news stories in a positive light. Apparently, making readers feel good about their investments sells more papers, or perhaps reporters feel a moral obligation to improve consumer sentiment to boost the economy. Whatever the motivation, financial reporting is one area where good news sells, so financial reporters treat us to happy-talk stories, and they often ignore harsh underlying truths. The latest cheery chatter from reporters relieves those whose mortgages exceed their home's value. House prices are up, so fewer borrowers are underwater. That's the good news. The bad news lies just beneath the headlines. Homeowners who owe more on their mortgages than their houses are worth don't really own their properties. The…[READ MORE]

I recently asked What would Watt do as the new head of the GSEs? His public statements support the view he would institute a widespread principal reduction program to loot the GSEs for political gain. Such a policy would be a tremendous boon to loanowners and his colleagues on the political left. His predecessor, Edward DeMarco, fervently resisted such policies because he recognized the moral hazards, and he wasn't motivated to help politicians buy votes. By contrast, Mel Watt is a political hack who would like to dole out taxpayer funds to buy more votes for his party. Senate Rule Change Could Ease Housing Regulator’s Confirmation By Nick Timiraos -- November 21, 2013, 4:30 PM Thursday’s Senate vote to eliminate…[READ MORE]

What makes a city a desirable place to live? Is it history, culture, climate, the "vibe," or is it something more tangible that can be weighed or measured? We could readily compile a short list of quaint or fashionable communities and argue about their subjective qualities. Publications trying to be hip or trendy do this periodically. But in the end, these articles make people feel good about living in one place or another, but they settle nothing. So how can we carefully measure desirability in a way that allows comparisons between one community and another? Do we take a poll and tally the results? Such an effort might reveal which cities have the most fervent admirers because those would be…[READ MORE]

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