The Collected Works of Author and Blogger Larry Roberts

Archive for November, 2013

Just in case you didn't know FHA is a government insurance program for lenders. FHA has front-end Mortgage Insurance and regular Mortgage Insurance and it's paid by the borrower.  These rates have greatly increased since 2007. Now a new question is being asked.  Is FHA now one the lenders (really an insurance product) the government tried to band after the housing bust. The FHA is a predatory lender According to the FDIC's Inspector General: "Predatory lending typically involves imposing unfair and abusive loan terms on borrowers, often through aggressive sales tactics; taking advantage of borrowers' lack of understanding of complicated transactions; and outright deception." This happens all the time with payday loans, auto title subprime loans, and even student loans.…[READ MORE]

What is the price for your soul? What would you have to be paid to advocate for something you knew was harmful? Would you feel comfortable creating ads for cigarette companies? Would you work for a lender making subprime loans or HELOCs? How dangerous does a product have to be before you couldn't participate in its manufacture or distribution in good conscience? Even writers and reporters face these dilemmas, particularly those who offer opinions to influence people's decisions and behaviors. Because real estate agents historically spent millions on print advertizing, it's rare to read negative stories about realtors or the health of the real estate market. With so much paid propaganda, they exert a subtle yet powerful control over the…[READ MORE]

Are we witnessing a new sustained housing recovery in California, or are we witnessing a new housing bubble? Some housing bulls postulate the dramatic increase in prices springs from sound fundamentals. Rents and incomes increased, unemployment dropped, and distressed property sales returned to pre-crisis levels. Some housing bears posit the dramatic increase in prices feigns the signs of market health while the patient is still very sick. Prices moved up far faster than rents and incomes (nearly 10 times faster), unemployment lingers, distressed properties lurk in the shadows temporarily removed by lender can-kicking, and the demand depends on fickle investors and artificial government programs and federal reserve stimulus, both temporary measures. Debates concerning fundamentals aside, whether or not you consider…[READ MORE]

The populace was sold on quantitative easing and mortgage interest rate stimulus as a measure to save "Main Street." It was said this money pumped into the economy would create jobs, and the combination of jobs, increased incomes, and low mortgage rates would cause a boom in housing which would elevate loanowners above water. What was sold as a big benefit to Main Street has instead devolved into another massive bailout of the banking industry with few tangible benefits to the people the programs were ostensibly designed to help out. Proponents of these policies can point to the rapid increase in house prices over the last 18 months as a sign of success. While it's true that many loanowners have…[READ MORE]

Is it okay for salespeople to lie to us in order to close a sale? Was your first reaction, "No, of course not?" It is for most people, but when you reflect on it, salespeople are encouraged to lie to us and manipulate us all the time, and we all put up with it. In fact, we train salespeople to do this, and we reward them for it. Don't believe me? Consider this example. ... Does this make my butt look fat? Perhaps this analogy is politically incorrect, but… Imagine you are shopping for clothes in a high-end retail outlet. You are trying on an outfit, and you are concerned about its appearance, so you ask the salesperson, “Does this…[READ MORE]

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