The Collected Works of Author and Blogger Larry Roberts

Archive for 2013

Blair Christopher Hanloh will go to prison for four years. He stands convicted in October of filing false or forged documents that allowed him to fraudulently assume ownership of several houses and rent them out to unsuspecting tenants. Similarly, thousands of borrowers during the housing bubble, and many Rob-signing lenders filed false or forged documents. Both dishonest borrowers and lenders sins are forgiven, and rather than endure prison sentences, the dastardly doers collect bailout checks and spar over properties obtained through subterfuge. Mr. Hanloh should go to jail, but what should become of the miscreants from the housing bubble? Mr. Hanloh isn't the first person to figure out this scam. When the housing bust was fresh, many people walked away…[READ MORE]

Just like FHA mortgage insurance premiums, Fannie and Freddie are also increasing their Guarantee Fee (G-fees).   They have been increasing since 2008, when the government purchased 79.90% ownership in each government sponsored enterprise.  The initial reason for increasing the G-fees was due to the cost of all those GSE-backed loans going into default.  In subsequent years there were other reasons for G-fee increases for example the mortgage tax (collected through the G-fees), and the stimulation of the private mortgage market.   If fact, Federal Government collects so much revenue it's used to help fund the government during the sequester for an extra couple of days FHFA Announces Increase in Guarantee Fees The Federal Housing Finance Agency (FHFA) has directed Fannie Mae and Freddie Mac to…[READ MORE]

Landlords profit by charging high rents and spending little on maintenance. Good landlords charge reasonable rents to avoid excessive turnover, and they spend wisely to maintain the quality of their property. Slumlords charge unreasonable rents, and spend only what they are forced to by regulation and code. Landlords maintain properties to the quality of the neighborhood whereas slumlords deteriorate neighborhoods through deferred and avoided maintenance of their properties. Lenders behave as slumlords. Technically, lenders are not true slumlords; most often they stay off title to avoid any direct responsibility. However, borrowers who are on title but owe more than the property is worth technically own the property, but since the lender's encumbrance exceeds the value, the loanowner rents from the…[READ MORE]

House prices carry price momentum. Once prices start moving up -- or down -- they tend to continue in the same direction for long periods; however, sustainable house price momentum propels on job and income fuel. The only viable source of sustainable housing demand springs from owner-occupants who gain new jobs and increase their incomes. Job creation drives housing demand because new employees relocate to areas near work and bid up prices of available housing stock, both rental and resale. Irrespective of what may happen with financing costs or supply availability, the relentless push of increased housing demand caused by job creation spurs housing momentum. For the last few years economists believed a resurgent housing market was key to economic…[READ MORE]

Mel Watt now runs the Federal Housing Finance Agency (FHFA). As FHFA director, Mel Watt establishes policy for Freddie Mac and Fannie Mae, the government sponsored entities (GSEs). This responsibility gives Mr. Watt tremendous influence over mortgage qualification standards, the secondary mortgage market, and ultimately house prices. As new agency leader, Mel Watt replaces Edward DeMarco, and many housing experts anticipate changes in key policies that may reflate the housing bubble. My disdain for Mel Watt roots in his public statements and policies as a US Representative. While in Congress he steadfastly supported lending quotas to unqualified borrowers, and after the housing bust, he championed efforts to award these unqualified borrowers free money through principal reductions. I asked the question…[READ MORE]

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