The Collected Works of Author and Blogger Larry Roberts

Archive for January, 2014

Excessive debt-service burdens reduces a borrower's ability to leverage themselves to buy houses at today's inflated prices. During the 00s lenders saddled borrowers with excessive loads of debt: housing, car, consumer, student. Debt was cheap and apparently getting cheaper every day, so neither lenders nor borrowers concerned themselves with worries of repayment, particularly with housing debt because the house was supposed to pay that off for the borrower, the borrower never needing their own income or savings to repay. Like all unsustainable constructs, it went on until it collapsed of its own weight in excess. In the past such episodes of excess were followed by painful purges, most painful for bankers who didn't get repaid; however, this time around, with…[READ MORE]

David J. Stern, the infamous robo-signer, lost his law license. He walks away with the $58 million he earned from selling his law firm in 2010. Delinquent mortgage squatters in Florida will still lose their homes. Nobody symbolizes the foreclosure purge like David J. Stern, the former owner of the largest of Florida's foreclosure mill, now defunct. Mr. Stern and his associates filled out thousands of foreclosure filings and routinely fabricated paperwork when the original lender files missed key documents. This fabrication of paperwork infuriated judges who didn't want to see the public record inundated with forged documents. David J. Stern was never charged with or convicted of any crime, and the people who lost their homes in foreclosure were…[READ MORE]

The housing market shows early signs of a new housing bubble; market psychology shifts toward foolish optimism, and lenders provide toxic loans to enable foolish buyers. The rapid increase in house prices since early 2012 concerns many housing market analysts. Federal reserve economists noted the 2013 housing recovery was different, in a bad way. Further, Mark Hanson and Nobel prize winner Robert Shiller warn of a housing bubble because of rising prices, excessive valuations, and changing consumer psychology. In the post OCHN Housing Market Update: Is OC forming a bubble?, I argued that we are not in a housing bubble -- at least not yet. My analysis of value -- a method of establishing value that properly identified the housing…[READ MORE]

If you repeat something enough times, does it make it true? One of the great Real Estate canards of the past year is the “myth of shadow inventory”. The realtor community had been drum beating this meme throughout 2013 in an effort to show how strong the market has been, and why you need to buy because inventory isn't coming back.  A simple Google Search for that phrase yields hundreds of articles posted just last year.... A myth-busting cacophony, or conspiracy, if you like. But does repeating that shadow inventory is a myth mean it’s true? I don't think so. Yes, there are fewer foreclosures thanks to market interference/consumer protective laws like California’s “Homeowner’s Bill Of Rights” and Nevada’s similar…[READ MORE]

 The price of gold is heavily manipulated. On Monday, January 6, a sell order for 4,200 contracts of February gold futures was executed; all at once.  If you are familiar with the gold futures market, and who is, you would know that a sell order for 4,200 contracts of gold futures represents a future sale of 420,000 troy ounces of gold in February, and the market price of those 420,000 ounces of gold on Monday morning was about $516,600,000.  In words, that is over 516 million dollars or about half a billion dollars.  Another report gives the figure as 11,000 contracts, or  1,100,000 ounces of gold, or 1.3 trillion in dollars.  But the exact numbers are not so important to this particular post.…[READ MORE]

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