The Collected Works of Author and Blogger Larry Roberts

Archive for August, 2014

Changing the timing of loss recognition for lenders could enable them to process their latent foreclosures, recover their capital, and regain true solvency again. Why have lenders permitted millions of delinquent borrowers to squat for years? Why haven't they processed foreclosures in a timely manner and recycled much-needed supply back into the housing market? The short answer is because processing foreclosures forces them to recognize losses they can't afford to take, but what if that wasn't their only alternative? In April of 2009, lenders convinced government regulators to allow them to value loans on their balance sheets based on financial models rather than current market value for those securities, thus beginning the era of "mark-to-fantasy" accounting. By allowing lenders to…[READ MORE]

Adams WWII veteran receives medals that were lost Posted: Aug 14, 2014 5:03 PM PDT, By Alyssa Meyer, Multimedia Journalist ADAMS COUNTY (WAOW) - An Adams County World War II veteran is about to be reunited with some of his prized possessions. Roger Roberts of Adams remembers D-Day like it was yesterday. "We got up in the morning and there were two big destroyers on each side because they spotted a submarine," said Roberts. Even at 97 years young. "We laid on the ground and didn't stand up until the next morning, and then we went from there until Omaha Beach, and then we went in about three miles inland and we set up camp," said Roberts. He was a…[READ MORE]

Proposition 13 was passed ostensibly to prevent rising property taxes from forcing people out of their homes. Proposition 8 may do that anyway. When Proposition 13 was passed, one of the main selling points was to prevent property taxes from rising so people on fixed incomes wouldn't be forced to sell because they couldn't afford their property tax bills. However, Proposition 13 was modified by Proposition 8 to allow property taxes to rise after a price crash so state and local governments wouldn't be locked in to low tax revenues from reassessments during the crash. Whether by accident or by design, Proposition 8 negates one of the primary selling points of proposition 13, and as lenders work to reflate the…[READ MORE]

Higher prices and weak wage growth, particularly among lower income Americans, prices out many marginal buyers. Each prospective buyer investigates current financing terms as part of their process. Lenders apply current underwriting standards and determine the loan balance they will approve and down payment required before they will fund. Since loan plus down payment equals maximum bid amount, prospective buyers house-shop with the budget established for them by their lender. As is human nature, most people spend their full budget. Every buyer goes through this basic process, and since financed purchases dominate the resale market, price levels of individual properties become tethered to the incomes of individuals who desire that property. If high wage earners suddenly became enamored with living…[READ MORE]

With the belief in continued home-price appreciation waning, consumer motivation to buy homes is declining. During the housing bubble mania, everyone wanted to own a house, mostly to capture the gains of rapid home price appreciation. Nobody believed the value of houses could go down, so there was no perception of risk to temper the unbridled enthusiasm to buy homes. Now that house prices have crashed, potential buyers know disaster looms if they buy at the wrong time. This increased caution has many buyers concerned about valuation and the obvious manipulations of the market with artificially low mortgage rates and artificially low for-sale housing inventory. This added concern dampens buyer enthusiasm. Fannie Mae: Americans increasingly skeptical on housing Housing survey…[READ MORE]

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