Hyperinflation? Back to the 70s?
October, 1 at 11:32 am
That is what Jim Rogers said on CNBC:
The US faces high inflation because of the weak dollar and the Federal Reserve’s policy of printing money to counter the effects of the crisis, legendary investor Jim Rogers told CNBC Thursday.
“There’s no question the US is vulnerable to hyperinflation down the road or certainly the inflation we saw in the 1970s, I would expect that to come back in the foreseeable future, certainly in the next few years,” he said.
Posted in Credit Crunch, The Economy, Real Estate | No Comments »
When is the next wave of foreclosures coming?
August, 31 at 6:14 pm
This Diana Olick blog post might help you answer that question:
Now that Making Home Affordable programs are operational, we do project an increase in foreclosures as we exhaust every available option to qualify customers for modifications and other solutions.
While we have very strong loan modification programs now available, unfortunately, these foreclosure projections reflect the increasing number of customers who will not qualify for loan modification because they have suffered major life events servicers can’t solve…primarily unemployment and underemployment.
Posted in Real Estate | 1 Comment »
Tim Geithner answers your questions
August, 26 at 5:09 pm
Posted in Politics, The Economy, Real Estate | 10 Comments »
The next “leg down” for the housing market
August, 26 at 4:59 pm
If you think the housing market is recovering, you are probably wrong. According to the NY Times:
First American CoreLogic anticipates 600,000 option ARMS to reset within four years.
Option ARMs, which lenders stopped offering last year, gave borrowers four payment options: less than the interest, which increases the balance every month; just the interest; the equivalent of a 30-year fixed-rate mortgage; and the equivalent of a 15-year fixed.
Three-quarters of borrowers take the minimum option, which usually expires after five years or when the balance reaches a cap, generally 110 percent to 125 percent of the original loan, according to the Mortgage Bankers Association.
Posted in Credit Crunch, California Housing Crash, Florida Housing Crash, Real Estate | 3 Comments »
California delinquencies continue to rise
August, 25 at 11:04 am
More bad news for the Golden State. According to the LA Times:
TransUnion expects the percentage of California home loans that are at least 60 days late or are in foreclosure to skyrocket to more than 14% by year-end.
Mortgage delinquencies will continue to rise and set records the rest of this year in California, according to projections to be released today by TransUnion, one of the three big U.S. credit-reporting companies.
California’s overall economic picture is worse than that of the country as a whole. The unemployment rate was 11.9% in July compared with the nation’s 9.4%. What’s more, the whipsaw of home prices from the housing boom and bust was exaggerated in California, leaving more borrowers than average “underwater,” or owing more than their homes are worth.
Posted in California Housing Crash, The Economy, Real Estate | No Comments »
Roubini: risk of a W-shaped recession
August, 24 at 11:12 am
The Financial Times has a piece by Nouriel Roubini and he is predicting more trouble for the U.S. economy.
There are also now two reasons why there is a rising risk of a double-dip W-shaped recession. For a start, there are risks associated with exit strategies from the massive monetary and fiscal easing: policymakers are damned if they do and damned if they don’t. If they take large fiscal deficits seriously and raise taxes, cut spending and mop up excess liquidity soon, they would undermine recovery and tip the economy back into stag-deflation (recession and deflation).
But if they maintain large budget deficits, bond market vigilantes will punish policymakers. Then, inflationary expectations will increase, long-term government bond yields would rise and borrowing rates will go up sharply, leading to stagflation.
Posted in The Economy | No Comments »
Foreclosures keep going up in Florida
August, 22 at 2:38 am
The housing crash in Florida is getting worse. According to the Miami Herald:
As home prices fell and the job picture worsened, the percentage of Florida home loans either past due or in foreclosure hit 23 percent in the second quarter, outpacing any other state in the nation.
The figure represents 807,000 loans, a staggering sum of the roughly 3.5 million mortgages outstanding in Florida.
Posted in Florida Housing Crash, Real Estate | No Comments »
Prime fixed-rate mortgage delinquencies increased in Q2
August, 20 at 12:24 pm
We have been saying this for a long time here on our blog and the latest numbers from the Mortgage Bankers Association (MBA) confirmed it. Our current foreclosure mess is not a subprime problem anymore, but it is now moving to prime mortgages. According to the MBA:
The delinquency rate for mortgage loans on one-to-four-unit residential properties rose to a seasonally adjusted rate of 9.24 percent of all loans outstanding as of the end of the second quarter of 2009, up 12 basis points from the first quarter of 2009, and up 283 basis points from one year ago.
“While the rate of new foreclosures started was essentially unchanged from last quarter’s record high, there was a major drop in foreclosures on subprime ARM loans. The drop, however, was offset by increases in the foreclosure rates on the other types of loans, with prime fixed-rate loans having the biggest increase. As a sign that mortgage performance is once again being driven by unemployment, prime fixed-rate loans now account for one in three foreclosure starts.
Evidently, high unemployment is pushing more prime borrowers into the foreclosure process and that was also reflected in the RealtyTrac foreclosure numbers published last week.
Although mortgage rates have come down a bit over the past few weeks, they still remain stubbornly high for the average family which in this weak economy, encourages more and more people to consider foreclosure or short sale as an option to get out of mortgage payments they just cannot afford.
Yes, it is true that 5% interest rate is still low by historical standards, but let’s keep in mind that many of these borrowers (even the ones with perfect credit scores) are trying to get out of teaser rates, interest-only loans, and even negative amortization loans. In other words, loans that allowed them to buy houses they just couldn’t really afford. Now that the free money is gone, these homeowners find it extremely difficult to afford even a low 5% mortgage rate.
The fact is that we can expect to see more prime borrowers default on their loans in the coming months, which will put even more pressure on the weak housing market. I wouldn’t expect a true recovery in the housing market until all these bad loans our finally flushed out of the system. It will take time but unfortunately time is exactly what many of these families do not have anymore.
Posted in The Economy, Real Estate | 1 Comment »
RealtyTrac: Initial defaults (NOD) in California spiked 15 percent from the previous month
August, 13 at 5:51 pm
The foreclosure mess continues….
Here is the RealtyTrac news release
IRVINE, Calif. — August 13, 2009 — RealtyTrac® (www.realtytrac.com), the leading online marketplace for foreclosure properties, today released its July 2009 U.S. Foreclosure Market Report™, which shows foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 360,149 U.S. properties during the month, an increase of nearly 7 percent from the previous month and an increase of 32 percent from July 2008. The report also shows that one in every 355 U.S. housing units received a foreclosure filing in July.
“July marks the third time in the last five months where we’ve seen a new record set for foreclosure activity,” noted James J. Saccacio, chief executive officer of RealtyTrac. “Despite continued efforts by the federal government and state governments to patch together a safety net for distressed homeowners, we’re seeing significant growth in both the initial notices of default and in the bank repossessions.”
Initial defaults (NOD) in California spiked 15 percent from the previous month, and the state registered the nation’s second highest state foreclosure rate for the third month in a row. One in every 123 California housing units received a foreclosure filing in July, nearly three times the national average. Scheduled auctions (NTS) in California were down 1 percent from the previous month, but bank repossessions (REO) were up 4 percent — leaving overall foreclosure activity up nearly 7 percent on a month-over-month basis.
Posted in California Housing Crash, Florida Housing Crash, The Economy, Real Estate | No Comments »
More houses going into foreclosure in California
August, 13 at 11:25 am
According to the LA Times:
July stats from ForeclosureRadar show that the backlog of California homes in default, but not yet repossessed, keeps growing.
At some point, many of these properties will be repossessed and put back on the market. Some may be kept by the current owners through loan modifications, but that hasn’t happened much so far. Until then, they remain clogging the system as “shadow inventory,” most likely to be foreclosed and sold again.
More repossessions are coming, however, due to the degree to which so many in California are underwater on their mortgages. The average California home in foreclosure has a loan balance of $425,000 but an estimated value of $237,000, ForeclosureRadar says.
Posted in California Housing Crash, Real Estate | No Comments »
