Sunday, November 30, 2008
Here's Ben Stein's column from today's New York Times. Now, I have to say that I love love love love love Barack Obama. And I love Ben Stein, too, but not in the same way. Ben questions Obama's choices for his economic team and also asks about how effective public works projects are in bringing the economy around. Hmmm. Interesting food for thought.
Friday, November 28, 2008
Tuesday, November 25, 2008
I hope you find many things to be thankful for this Thanksgiving!
Sunday, November 23, 2008
Two government programs intended to help hundreds of thousands of borrowers avoid foreclosure are having negligible effects, a top Bush administration official acknowledged Wednesday. One program will be revamped immediately, and the other possibly in the near future.
“The response has not kept up with the need,” Steven C. Preston, Secretary of Housing and Urban Development, said to the National Press Club. “Many Americans who should be getting help are not getting help.”
The FHASecure program announced in August 2007 has helped only about 4,000 delinquent borrowers, Mr. Preston said. The other, Hope for Homeowners, has received just 111 applications from distressed homeowners since it was introduced on Oct. 1. He outlined changes intended to encourage more participation in the Hope for Homeowners program.
Under the new rules, lenders would be allowed to take a smaller loss. New loans can be made for 96.5 percent of the home’s current value, rather than the previous 90 percent. Even with the changes, borrowers would still have to pay back half of any appreciation to the government if they sell the house or refinance."
Bizarre. Thanks, Dana Dukelow, for this article. Why aren't more distressed homeowners seeking assistance?
Friday, November 21, 2008
Wednesday, November 19, 2008
"Los Angeles County's median home sales price was $355,000, down 29% from a year ago.”
"Low prices did drive sales up 56% from a year ago. But a market bottom remains elusive, and a rebound in prices is not on the horizon." (Yes, I know this is not good news.)
"Last month's Case-Shiller Home Price Index, which tracks home sales by price tiers, showed that Los Angeles-area homes priced in the bottom third of the market had fallen 42% from their peak prices by late last summer -- but those in the top third had dropped 21%."
Mr. Hong also points out that foreclosed homes have dragged down the average price. Here’s how that works. If the majority of homes on the market are foreclosures with their lower prices, the majority of sales will be foreclosed homes with their lower prices as well.
Jeremy Oberstein, the article’s author, also cites a market index for both cities. It is based on a month-to-month ratio of new listings, active listings and days a house is listed as available on the market. Burbank’s market index for October is 0.41, and Glendale’s is 0.32. An index higher than 1.20 indicates a healthier market for home sellers, while a figure less than 0.80 reflects a more advantageous market for home buyers. I have emailed Mr. Oberstein and asked about the source of the index data.
Here are the relevant quotes from the Burbank Leader article:
"In Burbank, the average sale price for a home inched up to $544,166 in October, slightly higher than September’s figure and 11.3% less than the same point in 2007."
I'll list the new FHA guidelines once they're set.
As always, thanks to lender Dana Dukelow for this info!
Monday, November 17, 2008
Margie lost her home in the Sylmar fire this weekend. I can't imagine how terribly she must feel. My thoughts and all good wishes are with her.
Sunday, November 16, 2008
This article by Matthew DeBord appeared in today's L.A. Times Opinion Section. The title and subtitle just about say it all: "The Gang's All Here - The dream of owning a house turns into reality shock when the neighborhood is home to drug turf wars and bikers." Mr. DeBord and his family purchased a home in Glassel Park last year and were "following a particular gentification script." They had some expectations that this marginal neighborhood was slowly improving -- yes, they did due diligence and checked it out before they bought -- but they found that the Avenues gang is still firmly entrenched there. And it probably will be for years to come.
The article is touching and true. It puts the lie to the idea that if a locality's homes obtain "correct price discovery" then wonderful people will flock to buy homes there and magically turn the area into a dream neighborhood. No, they won't, necessarily -- some neighborhoods will still be degraded, regardless of attractive home prices. Gangs, crime and blight move in and become impossible to get out. And the community stays a less desirable place to live, no matter what the average home price is. Hats off to DeBord and his family for having the heart, guts and sense of humor to stick this out.
Saturday, November 15, 2008
Confused about the plethora of mortgage workout programs? Me too. Finally, here's an easy-to-read chart that details specific programs, eligibility, restrictions, etc. Please feel free to cut, paste, and send this on to anybody who may be having difficulty paying their monthly mortgage. Thanks for this, C.A.R.
Friday, November 14, 2008
I just returned from a week in Paris. Yes, I know; I'm a lucky, lucky person and we had a great time. Anyway, when I was last there eight years ago, I saw maybe one real estate office the entire time I was there. And now, there's a real estate office on every block. With beautiful pictures of apartments and flats for sale in the window. And they're not cheap -- studios in nice neighborhoods seem to be listing for $450,000 and up. I read that real estate has increased in price in Paris by 79% since 2005! I also understand that the Paris real estate market has slowed quite a bit (I have no knowledge of lending, title or mortgage issues there). So we're not the only country/state/city that had a real estate run-up and is now having problems, it seems.
Tuesday, November 04, 2008
Monday, November 03, 2008
Sunday, November 02, 2008
I take issue, though, with a couple of statements in the article. First, mid-way through the article and Ms. Cooper's story: "Although Ms. Cooper couldn't see it, the wheels were already coming off the subprime bus." C'mon. Everybody who thought about this process at all figured out in advance that many people would eventually not be able to pay back their huge debts. This is why usury laws have existed throughout history. Also, "Hidden fees meant brokers could easily make between $20,000 and $40,000 on a $500,000 loan." Huh? How hidden could fees be when they're thoroughly itemized at closing? And all states require complete itemization as part of their consumer protections. And $20k to $40k? The standard origination fee is 1%, and that would be $5,000. Yes, there are garbage fees like processing, document fees, etc., but I've never, ever heard of them amounting to more than 2% of the loan. But whatever; it's a great article anyway.
The second article is by my new favorite economic columnist next to Ben Stein, Robert J. Shiller. Titled Challenging the Crowd in Whispers, Not Shouts, and it's about the group-think that led the Fed, prominent economists and other major financing institutions to ignore the mortgage market meltdown until it was too late. The article's tag says, "A taxi driver seemed to sense what economists didn't." Uh, yeah.