More Foreclosure Problems

It's been over two months since this blog has appeared, probably largely unnoticed, but some serious surgery and hospital time has been a distraction. Meantime the wheels of commerce continue to be spinning ineffectually. The most recent event just took place and is likely to have a major impact on the housing market, and just when we were thinking it couldn't possibly be any worse. A major title insurance company has just announced it will no longer offer title insurance on sales of foreclosed homes. If other companies follow suit, a likely prospect, then that should put a stop to what has become a significant selling sector of the almost non-existent real estate market. All this has come about because major lenders have put a stop to their foreclosure activities because they suspect, with very good reason, that they are not in a legally supportable position to foreclose. The documentation has not been sufficiently verified, and in cases where it has been verified, it has been found wanting. One company holding a huge dollar value of mortgages originated by Countrywide, which was acquired in a scam sale supported by the government by Bank of America, has filed suit because they have discovered on an audit that 97% of the mortgages they purchased did not meet the underwriting claimed by Countrywide. 97%. The industry is in shambles, and not as a result of unintended consequences. With absolute knowledge that loans were being originated at the insistence of the government through Fannie and Freddie that could not have any expectation of repayment, the financial markets jumped all over these instruments, leveraging at unconscionable levels and selling instruments they knew to be worthless to not entirely blameless investors. The government initiated this problem, they continue to exacerbate it with uninformed glee because of a delusional belief that government can solve what private business decision cannot. We may not be doomed, but we're in a hell of a lot of trouble. November 2 may start the process of cleaning things up, but it's going to take at least a couple of rinse cycles to get rid of all the dirt.

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Financial Reform?

The newly passed (in the Senate) Financial Reform legislation has some interesting aspects. in addition to the several hundred new regulatory controls provided to the Executive without Congressional oversight. Also in addition to the fact that nothing is done to assist the small banks in their needs to facilitate lending to small business. Most interesting is the authorship of the Bill, largely at the hands of Chris Dodd and Barney Frank, the two most responsible for pushing Fannie and Freddie in their reckless lending to unqualified borrowers, which lies at the heart of the financial mess the Bill is intended to alleviate. Strangely enough, the same Fannie and Freddie are not even mentioned in the Bill, nor are they constrained in any way from continuing their reckless behavior. It could be that Obama wants this Bill, and it could be a coincidence that Obama, Dodd and Frank were the three largest beneficiaries of Fannie and Freddie political contributions, but I don't think so. Strange also that a settlement has been reached with Goldman Sachs, big numbers to be sure, but nothing compared to the benefits they enjoyed in the AIG bail-out. A bail-out with tax dollars. Now Goldman and the administration can again be friends, and presumably the contributions to those favored recipients can resume. Those favored include but are not limited to, the above mentioned threesome. Threesome may carry some connotation not specifically political, but there has been sufficient written to suggest that all of them may be willing to extend their interest in screwing beyond just the taxpayers.
The administration has some peculiar agendas. They are NOT suing sanctuary cities for violating immigration law. They ARE suing Arizona for voluntarily aiding in the enforcement of immigration law. They are not enforcing voting right violations when blacks are the violators. They did seat Al Franken although there is substantial evidence his win margin was produced by illegal votes of convicted felons. They have interfered with candidates in Senate races in Pennsylvania and Colorado. In the BP oil spill they have appointed an oversight panel composed entirely of environmentalists opposed to drilling, and not one oil expert or businessman. They lie about the meaning of unemployment figures and have spent almost 20 million dollars on propaganda signs extolling the virtues of a failed stimulus package. They have appointed without oversight a new head of financial control in Medicare who holds that he has a love affair with the British Socialist system of health care, and have submitted for approval for the Supreme Court a person with no judicial experience who holds that our court decisions should include a reliance on international law. Most of us are of the opinion that our Constitution made us the best country in the history of the world and we are loathe to surrender those values to an aggregation of laws pursued by a group of failed societies. When another country has surpassed us it will be time for us to consider conforming to that new standard. Until then, let them copy us.
Just to preserve the integrity of this as a real estate blog: Foreclosures are up, prices are flat to down, interest rates are remarkably low. If we can help you in any real estate or mortgage endeavour, please call us.
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Mortgage Confusion?

In one of the publications we receive, intended for mortgage brokers, and designed to present the wares of wholesale lenders plus "informative" articles and editorials, the conflicting information boggles the mind. Within a single column, which cites various sources, the information points to dramatically different conclusions, and sometimes there is conflict within a single source. Case in point. The Mortgage Bankers Association reports that foreclosures hit another record, "perhaps their peak", yet conclude that "If mortgage delinquencies are not yet clearly improving, it also appears they are not getting worse". In the same column it's reported that home sales in April increased "across the board", a result of the tax credit, so not a reliable statistic, just accelerating future sales. At the same time the Case-Shiller Home Price Index reported a 3.2% drop in home prices in major markets in the first quarter. Also at the same time it is widely reported that Jumbo Loans are becoming easier to finance, of interest to a very small segment of the population, yet unreported is the increasing difficulty of obtaining a conventional loan, those financed under Fannie/Freddie guidelines, which affects most of the population. As you probably know, Fannie and Freddie have been forced to de-list their stock from the major exchanges because of too low valuation. It is estimated by some that the ultimate cost to taxpayers of the mismanagement of those institutions is likely to exceed ONE TRILLION dollars, a real tribute to the leadership abilities of Frank and Dodd and other Congressmen. Trying to understand the marketplace is keeping many good people awake at night. Possibly after November some sense of order will be restored.
We have hired as captain of our ship of state an individual with no clear idea of our destination, no clear idea of how to reach it, no ability to hire crew members with any knowledge of the functioning of the system, and an inability to make the simplest decisions, unless we include choosing a tee time. HERE is an article of interest about why we're where we are.

Our office can still arrange financing or refinancing for you, and at rates that are the lowest in years. Call and let us compete for your business.
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Happy Birthday

For just a moment we can reflect on our collective very good fortune to be the beneficiaries of the actions of a small group of people who revolted against the notion that some people are born to be "rulers" and some are born to be ruled. The excitement of the celebrations, of fireworks, inspiring music, and the faces of citizens literally glowing with the joy of simply "being American", fills all of us with a sense of pride and gratitude. As a nation we come together to recognize our greatness. We are the most generous people one earth. We are the most innovative people on earth. We are the most fortunate people on earth. All because a small group of people gathered 234 years ago to put into words the philosophical concept that "All men are created equal". No government can infringe on this notion, and any government rules only with the consent of the governed. We have flourished as no nation before us because we are a nation of individuals, and government exists to secure and protect us as individuals. Tomorrow we'll be back to business as usual, and we are in perilous times. If we can individually recognize, and collectively exercise, the idea that the guarantee of equality is one of opportunity, and not of outcome, we'll probably survive. There are many issues to be addressed, but for today I wanted to join in the feelings of gratitude for being a part of the whole thing. Particularly a great thanks to the dedicated members of our military.
For those wishing more from better writers, go HERE
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Lowest Mortgage Interest In A Long Time

While not directly tied to the 10 year Treasury, mortgage interest tends to track it pretty closely, and today the 10 year dipped below 3% for the first time since last year. This should be incredibly good news for folks looking for a purchase or refinance loan, and it is except for a couple of details. First, loans are tough to come by, they require very good credit and substantial down payments or equity in the case of refinance applications. Second, the folks who have the level of credit and finances that lenders are looking for, characteristically have substantial stock holdings, usually 401K or similar. While interest rates are down, so are stocks, and the valuation of portfolios has taken some severe hits. It's tough to concentrate on other matters when the decline in personal wealth is so sharp and so severe, and the fear of more to come is so pervasive. This government can not accept the reality that taking from one group to give to another group is not stimulating nor creative of job or economic growth. Wealth is removed from those who would utilize it for entrepreneurial gain, creating jobs, and given or redistributed to those whose sole purpose on the planet is developing innovative strategies to take even more.
Obama is a failed President and painfully, for us, demonstrates that you can't expect executive leadership from someone with absolutely NO executive experience. Bad enough that he is hurting all of us directly but he has become a laughingstock in the international community and has diminished the luster that we rightfully enjoyed as leaders and protectors of the free world. Until very recently we were respected or feared by every nation on earth, allowing us to enjoy great freedoms for ourselves and to provide help for those who sought to emulate us, and discourage those who sought to disrupt the rights of others. With some wise choices in November, and again in 2012, we'll begin the restorative process, and we will recover, but what a waste it has been. We must take care to choose elected officials with attention to the values they adhere to, using the same techniques any employer would use, experience, ethics, goals, and a desire to leave things better than they found them. Enough of career politicians, enough of lobbying, earmarking, favoritism, and the culture of greed. Enough of fancying that bureaucrats or politicians can better determine the use of money than the people they took it away from. There are a million things that need to be done, but with the right people guiding the process, we'll get them done. The country sought out and utilized the founding fathers. We need to choose their successors with greater care than we've so far and most recently exercised.
With bodies dropping all around us, I'm pleased to note that we're still able to get you a very favorable loan, probably find a buyer for your home, or help you find a home. All of those things take a little longer than we would like, and all of them are considerably more work, but if you're realistic and patient, we'll get you to your real estate goal.
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Who Is Obama?

This link is to the best description of our President that I have yet read or heard. Additionally there is an opportunity to discover Imprimus, a free publication of Hillsdale College, and if you're a freedom lover, a great way to stay in touch with our value system. Go HERE.
We are witness to the greatest bunch of dithering idiots in our history, and it is costing all of us a great deal. The housing market, which is supposed to be my main concern, is still troubled, mainly because of government action and inaction, or inappropriate action. Foreclosures continue to plague the inventory, and no relief in sight. Mortgage rates are very favorable, but it's very tough to qualify for a loan for purchase or refinance. Possible certainly, but credit is severely restricted by lenders, mainly because they can make more money, more safely, by not loaning it on mortgages.
We have serious security issues with our porous borders, ignored by the federal government, a calamitous oil spill, ignored or mismanaged by the federal government, a health care bill which is now revealing itself as the disaster most of thought it was from the outset, and a group of clowns trying to swap jobs and favors in an attempt to control the outcome of elections. The list of course is much, much longer.
We are seeing some activity in home sales, but not much, and too much influenced by distress selling, foreclosures and short sales. If we could somehow induce the government to let market forces work we could get through this mess in a fairly short period, but the insistence by bureaucrats on forcing modification programs that are not working, giving seller credits to influence behavior, and generally messing with the financial markets has provided an effective bar to any short term recovery.
Does anyone remember a very old commercial in which a mother insists on advising and "helping" her daughter in some kitchen activity until finally the daughter says "Mother, I'd rather do it myself!"? Well politicians, we'd rather do it ourselves.
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Could Things Be Worse?

Usually if you scan the horizon it's possible to find something cheerful to lighten the mood, but boy oh boy, the pickings are really slim now. In real estate, the downward slide continues, foreclosures are a continuing problem, modifications have proven to be expensive and ineffective for the most part, and even though mortgage rates are very low, getting a loan is very difficult. The tax credit much like the "cash for clunkers" program, has siphoned of future sales and new mortgage purchase applications are down to 1997 levels. The stock market took a 300+ point dive today, stripping enormous value from 401K accounts and generally reflecting the malaise of the country.
We have been the strong protector of the entire world because of our financial and military strength, and our devotion to protecting human rights as a reflection of our own ideals. We now have a regime in Washington that insults our friends, bows to our enemies, and demonstrates weakness and indecisiveness with every challenge, whether an oil spill, saber rattling by North Korea or Iran, an economy in shambles brought about largely by failed government policies. The consequence of this demonstrated weakness of purpose is a stepped up testing of our resolve by everyone on the planet. Even the President of Mexico and an aging Beatle feel free to insult us publicly. The Chicago thugs were able to get this guy elected, but nothing is going to teach him, or them, how to govern. November is a long way off, but we absolutely must begin the process of restoring some semblance of sanity and fiscal responsibility to all levels of government, and if we can't teach some leadership skills to the President, we must at the very least change the disastrous course he's set us upon. ( I know that's a preposition.)
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