Category Archives: Real estate

Wolf Richter: After Mucking up Housing Market, Investors Flee

The housing market is looking wobbly now that big money investors are pulling back. But anyone who was paying attention should not be surprised.

Wolf Richter: California Home Sales Dive, Prices Hit Wall, Millennials Blamed

Yves here. The saying is that as California goes, so eventually goes the US. If so, its trends in home prices are sobering, with a rapid liftoff leading to a sudden air pocket. But even worse for the housing industry is the antipathy that young people now have for homeownership.

Wolf Richter: ‘Wealth Effect’ Kicks in – Luxury Homes Are Hot, Rest of Housing Market Gets Hosed

Home sales have been declining since last fall and in some cases steeply, with memories of bidding wars early last year triggering wistful sighs. The sales decline continued into the summer, and indications are that they’re dragging into September as well. But the median sale price continued to rise, if at a slower rate, and in many areas has moved out of reach for the median-income household.

Hidden Bomb in Single-Family Rental Securitizations: Trigger Risk

Yield-hungry investors have been snapping up single family rental securitizations, with recent deals heavily oversubscribed. Buyers have been comforted by raging agency reviews that give the top tranches AAA grades, based on loss cushions that these scorekeepers treat as generous (a dissenting view comes from Standard & Poors, which stated that the “operational infancy” of these rental securitizations made them ineligible for a triple A rating).

However, investors appear to be overlooking a risk component that can deliver large-scale losses. We’ll call it trigger risk.

Pending Suit Against Countrywide’s Angelo Mozilo: Yet More Politically-Driven Selective Enforcement

Let’s be clear: we are fans of going after bank execs who bear significant responsibility for damage to borrowers and the economy, rather than just the footsoldiers. We also prefer criminal prosecutions. But in this era when the elites just don’t think of white collar crime as criminal, at least if performed by people who have big titles are large institutions, we have to highlight whatever progress we do see on the “get tough with the bad guys” front.

One deserving target is Angelo Mozilo, head of Countrywide, the biggest and most efficient subprime originator.

Wolf Richter: Fannie Mae Sledgehammers Housing Forecasts

You’d think the housing market is in fine shape, based on the sizzling optimism of the National Association of Home Builders, which just released its Housing Market Index. It rose to 55 in August – above 50 means more builders view conditions as good than poor – the third month in a row of gains, and the highest level since January.

Think again.

Elites Finally Starting to Get that Inequality is Messing Up Growth

Even though there has been a big uptick in news stories on rising economic inequality, and more chatter among economists about the idea that high levels of inequality are associated with lower growth, much of the messaging has come from the Democrats desperate to use the one dog whistle that might rally their badly abused base. Even though inequality has risen under Obama, thanks to policies that favored rescuing banks and enriching the medical-industrial complex over helping ordinary citizens, the Democrats are all too willing to rely on their perceived lesser-evilism relative to the Republicans. After all, it was only Romney’s billionaire warts that kept Obama from what would otherwise have been a well-deserved 2012 defeat.

But while the Administration has been pushing inequality as a useful campaign theme (the signal was inviting Thomas Piketty to meet with Treasury Secretary Jack Lew), in parallel, it also appears that some of the expressions of concern about inequality among the policy classes are genuine.

Bill Black: AG Holder – “The U.S. Announces the Indictment of Citigroup’s Senior Officers for Fraud”

Yves here. I’m serving an extra heaping of contempt on the latest giveaway bank settlement, this one with Citigroup for a headline figure of $7 billion which is really $4.5 billion in cash and the rest in various chits. We’re turning the mike over to Bill Black, who excoriates Attorney General Eric Holder.

Colorado Attorney General Files “Massive” Lawsuit Against Foreclosure Mills, Paving Way for Suits in Other States

It’s not hard to notice the contrast between the posture of a Republican state attorney general in Colorado, John Suthers, who opened up an investigation when the Denver Post exposed pervasive overbilling by foreclosure mills, versus the conduct of a Federal task force dedicated to pursuing foreclosure fraud.

Courts Finally Waking Up to Bogus Allonges and “Ta Dah” Foreclosure Documents

A Florida appeals court nixed clearly bogus foreclosure documents in a short, gratifying ruling.

China Attacks Oz Banks for Laundering Flight Capital

Yves here. China is cracking down on flight capital, starting with Australian banks. As the most casual readers of the business press know, the international wealthy, particularly Russians and Chinese, have been using residential real estate in “world cities” as their favorite lockbox. As we’ve written, it’s stunning to see how much real estate has been hoarded in London. Mayfair was depopulated during the petrodollar recycling of the 1970s; now much of Belgravia, Chelsea near Sloan Square, and Kensington are visibly underpopulated. Vancouver has been bid to the sky by Chinese flight capital. New York is a big destination for Russian and Chinese investors, and Chinese money has been pouring into Australian real estate.

The Chinese move may be an admission of stress on the financial system.

Maine Supreme Court Hands Major Defeat to MERS Mortgage Registry

Yesterday, we wrote about a major loss by the electronic mortgage registry, MERS, in a major Federal court case in Pennsylvania. MERS suffered an additional blow via an important adverse decision in the Maine Supreme Court, against Tom Cox, the attorney who first made robosigning a national issue.

MERS Loses Major Case in Pennsylvania

As Georgetown law professor, Adam Levitin, said succinctly by e-mail, “MERS hasn’t lost a case like this before.”