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.
Read more...As Georgetown law professor, Adam Levitin, said succinctly by e-mail, “MERS hasn’t lost a case like this before.”
Read more...Private equity firms are the ultimate smart money on Wall Street; they know how to wring out the last dime from their own clients, such as pension funds and rich individuals, through hidden fees, obscure expenses, elaborate expense shifting, lackadaisical disclosure, and “zombie advisers,” to the point where SEC Inspection Chief Andrew Bowden singled them out in a speech in May. Now the lawyers are circling.
And these private equity firms invented a whole new business: buying vacant homes out of foreclosure and from banks and renting them out. But how do they exit at a profit?
Read more...Yves here. This article pokes at a topic near and dear to my heart, which is the generally reverential treatment of Thomas Piketty’s Capital in the 21st Century. It appears to be a classic example of the cognitive bias called halo effect, in which people have a tendency to see things as all good or all bad. Because there is a lot to recommend Piketty’s work, for instance, the fact that it is exceptionally written, that it has made inequality into one of the hottest topics in economics, and that Piketty has done an admirable and exhaustive job of finding and analyzing the returns on certain types of income producing assets are all highly commendable.
But as readers may know, one of my pet peeves is that Piketty has made a very strong claim, in the form of his formula r>g, or the rate of return on capital (which he also calls “profit”) exceeds the growth rate of the economy, when his data falls short of what would be necessary to prove that assertion.
Read more...Even though foreclosures and bank servicing abuses have virtually disappeared in the eyes of the media, it’s quite a different story in the courtrooms of America. Banks continue to proceed with foreclosures, too many of which are based on bogus charges or other servicing abuses.
Fortunately, more and more judges seem to be recognizing bank bad conduct. Wells Fargo proceeded with a foreclosure on a clear bad-faith basis, and then made some eye-rolling arguments before a judge who is on to Wells’ game and is none too impressed.
Read more...Repeated foreclosure attempts against an on-time borrower reveal why servicing remains hopelessly broken. That also means government guaranteed mortgages are here to stay.
Read more...Now that homes are coming on the market in large numbers, buyers, faced with sky-high prices and higher mortgage rates, went on strike.
Read more...Yves here. It’s been astonishing to see members of the Fed in denial about their own handiwork, so when St. Louis Fed President James Bullard berates his fellow central bankers for their abject refusal to notice pre-crisis bubbles, it’s an all too rare departure from their usual insularity and willful blindness.
Read more...Larry Summers, like Tim Geithner, wants the public to believe that rescuing banks and leaving citizens to rot was the right crisis response. But neither experts, nor people who followed the crisis, nor voters at large are buying what Team Obama is trying to sell.
Read more...Yves here. Ilargi is duly skeptical of the enthusiastic financial press response to an increase in home equity liquidation, um, borrowing using home equity lines of credit, or Helocs. While the party line is that this development reflects an rise in home equity and increased consumer confidence, Ilargi stresses that prices appreciation that the Fed has created, the Fed can also take away. I have to wonder how many of these Heloc borrowers are doing so out of necessity or near-desperation.
Read more...One of the side effects of QE is that housing prices and sales levels for the top 1% in most markets are strong, while activity in the rest of the market is falling.
Read more...Student loans are a millstone that is crushing college educated young adults, and with them, key parts of the economy.
Read more...How Blackstone’ single family home rental business, Invitation Homes, is proving to be more slumlord than landlord.
Read more...Last time, all that craziness was called a “housing bubble” with hindsight. This time, it’s called a “housing recovery.”
Read more...I’m a little surprised at the overly coded reporting at the New York Times and particularly the Wall Street Journal, where Nick Timiraos provides top-notch coverage on the mortgage beat, on the implications of the failure of a widely-touted, Administration-backed GSE reform bill to get out of the Senate Banking Committee. Basically, it confirms what I’ve long believed but refrained from writing about, namely, that government sponsored enterprise, aka, GSE reform, was not going to get done in this session of Congress.
Read more...