Category Archives: Real estate

The Real Foreclosure Scandal: Why Have Virtually No Lawyers Been Disbarred?

Even now, years after the subprime market’s death in 2007, new stories of mortgage chicanery or accounts providing more evidence of known abuses keep surfacing.

Municipal Workers in Bankrupt Cities Facing Financial Nightmare

Georgetown law school professor and bankruptcy expert Adam Levitin in a must read article in Salon parses how municipal workers, who on paper should actually be well protected in the event of a municipal bankruptcy, are likely to be butchered.

Quelle Surprise! Administration Lied About Mortgage Fraud Results, Numbers 4 to 10 Times Too High

Normally I’d relegate a good job of news spadework to the daily Links feature, but Bloomberg caught out Attorney General Eric Holder in such an egregious lie that this failed con job merits ample, widespread publicity and well-deserved derision.

So Why is the Administration Trying to Look a Smidge More Aggressive About Going After Banks?

In the last few days, the Department of Justice (as well as the SEC) filed a case against Bank of America over a 2008 prime mortgage securitization that takes breaks some new ground in fraud allegations and is also saber-rattling in the form of launching a criminal investigation into JP Morgan’s sale of mortgage backed securities.

So what’s with the new-found religion?

Calling All California Lawyers (and Others Who Want to Help Abused Homeowners)! Please Ask California Court of Appeal to Publish an Important Pro-Borrower Chain of Title Ruling

Your humble blogger is in no position to speculate how this curious set of circumstances came about, but we have a good news, bad news situation, and hope readers can help remedy the bad news part.

Beware Private Equity Guys Bearing Gifts: Eminent Domain Mortgage Scam Hit with Well-Deserved Lawsuit

The private equity firm Mortgage Resolution Partners looks to be well on its way to getting the good uses of eminent domain torpedoed by getting some not-too-swift municipalities to sign up for its self-serving scheme. One indicator of how dubious the MPR program is that investors who have been complacent in the face of all sorts of abuses by originators and servicers, have roused themselves to act in a unified manner and push back against the MRP plan, in the form of a suit filed in Federal court in California on Wednesday.

Four Headwinds to the US Housing Recovery

Yves here. This post from MacroBusiness describes three risks facing the American housing recovery, and I thought I’d add a fourth, which is the open question of how much longer private equity funds and other speculators will continue to bid up housing prices.

China’s Most Famous Ghost City Busts

The Chinese government, as has been widely reported, is trying to cool growth, in large measure to take the hot air out of its shadow banking sector. But can it engineer its hoped-for soft landing?

Bill Black: What if Bernanke Had the Character to be Candid?

Yves here. I suspect NC readers can go even further will Bill Black’s question!

Quelle Surprise! 38% of Prospective Home Buyers Halt Search Due to Rate Shock

We’ve been warning that the sudden rise in mortgage rates was going to create a great deal of buyer sticker shock. It’s already virtually halted refis. Further confirmation comes from the Urban Turf website:

Banks Outbidding Private Equity Funds at Foreclosures, Believing They Can Beat Them at the Pump and Dump Game

It’s conventional to deem local journalism to be dead, but Josh Salman at the Sarasota Herald-Tribune has written well-researched investigative story on bank bidding at foreclosures in his neck of the woods, Big lenders bidding to keep homes, that has national implications.

It’s Time to Levy the Land

Yves here. While some of the concerns in this post are specific to Australia, they can be readily translated to other property regimes. The part that is missing, however, is that the US relies on “real estate taxes” which includes the value of the buildings on the land. Michael Hudson has advocated taxing land much more heavily, since unlike taxing capital or labor, it does not burden the economy with higher costs . As he explains in a 2009 interview:

Michael Hudson: From the Bubble Economy to Debt Deflation and Privatization

Michael Hudson looks at the implications of ending QE in the context of the past 30 years of bubble blowing.

David Dayen: A Revealing Episode in DC Groupthink

So this week I got an education in the mentality of “official” Washington.

Last week I was asked by a DC-based publication to give a comment on Corker-Warner, the flavor-of-the-month proposal to abolish Fannie and Freddie and reform mortgage finance. I basically take the same position as Yves on this issue: all of these GSE 2.0 plans assume a private label MBS market the way the proverbial economist on a desert island assumes a can opener.

US Mortgage Rates Skyrocket

Yves here. So what is the Fed going to do, now that it has delivered a big blow to the nascent housing recovery? Risk its credibility by beating a serious retreat on taper talk, or keep whistling in the dark and wait and see what happens to July and August home sales (and remember, most housing market data is reported with a nearly two month lag…)?