Category Archives: Real estate

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…)?

Misguided Corker-Warner “Kill Fannie and Freddie” Bill Relies on Private Market Sparkle Ponies

Let’s be clear: I’m not a fan of Fannie and Freddie. Subsidizing housing finance is a lousy way to subsidize housing. But the Corker-Warner bill is no solution.

Regulatory Looting, Promontory-Style: Botched Foreclosure Reviews Alone Generate More than Double Goldman’s Revenues per Employee

t’s really hard to convey a sense of how utterly grotesque the looting that Promontory Financial Group conducted on the misnamed Independent Foreclosure Reviews.

Mortgage Rate Shock Likely to Dent the Housing Market

As regular readers know, your humble blogger, along with a lot of investors, was taken by surprise when the typically dovish Bernanke not only started using the taper word a month ago, but then made the demise of Fed heroics sound even more imminent by talking about higher unemployment “thresholds,” namely 7%, than had been voiced previously. And the reading of Fedwatchers like Tim Duy and (even before the FOMC statement) James Aitken is that the central bank wants out of the QE business sooner rather than later.

The impact on mortgage rates already looks very likely to throw a big bowl of cold water on the housing party.

Administration Keeps Pretending Mortgage Servicing Has Been Fixed, Whistleblowers Say Otherwise

It sometimes feels like a Sisyphean task to keep discussing how Americans were thrown under the bus in the various mortgage settlements reached in 2011 and 2012. Needless to say, whistleblowers continue to come forward and describe widespread abuse even though the officialdom would have you believe otherwise.

The Taper is Too Sharp

Yves here. I have to say I’m still gobsmacked by the Fed’s belief that the labor markets are showing meaningful improvement, and the further “clarification” that this means the central bank thinks it’s on track to start easing up on bond buying this year.

Vale David Hirst

Yves here. Steve Keen sent this note along with his post:

The journalist David Hirst was both one of the few to warn of the crisis, and someone who became a good friend. He died last week, as a long term consequence of internal injuries sustained about ten years ago in the USA, when he tried to stop a woman being bashed.

His spouse asked me to see if I could get the attached published on NC, which was one of his favourite sites.

If you know David’s writing, you’ll understand what a loss this is. And if you missed his prescient and incisive commentary before and during the crisis, I hope you’ll sample his work below and get a sense of what a talent he was. Either way, I trust you’ll join me in sending condolences to David’s widow and his family, as well as to Steve.

Mortgage Delinquencies Down….But a Record 843 Days to Foreclose

Yves here. While most investors and analysts were busy fixating on the Fed’s taper and the unemployment report and the Abenomics roller coaster, some important housing market news slipped under the radar.

Mortgage Rate Increases Starting to Bite

Bloomberg reports that that staple of mortgage funding, the 30 year fixed rate mortgage, has seen its interest rate increase from 3.48% a month ago to 4.16% as of yesterday. By contrast, the highest rate the 30 year mortgage reached in the previous year as of mid-March had been 3.85%.

One analyst, Mark Hanson, sees evidence that the dropoff in refinancings has been impressive

The Stealth Problem of Predatory Mortgage Modifications

Warning: mortgage modifications can be yet another exercise in bank predation.

So Who is the Dumb Money Ruining the Rental Housing Market?

The head of Carrington, which is known as an established distressed debt investor and more recently, an early entrant in the single family home rental business, said this week it was no longer buying houses for lease because dumb money had ruined the market.

Private Equity Residential Landlords Rushing to Cash Out via IPOs

We’ve been skeptical of the private equity land rush to snap up single family homes for rentals. They’ve been a big enough force in the housing market nationwide to lead some commentators to question how solid the housing “recovery” is. Yet the combination of rising enthusiasm for housing and a richly-valued stock market is leading a raft of PE firms to ready IPOs as a way to take profits and establish valuations for their profit participations.