HOUSING FEAR: The Truth about Inflation, Unemployment, Massive Deficits and the Real Estate Market

The Best Political Ad of All Time.

noreply@blogger.com (Chris) — Tue, 17 Jan 2012 18:49:00 +0000

Wells Fargo Harp 2,0: "Wait till March or April"

noreply@blogger.com (Chris) — Sat, 07 Jan 2012 16:17:00 +0000

My mortgage guy calls me up yesterday and tells me that if I am still interested he could go forward with the refinance, and he now has all the information he needs.

Wow I thought...This was great news. When I asked him if it was true that there were no fee's with the harp 2.0 mortgage if you refinance to a shorter term he started to play dumb with me and asked "whats harp 2.o". I was kind of flabbergasted because he knew this was the whole purpose of me meeting with him in person 2 different times and what I was waiting for.

Basically he was trying to refinance me with the harp 1.0 mortgage saying I would qualify with that and tried arguing with me that my condo was not more then 125% underwater based on the information he had in his system.

I informed him that My condo was worth 30,000 if I was lucky and I paid 87,000 for it. I also told him I was not going to pay the appraisal fee associated with harp 1.0 or the higher origination fee's.

He then told me he heard nothing about harp 2.0 being lower in origination fee's. (even though I read it on the fannie mae info page. (see page 19-20 under pricing)
https://www.efanniemae.com/sf/mha/mharefi/pdf/refinancefaqs.pdf

Basically I told him I was not interested in Harp 1, and I will wait till Harp 2 is out. He said it won't be until March or April, and he would hear more around Feb 1st.

I kind of feel like he was trying to trick me into refinancing into harp 1, even though he new I wanted harp 2.

Sometimes it sucks being so smart. Hopefully it's not another April Fools Joke.

THE MEDIA IS RUNNING SCARED OF RON PAUL

noreply@blogger.com (Chris) — Thu, 29 Dec 2011 14:26:00 +0000

It has become a comedy watching the news lately.

"If Ron Paul wins Iowa it means nothing"

"Ron Paul is good in Iowa, but thats about it"

Guess what guys...He is second in NH, and is surging. He will be the nominee if he wins Iowa.

I am predicting shenanigans in the MSNBC/Marist Poll tomorrow. The hosts are talking about "how excited" they are for this next poll so my guess is they have it rigged to show a drop for Ron Paul in Iowa to try and claim he is losing support and sway public opinion. Even though every other poll has him winning.

I really do detest the mainstream media.

Wells Fargo is Ridiculous

noreply@blogger.com (Chris) — Wed, 28 Dec 2011 12:23:00 +0000

I went into the office yesterday and my mortgage guy was not there. A lady was there and tried to argue with me that she had heard nothing about the new Harp 2.0 being an unlimited loan to value ratio. That what she had heard was the new Harp 2.0 would be a 125% limit.

I basically politely told her to put down the crack rock she was smoking, because the whole point of harp 2.0 was to refinance people who were deeply underwater, and even the paper work from fannie mae I read online says there is no limit on the loan.

She then pretends to make a phone call...and after talking with a guy agrees that there will not be a limit. But says she has no idea when the program will be ready.

How can they offer something like this in October, get everyone excited, and then 3 months later have idiots in their office not even know the basic premise of the program. Maybe she thought I would be dumb enough to apply for the harp 1.0 if she could trick me, I have no idea.

Just think that this whole thing is turning into a joke.

Wells Fargo Harp 2.0 Update

noreply@blogger.com (Chris) — Mon, 26 Dec 2011 16:03:00 +0000

Well...I qualify for everything to get the loan. The problem is that Wells Fargo has still not implemented the Harp 2.0 program. I think it is ridiculous that they recieved all the regulations on Nov 15th, and six weeks later they are still not able to take applications on it. My guess is that they are not in a big hurry to refinance people to a lower rate.

So I am still ready and waiting to lower my loan payment, and shorten the term of my mortgage. I just have to wait for Wells Fargo to get their act together.

Spoke with Two Mortgage people,

noreply@blogger.com (Chris) — Mon, 07 Nov 2011 19:12:00 +0000

Spoke with two mortgage brokers about the new Harp Program. Both said I qualify. The rate for a 15 year mortgage would be about 3.75% and the payment would be almost exactly what I am paying now with my 6.5% 30 year mortgage.

Yea...Thats correct...A 15 year mortgage payment would be the same as my 30 year payment because interest rates are roughly half of what I am paying now.

A 30 year mortgage would be about 4.25% which would cut my payment almost in half, but would add 5 years onto my mortgage and would cost me a ton more in interest.

I think I am leaning toward a 20 year refinance which will take 5 years off my mortgage and also lower my payment. Kind of a best of both worlds scenario. The final regulations should get to the bank soon, and then they will process the rules. I am hoping sometime in December I can get the ball rolling on this refinance!

Hope that I can refinance my Mortgage.

noreply@blogger.com (Chris) — Mon, 24 Oct 2011 15:28:00 +0000

Courtesy of Reuters:

Reuters) - A leading U.S. housing regulator on Monday announced changes to a government refinancing program that could help up to one million homeowners whose homes are worth less than their mortgage.

The Federal Housing Finance Agency, which oversees mortgage finance giants Fannie Mae and Freddie Mac, said it was easing the terms of the two-year-old Home Affordable Refinance Program, which helps borrowers who have been making mortgage payments on time but have not been able to refinance as home values have dropped.

To help underwater borrowers, or those whose loans are worth more than their homes, FHFA said it will scrap a cap that prohibits any homeowners whose mortgage exceeds 125 percent of the property's value from participating in HARP, which is targeted at loans backed by Fannie Mae and Freddie Mac.

The plan, targeted at borrowers who hold loans backed by Fannie Mae and Freddie Mac, is the latest government effort to deal with a problem at the center of the economy's weak recovery -- a crippled housing market.

"Our goal in pursuing these changes is to create refinancing opportunities for these borrowers, while reducing risk for Fannie Mae and Freddie Mac and bringing a measure of stability to housing markets," FHFA's acting director, Edward DeMarco, said in a statement.

After meeting with DeMarco earlier this month, one lawmaker said the expanded program could help as many as 600,000 to one million borrowers. But that is only a fraction of the estimated 11 million homeowners who are underwater.

President Barack Obama will showcase the changes at a stop on Monday in Nevada, the first leg of a campaign-style swing through western states that may be crucial to his re-election in 2012.

To encourage banks to participate in the program, FHFA is revamping it to protect lenders from having to buy back HARP loans if underwriting problems are later found. Banks will only have to verify that borrowers have made at least six of their last mortgage payments and the new rules eliminate the need for appraisals in most cases.

FHFA said government-controlled Fannie Mae and Freddie Mac will waive certain fees for borrowers that refinance into loans with a shorter term, such as 15 years, aiming to spur homeowners to pay down the amount they owe at a faster rate.

HARP, one of the Obama administration's anti-foreclosure efforts, was unveiled in March 2009 and was expected to help as many as 5 million borrowers. So far, however, only about 894,000 borrowers have refinanced their loans through the program.

FHFA said it will extend the effort until December 31, 2013. The program is limited to loans that Fannie Mae and Freddie Mac guaranteed before June 2009.

Wish me luck everybody. I have a Fannie Mae loan at 6.5% interest. I have never missed a payment. However I was not eligible for the program because my condo was worth way less then the 125% guidelines. I am going to speak with someone during the next week and see if I can get a refinance done, possible even to a 15 year mortgage and save myself the fee's. With today's 15 year mortgage rate at 3.5% that's 1/2 of what I am paying now. Plus I would get my house paid off 10 years sooner. I will give it a try and keep you all posted.

ROMNEY IS RIGHT ON HOUSING

noreply@blogger.com (Chris) — Thu, 20 Oct 2011 15:11:00 +0000

In an interview published Tuesday ahead of presidential debate, Romney told Las Vegas Review Journal's editorial board that solving the foreclosure crisis would require letting banks proceed against homeowners who have defaulted on their mortgages. New investors could then rent out the homes until markets adjusted.

"As to what to do for the housing industry specifically and are there things that you can do to encourage housing: One is, don't try to stop the foreclosure process. Let it run its course and hit the bottom," Romney said.

Romney elaborated during the presidential debate Tuesday night. "The idea of the federal government running around and saying, We're going to give you some money for trading in your old car...or we're going to keep banks from foreclosing if you can't make your payments...", Romney said, "The right course is to let markets work."

I can't agree more with Romney. I have been saying this since 2008!
The best thing the government can do to help the housing market is to do nothing. Things will get very bad, people will get foreclosed on...but then...like magic...the free market will take effect when prices get low enough to encourage people to buy. Then the price of housing will rise again as the housing market begins to feed on itself in an upward trend.

Ron Paul has my vote for 2012. However, Romney has the right idea on housing.

Divorced

noreply@blogger.com (Chris) — Tue, 18 Oct 2011 15:11:00 +0000

I would be wrong to say that the housing bubble and crash was the only cause of my failed marriage. However, I would say that it definitely was a contributing factor to it. My now ex-wife hated my condo. I really believe that when she was faced with the prospect of having to move back into it this spring, she decided to "explore her other options".

Now after helping her study, and pay her way through school, she has an education, a higher paying job, and no condo debt. She is now able to purchase the house she wants and live happily ever after.

I am stuck with a condo that is worth about $30,000....and I owe around $63,000 on the mortgage. I also have an additional 24,000 of "equity" into it (I payed $87,000 for the property in 2006) so there is no way I can just walk away since I have so much of my actual money invested into the property. On the bright side, I am graduating this December, Unfortunately, I still have another year of an unpaid internship to go before I too can make use of my degree and earn a higher salary.

My wife was not who I thought she was, and I am glad she is gone. But I must admit it is depressing that my financial situation now seems very hopeless while she gets a fresh start. I know what goes around comes around, and someday she will have done to her what she did to me...until then...

...I guess that is just the way life works out...

Housing Fear Humor

noreply@blogger.com (Chris) — Sun, 11 Sep 2011 02:37:00 +0000

I really worry what is in store for the future of America if Ron Paul is not elected President.

When do you think the housing market will recover?

noreply@blogger.com (Chris) — Sun, 11 Sep 2011 02:25:00 +0000

I posted a Poll in the sidebar.

I had originally predicted back when I started writing this blog in 2007 that the Housing Market would recover in 2012. However, I warned that if the government tried to get involved they would simply make matters worse.

This is exactly what happened with failed policy's like the first time home buyers credit that simply pushed all the demand into a small window and dried up demand for the next year. This also upset people who were not technically first time buyers, but chose to delay a house purchase because the credit was an unfair playing field that they did not have access too and had to compete against.

To make matters worse the government is now talking about selling off foreclosed homes to private investors in bulk, and letting them make a fortune on it. (I will write an article on this later). Once again the government is in the business of picking winners and losers. They need to learn to stay out of the way of the free market, let prices drop, and then let a natural recover occur.

Of course...That would make to much sense.

VA loans for bad credit.

noreply@blogger.com (Chris) — Tue, 06 Sep 2011 02:14:00 +0000

As I predicted the housing market is still in a depression. However, prices are very low and people who want to buy a house right now, and have the income to do so, can really get a great deal. The problem is the lenders have really tightened lending standards, and if you have bad credit you can basically forget about getting a house.

There is hope though...Even with bad credit you can still qualify for a cash advance . You can use this cash for a down payment on a new house, or to pay off debt.

If you are in need of a VA loan, check out VA loans for bad credit and get up to $700 quick!

One of the Best Ron Paul Video's yet!

noreply@blogger.com (Chris) — Sat, 03 Sep 2011 01:36:00 +0000

Good stuff!

August Stock Crash

noreply@blogger.com (Chris) — Tue, 16 Aug 2011 02:38:00 +0000

Is the party finally over?

Or are we going to party like its 1929 :)

Arab Spring

noreply@blogger.com (Chris) — Sun, 17 Apr 2011 02:40:00 +0000

There is a lot of unrest and anger in a lot of third world nations right now in the middle east. The problem is that the governments that are being thrown, Egypt for example, were friendly with the United States.

Its laughable to watch the media cover this like it is a great victory for America's war on terror. When in reality most of the rebels are AL-Qaeda extremists. I think time will show that this uprising is a direct result of Americas flawed foreign policy, and the result will not be what the media portrayed it to be. I would not be surprised if the new government of Libya is much worse then Gaddafi himself.

HousingFEAR Humor

noreply@blogger.com (Chris) — Sun, 20 Feb 2011 16:21:00 +0000

Shadow Inventory may take Years to Clear

noreply@blogger.com (Chris) — Thu, 11 Nov 2010 13:34:00 +0000

Shadow Inventory are houses that need to be sold, that want to be sold, but the owner of the house has basically given up on selling it untill situations improve with the housing market.

Say it is a couple like myself and my wife who own a 1-bedroom condo and want to buy a house. However, we are underwater on our condo, so we are trapped there untill the market improves. Even though we desperatly want to move up to a larger house and have the income and credit to do so, the condo is an albatross.

As soon as prices improve, that condo will be going up on the market, making it one of many shadow inventory properties waiting to be sold. It is not listed now in current supply, but it is lurking in the shadows waiting to join the supply as soon as economically possible.

Check out this blurb about Shadow inventory below...

If you thought the U.S. housing market is showing any signs of improvement, a
new report by New York City-based Fitch Ratings puts the damper on that view.

Fitch says seven million homes in the "shadows" will take 40 months to
clear.

The agency defines the shadow supply of properties as loans that
are delinquent, in foreclosure, or real-estate-owned (REO) by the servicer.
Fitch says based on recent liquidation trends, it will take at least 3 ½ years
to clear this existing distressed inventory.

DSNews.com reports that
according to the ratings agency, the number of months between the date of the
borrower's last payment and the date of liquidation has steadily increased over
the past several years, and is now at more than 18 months on average.

Fitch says that is the highest figure on record.

Clearly there is a ton of inventory on the market, but even more awaits in the shadows. This blog will continue on untill the housing market returns to normal and my condo is sold. Housing Fear is still alive!

HousingFear Humor

noreply@blogger.com (Chris) — Thu, 11 Nov 2010 11:21:00 +0000

Ben Bernanke’s Worst Nightmare: Chairman Ron Paul

noreply@blogger.com (Chris) — Wed, 10 Nov 2010 14:34:00 +0000

There is a great article written in written in the New American discussing the very real possibility that Ron Paul will be Chairman of the Subcommittee for Domestic Monetary Policy and Technology.

Paul is currently the ranking member of the House Subcommittee for Domestic Monetary Policy and Technology and is, therefore, in line to become chairman of the subcommittee when the 112th Congress commences. If he does indeed assume the chairmanship, “Paul said his first priority will be to open up the books of the Federal Reserve to the American people,” “We need to create transparency there. To see what it is they are buying and lending, and who it is they are dealing with,” Paul said.

Auditing the Fed is only the beginning, as one might expect from the author of End the Fed. Carney writes that Paul told NetNet, “I will approach that committee like no one has ever approached it because we’re living in times like no one has ever seen.” Among his other objectives: using subcommittee hearings to educate the public about Austrian economists’ view of the business cycle, namely that it is a result of central banks’ shenanigans rather than something inherent in the free market, and auditing the US gold reserves in preparation for monetary reform, either by legalizing competing currencies or by returning to the gold standard (or both). Also on his agenda is scrutiny of the International Monetary Fund and other global financial institutions, probably as part of monetary reform.

For people like me who live and breath this stuff this, I feel like I am on cloud nine. This is going to be the most entertaining, groundbreaking, and possibly game changing next 2 years in American financial history.

An Audit of the Federal Reserve, Return to the Gold Standard. These are things that will return America to the constitution and possibly save this country from bankruptcy.

RON PAUL is a patriot, an American hero, and I cannot wait to watch him make some real waves in Washington.

Dollar Collapse and Hyperinflation

noreply@blogger.com (Chris) — Mon, 18 Oct 2010 13:30:00 +0000

For those of you who have read this blog from the start, I have been writing about hyperinflation since 2007. I was a strong advocate of buying Gold and those who have followed my advice have made a killing.

If you look at the recent rise in the stock market, huge gold price increase and huge drop in the dollar....You have to wonder if this worst case scenario beginning to occur....A dollar collapse.

America is Greece. The only reason why we are not having the same crisis is because we are the worlds reserve currency and we can simply print more money, and monetize more debt. Greece did not have that luxury.

I actually sold my Gold around July and I am now regretting it seeing what is going on right now. My feelings were that when the conservatives won the mid term elections it would bring about an era of fiscal responsibility and a stabilization of the US Dollar.

The question is...Is it already too late? Have we already spent and taxed so much that our prosperity as a nation is now irreversibly in peril.

What do you think?

MONOPOLY: RECESSION EDITION

noreply@blogger.com (Chris) — Tue, 05 Oct 2010 12:38:00 +0000

I don't know what I like more...the first time home buyers tax credit space or the debtors prison :)

Housing is Still Flat

noreply@blogger.com (Chris) — Tue, 28 Sep 2010 12:43:00 +0000

Home sales rose over 7% from July's record lows....good news correct?
...NOT REALLY...August is still the second worse month for existing home sales on record.

Even though home sale prices are up...actual home sales are down and there is an 11.6 month supply of inventory.

The interesting question is how much shadow inventory is there on the market. You would assume that there are a bunch of people who have capitulated and are not even listing their house for what they owe on it because they know it won't sell. You would think as price do rise that loads of new inventory will be dumped on the market by people who want to leave the state, or move up in house thus increasing inventory and lowering prices.

We may have reached a bottom....but with all this inventory... we will be bumping along it for a long time.

Housing Data Not Expected to Sparkle

noreply@blogger.com (Chris) — Mon, 20 Sep 2010 14:13:00 +0000

This is a big week for housing Data, and its not expected to be good.

I will write later this week with an analysis on the data and what I think it means for the housing outlook.

July Home Sale Numbers Keep Dropping

noreply@blogger.com (Chris) — Tue, 24 Aug 2010 17:16:00 +0000

WASHINGTON (Dow Jones)--Existing home sales plunged to their lowest level in 15 years in July as inventories soared, painting a grim picture for the housing market absent government support in a stubbornly sluggish economy.

Home resales dropped a record 27.2%--nearly twice as much as analysts had expected--to an annual rate of 3.83 million in July, the National Association of Realtors said Tuesday. Meanwhile, inventories rose to 12.5 months from 8.9 months in June, pressuring already depressed home prices. Inventories are at their highest level in more than a decade.

"Historically July is the peak inventory month in any given year," NAR Chief Economist Lawrence Yun said.

Economists surveyed by Dow Jones Newswires had expected existing home sales to fall by 14.3% to an annual rate of 4.6 million.

Tuesday's data drove the Dow Jones Industrial Average down more than 100 points and pulled down yields on 10-year Treasury notes.

"The report shows the housing industry has hit more turbulence, is not leveling off and is worried about a nosedive," said Mitchell Hochberg, a principal at Madden Real Estate Ventures in New York. "Unemployment, foreclosures and shadow inventory are keeping consumers on the sidelines waiting for prices to drop further."

The realtors revised their existing home sales figures for June downward, saying existing home sales dropped to a 5.26 million annual rate instead of the initially estimated 5.37 million annual rate.

"The question is whether this pause is a temporary pause," Yun said. The National Association of Realtors is expecting sales to remain soft for much of the rest of the year.

The steep decline in sales in July reflects both a souring in the U.S. economic recovery and the expiration of a government tax credit program that has been supporting the housing market for more than a year.

The tax credits offered certain buyers up to $8,000 to sign a contract by April 30. Deals originally needed to close by June 30, but lawmakers pushed that deadline to Sept. 30.

Still, the tax credit's expiration drove pending home sales down 30% in May and caused a double-digit dive in mortgage application volumes even as interest rates hovered near their lowest levels in generations. July's existing home sales data reflects the May plunge in pending sales, which typically become existing sales within a couple of months.

Mortgage rates remain low, but lingering troubles in the labor market continue to restrain the nation's housing recovery. That trend likely will continue for some time.

The Federal Reserve, in its latest forecast, scaled back its growth projections, saying it expects the soft job market to continue to hold back economic progress.

In July, existing home sales dropped 29.5% in the Northeast, 22.6% in the South, 25% in the West and 35% in the Midwest.

On a year-over-year basis, July existing home sales were down 25.5% from an annual rate of 5.14 million in July 2009.

A growing number of the existing homes sold across the U.S. in July were distressed properties.

Median home prices in July rose 0.7% to $182,600.

The last sentance is what I want to focus on...In Michigan, Realtors are trying to claim that the housing market has bottomed. They say that home prices are rising since 2009 even though sales are way down. Realtors are trying to flaunt the price increase as a good sign of housing recovery while ignoring the fact sales are way down.

All this proves to me is that people are overpricing their houses. Banks are listing foreclosures as too pricey. The price has risen but not many people are biting because they know it is not a good deal in this economy.

Drop the price and sales will rise again. Thats the bottom line.

Housing Fear Quote of the day

noreply@blogger.com (Chris) — Tue, 24 Aug 2010 11:32:00 +0000

“There is no iron law that real estate must appreciate,” said Stan Humphries, chief economist for the real estate site Zillow. “All those theories advanced during the boom about why housing is special — that more people are choosing to spend more on housing, that more people are moving to the coasts, that we were running out of usable land — didn’t hold up.”

Instead, Mr. Humphries and other economists say, housing values will only keep up with inflation. A home will return the money an owner puts in each month, but will not multiply the investment.