Monday, December 24, 2012

Tuesday December 25 Housing and Economic stories


TOP STORIES:

Man refuses to sell house he couldn't afford, complains about foreclosure - (www.ochousingnews.com) Larry Faulks says his bank robbed him of over a quarter of a million dollars. By selling Faulks’ San Francisco house at a foreclosure auction, Wells Fargo wiped out all his equity, he said. Unlike most struggling homeowners, Faulks, 59, was not underwater on the home his family bought in 1962; it was worth considerably more than he owed on it. Wells Fargo did not rob him of his equity. Mr. Faulks was foolish and ignorant. He could have sold his home by choice as he didn’t require short sale approval. The fact that he chose not to sell doesn’t mean he was robbed; it means he was stupid. Wells Fargo says it tried to work with Faulks but couldn’t find a way to avoid foreclosure, as his income was too limited. Outside legal experts who reviewed his case said it highlights how California law doesn’t safeguard the rare homeowners with equity in a foreclosure. Foreclosure law isn’t designed to protect a homeowner with equity. It’s not supposed to. Foreclosure law is designed to force a sale so a lender can obtain their loaned capital. It’s supposed to be a threat to compel an owner with equity to sell on their own.

Federal agency asks to add big fee to mortgages - (www.timesunion.com) Foreclosures in New York typically take longer than in most states due to the protections and backstops that the courts and Legislature have put in place to try to keep people in their homes. That's the good news. But in what housing advocates say is a case of no good deed going unpunished, the federal agency that oversees mortgage giants Fannie Mae and Freddie Mac wants to add a special fee to its New York loans — precisely because of the long period of time it takes to complete a foreclosure here. The slow pace, which advocates view as a consumer protection, is viewed as a negative by lenders. "It's a real threat," said Kirsten Keefe, senior staff attorney at the Empire Justice Center, who notes that this increased fee could add more than $2,000 to the cost of a $200,000 mortgage over the life of a 30-year loan.

Fed Exit Plan May Be Redrawn as Assets Near $3 Trillion - (www.bloomberg.com)  A decision by the Federal Reserve to expand its bond buying next week is likely to prompt policy makers to rewrite their 18-month-old blueprint for an exit from record monetary stimulus. Under the exit strategy, the Fed would start selling bonds in mid-2015 in a bid to return its holdings to pre-crisis proportions in two to three years. An accelerated buildup of assets would also mean a faster pace of sales when the time comes to exit -- increasing the risk that a jump in interest rates would crush the economic recovery. “There is certainly an issue about unwinding the balance sheet” in a way that “is effective and continues to support the recovery without creating inflation,” St. Louis Fed Bank President James Bullard said in an interview in October. The central bank might have to “revisit” the 2011 strategy, he added.

Suppressed Inventory - (www.usawatchdog.com) Real estate expert Fabian Calvo says there’s more to the story about rising prices in the housing market than what’s reported by the mainstream media.  Calvo charges, “There’s a tremendous amount of manipulation . . . Yes, prices have gone up 3%.  I see it, but it’s because the inventory has been suppressed on purpose by big players . . . not foreclosing on properties.” Calvo should know because he runs a company called TheNoteHouse.us.  It buys and sells $100 million annually in distressed debt and real estate.  Calvo says, “Over 20 million houses, on any given night in America, are completely sitting vacant.”  According to Calvo, the economy is being helped by “shadow stimulus.”  It’s coming from millions of underwater homeowners who have stopped making mortgage payments.  Calvo says, “Money that would have been otherwise allocated towards a housing payment is going into consumer spending.” 

Right After The Election, New Home Sales Tumble From Downward Revised - (www.zerohedge.com) There are those who may be surprised that last month's number of Seasonally Adjusted New Home Sales, which was then reported at 389K, and which number hit the airwaves days before the Obama reelection, was the highest since April 2010. We are not among them, as we were fully expecting today's number to be a major revision of the September number lower - as just happened, with the whopper of a print revised far lower to 369K - but doubled down with the additional miss of expectations of Seasonally Adjusted annualized new home sales of 390K for October when in reality only 368K were sold. All these numbers are annualized. When observed on an as is basis, in October there was a grand total of 29,000 new homes sold in the entire USA, with the Northeast representing a whopping... 2,000 of this. 




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