Is it Time to Foreclose on Your Bank?

www.triplepundit.com12/5/11

A look back at the role of corporate banks during the financial crisis of 2008 and a look at other options such as Community Development Financial Institutions (CDFIs).

Daily Kos: Bank foreclosing on businesses that have paid their …

www.dailykos.com12/24/11

First off, how in the hell can it be legal for a bank to foreclose on a loan if the payments have been made on time? Second, less operating income and falling property values “Compelled the bank to act.” Seriously? We are in …

It certainly is a changing globe!

Five months ago Bank of America filed foreclosure papers on a Florida couple who didn’t owe anything on their home.

The homeowner’s, the Nyergers, were later forced to take the case to court because Bank of America refused to accept their proof that they’d paid cash for their home.

A Collier County judge immediately accepted the family’s evidence, confirmed the Nyergers’ claims, and told Bank of America to pay all legal fees.

The bank refused, and the family’s attorney did exactly what the bank had tried to do to his clients, he seized the bank’s assets.

A truck and sheriffs arrived at the bank with orders to remove assets from the bank and within an hour of being locked out of his bank, the branch manager handed over a check for the legal fees.

Related posts:

1. The ‘Loan Modification Program’ Finally Gets Underway.
2. As Stocks Advanced The Number Of Defaulting Homebuyers Rose By 50%
3. Two New Plans Announced To Help Homebuyers

The Obama Plan to Redistribute Housing | Libertarian Party

www.lp.org10/29/11

First Obama tried to redistribute wealth before he was President, by leading the charge to force banks to make loans to lower income Americans who could not afford to own homes (through the Community Reinvestment Act). …

Applying Obama's “redistribution of wealth” to school grades …

usamericanfreedom.com11/19/11

That class had insisted that Obama's socialism worked and that no one would be poor and no one would be rich, a great equalizer. The professor then said, “OK, we will have an experiment in this class on Obama's plan”. …

Obama and the liberals could perhaps have achieved both growth and redistribution, but they chose only the latter, and they will pay heavily for their error on Tuesday!

Will Obama change direction after the elections?

No He won’t!

During his election campaign Obama said:

“What people really want is fairness”.

“They want people paying their fair share of taxes”.

“They want that money allocated fairly”.

Redistribution Of Wealth

People thought it sounded good and they voted for him, but they didn’t know that he would immediately attempt redistribution of wealth, and he went for it full throttle in spite of the recession.

What the vast majority of Americans believe in however is economic growth, and they understand full well that the threat of having more and more money taken away as you get richer and richer is simply a demotivator.

The result, motivation went down, small businesses stopped hiring and unemployment went up and stayed up; and in some states it’s still getting worse.

Then Came ObamaCare

With motivation down, the Obama administration then committed another horrendous error of judgment – they rammed ObamaCare down a mostly unwilling nation’s throat.

Obamcare essentially subsidizes health insurance for low and middle-income groups and attempts to recover the cost by taxing high-earners even more, which in turn lowers motivation and causes people to hunker down instead of trying to grow their businesses.

And what makes it even worse is that low and moderate-income workers now feel no need to earn money because they can now maintain the same standard of living with even less effort.

Obama’s Response?

Seeing popularity wane both for him personally and for his policies Obama set out a stand and tried to sell the public his unwanted wares.

Expanding health care coverage was somehow going to somehow drive down costs.

Handouts to state and local governments became a stimulus package.

Climate change legislation became a “green jobs” bill, and so on.

When the voters didn’t buy his arguments his response was to tell them that, “They are confused and not thinking clearly” and that one statement will cost him dearly.

You don’t tell people that you want to vote for you that they are basically stupid if they don’t understand you, do you?

Harry Reid just said something equally stupid and it might cost him re-election in Nevada, “He saved the world economy!”.

Doesn’t he know that Oblamer is the One?!

Could Obama Have Played It Differently And Maybe Won?

Yes, he could have!

Obama could have embraced at least two policies that would have enhanced both equity and economic performance simultaneously, and some of them might well have bridged the ideological divide.

Fannie Mae and Freddie Mac.

Loan guarantees should not have been provided for Fannie and Freddie because they shifted risk from participants in real estate transactions to taxpayers, and the caused capital to flow into the industry under very favorable terms.

Creating the guarantees allowed mortgage lenders, realtors, homebuilders, developers, securities traders and others to reap enormous gains during the boom, only to later dump their losses on taxpayers during the ensuing bust.

Cutting off all federal support for Fannie and Freddie would have sent a completely different message.

It would not only have greatly enhanced equity, but would also have helped steer investment away from ever more conspicuous McMansions and into productive endeavors like building newer, more-efficient factories, all of which would have stimulated economic growth.

* “McMansion” is an originally pejorative term used to describe a large house, particularly in the United States, that is constructed using modern labor-saving techniques and materials

The Tax Code

Another area that was ripe for reform would have been the loophole-ridden tax code.

Today, the proliferation of carve-outs means that only around 40% of personal income is taxed!

The loopholes should have been removed as much as was possible and the tax base broadened, after which the Obama administration could have slashed rates, enhanced equity, and provided a huge stimulus to the economy.

Instead, the administration did exactly the opposite; it added even more loopholes and promised to raise rates!

Right now we have a situation where similarly situated families often face vastly different tax burdens depending on their ability to game the system, and it also means that investment is steered away from companies that are adept at building better products, to those with the knack for lobbying.

Will Obama Move The Goal Posts?

Obama was a member of the New Party (communist) just 13 years ago, and he was no teen.

Michelle is a Black separatist of the worst kind as her Princeton thesis shows.

Obama is on record as saying that he’d rather be a great one term President than an ineffectual two termer, so we can sadly expect him and Michelle to continue to try and force their socialist/communist on America!

Related posts:

1. More Than Eighty Reasons Why Obama Shouldn’t Be Reelected!
2. The ‘Loan Modification Program’ Finally Gets Underway.
3. More U.S. Cities Are Bulldozing Abandoned Homes

According to the National Association of Realtors, whose records go back to 1979, the median U.S. price for an existing single-family home dropped a record 15.6% to $174,100 in the second quarter of this year.

But Home Sales Increased

Meanwhile, sales of new homes increased by 11% for new homes and 3.6% for existing homes, which suggests that it’s a buyer’s market, and that buyers are taking advantage of the falling prices.

The total dollar reduction was $27.8 billion, and the states that were hardest hit were Nevada (15%) and Florida (13%) and a quarter of would-be sellers lowered prices by around 10%.

Which States Reduced Had The Most Reductions?

Connecticut, Massachusetts, Rhode Island and Illinois had the highest share of homes with price reductions of around 33%.

Then came,

Oregon 29%, followed by,

Washington
New Jersey
Minnesota
New Hampshire
Maryland.

Which Cities Were Worst Hit?

Jacksonville, Florida 38%
Portland, Oregon 35%
Milwaukee, Minneapolis, Boston and Seattle 34%
Albuquerque, New Mexico, and Chicago 33%
Detroit; 16%
Las Vegas 15%
Miami 13%
New York City and Phoenix 12%
San Francisco and Los Angeles 10%

* Undeveloped land and foreclosed properties were excluded from the above estimates.

Related posts:

1. Home Prices Higher In February Than In January
2. Home Prices in U.S. Expected to Fall Through 2010
3. U.S. Home Vacancies Reach Record High

What do they mean “probably rose”?

Surely, they did or they didn’t.

Sifting through the reports the good news was;

Orders for goods meant to last several years increased 0.4% making it the second gain in three months.

Combined sales of new and existing homes probably advanced to a 5.02 million annual rate from a 4.93 million pace in March, but again the reports say “probably”.

If true, and not “probable” then the above is good new but a stabilization in housing and manufacturing would help the present economic slump since they are the two areas suffering the biggest contractions. It won’t be possible to maintain these gains however unless banks loosen their purse strings, if unemployment continues to rise.

David Resler, who is the chief economist at Nomura Securities International Inc. in New York added to the “probables” and “expecteds” by saying “Evidence that the 16-month recession is coming to an end continues to build. Home sales and building activity seem to be stabilizing and manufacturing surveys point to smaller production cuts and smaller job losses”.

A spokesperson for Toll Brothers Inc., the largest U.S. builder of luxury homes, said last week, “That signs were beginning to emerge that the worst was over”, and “We believe the U.S. government’s forceful intervention in the capital markets has begun to restore some confidence that the financial system is on the road to stabilization”.

So the pundits are now telling us that the recovery is, “probable”, “expected” and “suggested”, and I hope that what they see is their glass balls is correct and that it will all happen soon, but I’d have liked to have seen more definitives.

Related posts:

1. U.S. Fixed Mortgage Rates Continue To Drop
2. Home Prices Higher In February Than In January
3. U.S. Housing Starts Unexpectedly Fall To Record Low

Why Banks Are Using Bulldozers on Foreclosed Homes | The …

curiouscapitalist.blogs.time.com8/1/11

UPDATED (5:29 PM) Banks have a new remedy for America's ailing housing market: bulldozers. There are nearly 1.7 million homes in the U.S. in some state of foreclosure. Banks already own some of these homes and will …

Council to bulldoze 175 homes in Gateshead – Chronicle News …

www.chroniclelive.co.uk12/6/11

YET more families are being forced from their homes as Gateshead Council flattens a third housing estate.

The growing number of abandoned properties across the country has caused property values and tax revenues to drop substantially, which in turn has led to fewer buyers and a growing number of vacant properties.

As of March 31, about 4 million homes had been empty for at least three months, a higher figure than in 2008, and about 3% of all U.S. homes.

Many cities and States, are themselves struggling with potential bankruptcy, and they’re finding it difficult to pay the firemen and policeman who are expected to deal with the increasing number of abandoned homes.

All is not doom and gloom however, and an innovative solution is now rapidly spreading across the country which entails local governments bulldozing abandoned properties, and using the newly reclaimed land for parks and playgrounds.

It’s a seemingly win-win situation, because it not only pleases local residents, but also creates jobs, and the icing on the cake is that the federal government is funding the action.

Last summer, Congress allocated $3.9 billion in emergency funds for cities to acquire and rehabilitate foreclosed properties, and a further $2 billion was assigned after Cleveland and other cities lobbied Congress.

In fact, Cleveland, which has over 10,000 abandoned homes, says it will use more than half of its $25.5 million stabilization fund to demolish more than 1,700 houses.

In addition to Cleveland, Cincinnati, Detroit, Minneapolis and Youngstown all say they have plans to use at least one-third of their neighborhood-stabilization funds for demolition.

Housing supply presently stands at about nine months, which is almost double the historic level of around five months, and approximately one in four home-buyers is in arrears on their mortgages, both of which sadly suggest the appearance of more and more abandoned homes, but happily, more jobs and more parks and playgrounds.

Related posts:

1. U.S. Fixed Mortgage Rates Continue To Drop
2. U.S. Home Vacancies Reach Record High
3. The ‘Loan Modification Program’ Finally Gets Underway.

www.clucerf.org1/10/12

As early as the 1950s, Mundell proposed an economic policy program of tight monetary policy to stabilize the value of the currency and low tax rates to stimulate economic activity. During the late … The Reagan Scenario included a sharp drop in inflation, a recession in 1982 due to tight monetary policy, passage of the Kemp Roth tax cuts and an economic boom starting in 1983. … Inflation and interest rates are much lower and tax rates are lower as well. While a high …

The hidden dangers of low interest rates | David Cay Johnston

blogs.reuters.com1/10/12

Low rates also come at a cost, cutting income to older Americans and to pension funds. This forces retirees to eat into principal, may put more pressure on welfare programs for the elderly, and … If rates return to, say, 6.64 percent, the level they were in 2000, one year's interest costs would equal the individual income taxes for all of 2011 plus the first few weeks of 2012. Last week , rates took a step in that direction. The yield on the 10-year bond, a benchmark for other …

President Obama’s recent claim to homeowners, that refinancing their mortgage loans at a lower rate, equates to a tax cut, doesn’t ring true for many tax experts.

Obama said at a recent press conference that the housing plan his administration had launched, had “already contributed to a spike in the number of homeowners who are refinancing their mortgages, which is the equivalent of another tax cut. The main message we want to send today is that there are 7 to 9 million people across the country who right now could be taking advantage of lower mortgage rates and that is money in their pocket”.

What Obama failed to mention however is that unlike the housing boom that led to the current financial crisis, this time, only borrowers with strong credit ratings and stable jobs will be able to save money if they refinance.

Obama’s announcement caused many tax analysts, including Gil Charney, who is an analyst for The Tax Institute at H&R Block to shout “foul”;

“While there could be overall savings by refinancing and lower monthly payments, there also could be reduced tax benefits as less interest is paid. Also refinancing could extend the period before the mortgage is fully paid off, so this might not be desirable for someone who wants to be mortgage-free. Therefore, someone about to make a financial decision should take their complete financial picture into account, not just their tax situation”.

In fairness to Obama, some analysts like Mark Steber, who is vice president of tax resources at Jackson Hewitt Tax Service did express a more supportive viewpoint, “While generally there is no tax advantage to refinancing at a lower rate, an individual can save on the total out of pocket costs each year over the life of the loan. Though a tax bill will actually increase after refinancing, the increase in taxes may be less than half of the total difference in interest paid, so the taxpayer may save more money than their taxes increase, therefore resulting in net savings”.

Related posts:

1. U.S. Fixed Mortgage Rates Continue To Drop
2. Two New Plans Announced To Help Homebuyers
3. The ‘Loan Modification Program’ Finally Gets Underway.

The Federal Reserve noted in a survey of loan officers that was released on Monday, May 6, that demand for prime mortgages rose in the first quarter for the first time since early 2007, and this was in spite of the fact that many banks tightened their requirements for home loans.

The increase in demand comes as 30-year mortgage rates fell to an average 4.78% last week.

Other details of the survey state that, about one half of U.S. banks tightened their lending standards on prime mortgages, which is up from about 45% from that given in a survey that was released in early February.

65% of banks reported having tightened their standards on non-traditional mortgages, such as adjustable-rate loans with multiple payment options, up from 50% in the last survey, and nearly 60% of banks said they tightened their requirement on credit card loans in the past three months.

The Fed’s survey was based on responses from fifty three domestic banks and twenty three foreign banks.

Additional good news was also reported by the National Association of Realtors which announced that its Pending Home Sales Index showed that pending sales of existing homes climbed upward in March, making two consecutive months of increases.

The NAR attributed a rise of 3.2% in signed contracts to “a flood of first-time home-buyers taking advantage of excellent mortgage interest rates”.

Related posts:

1. Are Low Interest Rates The Same As Tax Cuts?
2. U.S. Fixed Mortgage Rates Continue To Drop
3. As Stocks Advanced The Number Of Defaulting Homebuyers Rose By 50%

Median home-sale prices in March were around $7,000 higher than in February.
But they are still far lower than they were a year ago.

Some banks have started returning bailout money amid reports of better than expected profits in the first quarter of 2009, and the stock market has rebounded since early March.
But, the value of the Dow Jones Industrial Average is still at around 60% of what is was a year ago.

The administration claims that 2,000 new transportation projects have already been approved under the stimulus package.
But the construction sector lost 626,000 jobs between December 2008 and March 2009.

And whilst we’d truly love to believe that the economic crisis has bottomed out, the IMF (International Monetary Fund) estimates that the global economy will contract by 1.3% in 2009 and the U.S. economy by 2.8% which would be the most since 1946.

Related posts:

1. Our Economy – When Even The Ugly Looks Pretty.
2. As Stocks Advanced The Number Of Defaulting Homebuyers Rose By 50%
3. Home Prices Higher In February Than In January

The first program, which should be up and running within a month is intended to help borrowers that have second mortgages stay out of foreclosure, and it will make cash amounts up to $12,000 available to servicers, investors and borrowers who modify loan terms, and a government spokesperson said that as many as a two million participants in the mortgage-modification program may be eligible for the second-lien assistance.

An example of how the plan would work, would be borrower who had a $250,000 interest only, first mortgage and was paying 6% interest. If the housing expenses were equal to 40% of the borrowers income, then the government would pay $2,625 per year, for five years in order to reduce the payments. Moreover, if that same borrower also had a $43,942 second mortgage and was paying 8.6% interest, then the government might, and I say “might”, pay one half of the $2,336 annual cost for five years.

Overall reaction to the plans seems favorable, with Laurie Goodman who is an analyst at the Amherst Securities Group LP saying, “The new measures may ease mortgage investors’ concerns that the biggest banks and servicers would be tempted to rework too many loans under the program, in order to bolster their home- equity portfolios. Certainly, it appears that the Treasury has listened to first-lien investors and the announcement goes a very long way toward addressing their objections”.

Treasury Secretary Timothy Geithner said in a statement, “Ensuring that responsible homeowners can afford to stay in their homes is critical to stabilizing the housing market, which is in turn critical to stabilizing our financial system”.

Related posts:

1. U.S. Fixed Mortgage Rates Continue To Drop
2. The ‘Loan Modification Program’ Finally Gets Underway.
3. Are Low Interest Rates The Same As Tax Cuts?

The report lists a total of 4.2 million vacant homes for rent, and 4.9 million seasonal properties that were only used for a part of the year, and says that the number of people that own their own residences declined for the third straight quarter to 67.3%.

Foreclosures were included in a part of the Census Bureau, that also included vacation homes intended for year-round use, as well as homes that were unoccupied because they are under renovation, and there were 7.9 million such properties vacant in the first quarter, which is up from 7.5 million a year earlier.

What might seem odd however, is that the ‘percentage’ rate of all U.S. homes empty and for sale, known as the ‘vacancy rate’, actually fell to 2.7 percent in the first quarter, and the reason that it is thought to have fallen, is either because the number of homes on the market declined because they were sold, or because their owners gave up trying to market them, and according to National Association of Realtors, the inventory of homes on the market averaged 3.7 million in each of 2009′s first three months.

The world financial crisis, plus falling home prices seem to have pretty much destroyed homebuyer confidence, and the percentage of people who said they plan to buy a home in the next six months, dropped to a 26-year low in March, and the decline in real estate prices is expected to continue into 2010.

Related posts:

1. More U.S. Cities Are Bulldozing Abandoned Homes
2. U.S. Fixed Mortgage Rates Continue To Drop
3. Home Prices Higher In February Than In January