The Housing Bubble

As housing prices drop, closing costs are rising
Industry says new regulations demanding documentation for mortgages increases their workload -CNBC

Nationwide, the average origination and title fees on a $200,000 purchase mortgage totaled $4,070, according to Bankrate’s annual survey of closing costs. That’s an 8.8 percent jump compared to 2010 when the average closing costs totaled $3,741.

For the second year in a row, the states with the highest closing costs are New York, where costs average $6,183; Texas at $4,944; followed by Utah with $4,906. Next was California, where average closing costs in San Francisco totaled $4,832. New York and Texas have dominated the top spots for five years.

The cheapest places to get a mortgage are Arkansas, North Carolina and Indiana. In each of these states, the average closing costs are close to $3,400.

What exactly has gone up?
Most of the jump in closing costs is tied to fees charged directly by lenders.

On average, lenders charged about $1,614 in origination fees this year, up 10.3 percent from last year. Origination fees include lender charges for services such as underwriting and processing.

Fees imposed by third parties, including title, appraisal, postage/courier and survey charges, averaged $2,456, up 7.9 percent from 2010.

While some third-party fees rose, title insurance premiums changed little compared to last year. The survey excludes property taxes, homeowners insurance and recording fees.

Why are fees rising?
Many lenders and mortgage professionals claim that origination fees have increased because of stricter mortgage regulations that the government has implemented in the last two years.

“New regulations require more staffing and cost more money,” says Jason Auerbach, division manager of First Choice Loan Services in New York City.

Auerbach says some of the “new” regulations — which vary from having to take extra steps to verify a borrower’s income and employment to disclosure forms and licensing-related matters — have been in place for a couple of years already, but the mortgage industry takes them more seriously now. New forms and regulations that are still in discussion are influencing lenders already.

“Banks are self-regulating,” Auerbach says. “They want to make sure there is nothing in that loan that is going to make Fannie and Freddie uncomfortable.”

Fannie Mae and Freddie Mac buy most mortgages and have almost no tolerance for missing documents or errors in paperwork.

Neil Garfinkel, a New York real estate attorney with AGMB Law, says he has noticed firsthand the increased caution, as he has been retained to help several smaller banks seeking counseling related to mortgage compliance issues.

“It does cost them more, and I’m sure the costs have to be passed on to the consumer,” Garfinkel says.

No end in sight as Obama restarts debt talks- AP

President Barack Obama and congressional leaders are scrambling to find a way forward on a debt deal after House Speaker John Boehner threw negotiations into crisis by walking out on them with less than two weeks left to avert a potentially catastrophic default.

Do we know the fallout of the shoddy construction of the housing boom, or is the large number of squatters obscuring this information? All I’ve heard about is the toxic Chinese drywall.

This is a fact. I researched it.

2059 N Suzanne Cir
North Palm Beach, FL 33408

$104,000
Estimate My Monthly Payment

Beds:2 Bed
Baths:2 Bath
House Size:1,698 Sq Ft
Status: New
MLS ID R3212267
Days on site 2 days
————————————————————–

Location Address: 2059 N SUZANNE CIR
Official Records Book: 24626 Page: 802 Sale Date: Apr-2011

Apr-2011 24626/0802 $0 QUIT CLAIM SECY HOUSING & URBAN DEV

Jan-2011 24338/1793 $98,500 CERT OF TITLE US BANK NA

Jun-2008 22737/0813 $215,000 WARRANTY DEED PIZZI RICARDO

I’d use this price as the very maximum that I would pay:

Jan-2011 24338/1793 $98,500 CERT OF TITLE US BANK NA

Mommy! That mean ole REIC is still doing kickbacks! Syndicated story in Tucson’s daily fishwrap:

Housing: Referral games going on behind your back

The story’s sole comment (so far) references another racket:

reminds me of the doctors (not yours) who stick their heads inside the door to your hospital room to “see if everything’s ok” and bill you $75 for doing it.

Today’s little house for sale:

http://www.zillow.com/homedetails/13812-Parkland-Dr-Rockville-MD-20853/37303370_zpid/#{scid=hdp-site-map-list-address}

3/1, 0.21 acre, $215 K.

A little north of the heavily Hispanic areas. Also, the 3 bed 1 bath matches the 884 sq ft, so it probably doesn’t have any illegal bedrooms. Probably not that bad a deal. Yes, I know it would cost half that in another part of the country, but this is a mid-2002 price. I see more and mroe properties like this dropping from the $250K range to the $220K range… a good sign.

So much for President Obama’s Wall Street problem.

About a third of the money his top fundraisers have brought in this year has come from the financial sector, suggesting that strained relations with Wall Street have not hurt the president’s ability to attract donations there for his reelection campaign, according to data released Friday by the Center for Responsive Politics.

Why would anyone be surprised?

Sorry, Elizabeth, Wall Street Said No

So much for the meritocracy. Despite an elite education, effusive charm and brilliant wit, Barack Obama, like Bill Clinton before him, has ended up betraying his humble origins by abjectly serving the most rapacious variant of Wall Street greed. They both talk a good progressive game, but when push comes to shove — meaning when the banking lobby weighs in — big money talks, and the best and the brightest fold.

Both Democratic presidents had no difficulty appointing top bankers and their acolytes to all of the key economic positions in their administrations, but drew the line at fully backing the rare member of their team who had a proven record of defending the public interest when it was being savaged.

Consider the fawning treatment of former Goldman Sachs partner Gary Gensler by both Clinton and Obama. In the Clinton Treasury Department, it was Gensler working under both Robert Rubin and Summers who forcefully pushed for the radical deregulation of the financial industry that led to the biggest economic implosion since the Great Depression.

As Sen. Bernie Sanders, I-Vt., put it in opposing Obama’s nomination of Gensler to be head of the Commodity Futures Trading Commission, the position once held by Born: “Mr. Gensler worked with Sen. Phil Gramm and Alan Greenspan to exempt credit default swaps from regulation, which led to the collapse of AIG and has resulted in the largest taxpayer bailout in U.S. history.”

http://news.yahoo.com/sorry-elizabeth-wall-street-said-no-070000571.html

Go figure…

SUNDVOLLEN, Norway (Reuters) – A suspected far-right gunman in police uniform killed at least 84 people in a ferocious attack on a youth summer camp of Norway’s ruling Labour party, hours after a bomb killed seven in Oslo.

Deputy Police Chief Roger Andresen would not speculate on the motives for what was believed to be the deadliest attack by a lone gunman anywhere in modern times.

“He describes himself as a Christian, leaning towards right-wing Christianity, on his Facebook page,” Andresen said.

http://www.euronews.net/newswires/1024273-man-kills-at-least-91-in-norway-shooting-bombing/

Posted at 01:08 PM ET, 07/22/2011
How Congress put our credit rating at risk
By Ezra Klein

(JEREMY BALES/BLOOMBERG NEWS) Standard Poor’s is getting stricter. Back in October, they said our credit rating was solid for the foreseeable future. “We are keeping the rating at ‘AAA,’ with a stable outlook,” they wrote, because the various age-related pressures acting on our deficits were “unlikely to have an impact on the rating in that timeframe.”

In January, they emphasized their position that the debt ceiling and deficit reduction should be considered separately. “Raising the debt ceiling now is the delayed impact of budgetary choices made in 2010 and in previous years. Although we believe the U.S. government needs to enact a number of fiscally prudent reforms, in our opinion, it’s best practice for governments to enact such reforms on a holistic basis, using the broader and longer-term perspective occasioned by debate on the budget proposal as a whole, and tying any necessary increase in borrowing authority to the budget proposal that creates the need.”

In April, there were signs of some impatience. Now they said we had another two years before we need to take action to protect our credit rating. “Some compromise that achieves agreement on a comprehensive budgetary consolidation program — combined with meaningful steps toward implementation by 2013 — could lead us to maintain the rating where it is. Conversely, the lack of such an agreement by 2013, or a significant further fiscal deterioration for any reason, could lead us to lower the rating.”

And now? On July 18th, the credit-rating agency released a “research update” saying that the United States would be downgraded unless it struck a $4 trillion budget deal in the next 90 days or so. “We may lower the long-term rating on the U.S. by one or more notches into the ‘AA’ category in the next three months, if we conclude that Congress and the Administration have not achieved a credible solution to the rising U.S. government debt burden and are not likely to achieve one in the foreseeable future.”

So in under a year, Standard Poor’s has moved us from a three-to-five-year timeframe for a plan to 90 days. The question is, “why?”
…

Realtors Are Liars®

This is such an obvious solution to haggling over the debt ceiling, I’m surprised it took until now for someone to suggest it.

Moody’s suggests U.S. eliminate debt ceiling
By Walter Brandimarte
NEW YORK | Mon Jul 18, 2011 10:33am EDT

(Reuters) - Ratings agency Moody’s on Monday suggested the United States should eliminate its statutory limit on government debt to reduce uncertainty among bond holders.

The United States is one of the few countries where Congress sets a ceiling on government debt, which creates “periodic uncertainty” over the government’s ability to meet its obligations, Moody’s said in a report.

“We would reduce our assessment of event risk if the government changed its framework for managing government debt to lessen or eliminate that uncertainty,” Moody’s analyst Steven Hess wrote in the report.

The agency last week warned it would cut the United States’ AAA credit rating if the government misses debt payments, increasing pressure on Republicans and the White House to come up with a budget agreement.

Moody’s said it had always considered the risk of a U.S. debt default very low because Congress has regularly raised the debt ceiling during many decades, usually without controversy.

However, the current wide divisions between the House of Representatives and the Obama administration over the debt limit creates a high level of uncertainty and causes us to raise our assessment of event risk,” Hess said.

Stepping further into the heated political debate about U.S. debt problems, Moody’s suggested the government could look at other ways to limit debt.

It cited Chile, widely praised as Latin America’s most fiscally-sound country, as an example.

“Elsewhere, the level of deficits is constrained by a ‘fiscal rule,’ which means the rise in debt is constrained though not technically limited,” Moody’s said, adding that such rule has been effective in Chile.

It also cited the example of the Maastricht criteria in Europe, which determines that the ratio of government debt to GDP should not exceed 60 percent. It noted, however, that such a rule is often breached by the governments.

In the United States, Moody’s said the debt limit had not effectively curbed the rise in government debt because lawmakers regularly raise it and because that limit is not related to the level of expenditures approved by Congress.

America’s Debt Crisis
How Congress could spark a credit crisis
By Charles Riley @CNNMoney July 22, 2011: 2:48 PM ET

It could be 2008 all over again for Ben Bernanke and Tim Geithner.

NEW YORK (CNNMoney) — Could a failure to raise the debt ceiling spark the same kind of credit crisis that plunged the global economy into a recession in 2008?

Short answer: Yes. That’s exactly the situation some experts are warning the United States will find itself in if the Treasury Department were to miss interest payments.

The government’s debt — in the form of Treasuries — is the lifeblood of the credit system and provides the grease for the short-term lending banks rely on.

The doomsday scenario goes like this: Worried short-term lenders start demanding more collateral, while the value of Treasuries becomes muddled. Alternatively, a default results in a downgrade of U.S. debt, spurring some investors to sell Treasuries.

Either way, the impact ripples out into the economy. Banks are unable to borrow, and credit markets freeze.

It’s the kind of crisis that quickly transfers from Wall Street to Main Street.
…

Arlen Specter: Congress is a profile in cowardice
Former Pennsylvania senator says debt ceiling fallback plan is an abdication of Congress’ responsibility
By Arlen Specter
8:00 a.m. EDT, July 23, 2011

Washington traditionally boasts about its’ profiles in courage. Today, facing arguably the greatest potential financial crisis in American history, politics trumps economics as officials focus on the next election instead of the public interest.

The leader of the parade in profiles in cowardice is Senate Minority Leader Mitch McConnell with his ingenious, diabolical proposal, which avoids tough votes for Republicans and places all the blame on Democrats. It’s all inside the beltway maneuvering and hard to explain, but it is indispensible for the American people to understand it so public opinion can be mobilized to stop it.

Senator McConnell wants an act of Congress to give the president the authority to raise the debt ceiling on his own and then to decide where federal expenditures would be cut. Congress could overrule the president with a resolution of disapproval calculated to fail because it would be vetoed and an override by two-thirds of both houses would be a practical impossibility. This cynical plan would enable Republicans to vote for the sham resolution of disapproval and then claim no responsibility for raising the debt ceiling or for cutting popular programs. The Democrats would have to provide the votes to sustain the veto and get the blame for increased borrowing and curtailing popular social programs.

The plan is patently unconstitutional because Congress cannot delegate its’ core responsibilities to the president.
…

One thing seems increasingly clear as these debt talks proceed:

Whatever comes out of them, Main Street is going to take the hit. I’m guessing a year or so from now, we will once again be reading about how Wall Street Megabanks did miraculously well in the wake of whatever austerity measures come out of the success or failure of the debt talks, while Main Street Americans get to eat another steaming pile.

July 23, 2011 9:59 AM

Blame game over debt talks begins
By John Dickerson

Kaboom! The effort to reach a grand bargain on raising the debt ceiling blew up Friday evening. Before the pieces had even hit the ground, both White House aides and congressional Republicans were pointing to them as evidence that they were right and the other side was wrong. In his press conference, President Obama said Republicans “wouldn’t take yes for an answer.” Republicans said the president pushed his luck, asking for tax increases which soured the deal at the last minute. Each side disputed the other’s account.

This battle of the reconstruction will go on for months. At the same time, amid the he said/he said squabbling, we know reasonably well what each side was willing to do, and what each was unwilling to do. How you assign blame depends on how you see the world.

If you look to Washington for compromise in which each suffers some pain to get a mutually beneficial result, then you should credit the president for doing more than the Republicans. To anyone who has reported on this process over the last few months and in the fevered past few days, it was clear that Democrats were going to be taking the bigger hit to the things they cared about. Obama didn’t even want spending reductions tied to the debt limit vote. The Tea Party changed the national political conversation. To catch up with the country’s desire to cut spending, the president offered Republicans $3 trillion in cuts including offering to trim entitlements. His base, which includes people who think cuts of any kind are suicide, was furious at the size and kind of what Obama was offering.

If you hold this view about the way Washington should work, then you will find the president’s words at the end of his press conference stirring. He was as angry as he has ever been in public as he talked about “ordinary folks who are struggling every day.” He continued: “They know they’re getting a raw deal, and they’re mad at everybody about it. They’re mad at Democrats and they’re mad at Republicans, because they know somehow, no matter how hard they work, they don’t seem to be able to keep up. And what they’re looking for is somebody who’s willing to look out for them. That’s all they’re looking for.”
…

It seems clear the Republican plan is to engineer a double-dip recession going into a presidential election year, whether by success or failure in the debt limit talks. I still expect this to backfire on them, as the voters will place more blame on the Republican side of the aisle for a collapse of the debt talks.

Boehner to insist on deep cuts for debt increase
WASHINGTON | Sat Jul 23, 2011 10:19am EDT

(Reuters) - House Speaker John Boehner will stick to his demand for spending cuts greater than the size of an increase in the U.S. debt limit at an 11 a.m. EDT meeting with President Barack Obama on Saturday.

A Boehner aide also said the top House Republican viewed Obama’s insistence of a debt limit increase that would carry the country to 2013 as a condition designed to suit the president’s re-election chances.

“It would be terribly unfortunate if the President was willing to veto a debt limit increase simply because the timetable prescribed would not be the ideal one for his re-election campaign,” the aide said.

Analyst: Debt-ceiling debate harms housing
July 21st, 2011, 11:30 am · posted by Jon Lansner

Veteran Southern California real estate analyst G.U. Krueger adds his commentary on the housing market to this blog in a spot we call “Thursday Morning Quarterback.” Here’s his latest installment.

Attempting to identify the short term direction of the housing market is like deciphering hieroglyphs. There are many signs and all mean different things.

The housing market is struggling for stability and behind it all lurks the issue of consumer confidence, which is clearly not being helped by “the-running-out-of-time” Kabuki theatre about the debt ceiling in Washington.

This may be revealed by a recent report from Altos Research for July on repeat sales home price trends. Their 20-City composite index and Mid-City Composite exhibited an upward trajectory until just a few weeks ago, but the latest seven-day numbers show some flattening.

This is unfortunate, because the Altos Research Mid-Cities Report for 20 mid-sized US markets, which are normally ignored by the media, showed good improvements on a monthly basis through July this year.
…

http://blogs.telegraph.co.uk/finance/jeremywarner/100011023/chinas-spectacular-real-estate-bubble-is-about-to-go-pop/

The moment is ripe for the emergence of a Chinese Ben Jones.

The from WSJ…

The Obama administration is examining ways to pull foreclosed properties off the market and rent them to help stabilize the housing market, according to people familiar with the matter.

While the plans may not advance beyond the concept phase, they are under serious consideration by senior administration officials because rents are rising even as home prices in many hard-hit markets continue to fall due to high foreclosure levels.

Trimming the glut of unsold foreclosed homes on the market is “worth looking at,” said Federal Reserve Chairman Ben Bernanke in testimony to Congress last week.

I wonder if “rents” would still be rising if all the foreclosures were also available for rent? At a minimum, it would ensure a decent supply of living accommodations rather than some 10%+ of US homes sitting empty, but would it actually keep prices up or diminish the value of homes by lowering rents?

Victims? Deadbeats? How about thieves.

Original purchase

Location Address: 557 IVY AVE

Oct-1993 $87,700 WARRANTY DEED KONING THOMAS E &
———————————————————————–
For sale today

557 Ivy

MLS# R3213053

List Price $ 150,000

Shot Sale Y
———————————————————————-
Would have been a nice profit for KONING THOMAS E but he took out a little “equity” along the way.

Type: MTG
Date/Time: 3/27/2000 02:15:50
CFN: 20000108616
Book Type: O
Book/Page: 11682/89
Pages: 2
Consideration: $35,040.00
Party 1: WOOD NATALIE E NKA
KONING NATALIE E FKA & THOMAS E
KONING THOMAS E M
Party 2: ASSOCIATES FIN SVC AMERICA INC
Legal: PB GDN EST 1 B4 L12 BL

Type: MTG
Date/Time: 12/8/2004 08:40:44
CFN: 20040691543
Book Type: O
Book/Page: 17855/1749
Pages: 9
Consideration: $78,000.00
Party 1: KONING THOMAS E
WOOD NATALIE E
Party 2: BANK OF AMERICA NA
Legal: PB GDN EST 1 B4 L12 BL

Type: MTG
Date/Time: 10/25/2006 11:35:29
CFN: 20060602207
Book Type: O
Book/Page: 21005/1562
Pages: 17
Consideration: $315,000.00
Party 1: KONING THOMAS E
WOOD NATALIE E
Party 2: MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC
FIELDSTONE MORTGAGE COMPANY
Legal: PB GDN EST 1 B4 L12 BL

It’s the $100.00 made-in-China moped + x2 walkie-talkies, …versus… the $80 million$ Predator Drone + Military Industrial Complex Inc. $upport staff & mi$c. equipment.

Iranian nuclear scientist shot dead on Tehran street:
Gunmen on a motorcycle shot physicist Dariush Rezai outside his home near a military base, an Iranian news agency reports. He’s the latest victim in a series of attacks on nuclear scientists in Iran, which is suspected of trying to build a nuclear weapons program.

Borzou Daragahi Los Angeles Times / July 23, 2011
Special correspondent Ramin Mostaghim in Tehran contributed to this report.

It’s reassuring to know there are professional money managers who are just as confused about the prospective effects of a debt default as I am.

THE INTELLIGENT INVESTOR
JULY 23, 2011

Forget About Black Swans, the One Floating Ahead is Neon
By JASON ZWEIG

You’ve heard of black swans—events that are unthinkably rare, immensely important, and as unpredictable in advance as they are inevitable in hindsight. Now, with no one ruling out a default or downgrade of U.S. Treasury debt, investors face a new kind of threat: what we will call the neon swan, an event that is unthinkably rare, immensely important and blindingly obvious.

The politicians in Washington have a couple weeks to forestall a disaster that has begun to seem like a certainty. Investors everywhere are perfectly aware of the consequences if Congress and the Obama administration can’t strike a deal: The U.S. is likely to lose its privileged triple-A credit rating, and corporate bonds and stocks alike could plummet in response.

As Nassim Nicholas Taleb’s bestseller “The Black Swan” made clear, the human mind is poorly equipped to prepare us for rare, important and unpredictable events. But maybe our minds—and our markets—aren’t very well equipped to protect us against neon swans, either.

Many investors seem to be coping with what seems like an obvious risk simply by closing their eyes.

Theodore Aronson, a partner at Aronson Johnson Ortiz in Philadelphia, oversees $21 billion in stock investments for 90 institutional clients. In roughly 75 conference calls with clients over the past few weeks, says Mr. Aronson, no one has asked whether a different investing approach is needed in light of the risk that a U.S. debt crisis might make the markets go haywire.

“I find it amazing,” he says, “that we have not gotten a single question or comment about it.”

Then again, Mr. Aronson adds, his firm hasn’t done anything to protect against the risk of a crisis in the Treasury market. “We’ve thought about it, but we don’t know what to do,” he says. “As best we can figure it, there isn’t anything we can do.”
…

I personally doubt stories about higher interest rates in the event the debt ceiling is not raised. If rates truly were at risk of going higher, wouldn’t they have already risen by now to price in the risk of default?

Debt Drama Could Be Another Blow To Housing
by Chris Arnold

Patrick Fortin, owner of Century 21 Commonwealth, which has 500 real estate agents in the Boston area, says the uncertainty over the debt ceiling is hurting the housing market since it’s making people nervous about the economy.

July 21, 2011

Members of Congress appear closer to reaching a deal in the ongoing drama over raising the nation’s debt ceiling. The economic stakes are high, and top investors and executives at major companies have been putting increasing pressure on lawmakers to strike a deal.

Take the housing market for example: Industry insiders there worry that if the political theatrics continue much longer, that could spook investors, drive up interest rates, push down home prices and hurt the economy.

Right now, interest rates are low, and that means the government can borrow money cheaply to finance its huge debt load. Likewise, many home buyers can get low mortgage rates, which is a rare bright spot for the beaten down housing market.

“Rates are unbelievable, they’ve been unbelievable for a while,” says Patrick Fortin, who runs Century 21 Commonwealth in Boston. “It’s a huge factor, it’s kept the market from being in much worse shape.
…

“TrueReducetheDeficitNow!Today!™” + “TruePathtoPro$perity!™” =

Job$! Job$! Job$!

But efforts to harmonize the House and Senate measure have faltered because Republicans have inserted a number of controversial provisions into the proposed compromise, including a measure that would make it harder for airline and railroad employees to unionize.

Ho ho, hah hah, hehehehehehe, BwaHaHaAhHAHAHAHAHAHA!!! (Cantankerous Intellectual Bomb-thrower™)

FAA furloughs thousands amid congressional funding stalemate:
CHICAGO | Sat Jul 23, 2011 / Reuters

As a result, Transportation Secretary Ray LaHood warned the partial shutdown would immediately filter into the private sector, including the hard-hit construction industry, by bringing about $600 million in airport improvement projects around the country to a standstill.

The Federal Aviation Administration, the arm of the U.S. Department of Transportation responsible for air passenger safety, furloughed about 4,000 of its workers on Saturday after Congress failed to reauthorize the agency’s funding

We Are In a Great Depression:

Its just a depression with Food Stamps, UE for two+ years, “Simulus” out the Ying, Obamacare, Massive Bank Bailouts, QE, other stupid wasteful government give-aways.

That is the only thing that is different this time.

Take all of those freebies away and it would look identical to the last Great Depression.

(except)

The resoursefulness of average American is now a tenth of what it was 80 years ago. Things are much uglier than they seem. iPads and iPhones aside…

Expect a bumpy ride during the rest of this fake “Recovery”.

Oh yeah, more importantly, Amy Winehouse died is the big headline you should be paying attention to. (is anybody really supposed to care? Who is Amy Winehouse?). Now if you read the tabloids…

Pent up rant for the week is over. That is all. Go about your blog-reading.

I thought Boehner pulled the plug on debt ceiling negotiations. Did he change his mind already?

Congress Leaders Rush to Forge Debt Plan Before Markets Open
Saturday, July 23, 2011

July 23 (Bloomberg) — With few signs of progress, congressional leaders pressed to devise a plan to avert a U.S. default before financial markets open as President Barack Obama remained opposed to any short-term debt-limit increase.

Obama told lawmakers today at a White House meeting that a short-term extension of the $14.3 trillion debt-limit would be “irresponsible” and “could cause our country’s credit rating to be downgraded, causing harm to our economy,” White House Press Secretary Jay Carney said in a statement.

Less than 36 hours before markets open in Asia and a day after House Speaker John Boehner withdrew from talks with Obama on a broader deficit-reduction deal, congressional leaders sought to produce a plan that could pass both chambers.

“Over this weekend Congress will forge a responsible path forward,” Boehner, an Ohio Republican, said in a statement after the White House meeting. “House and Senate leaders will be working to find a bipartisan solution to significantly reduce Washington spending and preserve the full faith and credit of the United States.”
…

Would anyone who understands why providing “affordable housing” to millionaires living on the California Coast is a vital national concern kindly explain to me? I just don’t get it.

The Wall Street Journal
July 22, 2011, 5:47 PM ET

Rep. Frank: Hope Still Alive for Mortgage-Cap Extension
By Alan Zibel

Lawmakers still have a chance of preserving higher loan limits for mortgage giants Fannie Mae and Freddie Mac given fierce lobbying from the mortgage industry and a weak housing market.

That’s according to Rep. Barney Frank of Massachusetts, the top Democrat on the House Financial Services Committee.

Mr. Frank said in an interview Friday he believes the Obama administration will reverse course and support keeping the maximum size of mortgages that can receive government backing from dropping this autumn. He also said he believes many House Republicans will support doing so, given concerns about the housing market’s health.

“I think there’s a very real chance they’ll get extended,” said Mr. Frank.

Those limits, which affect loans backed by Fannie Mae, Freddie Mac and the Federal Housing Administration, are scheduled to drop on Oct. 1. If Congress takes no action, they will fall from the current level of $729,750 to $625,500 in expensive areas, mainly on the East and West coasts.

Government backing for mortgages makes it easier and cheaper for borrowers in high-cost housing markets to obtain mortgages because the government guarantees that investors will receive payments on those mortgages even if homeowners default. Fannie and Freddie have been under federal control since they nearly failed in September 2008.

In a paper published in February, the Obama administration endorsed lowering the limits as a way to wind down the government’s support for the $10.4 trillion U.S. mortgage market. Obama administration officials said Friday this position hasn’t changed and did not comment further.

Reps. John Campbell (R., Calif.) and Gary Ackerman (D., N.Y.) have introduced a bill that would delay the loan-limit reduction for another two years. They said that housing markets are too shaky, arguing that cutting the loan ceilings would raise borrowing costs for some homeowners.

“With so much at stake for American families, inaction is not an option,” Mr. Ackerman said in a statement Friday. Extending the limits will help “thousands of qualified homebuyers and maintain the affordability and availability of home loans across the nation.”

Housing Secretary Shaun Donovan told The Wall Street Journal earlier this month that the administration is “paying attention to market conditions” and “looking carefully” at the effect of the decline in the limits.

Geithner’s Possible Departure Would Make Obama Rebuild Team For Campaign
By Hans Nichols - Jul 1, 2011 3:43 AM PT

Treasury Secretary Timothy F. Geithner’s potential departure from the administration would force President Barack Obama to assemble a new economic team as he enters a re-election campaign that’s likely to be dominated by voter concern over jobs.

Geithner has told Obama that he’s considering leaving the administration after the president reaches an agreement with Congress to raise the national debt limit, according to a person familiar with the matter.

The Treasury secretary said yesterday that speculation about his departure was being driven by his decision to commute to New York so his son can finish his final year of high school there. He stated his intention to stay, without saying how long.

“I live for this work,” he said at the Clinton Global Initiative in Chicago. “It’s the only thing I’ve ever done. I believe in it. We have a lot of challenges as a country. I’m going to be doing it for the foreseeable future.”

Geithner, 49, won’t make a final decision on whether to leave until the debt-ceiling issue has been resolved, according to another person familiar with the matter. Both people spoke on condition of anonymity to talk about private discussions.

An exit by Geithner would complete the turnover in Obama’s original economic team, with Council of Economic Advisers Chairman Austan Goolsbee scheduled to leave in early August to return to the University of Chicago. It would leave Obama with two key posts to fill as the recovery slows. The unemployment rate rose to 9.1 percent in May, and the economy grew at a 1.9 percent pace in the first quarter, the government reported.
‘New Blood’

Three other top economic advisers already have departed. Goolsbee replaced Christina Romer at the CEA, and National Economic Council Director Lawrence Summers and Office of Management and Budget Director Peter Orszag left the administration last year.

“There is never a good time to leave, but there is also value to bringing new blood into the policymaking process,” said Stephen Myrow, a former Treasury official who’s now with ACG Analytics Inc., a Washington investment research firm.

“If and when Secretary Geithner announces his departure, it will be interesting to see whether the president emphasizes with his replacement financial-sector credentials like he did by choosing William Daley as his chief of staff, or if he focuses primarily on Washington experience and regulatory acumen,” said Myrow.
Needs a Break

Geithner has told associates he needs a break from government service after dealing with the turmoil that followed the collapse of Wall Street firms, including Bear Stearns Cos. and Lehman Brothers Holdings Inc., first as president of the Federal Reserve Bank of New York and then as Treasury secretary.

Now he’s facing pressure over the debt limit. He has said the U.S. risks defaulting on its obligations if Congress doesn’t raise the $14.3 trillion debt ceiling by Aug. 2. The administration and Republicans in Congress are at an impasse in negotiations over increasing the limit, which is tied to efforts to cut the nation’s long-term deficit.

Moody’s Investors Service said on June 2 that it expects to place the U.S. government’s Aaa credit rating under review for a possible downgrade if there’s no progress on the talks by mid- July. Fitch Ratings said June 21 it would place the U.S. on a negative rating watch if no action is taken by Aug. 2.

“Geithner leaving may raise the level of uncertainty for the direction of economic policy, and that is never a positive thing for the markets and the recovery,” said Christopher Sullivan, who oversees $1.7 billion as chief investment officer at the United Nations Federal Credit Union in New York.

No ‘Shock Value’

Still, he said, it wouldn’t have too much “shock value,” especially if Geithner remains at Treasury until the debt ceiling is settled, “which is the most pressing concern.”
…

One thing for sure: A failure to raise the debt ceiling would make Pimco’s Bill Gross look like a genius for unloading Treasurys several months ago.

Default Seen Unlikely, but Markets Prepare
By BINYAMIN APPELBAUM and ERIC DASH
Published: July 23, 2011

WASHINGTON — World markets have behaved until now as if it were inevitable that Congress would raise the debt ceiling, the maximum amount the federal government can borrow, before the Treasury Department exhausts its ability to pay all of its bills in early August. The breakdown of negotiations Friday has jolted that sense of equanimity, wrenching the worst-case scenario from unthinkable to merely unlikely.

Some debt traders said they were looking for evidence of progress toward a deal before markets open on Monday.

“This press conference was a pretty significant moment,” said Ajay Rajadhyaksha, head of United States fixed-income strategy at Barclays Capital, referring to President Obama’s announcement after markets had closed for the week that talks had broken down. “I would be pretty surprised if investors did not exhibit a greater degree of worry when we walk in Monday morning than they have shown so far.”

Aware of the pressure of Monday’s market opening, Speaker John A. Boehner said Saturday that Congressional leaders were working on a new deficit-reduction plan that would resolve the impasse and allow the debt ceiling to be raised. He said he hoped the plan could be announced within the next 24 hours.

Even if a deal is reached, investors have become increasingly worried that the rating agency Standard & Poor’s may reconsider its certification of government securities as an ultrasafe investment. The company has said there is a 50 percent chance it will downgrade the rating in the next three months, depending on whether the federal government adopts a long-term plan to pay down its debts. Such a move could send interest rates higher for a broad range of government and consumer loans.

Some of the options still on the table to raise the debt ceiling, involving smaller packages of spending cuts, might not be sufficient to satisfy S.& P. or Moody’s and Fitch, two other rating agencies that have expressed concern over the debt negotiations.

“I think the market still has confidence that the debt ceiling will be raised in time,” said Terry Belton, head of fixed-income strategy at JPMorgan Chase. “The focus is on downgrade risk.”
…

Sean Purcell’s Contrarian View: Celebrate Loan-Limit Changes

With the Oct. 1 change in loan limits fast approaching, I have heard nothing but grumbling from real estate brokers, agents, mortgage lenders and buyers.

The big surprise of the week was an email from Sean Purcell, a mortgage lender of 20-plus years in the area.

Although I don’t always agree with him on a variety of subjects, I have to consider his views. His bona fides are impeccable. Not only has he been a successful mortgage lender, but he also graduated from Princeton University with a degree in philosophy, is a managing director at World Wide Credit Corp. and founded Life that POPS, a philosophy site for achieving happiness and success in life (not necessarily related).

He blogs, and he writes for a number of online and national magazines. He also enjoys training for triathlons while, he laughingly says, listening to the laughter of those who see him doing it.

His email to me is printed here with his permission and does not necessarily reflect my views:

There’s more changes coming to the residential lending world (all those surprised by that, please stand on your head and whistle). The Fed has decided to maintain their conforming loan limits, while lowering their non-conforming loan limits. Wait, what? A little background might help: In 2008, Fannie Mae’s charter was expanded to allow for loan amounts in high-cost areas (such as San Diego—yeah, us!) to exceed the nationwide conforming loan limit of $417,000. Loans in San Diego County have most recently been limited to $697,500, thus keeping our beautiful San Diegans in the fine homes to which they’ve become accustomed.

But as of this Oct. 1, the limit is dropping; in San Diego County, it will be $546,250 and some wonder if this isn’t just a steppingstone on the way down to the original $417,000!

As you might imagine, not everyone likes this decision. The National Association of Realtors has sent out an Emergency Action message to all its members warning this decrease in loan limits will “make creditworthy borrowers unable to access affordable financing.”

This raises an interesting question: Should the government be providing affordable financing in high-cost areas?

Hold on. Let me ask that again with the subtitles translated: Should you and I be subsidizing mortgages for people buying $800,000 homes? You’re quite right; I’m being insensitive to the needs of many fellow San Diegans. Let’s move on to the good news.

Because the Fed was unwilling to do loans over the “high cost” loan limit, there were—until very recently— no true Jumbo loans to be found.

Unlike jumbo shrimp, a jumbo loan actually means what it sets out to mean—a loan amount larger than Fannie Mae’s conforming limits. If you were buying a home for, oh, let’s say $1.5 million, you were right out of luck unless you were willing to put down almost $1 million of the purchase price. How’s that for not providing access to affordable housing?

But something strange happened when the government decided to get out of the “high cost area” loan market. Actual bona-fide, free-market lenders came roaring back.

Once again, what’s that mean for San Diego County? It means you can get a loan for much, much more than $607,500 now; you can get a loan for $2 million, $3 million, even $4 million!

Imagine that. Just a couple of months ago, these loans didn’t exist and then—poof, as if by magic—they’re back.

“Oh, sure,” you’re thinking. “These loans might exist again and that’s nice, but what’s the rate? Can I even count that high?” Surprisingly enough, if you can count to 5 and one-fourth, you can master the rates on these true Jumbo loans.

So what’s the catch? The catch is: These are actual loans originated by actual lenders, which means they expect the buyer to put 25 percent or even 30 percent down. They also expect the buyer to have a very good credit score.

Well, those evil banks, is that what they call access to affordable financing? No, it’s called a risk assessment, and a surprisingly inexpensive one at that.

So while some bemoan the lowering of the non-conforming/conforming loan limits, may I suggest that we celebrate? Celebrate the reawakening of lenders who provide loans that, while not common, are needed for the move-up market.

Celebrate common sense underwriting standards as opposed to the same “we need to keep financing affordable no matter the cost.”

Celebrate this as an example of how to actually help the housing market.

The Fed is lowering its loan limits and moving away from the jumbo loan limit. That’s the best real estate news I’ve heard in a while!

After the scumbags get done screwing Middle Class America left or right over the debt ceiling, they will get back to the business of forcing taxpayers in Flyover Country to guarantee millionaires’ mortgages in high-end Coastal housing markets.

REVIEW & OUTLOOK
JULY 22, 2011

Fannie Mae’s Revivalists
A scheme is afoot to keep taxpayers guaranteeing $700,000 mortgages.

If you think a taxpayer bailout of $164 billion (and counting) is enough to convince politicians to stop guaranteeing mortgages, then you don’t know Washington. A bipartisan effort is now underway in Congress to keep Fannie Mae and Freddie Mac dominating the mortgage market even for affluent borrowers.

On Wednesday the Capitol Hill publication CQ Today quoted Barney Frank saying that the White House is ready to repudiate a February reform proposal and support this effort. An Obama Administration official tells us that its position hasn’t changed, and we hope they mean it.
…

Heh heh… we saw some Amish folk touring Yellowstone National Park a couple of weeks ago. Those funky beards and costumes really caught my kids’ attention.

Time for a ‘This is Bullshit’ Speech?
By James Fallows
Jul 23 2011, 11:45 AM ET

Years ago I saw this headline in The Onion: “AMISH GIVE UP. ‘This is Bullshit,’ Elders Say.”

It may be time for President Obama to give a “This is bullshit” speech about the debt-ceiling negotiations. Merrill Goozner has done an item worth noticing. It’s a proposed Presidential Address next week about the folly of Congress failing to authorize an increase in the debt ceiling, to pay for programs and tax cuts that Congress has already voted to enact. The speech begins:

>>”My fellow Americans. It is my sad duty to report that the House of Representatives, having voted over many years to establish this vast enterprise we call the federal government, which touches each one of our lives, has under its new leadership decided not to pay for the programs it voted to create. I now must carry out my constitutional duties, which are twofold. I must honor the commitment that the United States government has made to millions of lenders here at home and abroad. And, I must carry out the programs that Congress has voted to create.

“Unfortunately, Congress’ failure to raise the debt ceiling means there is insufficient money to do both. Therefore, I must do the best I can with the resources at hand, while not violating the constitution…”<<

And it builds to this conclusion about the steps the President will take to ensure that the nation honors its debts, as it has through war, depression, and strife through the preceding two centuries:

>>”I am by law required to honor the obligations of the U.S. government, which were appropriated by Congress and signed into law by me and previous presidents. Even as I am distraught beyond words at the pain the irresponsible actions of the Republican-controlled House of Representatives have brought on the American people, I must do my duty…. <<

Or more plainly, “This is bullshit.”
…

The debt ceiling
Scheme, stonewall and fulminate
America’s politicians posture as a self-inflicted crisis draws ever nearer
Jul 21st 2011 | WASHINGTON, DC | from the print edition

“WE’RE in the eleventh hour,” declared Barack Obama this week, referring to the short time remaining before federal borrowing reaches the limit imposed by Congress, forcing a default. Yet it is not too late, in the eyes of many congressmen at least, to introduce elaborate new schemes to avert calamity. A bipartisan group of senators unveiled one shortly before the president spoke. The leadership of the House of Representatives and their counterparts in the Senate, meanwhile, are each pushing their own plans. But it is not clear that any of these have the votes to get through Congress by August 2nd, when the Treasury says it will run out of accounting manoeuvres and simply stop paying some bills (it has not said which). That, in turn, could throw the global financial system into disarray, and further weaken America’s sickly economy.

A simple act of Congress is all that is needed to raise the debt ceiling. But the Republicans who control the House of Representatives say they will not approve one unless it comes with dramatic measures to cut the deficit. Some in their ranks claim they do not want the debt ceiling raised at all, although that would oblige the government to cut spending by almost half overnight. Despite many hours of negotiation the leaders of the two chambers and the president cannot even agree on what amount of deficit-reduction they are aiming for, let alone how to reach it. The president wants to cut $4 trillion or so from projected deficits over the next decade, which would be enough to stabilise and start reducing America’s debt as a share of GDP. Republicans say that is too ambitious given the tight schedule and the gulf between their positions.

The substance of a deal is even more fraught. Republicans in the House say they will not accept any tax rises, which the Democrats want. The leaders of the Democratic minority in the House say they will not accept cuts to the social safety net, which Republicans want (given the likely level of Republican opposition to any compromise, some Democratic votes will probably be needed to get any deal through the House). The president, for his part, has ruled out a short-term fix, saying he does not want the issue to come up again before next year’s elections. But he might be open to one lasting just a few days, if it helps to get a deal done.

House Republicans have decided to use some of the time remaining to play to the gallery. On July 19th they approved a bill known as “Cut, Cap and Balance”, which would hack government spending by $5.8 trillion over the next decade, in exchange for raising the debt ceiling by $2.4 trillion—enough to get the country through next year’s elections. Although the bill does little to specify where the axe should fall, it would entail cuts of over 10% to everything but defence, the White House says. The bill also limits federal spending to 20% of GDP from 2015 (it is 24% at the moment) and requires Congress to approve an amendment to the constitution that would, once ratified, require all future budgets to be balanced and bar any tax hikes unless approved by a two-thirds majority.

Needless to say, Democrats do not think much of “Duck, Dodge and Dismantle”, as they have dubbed the bill.
…

The guy in the “California Homeowners are Using This Ridiculously Easy Trick” add above looks retarded.

Attorney gets 5 years for home sales fraud

http://www.chron.com/disp/story.mpl/metropolitan/7665688.html

A federal judge sentenced an attorney who used to work for a mortgage title company to more than five years in prison for his role in a multi-million-dollar fraud scheme involving home purchases in the Houston area, officials said Friday.

Meanwhile, books at the Borders going-out-of-business “sale” near me are still priced higher than at Amazon…

In spite of this, there is a line about 75 deep from my count at the registers taking advantage of all the great discounts.

Wall Street seems to be losing faith in the politicians it bought.

Wall Street bracing for possible downgrade of U.S. credit
By Zachary A. Goldfarb, Saturday, July 23, 6:28 PM

Wall Street’s top concern is no longer that the United States will fail to increase the federal limit on borrowing by Aug. 2 but that political leaders will fall short in their negotiations over an ambitious plan for taming the nation’s debt, according to financial analysts.

If President Obama and Congress are unable to reach such an agreement for reducing the debt, credit-rating firms — in particular, Standard & Poor’s — could cut the top-notch U.S. debt rating, sending a shock across U.S. financial markets.

S&P has said that raising the $14.3 trillion debt ceiling by the deadline, and thus avoiding a potential default, is not enough to avoid a downgrade. In any case, analysts say, many on Wall Street remain confident that Washington will cut a last-minute deal to raise the debt limit before the government runs short of money to pay all government bills and interest on existing debt.

But there’s not as much confidence about efforts to reach an agreement on debt reduction.

So Wall Street bankers have begun discussing plans for responding to a downgrade of U.S. credit, according to people familiar with the talks. Specifically, banks want to find ways to prevent a repeat of the 2008 financial crisis, when investors acting as a herd started demanding tens of billions of dollars in collateral from banks because of fears about their health.

Meanwhile, some financial firms have begun taking steps because of their own mounting concerns about what could happen in the bond market in the coming months. J.P. Morgan Chase has reported that some financial companies have started shifting from longer-term investments to bonds that will be paid back in the next seven days.

“The possibility that the United States could be downgraded for the first time is seeping into investor consciousness,” said Ajay Rajadhyaksha, the senior U.S. debt strategist at Barclays Capital.
…

Prospects for a debt breakthrough seem dim
ERICA WERNER, Associated Press
Updated 06:26 p.m., Saturday, July 23, 2011

WASHINGTON (AP) — Prospects for a breakthrough in debt talks Saturday at the White House appeared dim as Republican leaders issued defiant statements ahead of their meeting with President Barack Obama.

A visibly irritated Obama on Friday summoned congressional leaders from both parties to find a way to raise the debt limit before an Aug. 2 deadline cuts off the government’s borrowing authority.

Neither House Speaker John Boehner, R-Ohio, nor Senate Minority Leader Mitch McConnell, R-Ky., seemed optimistic before the session with Senate Majority Leader Harry Reid, D-Nev., and House Minority Leader Nancy Pelosi, D-Calif.

“If the White House won’t get serious, we will,” Boehner’s office said. Boehner announced late Friday he was walking out of the negotiations.

The statement noted that Obama has said he wants an agreement that will take care of the problem through the November 2012 elections.

“It would be terribly unfortunate if the president was willing to veto a debt limit increase simply because its timing would not be ideal for his re-election campaign,” according to Boehner’s office.

McConnell said in a statement that it was “disappointing that the talks with the White House did not reach a favorable conclusion, and I appreciate the speaker insisting on reduced spending and opposing the president’s call for higher taxes on American families and job creators.”

At a hastily scheduled news conference Friday after Boehner’s announcement, Obama told reporters, “We have run out of time and they are going to have to explain to me how it is that we are going to avoid default.

Boehner accepted the invitation for Saturday’s meeting even while arguing that Obama bore the blame for the collapse.

“It’s the president who walked away from his agreement and demanded more money at the last minute,” Boehner said. “And the only way to get that extra revenue was to raise taxes.”
…

Amy Winhouse was murdered by MI5 to deflect attention from Rupert Murdoch and News Corp:

http://www.dailymail.co.uk/tvshowbiz/article-2018126/Amy-Winehouse-dead-Singer-heartbroken-split-Reg-Traviss.html

Call me skeptical, but I see mortgage rates near record lows. Given the potential for the Fed to use QE3 to keep them there, I doubt a debt default would have any noticeable effect on bond yields or mortgage rates.

A default’s painful cost to you
Senator spells out the price of government default to average family
By Jerry Zremski Buffalo News
Published 12:25 a.m., Sunday, July 24, 2011

WASHINGTON — A default on the federal debt would cost the average family $250 a year in increased credit card interest charges and an additional $600 in costs for essentials, while boosting mortgage borrowing costs by upward of $1,000 a year for new homeowners and those with adjustable-rate mortgages.
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The Tea Party’s Self-Fulfilling Bankruptcy Prophesy
Elspeth Reeve Jul 20, 2011

Why should Congress risk economic calamity by not raising the federal debt ceiling? Because of the economic calamity we’re facing! Or at least, so the Tea Party argument goes. We now have less than two weeks before the dreaded August 2 deadline, when, unless the debt limit is raised, the government runs out of money and pretty much all financial hell breaks loose. It’s a familiar scenario — primarily because the Republicans who are standing in the way of an immediate plan to avert a default have been warning us for months that it’s been coming.
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The Urgent Need for a Debt Deal Before a Monday Market Panic
Ujala Sehgal Jul 23, 2011

The debt ceiling talks, to the nation (and the world’s) increasing frustration and fear, reached a bleak moment Friday evening when President Obama said that House Speaker John Boehner walked away from negotiations to raise the debt ceiling. President Obama called an urgent meeting Saturday morning at the White House, which ended without resolution less than an hour later, the New York Times reports. The meeting, as various sources have speculated, was probably not a happy one. Jamie Dupree from Cox radio indicated that the White House Pool noted “strained body language” as debt limit negotiations began.

In attendance at the meeting, according to National Journal, were Vice President Joe Biden, House Speaker John Boehner, Senate Majority Leader Harry Reid, Senate Minority Leader Mitch McConnell, and House Minority Leader Nancy Pelosi. With an air of desperation, media outlets tried to report on what had been accomplished. So far few have come up with concrete answers. Senate Minority Leader Mitch McConnell said only that Obama wanted reassurance on Saturday that there was a plan to prevent the nation from defaulting, according to Talking Points Memo.
…

http://www.telegraph.co.uk/finance/financialcrisis/8658331/Angela-Merkel-faces-revolt-in-Germany-over-rescue-deal.html

German taxpayers getting angrier over their globalist government putting them on the hook for endless bailouts for the PIIGS.

http://www.telegraph.co.uk/finance/financialcrisis/8658500/Tim-Geithner-joins-warnings-of-market-meltdown-as-deal-goes-to-the-wire.html

Timmay joins the host of Republicrat figures warning of a market meltdown. Keeping the Ponzi financial markets levitated is of course far more important to this bunch than getting the US on a sound and sustainable economic footing.

http://market-ticker.org/akcs-www?post=190618

Tea Party laying down the law to Establishment GOP? I’m still expecting a craven capitulation from Boner & Co.