Unsustainabubble: Recent Comments

Comment on Where is the Tipping Point in Residential Real Estate?

2009-08-27T15:18:38Z

Great post. I think what you refer to is already happening in a big way. We have been closely tracking POA defaults from the top POA originators for two years and a in about April 2008 they really began to surge. Granted, the recasts are big trouble but the banks know this and are doing everything they can to kick the can down the road -- Wells with respect to the WB portfolio especially. While I know for a fact Alt-A, POA, Jumbo Prime and Prime will carry the default and foreclosure crisis well into the future, I do not think there will be a sudden noticeable sharp spike or anything. Just a constant grind higher in defaults and foreclosures, which we are already seeing as the total number of foreclosures in the pipeline as of July 2009 as never been greater.

Comment on The Loan Modification Dilemma

2009-04-21T02:41:51Z

Thanks for taking the time to read my blog. I hope you will share what you have learned with others! I emailed you the contact information of someone I trust who is tied into a network of attorney providers for this service that was established in 2005.

I hope that you will get the modification that you deserve, based on your efforts to understand the challenges.

Comment on The Loan Modification Dilemma

2009-04-18T14:16:48Z

Hi Lance,
We appreciate you writing a report on loan modification issues. It provided us an understanding of how the loan modification process may work for us.

Please provide me a contact information of a law firm specializing in Loan Modifications leveraged by a Forensic review of both loans and escrow/closing documents to discover any actionable violations of Truth in Lending "TILA" or the Real Estate Settlement Procedures. Act "RESPA". We appreciate your assistance on this matter.

Comment on 2009: Footrace to an Unseen Finish Line

2009-01-29T18:07:47Z

Thanks Jim, good of you to invest time in my blog... (Readers, Jim Randel is a well known and succesful RE investor and best selling author. You can see his site at www.jimrandel.com. He is often quoted in the national Media)

Jim, as you know, predictions on timing of legislation are hard to make, but the problems in the bubble areas are accelerating, aided by increased unemployment. I think legislators will act quickly, one way or the other and we will all live with the unintended consequences of their actions.

As far as a bottom in pricing, check out my earlier entry on that topic. In a deflationary period, all pricing will tend to go toward historical mean pricing. Since the normal 10 year RE cycle was extended by artificially low interest rates, it is likely that the correction will be extended also and the pendulum could swing past the mean to overcorrect because of so much supply. Tighter financing will mean more seller financing and private money financing, which generally means lower prices due to higher interest rates.

The wild card seems to be historical premiums in the most desirable areas not accounted for in traditional analysis. The best areas of the country, like Manhattan, or Beverly Hills CA do not seem to be as vulnerable as more moderate areas, perhaps because of old money and foreign cash buyers. I did notice that the new money areas of the Hamptons have taken a hit recently, but I am not too worried about the pricing of 3rd and 4th homes for the wealthy.

Comment on 2009: Footrace to an Unseen Finish Line

2009-01-29T13:39:27Z

lance: nice analysis of the options open to lawmakers... predictions? when do we see the bottom??

Comment on "Hope for Homeowners" on Life Support

2008-11-07T09:41:39Z

Thank you for your comment.

Clearly there have been abuses on both the borrower and lender sides of these issues. What is the point of having a contract if it can be abrogated by federal or state mandate? At the same time, a bad contract is a bad contract and the law should provide meaningful remedies.

I heard about a California stated income borrower whose actual income was less than 25% of the amount that was stated on his loan, purchasing a multi-million dollar beachfront property. Don't borrowers have to be realistic about what they can sustain for the term too? In retrospect, the buying frenzy in bubble areas caused a suspension of rational decision making by all parties. In a perfect world, there should be a reasonable balance in the division of costs and responsibility for solutions to the problems that were created.

Comment on "Hope for Homeowners" on Life Support

2008-11-06T21:24:02Z

This is not a surprising development in the so-called "bailout" program and one that we should have seen coming. So now we have a Treasury secretary, un-elected I might add, with nearly unlimited powers who is effectively powerless. I, for one, am not interested in seeing investors "forced" to accept a loan modification by fiat or legislation. The remedy, unfortunately for the homeowners, is to give the homes to the investors, walk away, and rent for a while. Frankly, that will teach future investors not to get involved in purchasing loan programs that are not sustainable by the ones accepting the loans. The better solution might be to reduce the required reporting time for derogatory credit issues ... just long enough to contemplate the mistakes made on both sides of the closing table, but not so long as to lock people out of future homeownership.

Comment on 1,2,3 Lenders, Investors and Servicers may go "Scott Free"

2008-07-29T16:30:27Z

We are witnessing the death of a nation.

Comment on Will Mortgage Lending In America be Socialized?

2008-07-15T20:17:07Z

Comrade! Why do you worry so about this little credit problem? For years in the Soviet Union we didn't even NEED mortgages because we could house everyone ... in the Party, of course! And what is wrong with a few more (million) government employees (living off of your tax dollars)? Employment is good, no?

Do not whine so much when you have to pay more to your government to support those who will not work, borrow responsibly, or plan for their own retirement. Soon you will be just like them! So we take (and take and take) a little bit more from you. You should feel privileged to help those in greater need (and who are just as capable as you are to find work). It is your duty as a citizen (slave).

No, comrade. Do not worry about a little more socialization. Worry about a little more socialization each and every day.

Comment on The Near Death of Securitization

2008-07-02T19:14:59Z

Lance-
In response, I think this issue and the corrections we can expect represent an enormous opportunity to savvy IRA investors who can fill the void. Additionally, seller financing can once again represent a viable option-and an alternative to the non-recourse loan that is required for IRA investors. I look forward to sharing information about opportunities for Self Directed IRA investing.