Investors Pushing to Buy Housing Other Than Foreclosed Properties

By: Tuesday December 18, 2012 2:30 pm

Tom Lawler pulls out an interesting piece of data from the latest housing statistics. Foreclosures have been dropping in 2012, mainly because of the rise of short sales as a foreclosure alternative. This appears to be changing – the repossession rate in November was 11% above that of October and even up 5% year-over-year – but Lawler is looking back at data, not forward at the recent trend.

 

NYT Reports on Investor Purchases of Foreclosed Homes for Rental Conversion

By: Tuesday December 11, 2012 1:50 pm

The same people who were present at the creation of the original bubble are driving the boat in this second incarnation.

Mark Zandi Doesn’t Understand Housing Very Well

By: Monday October 1, 2012 10:17 am

Court jester economist for power Mark Zandi tried to pull a fast one by readers of the Washington Post, by actually making the argument, in the face of all evidence to the contrary, that the Obama Administration successfully fixed the foreclosure crisis. He has to make a mental leap in order to do this, claiming that the state of the housing market in 2012 is directly related to foreclosure mitigation and housing market programs from 2009. Of course, we know the causes of the housing market “recovery” and they have nothing to do with those programs, and everything to do with over-speculation by institutional investors who have bought up massive amounts of foreclosed properties.

New Home Sales, Home Price Statistics Continue to Fuel Optimism on Housing

By: Wednesday September 26, 2012 2:00 pm

New home sales stayed flat in August, a modest miss from expectations. Still, new home sales are on track for a 16% increase year-over-year. This still puts annual sales at the third-lowest on record, but it’s a boost from the bottomed-out years of 2010 and 2011. The recovery is sluggish, but it’s moving in an upward direction.

More analysts are excited about the continued increase in home prices, designated by the Case-Shiller index released yesterday. They particularly point to prices at the low end:

Big Banks Increasing Spread on Mortgage Profits, Not Funneling Cheaper Rates to Customers

By: Wednesday September 19, 2012 9:33 am

Banks are making more off mortgages than ever before, refusing to pass on lowered interest rates from federal policy, including the purchase of trillions in mortgage-backed securities by the Federal Reserve, to consumers. This isn’t really the enigma that the New York Times’ Dealbook makes it out to be. It’s simple collusion. Nobody offers 2.8% mortgage rates, so nobody gets them. As a result, the spread that banks capture on their mortgages widens.

The Path for Housing Is Dangerous

By: Thursday September 13, 2012 3:30 pm

The housing market is headed on a dangerous path. I’ll have more on this in the coming days, but if you think that an investor-heavy market of house-flippers, with little recourse for those underwater but to sit tight and hope, and a nation of absentee slumlords redlining neighborhoods is something healthy, well you’re in luck, because that’s what we’re getting.

Housing Price Index Shows First Year-Over-Year Increase in 21 Months

By: Tuesday August 28, 2012 11:45 am

The housing recovery narrative got a boost today from the Case-Shiller price index, which went positive year-over-year for the first time since a first-time homebuyer’s tax credit goosed the numbers in 2010. So really, this is the first year-over-year increase since the housing bubble collapsed in 2007 2006. And the usual suspects are ecstatic, but there are still troubling signs the market is not yet healthy.

The Worst Idea in the World: Securitizing Rental Revenue

By: Sunday August 26, 2012 1:00 pm

The last financial crisis can be blamed in large part on runaway securitization. Wall Street giants sliced and diced mortgage loans into bonds that they sold around the world. They claimed that they diversified the mortgage pools so that even a few defaults would not undermine the value of the securities, and they offered tranches of the bonds at a decent yield. As global demand increased for the securities, Wall Street pressured originators to close more and more loans, regardless of creditworthiness. This caused a bubble in prices. Moreover, financial innovators took the lower-tranche loans and cut them up into once-removed securities, making bets on bets on the housing market that were allegedly “safe”. We all know how this ended, and how the securitization bubble took a crash in housing prices and made it exponentially worse.

So now we’re poised to do that all over again.

Housing Recovery Narrative Surges Forward, But Reasons for Price Rise More Sinister

By: Wednesday August 8, 2012 8:45 am

The “housing is back” narrative got another boost with a story in the Wall Street Journal that simultaneously makes an unequivocal statement about home prices, and then acknowledges wild variance in the data set.

Securitization, Take II: Investment Firms Seek to Securitize Rental Payments

By: Saturday July 21, 2012 10:15 am

Though this proposal to use eminent domain to buy up underwater homes and refinance them has been getting a lot of publicity in intellectual circles, the unorthodox fix for the housing market is already happening. That would be the REO-to-rental revolution, where investment firms buy up foreclosed properties in mass quantities after repossession, and flip them into the rental market. Entire firms are being built with this business model. We know that over 40% of the city of Oakland’s foreclosed homes have been purchased by investors. This isn’t prospective, it’s already happening.

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