Items of Interest:
One Third of New Owners Owe More Than House Is Worth -- Almost one-third of U.S. homeowners who bought in the last five years now owe more on their mortgages than their properties are worth, according to Zillow.com, an Internet provider of home valuations.
Second-quarter home prices fell 9.9 percent from a year earlier, giving 29 percent of owners negative equity, said Zillow, the Seattle-based service that offers values for more than 80 million homes. For those who bought at the 2006 peak of the housing market, 45 percent are now underwater, Zillow said.
Negative equity and declining prices are making it difficult for homeowners to sell property for a profit. Almost one-quarter of U.S. homes sold in the past year were for a loss, Zillow said ...
Freddie to Stop Buying Subprime Loans in N.Y. State -- Freddie Mac, the second-largest U.S. mortgage finance company, will stop buying subprime loans issued in New York state as a new law takes effect that holds investors accountable for mortgage fraud.
Freddie won't buy loans dated on or after Sept. 1 that meet the state's subprime definition, the McLean, Virginia-based company said today in a lender bulletin on its Web site. New York Governor David Paterson last week signed new foreclosure and lending laws that tighten legal protections for borrowers.
The legislation holds mortgage buyers like Freddie liable in ways that ``we have no way of monitoring and preventing,'' company spokesman Brad German said in a telephone interview...
A Few Housing Themes -- Alt-A; the new subprime. Or “We’re all subprime now!”
There is some evidence that subprime defaults have peaked, but Alt-A defaults are picking up steam). The next wave is here, and these defaults will impact house prices in the mid-to-high range...
Current Subprime Mortgage Stats --
Carpe Diem: NYFed:Dynamic Maps of Nonprime Loan Conditions
Home Prices Off Nearly 12 Percent in June, Index Says -- U.S. home prices in June showed a seasonal bump of 1.1 percent, but remain 11.5 percent below year-ago levels, according to data released Tuesday morning by Integrated Asset Services LLC, a Denver-based default management and collateral valuation specialist.
The company’s IAS360 house price index found while that three of four U.S. census regions experienced appreciation month-over-month in June, all posted yearly declines in price; like other repeat-sales home price indexes, including the S&P/Case-Shiller, the IAS360 data is not seasonally-adjusted and captures seasonal variability in pricing trends...
while month-to-month variations can be instructive, the annual trends are usually more telling...
A Myth About Fannie Mae and Freddie Mac -- The G.S.E.’s chose to maximize their margins at the expense of their missions. They ignored the solid, profitable, yet affordable loans that banks and nonprofits have made for decades to achieve Community Reinvestment Act objectives.
Instead, the G.S.E.’s borrowed at near-Treasury rates to finance half of all subprime, higher cost loans originated in 2004-2006 and then loaded up on other high-yielding “Alt-A” mortgages in 2007.
Fannie Mae and Freddie Mac aren’t victims; they dug their own holes.
Slowing Foreclosures May Mask Breadth of Woes -- "When the research firm RealtyTrac Inc. releases its latest foreclosure report Thursday, don't be surprised if the number of filings declines again.
Last month, RealtyTrac reported that foreclosure filings totaled 252,363 in June, down 3% from the previous month. Some analysts are expecting the July data to show another decline or very little change.
If that happens, could the improvement be a sign that the foreclosure problem is ebbing? Probably not. The data may reflect several developments aimed at reducing foreclosures, including new state and municipal laws that put a temporary moratorium on foreclosures. Such laws are designed to give homeowners more time to work with their lenders and modify troubled loans. Some cynics say the laws are designed to give the appearance that the housing crisis is easing ahead of the November elections." ...
The Big Picture: Slowing Foreclosures? -- Get ready for some more Housing bottom calls!
Thanks to some interesting regulations passed by New York, California, and Massachusetts, additional notice is required before initiating foreclosure procedures...
William L. Anderson:
The American Police State -- Paul Craig Roberts, an economist and a former assistant secretary of the Treasury during the Reagan administration, and Lawrence M. Stratton, an attorney and currently a Ph.D. candidate in Christian Ethics at Princeton Seminary, have exposed the modern U.S. legal system for the wretched lie that it has become. From the fraud of the "War on Terror" to the destruction of ancient legal doctrines, Roberts and Stratton document the death of law in the United States...
- JPMorgan Shares Plunge on $1.5 Billion Mortgage Loss Since July - Bloomberg
- Banks' Subprime Losses Exceed $500 Billion as UBS Writes Down $6 Billion - Bloomberg
- Roubini: Banks Losses Close to $2 Trillion - NewsMax
- NYC Foreclosures up 67% in July 08' vs 07' - NY RealDeal
- Lessons from the Credit Crunch - Desmond Lachman, The American
- Mortgage-Market Trouble Reaches Big Credit Unions - WSJ
- Subprime Debacle Is a Bush Mess - Diane Francis, National Post
- Housing Bubble Got You Down? - Free Exchange
- Could Your Bank Fail? - Lew Rockwell
- Reflections on the New Subprime: Alt-A - Tanta, Calculated Risk
- Everything We Knew About Real Estate Is No Longer True - Housing Bubble blog
- Chart du Jour: Loan Officers Slam Barn Door. Cows Gone. - Infectious Greed