Foreclosures continue to flood Washoe County market
Renters return to apartments, but rates continue to zigzag
FDIC calls bank closures a short term ill but closure rates remain high
Umpqua Holdings Reports Stronger Second Quarter 2010 Results Umpqua acquired the assets of Nevada Security Bank in 2nd quarter.
Gaming well is drying up Do you remember the last election? The teachers union(s) thought they could only kill the golden goose a little bit.
As most of you probably already know, real estate investors take many different forms. My friend and mentor had referred t0 the various stages in the life of an investor. He called them “Starters”, “Builders” and “Enders”. There was another stage that for the moment, I can’t recall. But, for this discussion, I shall focus on the enders.
The Ender has accumulated some cash and no longer wants to work as hard physically as he once did. He then focuses more on the financial aspects of the real estate business. He might fund the transactions for a cut of the profits. He might also finance the deals or become the lender. He makes the real estate transaction happen when the banks won’t or can’t cooperate.
As they say, “politics happens”. So, what does this mean? The Obama Administration has plans to address this problem by restricting the lenders. In case you missed it, the Ender has become the lender.
The new rules are:
Who would want to be a lender under these circumstances? That private mortgage would seem to have just lost a lot of it’s value.
The Financial regulatory reform bill, just passed by the Senate is awaiting the President’s signature. Now, I surely doubt that any bill requiring 2300 pages, and that Chris Dodd doesn’t “understand”, isn’t about reform. Not even close.
From a real estate point of view, don’t count on it helping anything to do with the market.
For the real estate market to recover, we must have solvent investors able to get loans to buy housing. But the Democrats’ new financial regulation bill, which President Obama will sign today, makes banks less innovative and responsive to future housing demand, and it won’t prevent future foreclosures. Instead, the plan is making it harder for investors to get back in the residential real estate market, eliminating many potential borrowers, and delaying any recovery in housing prices. (“Investor” is defined here as anyone wishing to buy real estate for rental purposes.)
Investor is a dirty word to Democrats. And don’t try any kind of owner financing. They can’t control you enough if you do.
Although broad in scope, home buyers and sellers are likely to be among the first impacted by the new provisions. They represent one of the most comprehensive – top to bottom changes to the finance, valuation, types of mortgage products offered and how lenders are compensated to take place in decades. In fact, there are even new rules for real estate investors that provide capital for the purchase of mortgages.
A ruling issued by the United States Bankruptcy Court for the Eastern District of California found that, as a matter of law, MERS could not have transferred the note to Citibank from the original lender, Bayrock Mortgage Corp. The Court’s opinion states that MERS and Citibank are not the real parties in interest.
The court found that MERS acted “only as a nominee” for Bayrock under the Deed of Trust and there was no evidence that the note was transferred. The opinion also noted that “several courts have found that MERS is not the owner of the underlying note and therefore could not transfer the note, the beneficial interest in the deed of trust, or foreclose on the property secured by the deed”.
The opinion states: “Since no evidence of MERS’ ownership of the underlying note has been offered, and other courts have concluded that MERS does not own the underlying notes, this court is convinced that MERS had no interest it could transfer to Citibank. Since MERS did not own the underlying note, it could not transfer the beneficial interest of the Deed of Trust to another. Any attempt to transfer the beneficial interest of a trust deed without ownership of the underlying note is void under California law.”
The bottom line is that MERS cannot assign what it does NOT own.
For more see here.
The foreclosure drama takes another turn. Investors have begun suing the lenders claiming that the lenders misrepresented the value of loan packages, thereby causing them to lose money on their investments. The claim is that the lenders committed appraisal fraud.
It is central to the issue of appraisal fraud. Anyone who moved into a new development knows that the developer was raising prices like crazy to create a a sense of urgency on the part of borrowers. Those prices from the developers were used an excuse to inflate the appraisals on a continual basis, so that a house of exactly the same model and features would be appraised one month for $350,000 and then a month later for $375,000 or more.
Check out this story: The Thirteen Housing Markets That Will Never Recover.
More specifically, see # 8.
Now, I don’t know what information they are privy to, but I thought it might be interesting to view.
I post this without comment.
This Forbes Magazine article states that a double dip housing market is “clearly under way.” They also explain that only some of the markets nationwide are experiencing the double dip. Some cities are experiencing slow to moderate growth while others are still in decline.Some even commented that it can’t be double dip. We haven’t finished the first recession yet.
This past year saw some increases in price and activity, but it was largely due to temporarily increased buying activity because of governmental meddling in the market place, i.e. the $8000 tax credit. Now the buying is below where it would have been without the governmental activity.
Forbes cited Zillow, Radar logic, and Goldman Sachs for their story.
Las Vegas home sales fall 11 percent in June: LVRJ
Nevada a bigger loser than California in economic downturn: Sac Bee
Realty downturn claims Nevada Security Bank: NNBW
Short Sales Out Perform REO & Traditional Sales In June: Dickson
Freddie and Fannie Delisted: RSRE
What’s the real job situation?
Here is a graphical illustration using data from the US Department of Labor depicting jobs gained and jobs lost. The red circles represent jobs lost while the blue circles represent jobs gained.
