Benchmarks.

Normally I hate self-imposed benchmarks since there’s plenty of downside to them and little upside. But in this case, what does he have to lose? Halperin: Would you like to be more specific about what the unemployment rate would be like at the end of your first year? Romney: I can’t possibly predict precisely what [...]

Read this post »

"If we wait until the very end ..."

It’s not new, either.  Thanks to the compromise cobbled together in the lame-duck Congress after the 2010 midterms, everyone knew that the big issues on tax rates got punted to after the 2012 elections.  The same thing was true of spending cuts in last summer’s debt-ceiling fight.  Both parties planned to run on their approach [...]

Read this post »

Plus, the "job destroyers" on Obama's own jobs council.

After a few days fighting the Bain wars, both Barack Obama and Mitt Romney pivot today — but in telling directions.  While Obama tries talking about senior citizens and veterans, Romney pulls the debate right back to the economy in his new ad, “Stories from the Obama Economy,” which could have been shortened to just [...]

View the video »

I am officially proclaiming the Homeowner’s Bill of Rights in California to be DOA – Dead on Arrival.  And… good.  I’m glad it didn’t take until June.

In fact, if it wouldn’t be too much to ask, banking lobby… just hang out in Sacramento another week or so and dispatch whatever other bills remain in the California legislature as early as possible… start the recess early this year!

The Big Banks and the FHFA’s Ed DeMarco brought their considerable political muscle to the job of killing the Homeowner Bill of Rights in California, and although technically there’s still some voting to do… trust me… that’s all she wrote.

This makes the third year in a row that the banking lobby has said a resounding no to any sort of change that’s supposed to protect homeowners from abusive foreclosure practices.  Why do we keep doing this?  Haven’t we learned anything by now?

So, I’m glad it’s over… early.  I’ve had a tough year, and I didn’t need to spend any more time on this pipe dream of a proposal.

Okay, sure… our politicians running for office and elected officials did essentially nothing… BUT NEITHER DID WE… so I’m not blaming them.  The simple fact is that we don’t deserve to have such laws on the books.

The Homeowner Bill of Rights is the name that’s been given to a collection of six legislative proposals.  I’ll give you an overview of each and you decide for yourself how important it would have been to get the bill passed.

1.     SB 1470 – The Anti-Dual Tracking Bill

Dual tracking is when the servicer invites a borrower to apply for a loan modification, but proceeds with foreclosure proceedings anyway.

Now, I realize that some people are going to see nothing wrong with that practice, saying that a loan modification is an accommodation granted at the discretion of the bank, and therefore the denial of a modification should not delay a foreclosure.  The problem is that as a practical matter, dual tracking violates California’s foreclosure statutes because it deprives the homeowner of the intended time to reinstate the loan.

In California, the law says a homeowner is to receive a Notice of Default, which gives the homeowner 90 days, and then after that they are to get a Notice of Sale, which provides an additional 20 days… and then up until five days before the sale, the borrower has the right to reinstate the loan.

But, if you’re told that you are under consideration for a loan modification, and then you’re told that you’ve been denied… let’s say 10 days before the scheduled sale date… then you can find yourself with a handful of days to reinstate your loan… and that, at the very least, violates the intent of the law.

That’s what happened to Norman Rousseau, who took his own life last week, and that I wrote about HERE.  By the time Wells Fargo Bank told Norm that he was being denied for a loan modification, he only had six days to reinstate the loan, and Wells refused to delay the sale.  He had the money in his IRA, but by the time it arrived, his home was sold.

SB 1470 would prevent banks from starting the foreclosure process while homeowners are still being considered for a loan modification. The bill would also require servicers to render decisions on loan-modification applications in a more timely manner.

Assembly companion bill is AB 1602.

2.     SB 1471 – Single Point of Contact & Fines for Document Fraud

This requires servicers to streamline the foreclosure process by assigning a single point of contact for each borrower. It also imposes a $10,000 fine for any incidence of document fraud.

Assigning a single point of contact shouldn’t be much of an issue, after all the banks have already agreed to do that as part of the OCC’s consent orders, which were issued last April.

And as far as fines for committing fraud or forgery… well, there’s an easy strategy to get out of paying those, right.  Just don’t commit fraud or forgery.  And I happen to know the strategy works because I’ve been employing it for years and I have yet to pay a single fraud or forgery related fine.

Assembly companion bill is AB 2425.

3.     SB 1472 - Fight Neighborhood Blight

Neighborhood blight happens when foreclosed properties are not properly maintained.  Among other things, this bill would allow cities to fine purchasers of foreclosed properties that fail to remedy code violations within 60 days. (I believe the Senate committee unanimously approved this bill last Thursday.)

The companion bill is AB 2314.

4.     SB 1473 – Renter Protection

This bill simply ensures that renters of foreclosed properties are given at least 90 days before an eviction process is started. Seems pretty reasonable to me.

The companion bill is AB 2610.

5.     AB 1950 – File an NOD, Pay $25

This bill would requires servicers to pay a $25 fee for each Notice of Default recorded, which kicks off the formal foreclosure process. The money collected would pay for state-run fraud investigations into the fraudulent practices of servicers.

6.     SB 1464 – Special Financial Crimes

This bill would allow the state Attorney General to create a special grand jury to look into special financial crimes that involve multiple victims and I simply cannot believe that this bill isn’t already a law.

The companion bill is AB 1763.

HERE COME THE BANKS… ALL RISE…

In a letter to California legislators, written by the FHFA’s General Counsel, Alfred Pollard, the FHFA said that these laws could “restrict mortgage credit and hamper necessary home seizures.”

The letter also said that the proposed legislation would loosely define robo-signing so that it may include any incomplete mortgage document.

“Such a strict liability approach is punitive, will have a chilling effect on the processing of lawful foreclosures and may lead to reduced credit availability or higher interest rates,” Pollard said.

Pollard didn’t even like the idea that renters should get 90 days before being evicted, saying that the legislation “did not include a ‘bona fide’ lease requirement and could result in property owners gaming the system.”

The FHFA also claimed the new laws could possibly pose “significant risks for the housing markets.”

Good Lord… those would be terrible things to have happen.  I’m sure glad he pointed it out before it was too late.  Doesn’t anyone check these things out with the bankers before they become legislative proposals?  Why do we go to all the trouble to write them and get them into legislative committee, just to have a few bankers show up and make us look like fools for having done so.

I think we should ask the bankers if they wouldn’t mind reviewing all draft pieces of legislation before write and and propose it… I’d bet collectively we’d save a lot of time.  I know I would.

Next up were the banking representatives, and I hear they were beautifully dressed by the way.

One of the bankers testifying was Ms. Stephanie Mudick, Executive Vice President, Head of Consumer and Regulatory Affairs, Mortgage Banking, J.P. Morgan Chase.  For the most part, she lied her ass off about how wonderful Chase has been when handling loan modifications.

But the one thing that she said I think I’ll remember above all…

“We’re also concerned that the private right of action included in draft legislation will likely impair the housing recovery of California.”

You can read her testimony here:
Mudick, Stephanie VP Chase Testimony 15may2012 PDF FILE

Warner backpedaling from Bain attacks now.

You get three guesses … and the first two don’t count. An analysis by The Hill of data from Open Secrets shows that Barack Obama got more than $3.5 million from donors who work in private-equity or hedge-fund firms in 2008, almost twice as much as John McCain raised in the same industry: President Obama [...]

Read this post »

Looks like ...

Will the strategy of highlighting Mitt Romney’s track record at Bain Capital do more to damage the Republican nominee, or Barack Obama?  A poll released yesterday by Rasmussen suggests that it might do more damage to Obama’s re-election efforts than it will to his challenger.  Only 33% of a sample of 1,000 likely voters say [...]

Read this post »

... in a sample with Republicans at only 22%.

The latest Washington Post/ABC News poll shows Barack Obama only three points ahead of Mitt Romney, 49/46, within the margin of error.  The poll also shows Obama’s advantage among women dissipating, and the President falling further behind his challenger on the economy.  All of this is rather amazing, given the manner in which Republicans keep [...]

Read this post »

I’m not exaggerating one bit when I say this… nary a month goes by that I don’t feel compelled to debunk the happy housing prices statistics that seem to get released immediately following the release of any bad news for the housing market.  As a matter of fact, I just did so a few days ago, HERE.

Each time I go through the pointless exercise I tell myself that it will be the last time, that from here on out if someone wants the housing market to have bottomed or being on its way up… or whatever, I’ll just respond b y saying, “Sounds great!,” and leave it at that.

The last time was entirely transparent … while absolutely nothing had changed all of a sudden everything was better… in the mainstream media, anyway.  So, once again I found myself sitting down at my keyboard to strip away the fabrication, manipulation and obfuscation so as to leave only the naked truth of the matter.

Basically, if you’ve been a Realtor out to have a parade over the last few years, then you’ve come to know me as the rain.

Well, today LPS (“Lender Processing Services”) published a report, based on analysis of 40 million loans, and to begin with, the foreclosure pre-sale inventory rate came out at 4.14 percent, which is UNCHANGED whether we’re comparing last month… or last year.  Pre-sale inventory exceeded two million properties.

Not only that, but the mortgage delinquency rate went UP in April by 0.4 percent to 7.12 percent, and the number of properties that are now 30 or more days late, but NOT in foreclosure, passed the three and a half million mark in April.

Florida, Mississippi, New Jersey, Nevada and Illinois were the states with the highest percentage of delinquent loans, which I found quite an interesting list because of the lack of “sand states” listed, Nevada notwithstanding.

Montana, Alaska, South Dakota, Wyoming and North Dakota made the list of states with the fewest delinquent loans, but since no one lives in those states anyway, who really cares?

Bang the Drum Slowly…

Starting last month, I heard from Realtors primarily in Phoenix, but also in Northern California, as they excitedly rambled on about the throngs of investors who had come from Canada and points unknown to bid up distressed property sales, which make up just under 50 percent of all sales for the last three months running.

However, a new study by Campbell/Inside Mortgage Finance shows that even with “all that action,” home prices are not moving higher.  In fact, most homes sold in April, although two or three offers were received, ended up selling below list price.

According to IMF’s HousingPulse, as reported by CNBC’s Diana Olick:

“The average price for non-distressed properties declined 1.5 percent from March to April, while the average price for short sales dipped 1.7 percent. For damaged REO [bank-owned] the average price fell 1.4 percent and for move-in ready REO the average price slipped 0.3 percent.”

So, demand is rising while prices are falling… fascinating.  Perhaps it’s because of a combination of factors, such as incredibly tight credit markets, an ongoing avalanche of foreclosures coming onto the market, a worsening jobs market, higher unemployment, and a market made up of greedy bottom-fishers not out to buy, but rather to steal.

Think I might be onto something there, or no?

Other reports are saying that investors in and around Phoenix are bidding up home prices to such levels that after necessary repairs are completed, the new owner will be underwater once again.

Olick and her crowd on CNBC, who only a week or two ago seemed all but ready to declare a bottom and begin the march back to prosperity, but thid week her tone is decidedly different.  In fact, she’s sounding a bit more like me… you know, were I a ditzy blond who’s chief skill is reading from a teleprompter…

“… depending on monthly financing costs, and the upfront investment, (investors) may not see the kind of returns they originally expected, and they may not be able to sell in the time frame they originally planned.”

Wait a minute, there’s a word for that… darn it, what do they call someone who ends up in that situation in the midst of this larger picture… Oh, yeah… I’ve got it…

SUCKER!

Mandelman out.

CLICK BELOW FOR:

State of South Carolina Foreclosure Laws

The link above will take you to the page dedicated to South Carolina’s foreclosure laws.  But, always remember… often people have a hard time understanding exactly what our laws mean just by reading them, so we always recommend that you contact an attorney and ask any questions you may have.

In South Caroline, the Mandelman Matters “trusted attorney,” is Russell A. DeMott.  You can reach him by clicking below, and he’s happy to answer your questions about South Carolina foreclosure or anything related, so don’t worry about calling or sending him an email.

DeMott Law Firm, P.A.

This Page Sponsored By…

Russell A. DeMott, Attorney

STATE OF SOUTH CAROLINA GOVERNMENT RESOURCES:

Office of the South Carolina State Auditor

Richard H. Gilbert, Jr., CPA
Interim State Auditor

South Carolina Attorney General

Alan Wilson

South Carolina Budget & Control Board

South Carolina Department of Commerce

South Carolina Department of Insurance

Consumer Complaint Form

South Carolina Department of Revenue

South Carolina Division of Consumer Affairs

South Carolina Legislative Council

Stephen T. Draffin
Code Commissioner and Director
South Carolina Legislative Council

Senate Calendar

STATE OF SOUTH CAROLINA FORECLOSURE RESOURCES:

Avoid Foreclosure: South Carolina

Columbia Field Office Email: SC_Webmanager@hud.gov

Contact HUD – South Carolina

eHOW money – How to Prevent Foreclosure in South Carolina

Family Services, Inc.

Foreclosure Prevention

RentLaw.com - South Carolina Eviction Law

South Carolina Appleseed – Legal Justice Center

Mortgage Foreclosure in South Carolina Brochure

South Carolina Foreclosure Laws

South Carolina Human Affairs Commission

South Carolina Legal Services

South Carolina Pro Bono Legal Services

SOUTH CAROLINA SHORT SALE RESOURCES:

ShortSaleLaws.net

The Homeownership Resource Center

STATE OF NORTH CAROLINA ADDITIONAL RESOURCES:

South Carolina Demographics

South Carolina State Election Commission

Find Your Polling Place – Vote!

Register to Vote

State of South Carolina Website

REPORT FRAUD OR SCAMS IN SOUTH CAROLINA:

Prevent Loan Scams - South Carolina

South Carolina Department of Labor, Licensing and Regulation

How to File A Complaint

STATE OF SOUTH CAROLINA COURTS:

Charleston School of Law Sol Blatt Jr. Law Library

South Carolina Circuit Court

South Carolina Court of Appeals

South Carolina Supreme Court

Supreme Court Law Library

University of South Carolina Coleman Karesh Law Library

FEDERAL GOVERNMENT RESOURCES:

Fannie Mae Loan Look-Up Tool – Find out if your loan is owned by Fannie Mae here.

Freddie Mac Loan Look-Up Tool – Find out if Freddie Mac owns your loan here.

Homeowner Crisis Resource Center – Includes tips on avoiding foreclosure.

Homeownership Preservation Foundation – Find Credit Counseling here and HERE.

Information on the OCC’s Independent Foreclosure Review

MyMoney.gov - This site organizes financial education help from over 20 different Federal web sites in one place, including dealing with mortgages.

OCC’s Tips for Avoiding Foreclosure Rescue Scams

Office of the Comptroller of the Currency – For Complaints Against National Banks

Service Members Civil Relief Act – The Act that postpones or suspends certain civil obligations to enable service members to devote their full attention to duty and to relieve stress on their families. The act covers:

•       Outstanding credit card debt

•       Mortgage payments

•       Pending trials

•       Taxes

•       Termination of lease

•       Eviction from housing

•       Life insurance protection

Get more information at Military.com or at HUD’s National Servicing Center, and here is Information for Veterans from HUD.

U.S. Congressional Representative Look-up Tool

You have found the Mandelman Matters state specific series of pages dedicated to homeowners at risk of foreclosure in South Carolina.

On the pages in this section you’ll find accurate, straightforward information and guidance specific to the State of South Carolina related to such topics as loan modifications, short sales, foreclosure defense litigation, bankruptcy… and other topics related to getting through the foreclosure crisis.

We’ve created these South Carolina specific pages in response to the proliferation of scammers polluting the Internet with misinformation and outright lies intended to sell something to homeowners at risk of foreclosure that they don’t need.  These sites are literally everywhere, and some are very good at appearing credible, when in fact they are nothing more than elaborate cons.

Well, we’ve taken great care to make sure that the information you’ll find here is always correct… always impartial… always based on real facts… and always easy to understand.

In case you’re not already familiar with me, my name is Martin Andelman and for going on four years, I’ve been writing the widely read blog Mandelman Matters.  Over the last three and a half years, I’ve written more than 650 in-depth articles covering the political, economic, social and legal aspects of the financial and foreclosure crises.

I decided that I had to do more to help stop homeowners from getting ripped off, by providing the state specific information homeowners need to make the right decisions for their individual goals and circumstances.  Moving forward on the best possible path… that’s what my state specific pages are all about.

And just so you know, I’ve never been in the mortgage business or the real estate business, but for more than twenty years I’ve been a writer that specializes in making complex subjects easy for people to understand… oh yeah, and people say I’m funny.  I have in-depth experience writing about subjects that fall under the broad headings of accounting, insurance, financial services and law.

You can read a lot more about me HERE, HERE, and HERE.

You may want to start by getting to know my trusted attorney for the State of South Carolina, Russell A. DeMott.

No one pays to be listed as a trusted attorney on Mandelman Matters… that’s just not how it works.  The lawyers I list as trusted… are simply those I trust.  And when I say that, I mean that I would trust these people to represent me, or to watch my house while I went away on vacation for the summer.

In order to write close to 700 articles on the economic situation we’re facing today, I had to learn everything possible about the mortgage and foreclosure crises.  Not only did I read dozens of books, research reports, court decisions, and more… I also had to interview a lot of people and many were attorneys from all over the country.  Over time, some became good friends.  So, when homeowners would call me to ask if I could recommend a lawyer, I would refer them to one that I had gotten to know well, and trusted.

As a Mandelman Matters trusted attorney, Russell DeMott has agreed to take calls from South Carolina homeowners who have questions about foreclosures, and help them by providing answers regardless of whether the caller decides to hire his firm or not.  So, if you want to talk with someone who knows foreclosure in South Carolina, please don’t hesitate to call him.

For DeMott Law Firm’s contact information CLICK HERE.

And, if you’re looking for State Resources, CLICK HERE.

Need to know more about South Carolina Foreclosure Laws, CLICK HERE.

Want to read my latest post about South Carolina on Mandelman Matters?  CLICK HERE.

As many as 1,000 surprise guests visited the Bethesda home of Treasury Secretary Timothy Geithner on Sunday around 5:00 PM.  They sang, they prayed  and they tried to deliver a letter to Mr. Geithner… but according to the Wall Street Journal’s story, no one answered the door.

The group was organized by National People’s Action, and they said that they went to the Geithner residence because they want Tim to launch an investigation into the causes of the 2008 financial crisis, impose a tax on profits from speculative trades, and roughly 60 people just wanted to use the family’s rest room after a long bus ride to Bethesda.

All we are saying’, is give fleece a chance…

Okay, so… Knock knock.

Who’s there?

Robin.

Robin who?

Robbin’ the middle class in America.

I already told you, I don’t know where the $16 trillion went.  

I just wanted to thank the nice people at National People’s Action for going to Tim’s house Sunday, and not mine.

“Does that taste like actual dog poo to you?”  ”Yep, ‘fraid so.”

 ”Oh God, what do we do? I think I’m going to heave.”

“Just spit it into the napkin, and look for a rear exit.”

“I told you we shouldn’t attend a Save Your Home America luncheon.”

“Yeah, well you’re the genius who said order the meatloaf.”

“Okay, now I’ll explain it one more time… You guys are down here.  And see the bankers, why they’re way up here.  And it’s true that the gap between here and here is getting larger, but that’s only because you guys down here aren’t excelling like the bankers are.  You need to do better.”

Yeah, I’ve got a plan, and it’s an evil plan too, Bwhahahahahaha.”

“No, no, no… not me again. Pick Ben, pick Ben, pick Ben…”

“Look, I paid last time, now get that wallet out of your pocket and pick up a check for once in your life, or I swear, I’ll call a press conference and tell the reporters that I found the $9 trillion they’ve been asking about and you’ve got it.”

“Yeah, so what if I have had a couple of drinks. Go ahead, ask me again and see what I do…

TARP, TARP, BO-BARP, BANANA FANA FO FARP… FI MO MARP, TARP.

See, I’ll be sober in the morning, but you’ll still be stupid.”

“Okay, now here’s where I show you how well the economy is performing with hand gestures, while I make Vrooomm sounds with my mouth. Last time I did this the market opened up almost  100 points so you guys might want to open your E-trade Apps.”

Russell A. DeMott, Attorney

"Gentlemen, we are finished."

This may end up being the political quote of the year, uttered by the president of Greece after talks aimed at forming an emergency government collapsed last week: “Gentlemen, we are finished,” said the patrician President, calling an abrupt halt to two hours of baiting and cat-calling between furious Greek politicians. “I’m starting to get [...]

Read this post »

My regular readers will likely remember past articles in which I stated that we would not win this battle over foreclosures by fighting individually in the courts.  I’ve stated on numerous occasions that we needed to bring political pressure to bear and fight this in our legislatures, both state and federal, because for our judges to be of more help, we need some new laws to be written and some older laws to change.

The fact is that over the last thirty years, as the financial sector was steadily growing in size it was increasing its ability to influence our legislative system.

While we were all in a debt-induced coma wandering around aimlessly at our respective shopping malls, the banking lobby was busy making sure that essentially every single state or federal law proposed, having to do with creditors and debtors, either blatantly favored, or at the very least tilted towards the creditor’s interests… certainly not the borrowers’.

Now, as we’re facing a crisis of unprecedented proportion, we’re learning the hard way that our rights as borrowers are almost non-existent.  In California and around the country, foreclosure defense lawyers saw that mortgage servicers could far too often pretty much foreclose at will using almost anything as documentation.

Mickey could sign it… Donald could notarize it, and it just didn’t matter very often.

I also came to realize that as far as messages go, saying that the courts would not be the answer we were looking for went over like a lead balloon.  And since telling people something that they hate hearing is no fun, I tried not to bring it up any more than was necessary.

The problem is, and I realized this yesterday… I WAS RIGHT… AM RIGHT. 

A few days ago I noticed that several California politicians were announcing a town hall type meeting on the foreclosure crisis that could be viewed online.  They were even soliciting questions from the general public.  (I submitted a few but wouldn’t you know it, mine weren’t chosen.)

Yesterday, I watched the video… it’s an hour long and you’ll find it below.

I also watched various individuals, from homeowners to housing counselors to consumer advocates, give testimony related to the proposed bills, and one thing came crashing through… I should have testified.

I would have made a significant difference.

What I learned watching both the testimony and the round table with the politicians was that the knowledge base of those making policy decisions related to the foreclosure crisis has much room for improvement and expansion.  Clearly, no one has filled them in properly in numerous areas.  And we are making a HUGE mistake by not marshaling our forces to get involved in the political process and make our voices heard.

State’s AG Backs California Homeowners Bill of Rights

In an effort to prevent now well-documented foreclosure abuses, California’s Attorney General has been pushing the state’s legislature to adopt a series of legislative proposals containing stricter consumer protections related to mortgage servicing and foreclosure.

The proposals are part of what’s come to be called the “Homeowner’s Bill of Rights.”

Politicians, no doubt recognizing that this was not a debate they wanted to be having publicly and desperate for political cover, decided to take many of the proposals out of the normal legislative process and place them instead into what’s being called, “a special conference committee.”

The special committee’s members, if it matters and I’m not at all sure that it does, include four Democrats and two Republicans.  State senators Noreen Evans and Ron Calderon… and Assembly members Mike Feuer and Mike Eng are the Democrats.  Senator Sam Blakeslee and Assembly member Donald Wagner are representing the GOP on the committee.

Party affiliation may not be important because just like all the past legislative proposals related to preventing abuses in the foreclosure process, the Homeowner Bill of Rights is vehemently opposed by the banking lobby.  And that means that the more important distinction will likely prove to be who is pro-banker and who is pro-consumer, or at least somewhat neutral.

So, how does the committee break down in that regard?  Here’s a quick look:

Noreen Evans appears to me to be pro-consumer, with stated policy priorities that include protecting the environment, fighting for women and children, and the reform of our legal system.  Currently, she chairs the Senate Judiciary Committee.

Also, her district covers Humboldt, Lake, Mendocino, Napa, Solano, and Sonoma counties.  However, and not that this in conclusive, she previously served in the State Assembly (2004-2010) and during that time she was a member of the Assembly’s Banking and Finance Committee.

Mike Feuer seems to be at least neutral, if not solidly pro-consumer.  He’s a graduate of Harvard College and Harvard Law School.  He chairs the State Assembly’s Judiciary Committee, but previously he co-chaired the Assembly’s Working Group on Jobs and Economic Recovery, and chaired the Budget Subcommittee on Transportation and Information Technology.

Also, while serving on the Los Angeles City Council, Feuer co-authored the Affordable Housing Trust Fund, funded meals for 75,000 indigent seniors, led efforts to create playgrounds accessible to disabled children, and bolstered the city’s Ethics Commission.

Ron Calderon is an ex-banker, and I think it’s more than safe to say that left to his own devices, he’ll vote with the banking lobby every single time.  Today, Calderon chairs the very influential Senate Insurance Committee, which I believe until recently was the “banking and insurance committee,” but during his two previous terms in the State Assembly, he served as chair of the Banking and Finance Committee.

Calderon says his policy priorities include a balanced state budget, strengthening state and local infrastructure, creating jobs, and protecting the rights of consumers.

The problem is that Calderon’s idea of protecting consumer rights is presumably what drove him to sponsor California’s SB 94, a bill signed into law by the governor in 2009, ostensibly designed to protect consumers from foreclosure scams, but that ended up doing nothing more than chasing legitimate attorneys away from helping homeowners get their loans modified.

Almost three years later, foreclosure related scammers remain ubiquitous in California, while now, in the hands of the State Bar, SB 94 threatens to make it literally impossible for a homeowner to hire a lawyer to help with a loan modification.  I understand why the Mortgage Bankers Association supported SB 94, but I for one don’t need or want that kind of “protection,” thank you anyway.

Mike Eng chairs the Assembly Committee on Banking & Finance, which oversees California’s financial institutions, real property finance, and corporate securities law.  The Committee develops and shapes public policy in such as areas as mortgage foreclosures, payday lending, regulation of state chartered banks and credit unions, consumer lending, and financial privacy.

That seems pretty conclusive, I understand, but watch him talk on the subject of the Homeowner Bill of Rights on the video below.  He makes clear that public support or the lack thereof is going to be a key driver of the committee’s decision.

Sam Blakeslee’s says he’s “known as one of the state legislature’s most bipartisan members,” and he chairs the Select Committee on Recovery, Reform and Realignment, which is described as a bipartisan Senate think tank.

But, Blakeslee is also president of his family’s business, the investment firm Blakeslee & Blakeslee, founded in 1971.  He is a Certified Financial Planner, a Registered Securities Principal, and a Registered Municipals Principal.  So, I don’t know what all that means, necessarily, but I’d say it’s worth keeping an eye on this guy for sure.  Maybe he’s the state’s most bi-partisan banker.

And finally, Don Wagner, the Vice-Chair of the Assembly Judiciary Committee, is from South Orange County (I live in North Orange County, by the way), and it looks to me like he’s a typical Orange Country conservative Republican… he ran for his seat in the State Assembly on a platform of fiscal responsibility… which on its face, doesn’t bode well as far as his support for the Homeowner’s Bill of Rights goes.

His website says that his “district has not raised taxes, but by floating bonds, it has paid off all of its debts, and balanced every budget.”  So, does that mean that he floated bonds to take on the debt needed to pay off the debt?  I’m not trying to be funny… that’s what it says on his site.

Wagner’s a lawyer involved with the Orange County Bar Association and he’s served as a Judge Pro Tempore in the Superior Court of Orange County.  He also founded the Orange County Chapter of the Federalist Society, which is “a national organization of conservative lawyers, judges, and law professors committed to ensuring a judicial integrity and strict adherence to the Constitution of the United States.”

Were I a betting man, and I am, I’d have to bet he’s a vote against the Homeowner’s Bill of Rights, but I’m certainly willing to be proven wrong.

Scoreboard says…

So, based on that cursory analysis and absent any information to the contrary, I’d say that as far as the “special committee” goes, the score at halftime is:

BANKERS – 4                        CONSUMERS – 2

Under just about any other circumstances, I’d say that based on who the committee’s members are… the fix was in.  I’d stop following the Homeowners Bill of Rights and just wait to read bad legislative news once again… “Killed in committee, but thank you for playing.  The End.”

But, this time I’m not so sure how this will turn out, especially if I were to be successful at getting others involved… like I was with Norm Rousseau’s suicide, for example.  Or even half that successful would probably do it.

Which, of course, ultimately comes down to you.

Here’s why I think this time could be different:

• Attorney General Kamala Harris is publicly backing the Homeowner’s Bill of Rights.  It’s the first thing you see when you visit her website.  And it’s an election year.

• Servicer abuses and misconduct are now very well documented and widely known.  The DOJ settlement provides some $17 billion in principal reductions nationwide, and California gets the majority of that amount.  Plus, there’s another $8 billion involved.  That’s going to keep a light shining on whatever is happening for a while.

• California is the third hardest hit state, but its size makes it number one by far.  Our state budget deficit is the result of the foreclosure crisis, and the austerity ahead is going to touch everyone’s life, not just those at risk of foreclosure, and last for several years.

• This time, everybody’s watching, which is why the politicians pulled the Bill of Rights proposals into a “special committee.”  It’s dark in there and they’re hoping they can kill it without anyone seeing who done it.  But that’s not going to be easy this time around.

• This time, maybe enough Californian’s have been affected by the crisis, or see that they’re about to be affected by the crisis, so they’ll actually take the time to send emails and contact their elected representatives… and ask that their friends and family do the same.

The only way this country ever gets onto a path not fraught with risk of pain, civil unrest, and violence is if some balance is restored.  The pendulum has been allowed to swing too far to one side… it can’t stay there… the question is how is gets pushed back.  As Robert Reich says in his brilliant book, “Aftershock,” the two choices are radical revolt or radical reform.  (If you haven’t read it I HIGHLY recommend it.”)

Regardless, the fact that our elected representatives still have such a rudimentary understanding of the crisis and its impact on our society is proof that we are failing to educate them.  Homeowners are spending more time talking about robo-signing than they are talking to their elected representatives at the state and federal levels.

I’m not saying we should stop anything.  But I am saying we need to significantly expand our communications capabilities.  And I know we can do so fairly easily…

… Norman Rousseau taught me that.

More people read, shared, forwarded and talked about the story I wrote about Norm’s suicide than any of the articles I’ve written in the past.  And that’s sad.

Consider the following 3 facts:

A. When it comes to our politicians, there’s only one thing more important than money in this country… and that’s getting reelected.  If politicians think banking lobby money is what’s needed to get them reelected, then they’ll vote with the banking lobby.

But, if they realize that by voting with consumers they won’t need banking lobby money to get reelected… and that if they do vote with the banking lobby, there’s not enough money in the world to get them reelected… why, then they’ll vote with consumers.

B. There are only two ways to gain real political influence in this country.  One involves having a lot of money, and on that front we’ll never win… they’ve got the money advantage cornered.

The other way to gain political influence is to have a lot of people, and that’s currency we should be able to come up with in the thousands, or even millions. Already, there are easily 20 million Americans that have been directly affected by the foreclosure crisis… enough to sway a national election if organized.

C. This is an election year.  Right now, in Washington D.C. those in the House of Representatives all know that soon, they’ll be coming home to campaign for reelection in their home districts.  And right now, they’re polling their constituents and likely voters to see what’s on their minds, because they don’t want to come home to find people throwing tomatoes at them.

If any one of them received 500 emails on the same topic right now, they’d start sweating like Rick Santorum at HomoCon-2012. 

(Or, maybe like… Tim Geithner at a Save My Home convention?  Pelosi on a duck hunt with Cheney?  Boehner at a Hallmark Film Festival?  G.W. Bush on Jeopardy?)

WE’LL WIN BECAUSE WE’RE RIGHT.

The special committee is reviewing what are considered to be the “more far-reaching of the proposals.”

So, what the heck does that mean?  Well, it includes things like a law that would, according to the San Bernardino County Sun…

“… prohibit foreclosures whenever a homeowner makes a timely application for a loan modification, mandate that banks establish a single-point of contact for borrowers facing foreclosure, and let borrowers challenge proceedings in court, among other things.”

Well, why didn’t you say so?  Good Lord, those things are incredibly “far reaching.”  In fact, I could have sworn that one of them just reached out from Sacramento and tickled my tushie some 400 miles away.  That’s some reach, I’ll tell you what.

Banking industry representatives are said to oppose these ideas on grounds that they may encourage strategic defaults and spurious lawsuits.

To which I would only reply: Prospice tibi, ut Gallia, tu quoque in tres partes dividaris.

(Latin, meaning: “Watch out, you might end up divided into three parts, like Gaul.”)

Come on, banking industry representatives… why would any of those things increase the probability for strategic default, or was that just all you guys could come up with on short notice.  What happened to, “there won’t be any more lending or borrowing costs will rise?”  Those didn’t make any sense either, but I was getting comfortable with them nonetheless.  Strategic default?  Phooey.

And spurious lawsuits?  I’m not sure we both understand what that word means, that is to say… I do… but do you guys?  Would you like to know what’s causing the spurious lawsuits in California?  I’ll be happy to tell you.

It’s SB 94, which was your idea in the first place, was it not?  Don’t try to tell me that it was Senator Calderon’s idea because clearly he’s a marionette.  You chase all the legitimate lawyers away from helping homeowners modify loans and what you get are spurious lawsuits by the hundred.  Haven’t you figured that out yet?

Attorney General Harris has said exactly what I was suggesting several months ago when the settlement was first announced, albeit a tad prematurely.  She said it’s important to strengthen due process by writing some of the provisions of the national mortgage settlement with the nation’s five largest banks into state law.

Finally, there is intelligent life in politics.  It absolutely takes my breath away that finally, someone in a position of power actually agreed with me about something.

And I wrote the following on March 1, 2012…

If the new servicer standards were made into state law that had a private right of action and a provision for attorneys fees, that would save homes and stop foreclosures, and it would do so more effectively than any amount of money.

I’m not talking about bailouts for borrowers, I just want the rules associated with a national program to be followed and enforced, and I think every homeowner in the country should and would want that too, regardless of whether at risk of foreclosure or not at this moment.

 

Every homeowner in America should want federal programs to operate as they were intended to operate.  It’s not about who is at risk of foreclosure and who isn’t.  It’s simply about being in favor of basic fairness in our federal or state programs.  No one should oppose any of those ideals, and those that suffered as a result of being deprived such fairness would engender sympathy from others.

We simply have to do what the Attorney General is suggesting… otherwise all we’ll have are another set of HAMP guidelines, and we don’t need another set of useless guidelines that no one follows and no one can enforce.

No one should want that, by the way, because we understand that “HAMP HAPPENS.” 

But, if HAMP HAPPENS TWICE, strategic defaults and spurious lawsuits are going to look like a picnic at the beach on a sunny day with someone you love.

A SPECIAL MESSAGE TO ATTORNEY GENERAL HARRIS…

Okay, I’m a HUGE fan.  Brilliant!  How can I help?

 Reach me anytime at mandelman@mac.com.

Mandelman out.

# # #

NOW CLICK PLAY TO WATCH CALIFORNIA’S

Foreclosure Crisis Town Hall

Fair game.

The early border skirmishes of Campaign 2012 are reviving questions about one candidate’s former pastor and shining a spotlight on the other’s high school hijinks. Can a fresh round of questions about President Barack Obama’s birth certificate be far behind? In a campaign year when voters have declared the economy their top concern, Obama and [...]

Read this post »

This might be bad

Voters this year will be treated to a pair of mutually exclusive pictures when it comes to the economy. What’s going to happen in the short term? What is coming our way further down the road? Obama will tell you that Bush wrecked the economy, but we are slowly but surely climbing back out of [...]

Read this post »

Where money goes to die

It’s been a while since we checked in on one of Ed’s favorite subjects, that being California’s high speed rail project. The proposed service hopes to whisk commuters from San Francisco to Los Angeles in a matter of hours without all that bother of using the existing regional air service to do the same thing [...]

Read this post »

Arizonans interested in the foreclosure process got some housing market news this week that seemed to make most everyone in the state darn near exuberant.  It was nice to see in many ways, after all it’s been a long time since there was positive housing market news in the Valley of the Sun.

But, it was kind of sad, too.  Why do I say that?  Read on… you’ll see.

One headline proclaimed that in terms of foreclosure activity, a 44 percent year-over-year decrease ranked Arizona fourth worst among the states in April.  A few months ago Arizona took over the number one spot from Nevada, who had been in the number one position for some five years.

Here’s how the APRIL numbers looked for the top four slots in the race to the bottom:

#4 – Arizona – 1 out of every 377 homes received foreclosure notice.

#3 – Florida – 1 out of every 364 homes received foreclosure notice.

#2 – California – 1 out of every 351 homes received  foreclosure notice.

#1 – Nevada – 1 out of every 300 homes received foreclosure notice.

In March, RealtyTrac’s monthly report showed Arizona with one out of every 300 homes receiving a foreclosure notice, which put Arizona in first place that month.

And, what does all that come to in real numbers?  Well, in March, the State of Arizona saw 9,497 foreclosure filings, while in April there were only 7,550.

So, if you’re anything like me, you’re sitting there wondering what the heck constitutes a “foreclosure filing?”

Well, funny story…

As defined by RealtyTrac, it could be a Notice of Default, or a Notice of Sale, which means that “foreclosure filings” could be double counted because the number in one month could be actions against previously foreclosed properties.   Or, maybe not… we simply don’t know.

Why don’t we know?  Because RealtyTrac is so entirely full of horsey do-do that the entire organization should be lined up against a wall and shot a dawn for pedaling garbage statistics in a state still being decimated by the foreclosure crisis.

Further, one should also remember that both “foreclosure filings,” whether Notice of Default or Notice of Sale, are generated by the servicer, so as if the data presented didn’t already have enough holes in them, it could also just be that servicers sent out fewer of one or the other, or both in April than they did in March.

Perhaps they slowed down because the five largest servicers spent April preparing to comply with the DOJ settlement.  Or, may it was because they sent out so many more in March and February.  We don’t know any of those answers either because once again, RealtyTrac is feeding us pabulum.

Here’s some of the twaddle RealtyTrac released, as seen on Arizona Public Media:

Nationally, April foreclosure activity decreased 5 percent from the previous month and was down 14 percent from April 2011, RealtyTrac reported. One in every 698 U.S. housing units had a foreclosure filing during the month.

Oh, goodie… a national average.  How about you guys at RealtyTrac take out North Dakota and similar states, reshuffle and deal these cards again.  NOBODY lives in National Average.

The company reported that foreclosure activity rose in many states, but the national number was down year to year as a result of sharp declines in the big three — California, Nevada and Arizona — and an increase in short sales, which stop the foreclosure process.

So, “foreclosure activity,” whatever the hell that means… “ROSE” in “MANY” states, did it?  Why is it that you guys at RealtyTrac have no trouble providing useless numbers, but when it comes to a number that might have some meaning, it’s MIA?

A “SHARP DECLINE” in the big three?  Sharp decline of what exactly?  “Foreclosure activity,” or “foreclosure filings,” which are either Notices of Default or Notices of Sale?”  These guys at RealtyTrac obviously majored in “Obfuscation,” with a minor in “Deceptive Speech.”

“Rising foreclosure activity in many state and local markets in April was masked at the national level by sizable decreases in hard-hit foreclosure states like California, Arizona and Nevada,” RealtyTrac CEO Brandon Moore said in a press release.

Okay, you tell me… isn’t that paragraph above entirely redundant when viewed next to the preceding paragraph?  If you answered no to that question, I’d like to suggest that you go jump in a lake.

“In addition, more distressed loans are being diverted into short sales rather than becoming completed foreclosures,” Moore said. “Our preliminary first quarter sales data shows that pre-foreclosure sales — typically short sales — are on pace to outnumber sales of bank-owned properties during the quarter in California, Arizona and 10 other states.”

And that incomplete and/or inconsistent comparison has succeeded in generating a completely fallacious argument.  So, very well done there.  Your ability to use a high word count while remaining entirely irrelevant or meaningless, is awe inspiring.

In its tracking of the 20 biggest metro areas, RealtyTrac reported Phoenix had the fourth worst rate in April, at 313 housing units with a foreclosure filing. That was down 22.6 percent from March and down 44.4 percent from April 2011.

And we’ve come full circle, so we’re bank to trying to figure out why banks sent out fewer Notice of Defaults, or Notice of Sales, if in fact they did at all… or, whether we’ve just got a lot of double counting going on since a “foreclosure filing,” could be on an already foreclosed home.

Here are some additional nonsensical numbers released by the Mortgage Bankers Association this past week…

•  In Utah, March foreclosures  up 74 percent over February. 
• In New Jersey, April foreclosures up 72 percent over March. 
• In Tampa and Chicago, February foreclosures up 64 and 43 percent over January, respectively 
• In Pennsylvania, April foreclosures up 23.6 percent over April of 2011, but Notice of Defaults up 115 percent over last year.

Now, here we are in mid-May and we’re to believe that everything has changed for the better?  That was then… this is now, is that the idea?  Complete poppycock.

Here’s how the Mortgage Bankers Association chose to confuse people in Utah last week…

The Mortgage Bankers Association yesterday released a report claiming that the share of Utah’s home loans at least 30 days late dropped to 7.4 percent… from 7.58 percent in the previous three months.

Oh, so what and who cares?

First of all, that’s not a statistically significant difference, in fact, it would be well within the margin of error for any legitimate survey of such data.  And secondly, it’s an incomplete and/or inconsistent comparison.

One point being compared is the “drop to 7.4 percent,” let’s call that the “apple.”  And the other point against which the dropped 7.4 percent is to be compared, is a three month average of 7.58 percent, which we can think of as the “orange.”

And, if the last month of the three month average was 7.2 percent, then this month’s 7.4 percent was actually an increase.  But we don’t know that one way or the other, now do we?

You can read more about Utah’s Garbage Stats by clicking HERE.

Look, if you’re doing just fine and you want to buy a house, go for it… I don’t care one way or the other.  If you’re planning on living there for a long time and you can afford the payments, what difference does it make if it goes up or down in the next so many years?  It’s a house, not a stock.  Buy it to live in it, not as an investment you’ll flip out of in five years, or even 10.

And to the Realtors reading this… My personal advice would be that you only sell to friends or family members that fall into the description above.  Everything else, sell to the greedy little Canadians and bargain hunting vulture investors.  I’m going to love watching them squirm when prices resume their decline.

And if you’re struggling in this economy, at risk of losing a home, and reports like these make you feel like you’re alone in your financial misery, and that everyone is doing better while you’re not… DON’T FEEL THAT WAY BECAUSE IT’S ALL NOTHING MORE THAN ONE BIG PILE OF STEAMING FRESHNESS.

I’m not seeing anything improve anywhere.  In fact, I’m only seeing things worsen ahead.  None of the underlying fundamentals have changed one bit.  In fact, last month’s unemployment data was a nightmare, much worse than expected, as was GDP, and the EU looks about as stable as a Christian Scientist with appendicitis.

So, just ignore this garbage news from the bankers and their supporters, and it will go away.  It’s like a ghost in your closet… go back to sleep and it’ll be gone in the morning.

Mandelman out.

Distractions.

Like I said yesterday, given his liabilities on the economy, I think The One’s reasonably comfortable with nearly any change of subject. Even this subject: Campaign manager Jim Messina sent out a fundraising appeal Thursday night saying that the proposal, submitted to (and rejected by) a Republican super PAC, “shows in vivid and gruesome detail [...]

Read this post »

In Utah, foreclosures in March were up 74 percent over February.  In New Jersey, foreclosures in in April were up 72 percent over March.  In Tampa and Chicago, foreclosures in February were up 64 and 43 percent over January, respectively.

Now, here we are in mid-May and we’re to believe that everything has changed for the better?  That was then this is now, is that the idea?  Poppycock.

The Mortgage Bankers Association yesterday released a report claiming that the share of Utah’s home loans at least 30 days late dropped to 7.4 percent… from 7.58 percent in the previous three months.

Well, so what and who cares?  First of all, that’s just not a statistically significant difference, in fact, it would be well within the margin of error for any legitimate survey of such data.  And secondly, it’s an incomplete comparison.  One point being compared is presumably the “drop to 7.4 percent.”  And the other point against which the dropped 7.4 percent is to be compared, is a three month average of 7.58 percent.

If the last month of the three month average was 7.o percent, then this month’s 7.4 percent was actually an increase.

The Mortgage Bankers Association (MBA”) also claimed that in the first quarter of this year, six percent of loans in Utah were in default — which the association defines being at least 30 days behind on payments.

Now, and you have to read this carefully to see the deception, they’re saying that at the end of the first quarter of this year… “2.5 percent of mortgage loans in Utah were in the foreclosure process.”

What the heck does that tell us?  Not a darn thing, although if you like to guess at things, here are a few things it could mean:

1. Nothing has changed – That’s right, based on those two claims by the MBA, the State of Utah could still have six percent of loans at least 30 days late and 2.5 percent in the foreclosure process.
2. Things have gotten worse – That’s right, based on those two claims, it’s possible that today there are more than six percent of loans in Utah more than 30 days late, and the 2.5 percent in the foreclosure process could be an increase from prior months.
3. Servicers are still preparing to comply with DOJ settlement – If the 2.5 percent in the foreclosure process is lower than expected it could be… and moreover likely is, due to servicers getting ready to comply with the DOJ settlement, meaning they have to foreclose without robo-signing and the like.

The point is that reports like this one are a study in obfuscation, which means: “muddying” or “confusing,” or refers to a “smokescreen.”  They don’t really tell us anything, but they’re designed to make us think something has changed, when it has not.

Why do I say that?  For several reasons…

To begin with, nothing we’re dealing with is going to change that quickly.  It was a huge problem yesterday… it’ll be a huge problem tomorrow.  If positive trends stay constant over the course of a year… then that will be something to cheer about.

Another reason for my skepticism is that none of the underlying fundamentals have changed one bit.  In fact, last month’s unemployment data was a nightmare, much worse than expected.  How could things have improved so dramatically so quickly when things have otherwise been moving so slowly?  Answer: They couldn’t.

And lastly, it’s the report itself.  The comparison of loans “in default,” which they defined as being over 30 days late, with loans “in the foreclosure process,” which they do not define, is an attempt to set up a deceptive or fallacious argument.

At the very least it’s an “incomplete or inconsistent comparison,” meaning that either not enough information is provided to make a complete comparison, or where different methods of comparison are used in order to create a false impression of the overall comparison.

The data above also was surrounded by irrelevant comparisons that I removed to show the deceptive structure of the argument being made.  In the original presentation of the data, the MBA compared the loans in default to the national average, which they claimed to be 6.9 percent, and loans in foreclosure, which they claimed to be 4.4 percent.

Why should we care about such comparisons by themselves?  We shouldn’t.  They tell us absolutely nothing.  It’s like saying, “In recent coin tossing experiments more coins preferred heads over tails.”

RealtyTrac chimed in with other statistics designed to be both encouraging and misleading:

 1.     “Foreclosure starts decreased in 41 states and the rate of loans in foreclosures fell in 22 states.”

 2.     “Foreclosure activity in all the judicial foreclosure states combined jumped 15 percent versus April last year.” 

 3.     “Taken together, non-judicial states saw foreclosure activity fall 29 percent.”

The first one is total junk, it is meaningless… and confusing… in fact, if you study it too long your hair will likely fall out. Foreclosure starts decreasing may just mean that banks decreased the number they started.  And the same for the loans in foreclosure garbage.

Banks control how many foreclosures start and how many are in foreclosure process, not borrowers.

The last two are more devious.  They are woven throughout stories in the media this week in order to make us believe that it’s the courts that are causing the foreclosure crisis to be prolonged.  Bad courts.  The clear implication being that if the courts weren’t in the way of the banks, we’d all be much better off, much sooner.  Abigail Field wrote a fabulous piece HERE.  Among many other things in her article, she wrapped up flawlessly:

Those darn courts, wrecking the housing market by slowing foreclosures and costing all of us more money.

Due Process is the Solution, Not the Problem

See where all this is going? Enough messaging like this and some states may change foreclosure laws more to the bankers’ liking. Short of that, people will target the courts as the problem instead of the bankers.

Whenever you read banker talking points embedded in news like this, remember: our Constitution guarantees Due Process for a reason. Due Process is essential to the rule of law and a fundamental check against the abuse of power. Don’t let the bankers sell you or your representatives into taking it away.

Obviously, the banking lobby would like it much more if they didn’t have to deal with things like… well, you know… like laws, for example.  Courts can be a real nuisance, I completely understand.

Look, if you’re doing just fine and you want to buy a house, go for it… I don’t care one way or the other.  If you’re planning on living there for a long time and you can afford the payments, what difference does it make if it goes up or down in the next so many years?  It’s a house, not a stock.  Buy it to live in it, not as an investment you’ll flip out of in five years.

But, of you’re struggling in this economy, at risk of losing a home, and stories like these make you feel like you’re alone in your financial misery, and that everyone is doing better while you’re not… please don’t feel that way because it’s all nothing more than one big pile of steaming freshness.  I’m not seeing anything improve anywhere.  In fact, I’m only seeing things worsen ahead.

So, just ignore it, and it will go away.  It’s like a ghost in your closet… go back to sleep and it’ll be gone in the morning.

Mandelman out.

Obama's policies old, not bold.

An amusing moment from yesterday’s speech in Iowa on the economy, in which Mitt Romney explains the difference between R&D in the public and private sectors.  All you really need to know is the history of technological innovation in the 30 or so years since the breakup of the AT&T monopoly, but Romney’s parable is [...]

View the video »

Pessimism.

“Steady,” in this case, depends on how one looks at the jobless claims numbers.  If we compare today’s figures to today’s adjusted figures from last week, then claims remained steady at 370,000.  However, that ignores the fact that the claims numbers got adjusted upward from last week’s announced 367,000 claims, the 61st week out of [...]

Read this post »

First official comments on the Mack endorsement, and more.

Earlier today, I had an opportunity to speak with Republican presidential nominee Mitt Romney about the campaign and the economy, as well as Romney’s official endorsement of Connie Mack in the Republican primary for the US Senate race in Florida.  Governor Romney is traveling in Florida today, and while he and Mack have often appeared [...]

Read this post »

Plus: From "solid B+" to incomplete.

The obligatory pit stop on “The View” for America’s first female president. I think this dumb, insulting line is almost a verbal tic for him at this point. He used a variation of it on the trail in 2008 to smear McCain even though Maverick refused to make an issue of his association with Rev. [...]

Read this post »

Favorability now virtually even.

USA Today leads the analysis of its joint poll with Gallup on the news that people have become more optimistic on the economy, and that’s good news for Barack Obama.  More people think Obama will win re-election as well, although at least so far, USAT doesn’t say whether Obama actually leads in the poll.  But [...]

Read this post »

BRIAN!  Dude… My good friend… Mi amigo de la Hipoteca clase… My favorite lender defender from whom laughs do engender… please don’t take me an offender… but as the message’s sender… a response to you I’ll tender… and my views I’ll therefore render…

Okay, I give in… that TBWS Daily was hysterical.  I mean, people say I’m funny, but I can’t hold a candle.

Overall, I loved the show, but, if I may… there were just a couple things…  

Just to make sure I understand what you said there… the problem is that there aren’t enough homes for people to buy?  We’re having a shortage of houses for sale, are we?  Wow… you know, I was sleeping and woke up to today’s video and for a minute there, I thought I must have dozed off for a decade or more.

But seriously… I had no idea that was the problem.  Well, alrighty then… I guess I’m going back to work… Mandelman doesn’t matter anymore… our economic problems have been solved.  And, thank heavens for that, because I was getting darn tired of writing about… um… well… I guess you could refer to it as… oh, I don’t know… how about… “the truth?”

Get more houses on the market?  Seriously?  More houses is what we need?  Am I on Candid Camera, or is there a rabbit hole around here somewhere that I can’t see?

So, I guess what you’re telling me is that at this point, the banks are actually hoarding them… holding them back for their own heads?  Foreclosing on more and more of them every day because they have a plan to corner the deteriorating home market?  Or are they just trying to pay us back for bailing them out by offering to pay most of the property taxes in this country going forward?  Or, maybe they just have a handyman fetish, so the more vacant homes the better?  Nothing turns them on like monitoring property preservation companies?

Why would they be hoarding empty houses?  Correct me if I’m wrong, but I was always under the impression that empty homes COST money as a result of their tendency to… what do they call it?  Oh yeah… decompose.

Aren’t banks the ones that are always trying to MAKE money?  Or have that backwards and banks are the ones that want to have the highest possible costs?  I can never keep that one straight… like eating eggs for breakfast… are they good for me or bad for me?  I can never remember… so I eat granola.

But, I digress…

Why do you suppose it might be that banks aren’t putting more homes on the market… or in the parlance of the economist… why are they limiting supply… making sure that it remains lower than demand?

Anyone?  Anyone?  Bueller?  Bueller?

Well, it can’t be because they don’t like money, right?  Right.  Okay, good.  I was pretty sure we’d have no argument there.

Could it be that they’re just so busy foreclosing and proprietarily trading credit derivatives for fun and losses, that they just haven’t realized that there are throngs of Californians and Arizonans clamoring to buy the homes they’re holding onto?  Again, I’d have to guess that… no, that can’t be it either.

Okay, let’s try this… What happens when the demand for a good exceeds its supply?  Oh, now lets not always see the same hands…

Brian?  Is that you I see in the back of the room doodling?  What’s that a picture of?  That’s you sitting at a table refinancing a four-plex for a dentist?  Yes, that’s very nice, but we’re trying to hold a class here, so if you wouldn’t mind…

So, what happens when the demand for a good exceeds its supply? Right, Brian!  Prices go up… or actually, in this particular case, they don’t go down as quickly.

And just what do you suppose would happen if the banks decided to make a bunch of homes available for sale, as you suggested is the thing to do in today’s TBWS Daily?  Do you think prices would tend to go up or down?  I’ll give you a hint… the answer is the opposite of “up.”

And, if home prices were to go down even faster than they are as a result of all of the other factors that haven’t changed a lick, except to worsen… you know… like, unemployment, long-term unemployment, foreclosures, average incomes… GDP… the state’s $16 billion budget deficit that’s about to constrict the state’s economy even further as we cut services and raise taxes on the wealthy… those kind of things?

Well, if home prices fell further and faster I’d have to venture a guess that more people would find themselves underwater and/or further underwater… and that would mean what do you suppose?  If you guessed further reductions in consumer spending, higher unemployment and more foreclosures… well, you’d be right once again!

And then what about all the people who, having been duped into believing that housing had bottomed, bought homes recently?  Would they be gaining equity or losing it?  Losing it, right!  And assuming an FHA/new-sub-prime loan was involved many would be underwater by Christmas… and you know what that would mean, right?

Even more foreclosures!  Maybe that’s why FHA is reporting almost 20 percent defaults on loans made SINCE 2009.  It’s kind of funny if you think about it… we’re actually creating foreclosures over at FHA even faster than we can foreclose down the street at Fannie and Freddie.  It’s very “Dr. Strangelove – Or, how I learned to stop worrying and love the bomb,” don’t you think?

And I did hear you say that the shortage was “at the low end of the market,” right?  I’m sure that’s correct, because that’s the end of the market that’s not only less expensive, but also less experienced.  Those are the folks easiest to convince to buy a home because it’s never going to be this cheap or the rates this low again… so, better hurry and get your offer in today… isn’t that about right, Brian?

Of course, I wouldn’t want to leave out my favorite flavor of scumbag, the vulture investors who envision this as a once in a lifetime opportunity to become full fledged slum lords, gouging the unfortunate and credit impaired with top tier rents for at least a decade while they put the absolute minimums into maintenance and scheme to hold onto security deposits in all cases.

No, I wouldn’t want to forget them.

See, it’s not that there aren’t enough homes on the market really, right Brian?  It’s that there aren’t enough homes that can be purchased below market value that’s the problem.  Realtors don’t really want more inventory… they want more inventory that can be purchased at distressed prices.  I’ll be happy to put my home on the market tomorrow, just not at a price at which it would sell any time soon.

Don’t get me wrong… I do understand that the banks dumping homes on the market at distressed prices would make summer fun for Realtors and mortgage brokers… and Lord knows I do like seeing you guys having a good time… after all, you’re always a fun lot to have at a party.

But, since the banks doing what you suggest under today’s circumstances would only push us further into a recession, with housing prices falling even faster than they will otherwise, thus creating even more foreclosures… thus further destroying the housing and credit markets once the fun ends… well, I’d like to humbly suggest that IT’S A TERRIBLE IDEA.

So, if you put it all together… the worsening employment and overall economic conditions (except in the media where it’s an election year), combined with the tightening of the already tight credit markets… and with the unabated flood of foreclosures on the horizon (forecasted to exceed the number of homes lost to-date, by the way)… and the permanently broken private securitization market… CA’s $16 billion and growing state budget deficit… and the need for Washington D.C. to reduce spending going forward…

… to say nothing of the EU’s high wire act, sans net, that’s destined to see one or two countries fall to their deaths sooner than we think, thus causing us to nationalize or bailout several or more of our TBTF banks once again… and then factor in the possibility of Mitt Romney and the GOP actually winning in November… OMG, OMG, OMG… consider all that…

… And you’ll want to eat a gun.

But… STOP!  Don’t do that.  That is NOT the answer, Brian.

Just like it’s NOT the answer to… “put more homes on the market.”

From your good friend who loves you… and as always I remain…

Most sincerely yours…

Martin

xoxoxoxoxo…

Martin Andelman

Mandelman Matters

P.S. If I’m in town, I think I’m going to come to Anaheim to see you guys… I figure you’re just dying to buy me a beer.  And tell Frank to be careful on that bike.

Mandelman out.

Hey, to subscribe to TBWS… CLICK HERE!

The 23 million.

Team Romney continues to hammer Barack Obama on the economy with their new video spot, “A Few of the 23 Million.”  The spot focuses on Iowa, where three people represent the 23 million Americans who are out of work, underemployed, or who have simply given up all hope for economic change.  It’s a bleak picture, [...]

View the video »

The 23 million.

Team Romney continues to hammer Barack Obama on the economy with their new video spot, “A Few of the 23 Million.”  The spot focuses on Iowa, where three people represent the 23 million Americans who are out of work, underemployed, or who have simply given up all hope for economic change.  It’s a bleak picture, [...]

View the video »

The 23 million.

Team Romney continues to hammer Barack Obama on the economy with their new video spot, “A Few of the 23 Million.”  The spot focuses on Iowa, where three people represent the 23 million Americans who are out of work, underemployed, or who have simply given up all hope for economic change.  It’s a bleak picture, [...]

View the video »