News, Research & Insights for American Homeowners, Patriots & Constitutional Conservatives
3 pm ET!
Today on The Ed Morrissey Show (3 pm ET), we’ll spend the first half catching up on all of the top political stories with my Salem colleague and good friend, Townhall political editor Guy Benson. In the second half, Tea Party organizer-turned-Senate candidate in Virginia Jamie Radtke returns to bring us up to speed on [...]
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.
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.
From your good friend who loves you… and as always I remain…
Most sincerely yours…
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.
As she moves to her next adventures.
What do virtual-officegoers do on a colleague’s last day? In my old days in a traditional office setting, we’d have a cake and maybe a luncheon, or get together for drinks after work. Here in the virtual world, though, all we can do is write about the departure of a colleague and a friend. Unfortunately, [...]
3 pm ET!
Today on The Ed Morrissey Show (3 pm ET), my Townhall colleague and good friend Guy Benson returns to discuss the top political stories of the day, including the polling that has kicked off the 2012 general election fight for the White House, and the continuation of the Senate’s (yellow) streak on budgeting. In the [...]
3 pm ET!
Today on The Ed Morrissey Show (3 pm ET), we’ve had a late cancellation from our good friend Kevin McCullough who’s simply too buried in work to join us, but we’re going to plunge ahead with a look at the top stories of the day, and a session of Face the Chat! Be sure to [...]
Obligatory
I first caught wind of this story from our good friend Fausta, and it seems like a suitably silly note to help wrap up an already strange and unusual week. We’ve got a brand spanking new, rootin’ tootin’ study, fresh off the press from a distinguished group of scientists. (And I can tell they were [...]
3 pm ET!
Today on The Ed Morrissey Show (3 pm ET), we have my good friend and Townhall colleague Guy Benson, LA talk-show host John Phillips, and our artiste-in-residence Sarjex to talk about her experiences as a Mormon. Don’t miss it! The Ed Morrissey Show and its dynamic chatroom can be seen on the permanent TEMS page — be [...]
3 pm ET!
Today on The Ed Morrissey Show (3 pm ET), we are joined once again by my Townhall colleague Katie Pavlich and my good friend Steven Crowder! We’ll talk about the upcoming debate tonight, the media treatment of Marianne Gingrich and the contrast to media disinterest in John Edwards’ affair in 2008, and much much more! [...]
Our good friend “Anonymous” has piped up with more vital information and expressed it more succinctly than I did.
Editor’s Note: In other words, if you have a high quality loan wherein you have a high credit score and received relatively good terms, it was in the “senior tranches.” The senior tranches were paid and closed. They were paid from the meager proceeds of the junior tranches, from insurance, credit default swaps etc. Bottom Line: If you got one of those mortgages, it has almost certainly been paid in full. So why are they still collecting your payments? Because they can.
Your obligation has most likely been satisfied long ago without any rights of subrogation. If you are in foreclosure now with one of these loans, the “Trustee” is in actuality out of the picture because the “Trust” was closed out (IF IT EVER LEGALLY EXISTED). All of this leads to the politically incorrect conclusion that people gt their houses for “nothing.” But that is not true.
ALL THE MONEY THAT WAS OWED ON THAT LOAN HAS BEEN PAID. WHY SHOULD ANYONE COLLECT ANYTHING FURTHER?
More comments from “Anonymous”
This is a very important post. I have been aware of cases where the defendant is sent to mediation without first identifying the real creditor. Some here have stated that the real party issue is not relevant because eventually the plaintiff will get his “ducks in a row” and proceed with the foreclosure under the real party name.
Not identifying the real party in court is not only fraud but also deprives the defendant of direct and timely negotiation with the real party true creditor. Thus, damages accrue to the defendant.
Although real party, in my opinion, is the single most important issue, I am not seeing courts enforce discovery to ascertain the real party. Once it can be established that the real party is not before the court, all the produced documents are also subject to question. I have seen cases where the real party is at issue – but most of the cases simply state that the plaintiff does not have standing – without attempting to demonstrate why the plaintiff is not the real party.
Since foreclosure cases most often are indicative of securitization, knowing the chain of sale/assignment in a securitization is crucial. Also, knowing what the “investors” are entitled to is important. Again, while I think this post is very important – i disagree with “there is nothing left to pay the investors who advanced money into a pool from which some mortgages were funded” 1) any investors who indirectly funded a “pool” – did not directly fund mortgages and 2) tranche “investors” – for which there a limited number of tranches – were only entitled to current income pass-through – not foreclosure recovery (which is not current and not passed on to pass-through security investors. (However, the residual tranche is not a pass-through – and is usually held by the servicer – who may -or may not be the current creditor). 3) the Trust is likely dissolved.
The fact that mediation is being conducted without identification of the current creditor – in whose name any modification must be contracted – is simply additional fraud upon the borrower defendant. This fraud is akin to “loan modification” scams that are being currently investigated by some state Department of Justices.
How and why the courts are allowing this to happen – and actually promoting it – is beyond me.
Editor’s Note: Legally this puts us at the horns of a dilemma. If we want to travel the path of “PAID IN FULL” then we are treading on the thin ice of accepting or admitting that the loan was actually legally and correctly assigned and indorsed into the pool, in addition to the usual “free house” talk. If we travel the path of UNSUCCESSFUL ATTEMPTED ASSIGNMENT then we get to the conclusion that the loan is still owned by the originating lender, who was PAID IN FULL at the time of the loan closing, but still is the owner of record. If we travel both paths, we are presenting a highly complex argument that most judges won’t understand. This is why the winners out there are not making big splashes with exotic legal arguments (even though they would be right), the winners are getting down to the details that any Judge would understand — SHOW ME THE TRUST DOCUMENT, SHOW ME THE NOTE, SHOW ME THE ASSIGNMENT, SHOW ME THE INDORSEMENT, SHOW ME THE ACCOUNTING, SHOW ME THE CREDITOR ETC.
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