The Delusional Benefactors

"Mass delusion is always encouraged by those who benefit most from the mass delusion. David Lereah has admitted that he lied about the housing bubble because he was employed by realtors. Realtors made millions in commissions. Appraisers made millions in fees by inflating appraisals. Mortgage brokers made millions by encouraging people to lie on mortgage applications. Wall Street whores made billions by creating toxic packages of mortgages and selling them to Irish nuns, old ladies and clueless municipal administrators. The ratings agencies made hundreds of millions in fees for slapping AAA ratings on toxic derivatives. Politicians got rich from political “contributions” from Fannie Mae, Freddie Mac, Wall Street, and the NAR. Any reasonable human being could look at the chart above and see that this would end badly, but Americans wanted to be deluded. They choose to believe. The housing market has now been falling for five years, with another five years to go. Ben Bernanke has reduced interest rates to zero. I wonder how that will work out."
James Quinn, TheBurningPlatform.com

A Sandy Update

"Four states -- California, Florida, Nevada and Arizona -- accounted for all top 20 metro foreclosure rates."
Source: Sacromento Business Journal, July 29, 2010

"Things built on 'sand' will continue to struggle: California, Dubai, Arizona, Florida, and Las Vegas. Golf courses and cities are not naturally aligned with the habitat of a desert."
Random Roving, January 1, 2010

More Mortgage Facts

"Believers in the fledgling recovery are ignoring some key facts. There are already 11 million homeowners underwater on their mortgages. As of March, banks had an inventory of about 1.1 million foreclosed homes, up 20% from a year earlier. Another 4.8 million mortgage holders were at least 60 days behind on their payments or in the foreclosure process. This “shadow inventory” was up 30% from a year earlier.  At the current rate of sales, it would take banks nine years to clear this inventory. They are likely to increase the rate of sales as inventory continues to pile up. This will compel prices to go lower. Prices would fall even if a tsunami of Option ARM and Alt-A resets weren’t hurtling down the track – but they are. Beginning in June, a surge in resets will begin and not subside until late 2012. These liar loans were riddled with fraud, and the vast majority of these mortgagees will default after the reset. A surge in foreclosures is just over the horizon. Reversion to the mean cannot be circumvented. It can be delayed, but it will not be denied. "
James Quinn, The Burning Platform

"Casey Research presents the chart below. It confirms that we are in a "default lull" of the adjustable rate mortgages (ARM's). April 2010 will kick off the next round of chaos. June 2011 could be the peak. Buckle your chinstraps!"
Random Roving, February 14, 2010

Extreme Bulldozing

It seems like yesterday that I was discussing extremes. Men flying planes into IRS buildings. College professors shooting people because they didn't get tenure. Well how do you like this guy. He bulldozed his own home in Moscow, Ohio so that the bank couldn't get it in foreclosure. Wow!

"Like many people, Terry Hoskins has had troubles with his bank. But his solution to foreclosure might be unique. Hoskins said he's been in a struggle with RiverHills Bank over his Clermont County home for nearly a decade, a struggle that was coming to an end as the bank began foreclosure proceedings on his $350,000 home. "When I see I owe $160,000 on a home valued at $350,000, and someone decides they want to take it – no, I wasn't going to stand for that, so I took it down," Hoskins said. Hoskins said the Internal Revenue Service placed liens on his carpet store and commercial property on state Route 125 after his brother, a one-time business partner, sued him. The bank claimed his home as collateral, Hoskins said, and went after both his residential and commercial properties. "The average homeowner that can't afford an attorney or can fight as long as we have, they don't stand a chance," he said. Hoskins said he'd gotten a $170,000 offer from someone to pay off the house, but the bank refused, saying they could get more from selling it in foreclosure. Hoskins told News 5's Courtis Fuller that he issued the bank an ultimatum. "I'll tear it down before I let you take it," Hoskins told them. And that's exactly what Hoskins did. The Moscow man used a bulldozer two weeks ago to level the home he'd built, and the sprawling country home is now rubble, buried under a coating of snow."
Source: WLWT Cincinnati

Mortgage Facts Part 2

On 2/14/10, I made a post regarding the upcoming mortgage crisis Part II. This chart presents a much clearer picture. I hope that the media warns everyone before the next storm arrives!!

Some Hard Data On Mortgages

One thing you never see presented in the media is "hard data". Yes, they show nice stock price charts, but the macro level economic data never gets presented graphically to illustrate where we are on the curve.

The chart below presents a very revealing picture of the mortgage market and what has yet to come.

Is this the next finanical storm? Read the article and make your own decision.

http://www.financialsense.com/editorials/casey/2009/0528.html