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"Brad" commnets: Below is a brief history of why the housing bubble burst. » 1977: Democrat Jimmy Carter signs the Community Reinvestment Act, guaranteeing home loans to low-income families. » 1999: Democrat Bill Clinton puts the CRA on steroids by pushing Fannie Mae and Freddie Mac to increase the number of subprime loans. » September 1999: The New York Times publishes an article headlined "Fannie Mae Eases Credit to Aid Mortgage Lending," which warned of the coming crisis due to lax lending policies of the Clinton administration. » 2003: The White House calls Fannie and Freddie a "systemic risk" and...

Existing home sales plunged to their lowest level in 15 years in July as inventories soared, painting a grim picture for the housing market absent government support in a stubbornly sluggish economy. Home resales dropped a record 27.2%--nearly twice as much as analysts had expected--to an annual rate of 3.83 million in July, the National Association of Realtors said Tuesday. Meanwhile, inventories rose to 12.5 months from 8.9 months in June, pressuring already depressed home prices. Inventories are at their highest level in more than a decade. "Historically July is the peak inventory month in any given year," NAR Chief...

Last summer there was a bit of a spitball fight when some critics of Paul Krugman dredged up an old 2002 column of his in which he seemed to call for another housing bubble. Here's what he said: "The basic point is that the recession of 2001 wasn't a typical postwar slump, brought on when an inflation-fighting Fed raises interest rates and easily ended by a snapback in housing and consumer spending when the Fed brings rates back down again. This was a prewar-style recession, a morning after brought on by irrational exuberance.To fight this recession the Fed needs more...

LOS ANGELES – More than 1 million American households are likely to lose their homes to foreclosure this year, as lenders work their way through a huge backlog of borrowers who have fallen behind on their loans. Nearly 528,000 homes were taken over by lenders in the first six months of the year, a rate that is on track to eclipse the more than 900,000 homes repossessed in 2009, according to data released Thursday by RealtyTrac Inc., a foreclosure listing service. "That would be unprecedented," said Rick Sharga, a senior vice president at RealtyTrac. By comparison, lenders have historically taken...

Housing: America still has far too many underwater debtors labeled as "homeowners," but Washington can't bear to let them liquidate. Instead, it saddles taxpayers with ever-costlier bailouts. The federal government has tried just about every trick in the book to revive the nation's housing market and forestall a feared tsunami of foreclosures. How well have they worked? The answer depends on how you judge success. If the object is to keep "owners" - really, maxed-out debtors - in their homes, the results have been so-so. But there's another way of framing the issue. What if it would have been better...

House Prices Are Still Too High And They're Going To Tank -- Ritholtz Henry Blodget Jun. 30, 2010, 11:47 AM We had Barry Ritholtz on TechTicker yesterday. He's still a big bear on housing...(go to the site of to article to view a video) We're on our way to a second leg down in housing prices, says Barry Ritholtz, writer of The Big Picture a founder of investment research firm Fusion IQ. Why? In short, because house prices are still too high. Even after a plunge of more than 30% from the 2007 peak to the 2009 trough, house prices...

According to the U.S. Census Bureau and the Department of Housing and Urban Development's jointly announced new residential construction statistics for May 2010, privately-owned housing units authorized by building permits in May were at a seasonally adjusted annual rate of 574,000. This is 5.9 percent (±2.2%) below the revised April rate of 610,000, but is 4.4 percent (±2.6%) above the May 2009 estimate of 550,000. Single-family authorizations in May were at a rate of 438,000; this is 9.9 percent (±2.1%) below the revised April figure of 486,000. Authorizations of units in buildings with five units or more were at a...

Report: FBI to "arrest hundreds of people" next week for Mortgage Fraud by CalculatedRiskn 6/11/2010 01:20:00 PMFrom the Financial Times: FBI to target mortgage fraud: The FBI is preparing to arrest hundreds of people across the US as early as next week for offences including encouraging borrowers to falsify income on mortgage applications, misleading home owners about foreclosure rescue programmes, and inflating home appraisals ... The FBI is scheduled to release its 2009 mortgage report on June 17. (excerpt with permission) The FBI usually only arrests people engaged in fraud for profit and not fraud for housing - they typically...

Voodoo Used to Influence Outcome of Mortgage Fraud Case Ruben Hernandez, 34, California, owner of Downey Motorcars, and co-defendant Joel Rodriguez, 45, a California resident, owner of Coast to Coast Mortgage, were sentenced in a mortgage fraud case. Hernandez and Rodriguez were convicted by a jury on May 6, 2010. Hernandez was found guilty of four counts of filing a false application and three counts of grand theft. He received a 12 year sentence. Rodriguez was convicted of six counts of filing a false application and five counts of grand theft. He received a 12 year, 8 month sentence. Hernandez...

Lumber prices are sinking. And while that might make a trip to Home Depot cheaper, it's also a sign that the global economic recovery and the U.S. housing rebound are in danger of stalling. Only a few months ago, inflation was the main worry of many economists. But falling prices for the raw materials of many industries, including lumber, have set off deflation warning bells for some economists, who worry that they could signal another global economic downturn. Prices for framing lumber have tumbled 21% from their peak only five weeks ago, according to figures from the National Association of...

"Sub-prime mortgages are just the start the worst still to come" 60 Minutes special. Get out of Dollars and the US Stock Market. There is going to be a run on the dollar soon as China becomes a net seller of treasuries instead of a net buyer like they are currently. They just announced a 600b bailout of their own, how do you think they will pay for it? Dump their 1Trillion plus in US treasuries. The game is up. In 2010 a hundred US dollars wont even buy you a case of beer.

<p>The withdrawal of federal tax credits for home buyers led to a steeper-than-expected plunge in May home sales in much of the U.S., as the housing market struggles to wean itself from government support.</p> <p>Economists and real estate analysts expected home sales to slow after the tax credit, of as much as $8,000, expired at the end of April. But early data from real estate brokers indicate that the sales decline has been far more substantial than expected, with some markets showing declines of 25% to 30%...</p>

The market was ecstatic on Wednesday in anticipation of Friday’s big job’s report. But while the market rallied 2.5%+ there was a potentially far more important story than the census driven job’s report: the real estate data. While the data came in “better than expected”, primarily due to the end of the home buyers tax credit, there was an underlying red flag. As the end of Spring buying season coincided with the tax credit the buyers have literally become non-existent in the housing market. This was clear in the most recent mortgage applications data also released on Wednesday. Diana Olick...

A Graphical Illustration Why the Downturn Will Persist Through 2013 What We Know Will Happen Adjustable-Rate Mortgages Will Reset Adjustable Interest Rate Mortgages will continue to reset through 2012. These resets will trigger a steady flow of foreclosures. While there exists a material supply of foreclosures, house prices can not maintain inflation-adjusted value and the Housing Market will not recover. The worst offending Affordable Mortgages, the Option-ARMs, are only now beginning to reset. These mortgages will result in massive foreclosures within the markets they were utilized. While the bulk of ARM resets will end in 2012, it will take up...

House Prices Are Falling Again Michael David White May. 8, 2010, 8:08 AM Isolate recent values on the First American index of property values and a national fall is not difficult to anticipate. Since I began in August to forecast a continuation of falling values, frequently I met with anger, disbelief, myopia. This week I wanted to take a closer look. So I pulled out one of the best number sets, and applied my crude math in exactly the same way I always do, but I did a close up on five years of data before and after the peak....

Link to page with YouTube Video.(Video caption: Rep. Barney Frank (D-Mass.) speaking at a forum on national housing policy on December 11, 2006. Three weeks after making this speech at the Treasury Department, Frank became Chairman of the House Financial Services Committee. Frank on Democrats taking over regulatory reform:“You will see far less difference with Democrats taking over in the Financial Services regulatory area than in virtually any other area of public policy, because we did work together on things like regulatory relief and we have more to do yet in the deregulation. One of the things we did was...

Let's face the now-documented facts: The Fed knew about the housing bubble, and both Alan Greenspan and BEN BERNANKE intentionally suppressed any public discussion of same by The Fed. This isn't conjecture any longer, and we can no longer believe that there was any sort of mistake involved here, nor a difference of opinion. As disclosed from the Fed Minutes (the real ones, transcripts, not the abbreviated cheat sheets) and as now written about on Huffington Post, we have a problem here with credibility - and intentional misdirection: "We run the risk, by laying out the pros and cons of...

Goldman Executives Cheered Housing Market's Decline, Newly Released E-Mails Show By Zachary A. Goldfarb Sunday, April 25, 2010 As the U.S. housing market started to slide, executives at the most legendary investment bank on Wall Street, Goldman Sachs, were trading e-mails in which they cheered the declines, even when those declines meant some of their clients were taking major losses, according to newly released documents. The documents show that the firm's executives were celebrating earlier decisions in which they bet against the housing market, a Senate investigative committee found. In a fall 2007 e-mail, for example, top mortgage trader Michael...

The Distressing Gap Between New Home Sales and Existing Home Sales Calculated Risk Apr. 24, 2010, 7:58 AM First a comment on the seasonal adjustment ... on a Not Seasonally Adjusted (NSA) basis, the Census Bureau reported there were 38,000 new homes sold in March. That is up from 31,000 in March 2009. Some (or all) of the increase was due to a one time event - the tax credit that expires in April. The Census Bureau doesn't know the number of homes sold due to the tax credit, so they report the Seasonally Adjusted Annual Rate (SAAR) assuming this...

NEW YORK (AP) - E-mails released by a Senate committee investigating the financial crisis show top executives at Goldman Sachs Inc. boasting about money the firm was making as the housing market collapsed in 2007. The documents suggest that Goldman benefited at least for a time from bets that subprime mortgage-backed securities would lose value. The e-mails appear to contradict previous statements by the investment bank that it lost money on such securities.