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A ways back in an interview on NBC's Meet the Press, former Federal Reserve Chairman Alan Greenspan suggested that a new economic contraction would be possible "if home prices go down." The following day USA Today reported that the rate of homeownership in the U.S. had declined to 66.9%, down from 69.4% in 2004. The article's author noted that, with millions of houses on the verge of foreclosure, the rate of homeownership could fall to "its lowest level in 50 years." This expression of concern dovetails nicely with Greenspan's assertion that "right under this current price level, mainly 5, 7...

When you meet people who are losing their homes in this foreclosure crisis, they almost all have the same look of deep shame and anguish. Nowhere else on the planet is it such a crime to be down on your luck, even if you were put there by some of the world's richest banks, which continue to rake in record profits purely because they got a big fat handout from the government. That's why one banker CEO after another keeps going on TV to explain that despite their own deceptive loans and fraudulent paperwork, the real problem is these deadbeat...

Interesting story here... CourtHouseNews (via Denninger): A La Jolla man can keep his home for now, after a federal judge granted his motion for a temporary restraining order blocking Washington Mutual and JP Morgan from foreclosing on his house because the banks misled him into defaulting on his mortgage. Kaveh Khast claimed the banks instructed him to stop making his mortgage payments so he could qualify for a loan modification. A Washington Mutual representative confirmed receipt of the documents, but did not contact Khast within two months as promised. After learning JP Morgan Chase had acquired Washington Mutual, Khast contacted...

The nation's homeownership rate is at the lowest level in more than a decade, hampered by a rise in foreclosures and weak demand for housing. The percentage of households that owned their homes was unchanged at 66.9 percent in the July-September quarter, the Census Bureau said Tuesday. That's the same as the April-June quarter. The last time the rate was lower was in 1999, when the rate was 66.7 percent. The nation's homeownership rate was around 64 percent from 1985 through 1995. It then rose dramatically during the Clinton and Bush administrations, hitting a peak of more than 69 percent...

The robo-signing controversy is just another issue that the already sluggish housing market didn't need -- but most analysts do not think it will have far-reaching impact. Nevertheless, the housing market still faces many problems: a weak economy, sluggish hiring, tight mortgage underwriting, falling home prices, and slowing sales. Then there's the potentially disastrous number of foreclosures that may occur over the coming years. "The market faces much bigger problems than the robo-signing issue," said Mike Larson, a housing market analyst for Weiss Research. Prime among them are declines in home prices. And while cheaper homes are good for buyers,...

A few days ago, we wrote an article entitled:”Millions of home owners sending monthly payments to wrong bank.”Some of you accused us of trying to scare homeowners and of exaggerating the situation.The fact is that this is a very, very serious issue which will most likely result in the government having to print $6 trillion to paper over this mess had not Nancy Pelosi and Barney Frank insisted in giving loans to anyone with a heartbeat. Arizona has been one of the hardest hit areas by real estate foreclosures. Add to this bank fraud to the equation and the consequences...

Bill Black, who will soon, together with Neil Barofsky, be a guaranteed shoe-in for the POTUS/VP position (both as independents, of course), was on the Ratigan show today, following on his op-ed from last week (here and here) calling for the long-overdue nationalization of Bank of America, and discussing the rampant fraud at the heart of mortgage gate. And contrary to ongoing lowball estimates from the like of JPM and Goldman, Black provides numbers about the bank liability that are simply stunning: "Credit Suisse says that by 2006 49% of all mortgage originations were liars loans. When independent folks study...

Foreclosure Mess Scares Away Investors as 'Fear Has Taken Hold' Friday, 22 Oct 2010 02:23 PM Investors who have been snapping up foreclosed homes are backing off in the wake of the U.S. foreclosure fiasco, driven off by sagging inventory and fears over legal title. Some economists say the trend could hurt the overall housing market. With foreclosed properties accounting for a large portion of housing sales, and investors accounting for a large portion of buyers — particularly in some key markets with very high foreclosure rates — the implications for the broader economy could be serious. Investors who would...

U.S. banks will be in the limelight this week as several household names report earnings and investors worry a forced halt to foreclosure proceedings could hit the sector and end the recent rally. Bank shares fell sharply on Friday on very high volume, continuing a slide from the previous day. Although recovering some of their losses, Bank of America (BAC.N) shares hit their lowest in more than a year, while the KBW bank index .BKX> fell 2.4 percent. Shares of Bank of America, the nation's largest mortgage lender, fell 9 percent during the week. More than 595.9 million of its...

Check Out Chris Whalen's Terrifying Presentation On The 2011 Foreclosure Crisis (2008 Was A Cakewalk) Gus Lubin Oct. 7, 2010, 10:04 PM Chris Whalen has doubled his warning about the coming banking bloodbath. At a Thursday conference with Nouriel Roubini, Institutional Risk Analytics' Whalen said the foreclosure crisis would make 2008 look like a cakewalk (via Prag Cap): The U.S. banking industry is entering a new period of crisis where operating costs are rising dramatically due to foreclosures and defaults. We are less than ¼ of the way through the foreclosure process. Laurie Goodman of Amherst Securities predicts that 1...

Strategic Defaults Threaten All Major U.S. Housing Markets Keith Jurow 09/30/10 8:00 AM EST In my last article, we examined the shadow inventory to determine how many distressed properties (not on MLS) were almost certain to be forced onto the market in the not-to-distant future. For a sensible follow up, let's take an in-depth look at so-called "strategic defaults" to see how many homeowners are likely to "walk away" from their mortgage debt although they might be financially able to continue paying it. Strategic Default Defined According to Wikipedia, a strategic default is "the decision by a borrower to stop...

NEW YORK (Reuters) - Nearly one in every four U.S. homes sold in the second quarter was a deeply discounted foreclosed house, putting the market on pace to work through distressed properties in about three years, RealtyTrac said.

A new wave of distressed home sales is rippling, more quietly this time, through American cities and suburbs. Its unsettling effects are playing out here in Manassas, along Brewer Creek Place, a modest, horseshoe-shaped street lined with 98 brick townhouses. Several years after the U.S. foreclosure crisis erupted, the U-Hauls are back. The last time, banks seized nearly every fourth house on the street through foreclosure. This time, homeowners are going another route: a short sale. Completed short sales have more than tripled since 2008, and 400,000 of these deals are projected to close this year, according to mortgage research...

Pew released a very interesting poll Wednesday that provides a revealing look at American values and a particular demographic group that is out of step with the rest. The topic could hardly be more relevant to the economic crisis that has caused so much suffering: attitudes toward walking away from mortgages - in other words shirking the obligation to pay back the lender for funds received. But for me the most fascinating aspect of the study is that, with one single exception, most demographic segments of the population share roughly the same opinion distribution. While some demographic groups are more...

“We are sitting on a time bomb,” the mortgage analyst said — a huge increase in unconventional home loans like balloon mortgages taken out by consumers who cannot qualify for regular mortgages. The high payments, he continued, “are just beginning to come due and a lot of people who were betting interest rates would come down by now risk losing their homes because they can’t pay the debt.” He would have given great testimony at the current Senate hearings on subprime mortgage lending. The only problem is, he said it in 1981 — when soon after several of the alternative...

Lisa Epstein, an unemployed oncology nurse, and Michael Redman, a former online salesman for Toyota, never planned to be on the front line of the foreclosure crisis. But that happened when they independently mounted campaigns to challenge a system they say is stacked against consumers and where courts are more focused on moving cases than dispensing justice. For nearly a year, Epstein, 44, and Redman, 35, have spent countless hours in South Florida courthouses scrutinizing foreclosure documents filed by lenders’ lawyers. They have sent copies of filings they consider improper — including potentially fabricated documents and many with signatures they...

If you're a buyer with little cash or a small-scale investor looking for a deal on a foreclosed house, a little-publicized national lending program could be just what you need this fall. Here's what it offers: • Minimal down payments — 3% for buyers who plan to live in the house, 10% for investors. Most of your down payment can come from documented gifts from relatives or others with no direct connection to the transaction. • No requirement for an appraisal on the property unless you're applying for additional money to renovate the house. This is crucial because lowball appraisals...

If you've recently had your house reappraised for sale or refinancing, and wonder where the equity went, consider this:Since the real estate boom ground to a painful close about 31/2 years ago, the nation's housing stock has shed from about $4 trillion to $7.1 trillion in value.The amount depends on who's counting. A study by Equifax Inc. and Moody's Analytics Inc. says the downturn began in early 2007 and cost $4 trillion through March. The Federal Reserve says the downturn began in the fourth quarter of 2006 and cost $7.1 trillion through March.

You can't force someone to buy a house. But as a society we've long tried to make homeownership an offer you couldn't refuse. And since the real estate mega-bubble burst three years ago, the government has tried even more tricks to get people to sign home purchase contracts. Now, a grim reality has set in: Despite the still-rich basket of tax breaks for residential property owners, and the lowest mortgage rates in a generation, the pool of willing or able buyers is dwindling.

From CoreLogic Real Estate News and Trends •23% of mortgaged properties (11 million) were under water by $766 billion at the end of the second quarter of 2010 •An additional 2.4 million had less than 5% equity – That makes 28% negative or near negative •5 million borrowers are in “severe negative equity” and defaults will be high for an extended period •Top 5 states: Nevada 68%, Arizona 50%, Florida 46%, Michigan 38%, California 33%