Bankruptcy can save your house from foreclosure – CNN Money
One thing courts cannot do is “cram down” loan balances on primary residences. That is, reduce mortgage debt to what the home is worth. Neither can they lower interest rates, in most cases, nor lengthen the term of the loans.
They can, however, “strip off” second mortgages, like home equity loans or lines of credit, when home values fall below the first mortgage balances, according to Elias.
“This allows the judge to get rid of the second mortgage,” he said. “If there’s not enough equity to secure the second, it becomes unsecured debt.”
MIT economist measures how much foreclosures lower housing prices. – MIT News
By looking in granular detail at real-estate prices, the researchers have concluded that a foreclosure reduces the value of a house by 27 percent, on average.
“It’s not surprising that there is a discount due to foreclosure,” says Pathak. “But it is surprising that it’s so large.”
Can the American mortgage market survive without taxpayer support? – The Economist
If Fannie and Freddie are making money now that they are pricing their insurance differently, this suggests that the private sector could do their job.
65 MILLION VACANT APARTMENTS – James Quinn
Excellent conversation with Casey. He discusses the short term coming collapse of China. The misallocation of funds makes our bubble seem like a pimple. There are 65 MILLION vacant apartments.
Economists Take Gloomier Views of Housing Market – WSJ
Some 60% of economists and other analysts surveyed by MacroMarkets LLC are forecasting home-price declines this year, up from 40% in May and the second straight month of diminished confidence.
Federal Report Faults Banks on Huge Bonuses – NYT
With the financial system on the verge of collapse in late 2008, a group of troubled banks doled out more than $2 billion in bonuses and other payments to their highest earners. Now, the federal authority on banker pay says that nearly 80 percent of that sum was unmerited.
We Can’t Afford This House – National Review
Though the homebuyers’ credit was sold as a stimulus measure, we have no reason to believe that it is anything other than another wealth transfer to a large and powerful industry, one with allies conveniently situated in every congressional district. Casey Mulligan of the University of Chicago has suggested that the credit had almost no economic impact. As Harvard economist Edward Glaeser observed, it did little more than create an incentive for “mindless house swapping.” It didn’t even have a meaningful impact on the behavior of first-time homebuyers — people already planning to make purchases simply moved them forward a few months. Yet this is where we find a consensus in policymaking: We can’t agree on balancing the budget or reforming entitlements or the tax code, but we can agree to churn the housing market so that a handful of real-estate agents can make a buck on commissions while the economy crumbles.
Inside Our Toxic Asset: An 81-Year-Old Man With A Dog Named Muffin – NPR
Richard Koenig is 81 years old and has a dog named Muffin. He doesn’t look like a deadbeat.
“I don’t have horns,” he says. “I don’t have much hair.”
But Koenig, like many, many other people, owes us money. And he has no plans to pay it back.
Offices at the top are going empty – LA Times
Penthouse floors are vacant in some of the best office buildings in Los Angeles County, a sign of the troubled economic times and the gulf between asking prices and what tenants are willing to pay.
$1T Mortgage Securities It Holds Pose Sticky Problem for Fed – NYT
While officials and economists generally regard the program as successful in supporting the housing market, it has left the Fed holding a vast pile of mortgage securities — basically i.o.u.’s from homeowners — that it does not want and cannot sell.
Economic Insecurity: The Long View – NYT
The typical American experiencing such a plunge will require six to eight years just to climb back to previous levels of income.
