The next big thing until people stop paying rent…..a look at rental backed securities.

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“U.S. homeowners are getting better about keeping up with their mortgage payments, driving the percentage of borrowers who have fallen behind to a three-year low, according to a new report.”

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Bill McBride writes, If I’m correct about house prices bottoming earlier this year – and the CoreLogic report released this morning is another indicator that prices might be increasing a little – a key question is: What will be the economic impact of slightly increasing house prices?

It is a great question, and you’ll find his answers here.

In the wake of the biggest housing bust ever, it’s hard to imagine that we would be walking right back into a housing bubble.

But that’s just the nature of bubbles: you don’t know if you’re in one until after the fact.

Robert Shiller, the economist who famously predicted the dotcom and housing bubbles, was on Fox Business News discussing the Case-Shiller home price index, which recently rose faster than expected.

In the wake of the biggest housing bust ever, it’s hard to imagine that we would be walking right back into a housing bubble.

But that’s just the nature of bubbles: you don’t know if you’re in one until after the fact.

Robert Shiller, the economist who famously predicted the dotcom and housing bubbles, was on Fox Business News discussing the Case-Shiller home price index, which recently rose faster than expected.

“I think it’s possible this is the bottom, but I’m not at all confident,” said Shiller regarding the housing market.

He continued.

“The real question in my mind is, ‘Are we possibly off to the races again?'” he said.  “I think in cities like Phoenix and San Francisco, we might be seeing something pretty big developing.  People there are very speculative-minded.”

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“China’s new home prices posted the biggest gain in more than a year, signaling a turning pointfor the nation’s property market, according to SouFun Holdings Ltd. (SFUN), the country’s biggest real estate website owner.

Home prices last month rose 0.3 percent from June to 8,717 yuan ($1,369) per square meter (10.76 square feet), SouFun said in a statement today, based on its survey of 100 cities. That was the second monthly gain and the biggest rise since June 2011.”

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A big moment is coming up in the housing recovery.

According to the latest Case-Shiller report, home prices were only down 0.66% in May, and as you can see they’re very close to being up year-over-year.

“Fannie Mae (FNMA) and Freddie Mac won’t forgive principal on delinquent mortgages they guarantee even as the U.S. Treasury Department is offering incentive payments for writedowns, the companies’ regulator said today.”

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Prior 386k, Market Expects 373k, Actual 350k

Prices are down 3.2%

This number has taken down the sector by almost 3%

“Call it a case of man bites dog. Since the start of the housing crash, millions of Americans have lost their homes to foreclosure. Many of them lived in homeowner or condo associations. 

These are organizations that collect monthly dues to pay for amenities, like added security, maintenance and recreational areas; one in five Americans currently lives in an association-governed community.

These associations have been hit hard by thehousing crisis, as many delinquent borrowers stopped paying their monthly HOA dues. In some cases, HOA’s, which do have the authority in many states, managed to foreclose on properties even before the banks, by using the back dues as liens.”

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Your home is now worth 0.2% more than yesterday….

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I absolutely hate eminent domain – but this was interesting enough to post anyway. Here’s the thing; if you’re going to pay “fair value” (presumably a steep discount) for these mortgages, why not just put the banks into bankruptcy? It’s tantamount to the same thing – sans the supra-legal initiatives.

It’s been nearly six years since the housing bubble burst but the aftermath of the crash continues to wreak havoc in the towns and cities most affected by the destruction.

Home prices have yet to stabilize and foreclosures remain an acute problem for homeowners, banks and mortgage servicers. The housing market’s troubles have dragged down economic growth and stymied an economic recovery.

Steven Gluckstern, chairman of San Francisco-based Mortgage Resolution Partners, believes he may have the answer for the country’s housing problems.

Using three California communities in San Bernardino Valley as a microcosm of the broader housing market, his venture capital firm wants municipalities to seize troubled mortgages in the name of eminent domain. The communities would refinance these mortgages at rates that reflect the current property value of the home and then resell the mortgages back to the troubled homeowners at a lower rate. This program would apply to homeowners that are underwater on their mortgages, or those who owe more than their houses are worth.

Real estate information provider CoreLogic projects that almost 43 percent of homes in San Bernardino County were underwater in April. Sixteen million homes across the U.S. are estimated to be underwater and homes with second mortgages are twice as likely to be underwater.

Gluckstern says his proposal directly benefits the homeowner.

“This is a program that’s designed to help communities deal with underwater mortgages by using eminent domain to acquire the mortgages that underlie these houses,” he says in the accompanying video. “The objective of the program is to keep [homeowners] in their homes. [We] use the power of eminent domain to take the underlying mortgage and then restructure it for that homeowner in a way that’s much more appropriate given today’s environment.”

This controversial initiative has caught the attention of the mortgage industry and investor and bank lobbying groups including the Securities Industry and Financial Markets Association. Critics argue that using eminent domain to seize and restructure underwater mortgages would be costly to homeowners, make future mortgages more expensive, bring losses for public pension and 401(k) plans and could be unconstitutional. Gluckstern disagrees.

The proposal is “absolutely legal,” he says. “The vast bulk of mortgages in this country are owned by trusts. Trusts that are run by trustees and services. Not by banks. It would be the trusts that would be giving up the mortgage and be paid fair value for it.”

Whether Gluckstern’s plan will be given the green light in California could be determined this summer. Gluckstern says his firm will submit its proposal to San Bernardino officials, and if accepted, the plan could go in to effect before year’s end.

The White House has not officially commented on Gluckstern’s proposal but according to a report in The Wall Street Journal, the Obama administration is “skeptical” that seizing mortgages by eminent domain is the savior the housing market desperately needs. Gluckstern’s plan does not involve government funds but his firm does charge a $4,500 fee for every mortgage that it restructures.

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Here are some charts to make you ponder the recovery of housing….

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This article contends that America is heading towards a nation of ghost towns. Granted we have been on the downtrend, but let us all pray for the American spirit and ingenuity to accelerate us out of these ‘hellholes’.

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REALLY ?

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Keeping property curbs in place helped to get get most of Asia into negative territory.

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Inventories climbed 0.2%, 30 year mortgage drops to 5.32%…..

“WASHINGTON – More than 1.5 million older Americans have lost their homes, and millions more are at risk as the national housing crisis takes its toll on those who are among the least able to weather the storm, an AARP report says.”

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“WASHINGTON (AP) — U.S. builders broke ground on the most new homes and apartments in nearly four years last month, the latest evidence of a slow housing recovery.

The Commerce Department said Wednesday that housing starts rose 6.9 percent in June from May to a seasonally adjusted annual rate of 760,000. That’s the highest since October 2008.

Single-family housing starts rose for the fourth straight month to a two-year high. Apartment starts, which can be volatile, increased after falling in May.

The number of permits to build homes, a sign of future construction, fell 3.7 percent to 755,000. But that’s down from May’s three-and-a-half-year high. Permits for single-family homes edged up to the highest level since March 2010. Permits to build apartments declined.”

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“Homebuilders today are feeling more confident than they have in more than five years. Recent earnings reports from the big public builders have shown spikes in new orders for single family homes, and competition from foreclosures has eased as banks try to modify more troubled loans.”

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