The mortgage mess that you are reading about is bad. Very, very bad. But it will not derail this rally just yet. I liken it to when the subprime mess began and you were told that it was “contained”.
The legal mortgage structure/ownership issue will clog up the foreclosure process for a year until legislation will have to be passed to protect the banks and their minions. In the meantime, house prices will stagnate and then plummet because you will not be able to transfer a property. That will be the bottom of the housing market.
This issue has not derailed the markets yet, but they will be the blame for the post-election “correction” and this action will last well into next year. Just get ready for it…
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it’ll be swept under the carpet as the news cycle goes on. and, if it really does become a larger problem funds will be allocated and programs created to “deal with the issue”. the lesson i learned from 2008 when it comes to trading/investing… crisis = buying opportunity. nothing more. there is no such thing as failures in finance. therefore. short term risk only; which in the end always recovers. the mortgage mess will be no different. (for now.)
love your morning radio show and your market calls still stun me on the weekly. thanks for the consistent writing as i continue to learn.
A client wants me to bid on his loan which is owned by the FDIC. They won’t let him buy it for a discount. An outside bidder can offer a huge discount and might get it. But if you are the property owner and making your payments you might get 5% off. Along with a 1099 for ‘forgiveness of debt.’ (not a home loan, investment RE)
compound the current foreclosure “paperwork” mess with the quiet but soon imploding commercial real estate area and you’ll have something.
remember, as residental real estate values go down, so do commercial values right along side.
enjoy.
bad for short sales, bad for mortgage servicers, bad for mbs investors… but good for prices, imho.
one chunk of supply won’t come on the market ‘cuz it’s disputed. another chunk already on the market won’t sell because investors aren’t sure if it will be disputed. And a big chunk of “shadow” will stay there while the mortgage servicers are frozen. And the chunksof supply getting carved out here are the low end of the market.
looks great to me as an owner.
what happens to all these locked up properties when property tax time rolls around.
No one knows who owns the place, who should be paying the property tax..
Why doesnt the local gov move in and foreclose all those properties in tax arrearages. Then sell them off.??
But I think the local GOV will be on the hook…
I bought a foreclosed home here in porter Texas.. Never lived in.. The property tax was years in arrears. the lady at the local tax assessors office told me.
“Thats normal, they dont go after people until its many many years in arrears. Just the same, in the case of this house it was two and a half years in arrears.”
I dont think the state can handle the back log of property tax default.. If they even care.
The more one thinks about it. Housing is a huge Octopus.
The land policy of the United Nations was first officially articulated at the United Nations Conference on Human Settlements (Habitat I), held in Vancouver, May 31 – June 11, 1976. We are now seeing these recommendations come to fruition. These will be expedited with the help of Cap & Trade legislation being carried out at the State level, as well as Financial Stability Board/IMF participation in setting new standards for determining who may qualify for a mortgage loan.
Recommendation D.4
(a) Public ownership of land cannot be an end in itself; it is justified in so far as it is exercised in favour of the common good rather than to protect the interests of the already privileged.
(b) Public ownership should be used to secure and control areas of urban expansion and protection; and to implement urban and rural land reform processes, and supply serviced land at price levels which can secure socially acceptable patterns of development.
Recommendation D.5
(b) Past patterns of ownership rights should be transformed to match the changing needs of society and be collectively beneficial.
(c)(v) Methods for the separation of land ownership rights from development rights, the latter to be entrusted to a public authority.
http://www.marketwatch.com/story/us-bank-industry-entering-new-crisis-analyst-2010-10-06?siteid=rss&rss=1
Good artical..
http://ezinearticles.com/?Is-Your-Mortgage-Registered-in-the-MERS-Database?&id=2802150
intro to M.E.R.S – Mortgage Electronic Registration Systems database (“MERS”).
Scott that rumor may come true. How else do you get out of this jam.. Have fannie and freddie take over all the bad loans then adjust principle and refi…
Scott, thought on the numbers tomorrow?