Ira Artman

Jawbone: Whither Foreclosures?

Thanks for comments.

Hardwood suggested:

>>"With respect to foreclosures, they won't hit 3% they will
>>continue to trend between 1-1.5%"

Interesting conclusion.

If the banks had NOT responded to jawboning and held off on foreclosures in response to jawboning, foreclosure starts would already be at 1.65%, as noted above. And you say that they won't get higher than 1.5%? I hope you're correct.

Greed, Fear and Loathing: What’s Next for Home Prices?

Thank you all for reading and comments.

Quick comment responding to Charles Lieberman's note that my notion of affordability is suspect because it differs from that produced by the NAR - National Association of Realtors; i.e. people who sell homes for a living.

1. Sure, the NAR is objective - why wouldn't they be?

2. But more seriously - the notion of affordability used by the NAR uses median income (derived by NAR) and median home prices (also by NAR).

I'm using average income, per BLS Census, along with average home price from FHFB.

While NAR uses FHFB rate information as is, they assume 20% down, all the time. I'm using down payment per the FHFB.

Finally, I also make an adjustment to the FHFB reported rates, reflecting the fact the dislocation in non conforming markets (i.e., requirement that borrowers have relatively spotless credit, currently) has made mortgage credit somewhat scarce for those with imperfect credit histories.

Think that - IMHO - the NAR is a "best case" figure, for reasons that I snarkily suggested above, and that mine is more realistic. Think the NAR - by definition - assumes the problem away and then proudly reports that there are no problems.

Well, .... sure, but ...