Smalltownbanker

Delinquent Mortgages Equal to Three Times the Balanced For-Sale Inventory

Common sense tells me that a high percentage of those homes listed for sale have delinquent mortgages. There is also consideration that a percentage of mortgages are always delinquent but do not always end in default. There lots of assumptions in that chart and it results in figures that look much worse than reality.

Home Purchase Tax Credit Extended: Is This Wise?

Reason #1 False. The tax credit comes back to the consumer after they buy a home. This money is going to be used to furnish the home and make improvements such as landscaping, painting, upgrades, etc. in most cases because that is what first time buyers do when they buy a home. The infrastructure projects expenditures are simply moving projects up which needed to and would have been done anyway eventually. The tax credit stimulates sales on the low end resulting in move up sales and thus rejeuvenates a market that was virtually dead.
Reason #2 False: They do not receive the money at closing and cannot use it to defer downpayment, closing costs or other expenses unless some fool non-profit organization makes a loan to them to enable this. Regarding home prices. When land value as a percentage of home price falls to Zero how much more real price depreciation can occur? The answer is none because once recovery begins prices will rise to a level that supports the cost to build plus a profit or homes will not be built.

By the way Case/Shiller index is not an accurate measure of market activity today and does not reflect the true total fall in market value because it excludes foreclosure sales. Real prices have fallen farther than it indicates.

I disagree with all of your conclusions on this measure. "Feel Good" give me a break. $6 Billion is a gross underestimation of the true impact and $32 Billion diversion is absurd. The tax credit may in some cases increase the buyers willingness to bid but I have seen no cases where it has led them to bid up a price and I do mortgages for a living. My market is primarily move up buyers and lots of them are coming our way now since the credit has led to the sale of their previous residence.

If the credit were available at time of close it could be inflationary but in 99% of all cases it is not monetized to be used at closing. Therefore I do not believe this credit is impacting the quest for a bottom to pricing.

Property Values Set to Fall 43% from Current Depressed Levels

By the way. The 43% figure is way too high and will not happen. Call that a predicition if you like...

Property Values Set to Fall 43% from Current Depressed Levels

Two invalid assumptions.
One is that Case Shiller's index accurately measures a market like the current market where such a high percentage of sales are foreclosure activity. Clue: It does not.
Two is that the second chart shows an increase in government lending acitivity. Lending funded by private securitization has virtually disappeared but the total lending has significantly declined also. Granted the percentages have shifted dramatically towards government backed programs but it would be interesting to see this correlated to a total lending volume by agency chart. I think the biggest shift you would find is the increase in FHA is coming from a decrease at Fannie / Freddie and not from the private securitization arena. Credit policy changes have eliminated the market that was served primarily by private securitizations.

Does Autumn Mean 'Fall' for the U.S. Housing Market?

Some markets around Atlanta are stabilized on pricing and marketing times are becoming more reasonable. This is in the mid range of prices for the area, 250-350,000. Lower priced homes are moving well but the higher end is still stagnant. There are also still lots of in-town properties in run down areas selling for under $20,000. Some up and coming areas in-town have recovered pretty nicely up the the $500,000 level.

The New Warren Commission

notso - I believe there is plenty of guilt to go around. I also believe the notsosmart's of the world who want to blame the banks for the actions of people who signed loans they knew they could not pay are too numerous to mention.

Neither of these comments address the substance of the article which is what happens to the toxic assets. My understanding was that TARP funds would be used to purchase these assets at a marked to market price and the assets would then be held until such time that a market returned for them. (This was the proverbial smoke blown where it did not belong because some of these assets had no value and never will. Altogether they are probably worth 10-20 cents on the dollar of the value they are being held at on the books of the big banks).

These so called assets are still showing up as "off balance sheet assets" for many of the large banks and accounting standards were changed to make them look less toxic or worthless in more common language. The banks were allowed to simply borrow TARP money, use it to shore up their capital positions while continuing to hold worthless assets off the balance sheet, and then pay back the borrowed funds and keep the garbage assets.

Nothing has been fixed and the banks will eventually pay the piper.