Sun Shines on Vegas Rentals

You know there is a difference between pessimism and realism. We count ourselves in the realism category. The last post described, (link to post is here) why prices would be coming down even though the national sources are trumpeting stellar recovery. The word that comes to mind is “double minded revisions”. All of this of course continues to cause the sun shines on vegas rentals headline. Reality is that folks are just sick of it all and want to stay put. Our busy season has always been summer with many moves occurring while schools out. Oddly, not this year, most tenants renewed their lease. A trend is starting to form before our eyes. Homes are no longer just a piggy bank and a stepping stone in Vegas. People are actually wanting to stay put and raise their family without worrying about moving all the time. Below may include several clues.

August Home Prices Dramatically Jump! Just Kidding-

New Home Sales rose a magnificent (seasonally-adjusted annualized rate) 18% in August – the biggest monthly rise since January 1992 albeit with a 16.3 90% confidence interval, meaning the final number may well be +1.7%. At 504k, new home sales are back at May 2008 levels (though obviously massively below the 1.4 million homes sold at the peak in 2005). As a reminder, May’s 504K new home sales print was later revised later to 458K. But even more stunning, new home sales in The West rose a mind-numbing 50% in August (and up 84.4% YoY – nearly double). click chart to enlarge

In short: the euphoric, consensus-beating data for every single month since May has been revised lower, by on average 6% and as much as 9%. Perhaps finally people will realize that there is only one number that matters in the Census bureau’s monthly new home sales report: the ±15.7 90% confidence interval. Well, people maybe, but not algos, who only care about one thing: whether the data beat or missed. Oh, and as for that record new home price reported last month, which magically also resulted in what the US government wanted everyone to believe was a surge in buying… well, see for yourselves: click chart to enlarge

So we will take boots on the ground realism over the hopium optimism and the pessimistic porn. Read more here.

Read more here if you need to.

Renter Numbers Increasing

presented without comment. click to enlarge

Fannie and Freddie have to soften guidelines, may accept 3% down payments again-This will help stabilize the market no question! What a Great bunch of Rulers, we Serfs should send them gifts.

Apparently the banks don’t want to make loans if they have to buy them back when they go bad. Imagine that! It makes sense under a traditional underwriting stand point where fully qualified loans should not be repurchased by the lending banks 3-7 years down the road if the borrower looses his job or some unforeseen event occurs. But on grocery store clerks buying $750K homes with a negative amortization or a 5/1 arm, with no cash down, they probably should be. They have to do something though because no one is borrowing. It goes like this:

The banks’ reticence has kept first-time homebuyers and others with weak credit out of the real-estate market and created a drag on the fragile housing recovery. (Gee, lets not lend anymore to unqualified people because we pay Billions in fines for being predatory. someone might eventually go to jail.)

Melvin L. Watt, the director of the Federal Housing Finance Agency, will clarify in a Oct. 20 speech at the Mortgage Bankers Association conference in Las Vegas how some loans can be permanently exempted from the threat of buybacks, said the people, who asked not to be identified because the plans aren’t public. Watt will also discuss an effort that would allow borrowers to put down as little as three percent of the purchase price on loans backed by Fannie Mae and Freddie Mac (FMCC), enabling borrowers with lower incomes to access the mortgage market, the people said. The two companies currently require a five percent down payment on most loans. More here

BUT WAIT!!!! There is another issue that holds borrowers from buying again. Deficiency Judgements and Fear! Strange they don’t talk about the fact that folks who didn’t use BK or a good agent to short sell are getting deficiency judgements from Fannie and Freddie. Folks that walked away because they didn’t know what else to do and didn’t have money or fight left in them. See that Renter chart above with no comment showing decreasing owner and increasing renters? Just sayin…

(Reuters) – Many thousands of Americans who lost their homes in the housing bust, but have since begun to rebuild their finances, are suddenly facing a new foreclosure nightmare: debt collectors are chasing them down for the money they still owe by freezing their bank accounts, garnishing their wages and seizing their assets.

By now, banks have usually sold the houses. But the proceeds of those sales were often not enough to cover the amount of the loan, plus penalties, legal bills and fees. The two big government-controlled housing finance companies, Fannie Mae and Freddie Mac, as well as other mortgage players, are increasingly pressing borrowers to pay whatever they still owe on mortgages they defaulted on years ago.

Using a legal tool known as a “deficiency judgment,” lenders can ensure that borrowers are haunted by these zombie-like debts for years, and sometimes decades, to come. Before the housing bubble, banks often refrained from seeking deficiency judgments, which were seen as costly and an invitation for bad publicity. Some of the biggest banks still feel that way.

Andrew Wilson, a spokesman for Fannie Mae, said the finance giant is focusing on “strategic defaulters:” those who could have paid their mortgages but did not. Fannie Mae analyzes borrowers’ ability to repay based on their open credit lines, assets, income, expenses, credit history, mortgages and properties, according to the 2013 IG report. “Fannie Mae and the taxpayers suffered a loss. We’re focusing on people who had the ability to make a payment but decided not to do so,” said Wilson.

Freddie Mac spokesman Brad German said the decision to pursue deficiency judgments for any particular loan is made on a “case-by-case basis.”

The FHFA declined to comment. More here In Maryland, it stays in place for 36 years. So I can hear them banksters now in the back room of some expensive club while they smoke cigars and drinking cognac, “Lets wait till the borrowers get another job and get back on their feet. Then we unleash our legal hounds from hell and reap another wind fall of profits through lawsuits.” Why was it people are getting sick of it all again? We are clueless…

Time for a good laugh, don’t you think?

Donald Trump was just nailed and held personally liable in his real estate mentoring business by NY Supreme Court. The decision came in an ongoing lawsuit filed last year by New York Attorney General Eric Schneiderman that accuses Trump of misleading more than 5,000 people who paid between $1,495 and $35,000 to learn Trump’s real estate investment techniques. Oops, wind blew the comb over on that one.

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