Money and Finance
Found via the Corner of Berkshire & Fairfax.
The U.S. housing market is showing tentative signs of life as demand for new homes and housing prices begin to rise in some areas.
Yet pitfalls remain, including about 12 million borrowers who still owe more on their “underwater” mortgages than their homes are worth. To help some of those people, the recent $25 billion national mortgage settlement required five large banks to pay states $2.5 billion for foreclosure prevention and other housing-related efforts.
Here’s the problem: many states -- including some hardest hit by the housing bust -- are diverting more than $1 billion of that settlement money to fill budget gaps, fund public universities and even bankroll litigation against defective Chinese drywall, according to a Bloomberg Government report. In doing so, states are robbing troubled borrowers of assistance and jeopardizing their housing recoveries in the process.
- Mark Hanson's Latest On Housing
“Effective negative equity” is central to my “structurally broken housing market in need of years of de-leveraging before a “durable” bottom can occur”, theme. I have been pounding the table over “Effective” negative equity for years and...
- Wall Street Aristocracy Got $1.2 Trillion From Fed
Citigroup Inc. (C) and Bank of America Corp. (BAC) were the reigning champions of finance in 2006 as home prices peaked, leading the 10 biggest U.S. banks and brokerage firms to their best year ever with $104 billion of profits. By 2008, the housing market’s...
- Comparing Wealth Effects: The Stock Market Versus The Housing Market - By Karl E. Case, John M. Quigley, And Robert J. Shiller (2005)
ConclusionThe importance of housing market wealth and financial wealth in affecting consumption is an empirical matter. We have examined this wealth effect with two panels of cross-sectional time-series data that are more comprehensive than any applied...
- September 2003 Statement From Ron Paul On The Gses And The Housing Market
I saw this statement mentioned on TV and thought it was worth posting. The connection between the GSEs and the government helps isolate the GSE management from market discipline. This isolation from market discipline is the root cause of the recent reports...
- Wsj: First, Let's Stabilize Home Prices - By R. Glenn Hubbard And Chris Mayer
We are in a vicious cycle: falling housing values cause losses on securities, which reduce bank capital, thereby tightening lending and causing house prices to fall further. The cycle has spread beyond housing, but housing is the place to fix it. Housing...
Money and Finance
States Steal Federal Foreclosure Funds at Their Own Peril
Found via the Corner of Berkshire & Fairfax.
The U.S. housing market is showing tentative signs of life as demand for new homes and housing prices begin to rise in some areas.
Yet pitfalls remain, including about 12 million borrowers who still owe more on their “underwater” mortgages than their homes are worth. To help some of those people, the recent $25 billion national mortgage settlement required five large banks to pay states $2.5 billion for foreclosure prevention and other housing-related efforts.
Here’s the problem: many states -- including some hardest hit by the housing bust -- are diverting more than $1 billion of that settlement money to fill budget gaps, fund public universities and even bankroll litigation against defective Chinese drywall, according to a Bloomberg Government report. In doing so, states are robbing troubled borrowers of assistance and jeopardizing their housing recoveries in the process.
- Mark Hanson's Latest On Housing
“Effective negative equity” is central to my “structurally broken housing market in need of years of de-leveraging before a “durable” bottom can occur”, theme. I have been pounding the table over “Effective” negative equity for years and...
- Wall Street Aristocracy Got $1.2 Trillion From Fed
Citigroup Inc. (C) and Bank of America Corp. (BAC) were the reigning champions of finance in 2006 as home prices peaked, leading the 10 biggest U.S. banks and brokerage firms to their best year ever with $104 billion of profits. By 2008, the housing market’s...
- Comparing Wealth Effects: The Stock Market Versus The Housing Market - By Karl E. Case, John M. Quigley, And Robert J. Shiller (2005)
ConclusionThe importance of housing market wealth and financial wealth in affecting consumption is an empirical matter. We have examined this wealth effect with two panels of cross-sectional time-series data that are more comprehensive than any applied...
- September 2003 Statement From Ron Paul On The Gses And The Housing Market
I saw this statement mentioned on TV and thought it was worth posting. The connection between the GSEs and the government helps isolate the GSE management from market discipline. This isolation from market discipline is the root cause of the recent reports...
- Wsj: First, Let's Stabilize Home Prices - By R. Glenn Hubbard And Chris Mayer
We are in a vicious cycle: falling housing values cause losses on securities, which reduce bank capital, thereby tightening lending and causing house prices to fall further. The cycle has spread beyond housing, but housing is the place to fix it. Housing...