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One Thing That Still Concerns Us

There is no doubt that the housing market is stumbling to a recovery.  This past week Lawrence Yun, NAR’s chief economist, predicted a 4% increase in sales next year. Last month, Celia Chen of Moody’s Analytics projected sales to increase over 20% in 2012.  Any increase in transactions will be welcomed.

However, we believe there is one headwind that could jeopardize a recovery: fragile consumer confidence. Consumer sentiment, as measured by the University of Michigan, has seen modest improvement in the last few months after nose diving over the previous several months. Moving forward, any hit to consumer confidence will impact a real estate rebound.

Prices are predicted to soften through the first two quarters of 2012 before reaching modest levels of appreciation by year’s end. Falling prices will force more homeowners into a position of negative equity. Being underwater is one of the triggers that cause people to strategically default on their mortgage obligations. If this happens, there will be an increase in the number of foreclosures. This, in turn, could cause a relapse in consumer sentiment.

Bottom Line

We believe that there will be a dramatic increase in residential real estate transactions (both existing sales and new construction sales). The only thing that may stand in the way is a loss of confidence in a housing recovery. The next six months will tell us a lot regarding this possibility.

17 Responses

  1. Nora C, you are correct. Alex Jones is the place to hear the truth. Neil needs to go on Alex’s show and be a regular guest.

  2. Hey Neil and your readers, thought you might find this story about a case going to the supreme court regarding title insurance somewhat interesting.

    It’s not so much about fraud but a bank using the same title insurance for all of their transactions because they apparently got a kickback.

    http://www.cleveland.com/open/index.ssf/2011/11/us_supreme_court_case_from_cle.html

    What makes the case so beguiling is the potentially illegal kickbacks and bribery doesn’t actually raise the price the homeowner pays.

  3. While they MIGHT be well meaning, these Moveon.org people support Obama, and poke fun at Ron Paul. I’ll pass on anything they propose.

    Obama the deceiver, promised change, and delivered marxism. Focks news and the rest of the mainstream propaganda machine deserve to be cained. (yeah, pun intended.) Subscribe to Alex Jones when you want an unbiased dose of truth.

  4. OCCUPY THE HIGHWAY

    Last week, a courageous group left the Occupy Wall Street camp in New York City and started marching to Washington, DC. Their goal was to bring the outrage and energy of the 99% directly to Capitol Hill. They’re marching to call out the congressional Super Committee, which could cut a deal before Wednesday slashing Social Security, Medicare, and Medicaid to protect tax breaks for the 1%.

    The marchers’ stories are powerful, and Congress needs to hear them before they slash programs that so many people rely on.

    So we met up with the marchers yesterday and filmed a short video to help spread their story. It’s critical that as many people as possible see this, as the Super Committee nears its critical deadline. Can you share it right now with your friends and family?

    If enough of us share this video we can help the march get more attention, get more coverage in the media, and ultimately, put more pressure on Congress and the Super Committee.

    After marching nearly 200 miles through the winter cold, they’ll cross through Baltimore and prepare for their final push into Washington on Tuesday, just before the Super Comittee’s deadline. Dozens of supporters have joined the march along the way. But it’s up to all the rest of us to help share their story and make sure that by the time they get to Washington, Congress—and the rest of the country—is expecting them.

    Please click here to share the video with your friends and family.
    http://front.moveon.org/breaking-occupy-protesters-walk-230-miles-from-new-york-to-dc/?id=33071-19440693-j8rBC8x

    Thanks for all you do.

    –Justin, Elena, Laura, Robin, and the rest of the team

  5. Only the possibility of “consumer confidence” may stand in the way of a housing recovery?

    Is this a JOKE?

    No, it isn’t, unfortunately. I know these economic prognosticators are serious! No dose of reality will wake them up until their own bank bonuses, ivory offices, and Kazakhstan rugs are pulled out from under them. Even at that, in all the dust, their neurons still may not make the connection.

    It goes to show how “clouded” are the minds of these commission-loving house-mongers.

  6. […] Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud Tagged: bankruptcy, borrower, countrywide, disclosure, foreclosure, foreclosure defense, foreclosure offense, foreclosures, fraud, LOAN MODIFICATION, modification, quiet title, rescission, RESPA, securitization, TILA audit, trustee, WEISBAND Livinglies’s Weblog […]

  7. Yup, get yer wheelbarrows. Is it just me, or did this article actually contradict itself? Cooking the books won’t negate in-your-face facts. Cave dwellers & people without electricity who don’t read might be potential buyers of foreclosed properties, but the rest of us aren’t even kicking the tires–we know about the Title issues! (Thanks, Neil)
    Until Americans have jobs again, and justice has been dealt to the criminals behind the transfer of wealth, nothin’ is gonna change in the real estate realm. “Bargain properties” are boomerangs, aimed at your wallet.

  8. Housing is not going to get better until the banks have their collective asses kicked. The banking cartel created this mess, and they can go under. Forgive the debt! Forgive the notes on the mortgages.

  9. Lennar FDIC scam blocked by Federal Court.

    FDIC, distressed debt investor lose second Nevada lawsuit
    By Steve Green (contact)

    Monday, 7 November 2011, 10:28 a.m.

    The Federal Deposit Insurance Corp. and its partner in suing
    borrowers in defaulted loans of failed banks have lost a second
    Nevada lawsuit.

    U.S. District Judge Lloyd George, in dismissing a suit against a Las
    Vegas homebuilder on Friday, became the second Nevada federal judge
    in less than a month to find the FDIC and its lawsuit partner,
    distressed debt investor and homebuilder Lennar Corp. of Miami , can’t
    pursue their state-law claims in federal court.

    After the collapse of scores of banks during the recession, the FDIC
    and Lennar in 2010 created a company called Multibank 2009-1 RES-ADC
    Venture LLC. Multibank then acquired a portfolio of $2.253 billion in
    defaulted loans from failed banks.

    After Multibank started foreclosing on property backing the loans and
    suing the borrowers for deficiency judgments, it ran into
    jurisdictional problems when the suits were filed in federal courts
    after defense attorneys said federal courts lacked jurisdiction to
    hear these state-law claims.

    Multibank typically alleged in its lawsuits that the federal courts
    had jurisdiction because the disputes involved parties from different
    states as the FDIC “is a Delaware corporation with its principal place
    of business in Washington , D.C. ”

    That assertion about the FDIC is wrong, George ruled Friday in
    dismissing one of the lawsuits.

    “This court lacks diversity jurisdiction over this civil matter
    because the Federal Deposit Insurance Corporation is a federal
    corporation that is not a citizen of any state,” George wrote in his
    order.

    In the suit at issue, Multibank had sought to recover a $21.6 million
    deficiency judgment involving a loan from the failed Silver State Bank
    of Henderson .

    The borrowers, including Astoria Pearl Creek LLC and Thomas McCormick
    of Astoria Homes, had intended to use the 2007 loan for $20.5 million
    for a homebuilding project at Boulder Highway and Magic Way in
    Henderson .

    Then, as Astoria ’s attorneys put it in a court filing: “Little did
    Astoria know that the housing bubble was about to burst.”

    “The project failed, Silver State Bank failed and Astoria too
    failed,” Astoria attorneys at the Las Vegas law firm Marquis Aurbach
    Coffing wrote in a court filing.

    A Multibank subsidiary that was the plaintiff in the suit, RES-NEV
    APC LLC, charged in the complaint that $25.2 million was due on the
    loan when it foreclosed on the property backing the note and bought
    it in December 2010 with a credit bid of $3.6 million.

    Multibank can now try to sue again over the defaulted loan in state
    court, though it may face problems there because of a state law
    basing deficiency judgments not on the face value of the note, but on
    the discounted price the note holder paid for the loan.

    For McCormick and his attorneys, Friday’s ruling was at least an
    interim legal victory against what they have complained is a vulture
    investor.

    Friday’s ruling by George follows an Oct. 26 ruling by U.S.
    District Judge James Mahan in Las Vegas , who dismissed another
    Multibank lawsuit after finding “FDIC’s status as a
    federally-chartered bank destroys citizenship.”

    With local attorneys seeking additional dismissals of similar
    lawsuits, the national law firm Ballard Spahr LLP issued a legal
    alert on the issue last week saying: “For banks and investors
    purchasing loans from the FDIC under certain types of risk sharing
    arrangements, these rulings may directly affect litigation strategy,
    and awareness of this issue can mean the difference between
    recovering on your investment, or losing it altogether.”

    “Federal court is often the preferred venue for this type of
    contract-based judicial action for a variety of reasons, including
    predictability of outcome; clear precedent; avoiding the risk of
    judicial bias; and a tendency on the part of federal judges to
    construe contracts and statutes plainly and as written,” Ballard
    Spahr said in its alert. “But co-venturers must recognize that the
    mere fact of partnering with the FDIC may prevent the venture from
    using the federal courts.”

    Comments
    2 commentsBy CynicalObserver1.. Nov. 7, 20118:07 p.m.Flag Back in the
    days of the “savings & loan crisis”, in the mid 1980’s to early
    1990’s, when the FDIC was suing guarantors for deficiency judgments,
    FDIC’s lawyers were smart enough to hold on to ownership of the loans
    and to enforce the guarantees directly, in Federal Court, rather than
    trying to form “partnerships” with investors who would buy a share of
    a defaulted loan and then try to enforce the loan guarantee’s terms.

    During the Bush Administration, Federal agencies were larded up with
    attorney-civil service appointees from bottom of the barrel law
    schools. The attorneys got their jobs because they were “young
    Republicans”, even if they were morons in terms of their legal
    knowledge, skills and experience.

    Those political appointments to civil service lawyer jobs were
    illegal, but early on in the Obama Administration, the Justice
    Department determined it couldn’t get rid of its own incompetent
    young Republican lawyers, so its only natural that other Federal
    agencies are stuck with the well-connected but dumb Republican
    lawyers as well..

    Equally sad for those who rely on the FDIC’s solvency as the insurer
    of their bank deposits, this the allegation that several senior
    officers at Lennar were financial donors to the Obama campaign.

    As a result, just as the Obama Admin is under fire for pushing
    through a politically motivated Energy Department loan to bankrupt
    Solyndra, I sure would be red hot mad, as a Federal taxpayer and as a
    person who relies on FDIC insurance, if the structure of FDIC’s deal
    with Lennar was driven by politics causing the FDIC to ignore the
    advice of its own senior lawyers.

    Assuming the FDIC has any senior lawyers who have some level of
    sophistication about the special powers of the FDIC to enforce loan
    documents despite state laws to the contrary, they might have said
    something like the national law firm Ballard Spahr LLP legal alert
    that the structure of the FDIC-investor deal “under certain types of
    risk sharing arrangements, these rulings may directly
    affect litigation strategy, and awareness of this issue can mean the
    difference between recovering on your investment, or losing it
    altogether.”

    If good legal advice inside FDIC was ignored due to political
    pressures, we will never know due to attorney-client privilege.

    During the “savings & loan crisis” in the mid 1980’s to early 1990’s,
    lawyers would joke that the legal definition of a loan guarantor was
    “a fool with a pen”. That’s how FDIC minimized taxpayer losses when
    the massive savings & loan and bank failures rendered the FDIC
    insolvent causing what was then a massive taxpayer bailout of FDIC
    and FSLIC.

    These days, there is great fear and doubt about the FDIC being able
    to survive the failure of just one big bank. As a result, it’s very
    said if FDIC is going to lose its ability to recover money due and
    owing because of politically motivated, bad decisions my FDIC’s
    management.

    D’Oench Duhme forever

  10. You seem to forget that most of these sales will be done on unperfected title. The new owners thinking they got a bargain and oops by the way you title insurance is void as well as you deed and I am here to ask you to move since I have a perfected title. Good Luck on you next purchase if they title has been changed since 1994 or maybe even before.

  11. I have not posted in a while..But this is a must see

  12. Ridiculous—$5.00 for a tiny box of cereal…

  13. Property rights have no value without the fraudulent foreclosures of the past being undone and the properties restored to the rightful owner.

    Only a moron would buy under these conditions.

  14. “We believe that there will be a dramatic increase in residential real estate transactions”

    I see the books boys have their statistical models up and running. Oh and are the titles to the “current inventory” clear? And new construction; the banks are loaning again? I guess I missed it.

    Woe is me, I guess I am living in a bubble, as where I live there are auctions of business inventory each week, auto sales businesses are closing at a record pace, grocery items are being reduced in quantity 25%-while prices have risen exponentially, gas is rising per barrel (don’t see the reduction in quantity of goods related to this), insurance premiums up 25-30%, health care costs up 15-22%…yup, I guess people have a lot of reason to be optimistic!

    And let’s not forget we will bail out Fannie and Freddie to the tune of 7.8 Billion for the QUARTER! Get your wallet out taxpayers’. Rejoice in our freedom and buy a deeply discounted house. Hurry, they are going fast.

  15. Apparently buying a wheelbarrow is the first order of business in this brave new world

  16. The death spiral will continue until wages come up … wages will stagnate .. and in reality decline relative to inflation as our trading partners around the world take massive hits due to debt defaults.. Europe is toast , China has been blowing bubbles with 2/3rds of new housing bought for investment and never occupied, it’s been kept quiet but they have riots in the streets over factory closings… and now they can’t meet their growth targets except through lying in gov’t statistics… The EU stability people demanded Germany surrender their gold (Germany politely told them to get stuffed).

    We are going to have a global financial meltdown in all the FIAT currency nations and the only backing for a new currency will be real assetts .. precious metals and raw land.

    People , real inflation is here now. Just visit any grocery store or discover that the cheapest new cars are about $20k… outside of gov’t stats (using the formulas from the 1970’s) we’re at about 17% inflation.

    Now , believe it or not , is a great time to buy a house … or farmland … or a new car … because that 0% for 72 months or 4.25% for 30 years will having you pay the equivalent of a cup of coffee for the payment in the near future.

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