What Congressmen said about Fannie and Freddie before the crash
Check out this Wall Street Journal article about what Congressmen said about Fannie and Freddie back in the day. http://s.wsj.net/media/swf/main.swfRead more
Wall Street Bailout Bill passes House
I have a bad feeling about this.Read more
Wall Street Bailout – Random points
I was out with a bunch or Realtors today learning tons of great stuff about the Scottsdale Unified School District (“Most Excelling School District in Arizona”) with the Scottsdale Area Association of Realtors’ Leadership Academy. I spoke with a few Realtors about the banks. I’m very curious to know why banks don’t modified more loans. My guess is that banks would lose a lot less money, if they modified more and foreclosed less. Inertia Bureaucratic inertia is one big reason. “Banks create idiot-proof systems and then hire idiots at $12 per hour.” I guess that is one economic model. The banks have a certain way they do business and they…Read more
“What’s the line on Wachovia being bought out next week?”
That was the title of a post last Saturday. In a surprise twist, the West Coast bank Wells Fargo & Company, said Friday that it had reached an agreement to acquire a rival, the Wachovia Corporation, for about $15.1 billion in stock. The announcement came just four days after Citigroup had agreed to buy Wachovia’s banking operations of Wachovia for $2.2 billion of about $1 a share. But Wachovia, which is based in Charlotte, N.C., has now rejected that deal in favor of one where the entire company would be acquired. It’s nice to see there is enough life in the financial markets that we have a bidding war of…Read more
Scottsdale School District boundary maps
Do you trust real estate agents? Follow home prices in your zip code yourself just like the pros. Find boundary maps of the entire Scottsdale Unified School District, the boundaries for Scottsdale High Schools, the boundaries for Scottsdale Middle Schools and the boundaries for Scottsdale Elementary Schools. Notice that the Scottsdale Unified School District does NOT go north of Pinnacle Peak Rd, nor south of McKellips Rd but it does go a little bit east into Phoenix, in particular, it covers the Arcadia neighborhood of east Phoenix.Read more
The Financial Crisis: What Went Wrong?
Here is an interesting take on the Financial Crisis and what went wrong. He puts the largest blame on teaser-rate mortgages. The media talks about ” sub prime mortgages” ““ by which it means mortgage loans to borrowers with less than stellar credit. The real problem, however, was the advent and widespread use of teaser-rate mortgages in both the prime and sub prime markets. A teaser-rate mortgage allows a borrower to make relatively small payments for several years. At some point, the rate jumps dramatically, and the borrower faces much higher monthly payment obligations. The teaser-rate aspect is certainly an important one. Okay, that helps explain why those mortgage companies…Read more
On the other hand – Are people moving out of stocks and into real estate?
A client had a full price offer out on a bank-owned home in Chandler 85286. My client had some problems with the bank’s counter offer. The bank’s standard addendum said in any dispute that the buyer’s earnest money would be disposed of “at the sole discretion” of the bank, that the Buyer would pay for the Seller’s title insurance policy for the Buyer, and that the inspection period would be 5 days instead of 10. My buyer client countered out those 3 items yesterday morning. I just found out, unfortunately, than in the interim a full price, all cash offer with a 2 week closing came in and was, of…Read more
Phoenix Case-Shiller Home Price Indices – Updated through July 2008
(See recent posts on Phoenix Case-Shiller Home Price Index.) Although Phoenix residential real estate prices are falling less than during the November through April period, home prices are still careening down. I thought in recent months that prices seemed to start to stabilize but I’m really not seeing any slowdown in the rate of decline since May. The rate of decline slowed from April to May but it hasn’t really slowed again since then. The July and August shenanigans with Fannie and Freddie and all the recent bank “failures” can only be bad news for home prices in Phoenix. However, it’s hard for me to see how Phoenix home prices…Read more
Option ARMs – Crack cocaine for mortgage lenders
When I was describing options ARMs to my sister yesterday she couldn’t believe that any lender would be stupid enough to make such loans. I had to repeat it to her a few times before she kinda believed me. Option ARMs allow borrowers to skip part of their payment and add that sum to their principal. Monthly payments increase after five years or once the loan balance reaches a predetermined limit, usually 110 percent to 125 percent. Introductory interest rates can be as low as 1 percent. For the average option ARM borrower, payments will rise 63 percent, or an additional $1,053 a month, when their rates reset, according to…Read more
Wall Street Journal on loan modifications in Wall Street Bailout
Rescue Includes Steps to Help Borrowers Keep Homes; Bill Would Give Government Power to Alter Mortgages The bill not just gives the government power to alter mortgages, it essentially requires it. The bill calls on the government, as the owner of mortgages, mortgage-backed securities and other assets backed by real estate, “to implement a plan that seeks to maximize assistance to homeowners and use its authority to encourage the servicers of underlying mortgages, and considering net present value to the taxpayer, to take advantage of…available programs to minimize foreclosures.” You read about it first here at Arizona Real Estate Notebook. The focus of the “rescue” bill is shifting towards creating…Read more