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Former Fed Chairman Greenspan sounding a call for the Fed to end quantitative easing.

Should we end QE

Craig Osment's insight:

Former Fed Chairman Greenspan appeared on CNBC this morning, sounding a call for the Fed to end quantitative easing. It was quite clear in his comments that the current Fed Chairman has a very different take on the risks of QE than does Chairman Bernanke. The following are paraphrases from his interview: 

Tennessee Senator Bob Corker (R) and Virginia’s Mark Warner (D) introduced a draft bill to unwind the GSEs this week. The bill calls for a system in which private firms would buy individual loans from originators, package and securitize them to be sold in the market, and provide the first line of credit support. Behind the private securitizer would be catastrophic credit support provided by the government for a guaranty fee. The bill also calls for the FHFA to be replaced by a new Federal Mortgage Insurance Company which would be governed by a five-member board. FMIC would be required to hold 2.5% of all outstanding principal guaranteed, compared to the less-than-1% that Fannie and Freddie held. To wind down Fannie and Freddie, the bill calls for a 15% annual reduction in the agencies’ portfolios and would cut the loan maximum from $625k to $417k over six years. Most importantly to current investors, the bill proposes having all outstanding single-family MBS debt guaranteed by Treasury.

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Affordability a Concern in Housing Recovery

Affordability a Concern in Housing Recovery | Finance a house | Scoop.it
As the U.S housing market climbs back to healthy, a third of it is less affordable now than it's been...
Craig Osment's insight:

RealtyTrac found that if interest rates rise just a quarter percentage point, 461 counties—with a combined population of 77 million, or 30 percent of total U.S. population—will exceed their historical averages for affordability and 27 will exceed their historical peaks.

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California’s April Home Sales Jump 20 Percent from March

California’s April Home Sales Jump 20 Percent from March | Finance a house | Scoop.it
In a new report from PropertyRadar on California...
Craig Osment's insight:

Sales are up!  way up.

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Affordability Issues Create Housing Bubble Concerns

Affordability Issues Create Housing Bubble Concerns | Finance a house | Scoop.it
Recovery in the housing market is not without its side effects, particularly in major metro markets on...
Craig Osment's insight:

Most people will not be willing (or just flat out can't)  move once they have their 2-3% rate locked in for eternity(thanks to unprecedented Fed stimulus , loan modifications, bailouts), especially when home prices have gone up 20% and rates go up to 5% or more.  With wage stagnation, try convincing someone to pay 20%+ more for a house and 2-3% more on the rate.    end result: no one moves, inventory does not increase.  Prices go up... until they don't.

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Hottest Neighborhoods of 2014 - Research Center | Redfin

Hottest Neighborhoods of 2014 - Research Center | Redfin | Finance a house | Scoop.it
As we usher in the new real estate season at Redfin, a big question on our minds is: Which neighborhoods will be the darlings of 2014?
Craig Osment's insight:

Buyers who have made these alternative spots so hot aren’t like the ones we saw in the last boom, who just borrowed more and paid up. The buyers for 2014 are settling on a price range, and they’re sticking to it.

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Will you qualify for a mortgage in 2021?

Craig Osment's insight:

CoreLogic just did a study, and they say that in 2021 when the GSE exemption ends, it's estimated that only 25% of homebuyers in America will be able to qualify for mortgage, and obviously, this will result in a significant demand for both nonprime credit, as well as single-family home rentals.

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Commentary: Investors Still Flooding the National Housing Market

Commentary: Investors Still Flooding the National Housing Market | Finance a house | Scoop.it
Both large institutional and smaller mom and pop investors have been very active purchasing homes at a steep discount, primarily in housing-bust markets.
Craig Osment's insight:

Way to go investors.

September:50%

August:40%

September 2012:30%

Significant investor activity keeps REmarket propped up.

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Southern California housing market slows after torrid rebound

Southern California housing market slows after torrid rebound | Finance a house | Scoop.it
Southern California home buyers have apparently had their fill of bidding wars, home shortages and double-digit price hikes.
Craig Osment's insight:

 

"We are now probably in the most normal housing market we have been in for 12, 13 years," Richard Green, director of USC's Lusk Center for Real Estate said.

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First-time homebuyers sidelined by financial challenges

First-time homebuyers sidelined by financial challenges | Finance a house | Scoop.it
By most accounts, this year is shaping up to be a positive one for housing, with prices, sales and construction numbers consistently on the rise. However, there is a catch.
Craig Osment's insight:

key insight:  the homeownership rate declined for the fifth consecutive year in a row, reaching 63.9%, according to the Census Bureau’s latest American Community Survey.

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FHA to Take First Ever Bailout

FHA to Take First Ever Bailout | Finance a house | Scoop.it
The Federal Housing Administration (FHA) will be accepting a bailout of more than $1 billion to make up for losses sustained from the agency’s legacy books and its reverse mortgage program.
Craig Osment's insight:

No Comment

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Welcome to the neighborhood CFPB

CFPB coming soon to implement 4,000 pages of new mortgage rules

Craig Osment's insight:

The Consumer Financial Protection Bureau is holding fast to its plan to fully implement a raft of new mortgage rules in January despite industry pleas for more time, a tough stance banks fear will force them to cut back on lending or face a wave of enforcement and private litigation.

The nearly 4,000 pages of new mortgage rules, which the CFPB released over the course of this past January and is still revising, will change every aspect of a mortgage lender's business.

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Making Sense of the Housing Recovery

John Burns of John Burns Real Estate Consulting breaks down the housing market.
Craig Osment's insight:

Housing recovery update

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Another reason to kill your social media accounts: Your lenders snoop there and use the info - News - Bubblews

Another reason to kill your social media accounts: Your lenders snoop there and use the info - News - Bubblews | Finance a house | Scoop.it
Speak Freely. Write Your World.
Craig Osment's insight:

Once again.  Buyer Beware.

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Liberty Street Economics

Liberty Street Economics | Finance a house | Scoop.it
Recent activity in the U.S. housing market has been widely perceived as disappointing.
Craig Osment's insight:

To buy or rent?  

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China Poised to become Force in U.S. Housing Market

China Poised to become Force in U.S. Housing Market | Finance a house | Scoop.it
As the United States' neighboring countries lose their economic edge in the nation's home market, analysts...
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All-Cash Residential Sales Reach New High

All-Cash Residential Sales Reach New High | Finance a house | Scoop.it
The share of all-cash sales reached a new high in the first quarter of 2014, even as the total share...
Craig Osment's insight:

 All-cash sales made up 42.7 percent of all U.S. residential property sales for Q1, up from 37.8 percent from the previous quarter, according to RealtyTrac’sU.S. Institutional Investor and Cash Sales Report.

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CFPB and Ability-to-Repay

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Craig Osment's insight:

On January 10, 2014, the Consumer Financial Protection Bureau’s Ability-to-Repay Rule will go into
effect. This rule protects consumers from debt traps by requiring mortgage lenders to evaluate whether
borrowers can afford to pay back the mortgage before signing them up. The rule was required by
Congress, as a response to the financial crisis and nationwide foreclosure epidemic.

Under the new Ability-to-Repay Rule, mortgage lenders must look at customers’ income, assets, savings,
and debt, and weigh those against the monthly payments over the long term – not just a teaser or
introductory rate period. As long as they check the numbers and the numbers check out, lenders can
offer any mortgage they reasonably believe a consumer can afford. These are common-sense practices
that most lenders already follow.

Certain types of mortgages are more likely to become a debt trap for the borrower, so the new rule lays
out basic guidelines that lenders can follow. Loans within these guidelines are called “Qualified
Mortgages,” and they give lenders greater certainty that they are meeting the Ability-to-Repay
requirement. If lenders choose not the follow these guidelines, they can still make a loan based on their
reasonable, good-faith determination that the borrower has the ability to repay it.

To be a Qualified Mortgage, the loan:
• Cannot have excessive upfront points and fees;
• Cannot be longer than 30 years;
• Cannot have certain risky features, such as paying only interest and not principal, or paying less than
the full amount of interest so that the total debt grows each month; and
• Must be in one of three categories:
1. The monthly loan payment, plus the borrower’s other debt payments, does not exceed 43
percent of the borrower’s monthly income; or
2. The loan qualifies for purchase or guarantee by a government sponsored enterprise (Fannie
Mae or Freddie Mac), or is insured or guaranteed by a federal housing agency; or
3. The loan is made by a small lender that keeps the loan in portfolio.

Bottom line: The Ability-to-Repay rule is intended to prevent consumers from getting trapped in
mortgages that they cannot afford, and to prevent lenders from making loans that consumers do not
have the ability to repay. It’s that simple.

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Lenders Incur Visible Risk from Hidden Borrower Debt

Lenders Incur Visible Risk from Hidden Borrower Debt | Finance a house | Scoop.it
Over the past few years, lenders and underwriters revamped their standards to reduce risk, but Equifax says there’s one challenge many lenders still have difficulty combating—undisclosed debt.
Craig Osment's insight:

Whats not included in housing ratios: cell phone bills, utility bills, cable/satellite, children's activities, soon to come ACA(obamacare),.  All of these could easily add up to over $500 per month, maybe more.

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California Home Sales Hitting Record Levels

California Home Sales Hitting Record Levels | Finance a house | Scoop.it
California saw an increase in home sales levels not seen since before the crisis.
Craig Osment's insight:

Way to go California!!  Keep selling(and buying) those homes.

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Industry, Congress Urge DeMarco Not to Lower Loan Limits

Industry, Congress Urge DeMarco Not to Lower Loan Limits | Finance a house | Scoop.it
Federal Housing Finance Agency Acting Director Edward DeMarco is deliberating lowering the loan limits for Fannie Mae and Freddie Mac.
Craig Osment's insight:

No, No, No, please don't lower "my" loan limits.  That means I will have to pay more money for "my" loan doesn't it?

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Bank Analyst: Dodd-Frank killed low-income lending

Bank Analyst: Dodd-Frank killed low-income lending | Finance a house | Scoop.it
Congress enacted the Dodd-Frank Act three years ago to remedy lending excesses that took root prior to the financial crisis, but the outcome of this intervention is a modern mortgage market where big banks can no longer lend to low-income...
Craig Osment's insight:

 key insight: the average FICO score on purchase loans now hovering at 750, up 50 points from pre-crisis markets.

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All Cash Buyers

All Cash Buyers(identified)

Craig Osment's insight:

More than half of all homes sold last year and in 2013, so far, have been purchased without financing, according to economists at Goldman Sachs Group. Prior to the housing crash, about 20 percent of all homes sold were purchased without financing. All-cash sales have more than doubled over the last seven years. “The surprisingly large cash-share of purchases helps to explain why home sales have jumped over the past two years despite more muted increases in broad measures of new residential loan activity, such as the MBA’s application index,” The Wall Street Journal reports. The large share of cash buys are most likely from investors, foreign buyers, and wealthy home owners, the report notes. The Goldman report estimated that around 44 cents of every one dollar of homes sold presently are being financed. Prior to the housing crisis, that stood at 67 cents of every dollar. The Goldman Sachs analysts used data from the National Association of Realtors®, Census Bureau, Mortgage Bankers Association, and Lender Processing Services to arrive at their calculations. Source: Wall Street Journal

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Brawndo Recovery: 8 Headwinds For Economy, Housing and Mortgage Markets

Brawndo Recovery: 8 Headwinds For Economy, Housing and Mortgage Markets | Finance a house | Scoop.it

The US economy is straying further and further away from a free-market model and towards a government-controlled, crony economy.

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What is the MMR?

What is the MMR?

Craig Osment's insight:

When the Mortgage Market Review (MMR) comes into effect in April 2014,
the Financial Conduct Authority (FCA) will require lenders to complete
affordability assessments and to verify income in all circumstances.

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Now's a Good Time to Be a Renter in Los Angeles

Now's a Good Time to Be a Renter in Los Angeles | Finance a house | Scoop.it

The LA Times has a message for all those people getting discouraged in the attempt to buy their first homes: relax, you might be better off renting.

Craig Osment's insight:

Rent in L.A. It's a good deal.

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