Refinance Home Mortgages

FHA Chief Warns Against Increasing Downpayments

Luke Ford — Mon, 15 Mar 2010 15:53:39 +0000

Low downpayments make it easier for people to walk away from loans. Low downpayments were a key ingredient in all the fancy new mortgages that fueled the housing boom and then bust over the past eight years.

Over One Million Enroll In Obama's Mortgage Modification Scheme

Luke Ford — Mon, 15 Mar 2010 15:49:13 +0000

Only 170,000 have completed the paperwork, while 1.1 million home owners have begun the process.

The program is having a tiny impact on America's high rates of foreclosures.

Las Vegas is hard-hit by foreclosures but fewer than 4,000 homeowners have completed the paperwork for the program.

Higher Interest Rates On The Way

Luke Ford — Mon, 15 Mar 2010 15:42:09 +0000

We've had easy money since 2005. It got us into this housing mess. We've kept the Fed policy of easy money to try to get us out of the housing mess. The surge in the stock market is a direct result of easy money.

Freddie Mac's Losses Decline

Luke Ford — Thu, 25 Feb 2010 16:51:30 +0000

That's about the only good news that I can find in the latest figures.

Freddie Mac says it does not need new federal government subsidies.

The Obama administration is taking its sweet time reforming these drunk on subsidies companies.

Jumbo Mortgage Market Improves

Luke Ford — Thu, 25 Feb 2010 16:43:17 +0000

Big expensive homes have been hard hit by the housing crisis.

Fannie Mae and Freddie Mac have limits on the expenses of homes whose mortgages they guarantee.

Some of those owning these expensive homes have been able to refinance to lower rates.

Reforming Fannie Mae, Freddie Mac

Luke Ford — Thu, 25 Feb 2010 16:38:53 +0000

U.S. Treasury secretary Timothy Geitner says that the Obama administration will wait until 2011 to unveil a plan to reform the GSEs Fannie Mae and Freddie Mac.

We're still in the middle of a housing crisis and the Obama administration does not want to cut out subsidies at this vulnerable time.

Chase Blamed For Not Modifying More Mortgages

Luke Ford — Thu, 25 Feb 2010 16:33:40 +0000

Why are banks getting blamed for not modifying more mortgages?

Why should they modify mortgages unless they believe it is in their self-interest?

What about the sanctity of contracts? People signed up for certain terms. If they can't live up to them, then they default and the bank forecloses.

Get Ready For The Next Wave Of Foreclosures

Luke Ford — Thu, 25 Feb 2010 16:24:26 +0000

I am so glad that the federal politicians chose to bail out Fannie Mae and Freddie Mac. It is only costing us taxpayers over $200 billion.

That's crazy.

I'd love to see what some free market policies would do for the housing market. Let's stop intervening. Let home prices drop to a level where there's an efficient allocation of resources.

Low Demand For Mortgage Loans

Luke Ford — Wed, 10 Feb 2010 17:02:44 +0000

How are you going to take out a mortgage loan if you don't have a job? Or you fearing losing your job? Or your hours and benefits are getting cut back.

Why Fannie Mae, Freddie Mac Went Broke

Luke Ford — Wed, 10 Feb 2010 16:58:06 +0000

Because they follow the dictates of politicians.

Politicians, be they Republicans or Democrats, saw increased home ownership as an absolute good. They ended up sacrificing our entire economy for this false god.

Reeling In The Stimulus

Luke Ford — Wed, 10 Feb 2010 16:54:03 +0000

I love that Steely Dan song, 'Are you reelin' in the years?'

That's the song I hear in my head as I read about Federal Reserve chair Ben Bernanke talk about his plans to reel in the stimulus once the economy is on firmer footing.

Low Rates For Those With Great Credit Scores

Luke Ford — Wed, 10 Feb 2010 02:52:07 +0000

You keep hearing on the news about record low mortgage rates. But you're having a hard time getting a hold of those low rates for yourself.

Exactly who is taking advantage of these low rates?

Why Is The Mortgage Default Rate So Low?

Luke Ford — Wed, 10 Feb 2010 02:49:30 +0000

About 11 million American households are underwater on their mortgage.

So why don't more Americans walk away?

That's the theme of about a dozen articles in the New York Times over the past month.

Will Debt Problems In Greece, Portugal and Spain Hurt You?

Luke Ford — Wed, 10 Feb 2010 02:47:02 +0000

Yeah. We live in a global village.

It sounds like Germany is underwriting bailouts of Greece. Germany is the European country best situated to ride out this storm.

Remember how the Bush administration kept assuring us in 2007 that the subprime collapse was contained? Well, it wasn't. Some of my friends have been wiped out.

Too Scared To Walk Away From An Underwater Mortgage

Luke Ford — Wed, 10 Feb 2010 02:43:43 +0000

Banks and businesses walk away all the time from bad investments. It's called cutting your losses.

Individuals? Not so much. They're scared. They're scared of defaulting. They fear it shows bad character. They fear the hit it will give to their credit rating. They've never defaulted on anything so massive in their life. Their fears override their rationality.

Feeling Like A Sucker For Not Walking Away From An Underwater Home

Luke Ford — Wed, 10 Feb 2010 02:40:08 +0000

I am amazed at how often people stay in underwater homes. They have a huge economic incentive to walk away but they feel a moral responsibility to pay off their mortgage, even when it is not in their self-interest.

Avoiding The Strategic Default

Luke Ford — Wed, 10 Feb 2010 02:36:27 +0000

About eleven million American families are underwater on their mortgages. They owe more on their homes than they are worth.

Much of the time, it would make sense for these families to walk away from their mortgages.

I Want My Share Of Bailout Nation

Luke Ford — Wed, 10 Feb 2010 02:09:26 +0000

All around me, I see folks taking advantage of bailout nation.

I have friends who work for the government who have good salaries and great benefits.

I see homeowners who are able to modify their mortgages with the help of government subsidies.

Mortgage Modification Programs May Be Pushing More People Underwater

Luke Ford — Wed, 10 Feb 2010 02:06:15 +0000

If the government stood back and did nothing, there would be a massive increase in foreclosures, a crash in housing prices and eventually the housing market would recover.

Prices on homes would drop until more people were ready to buy.

The F.H.A. Tightens Standards For Mortgage Insurance

Luke Ford — Wed, 10 Feb 2010 02:03:24 +0000

Despite massive government subsidies, the government can't abolish the consequences of a free market.

Mortgage insurance has become increasingly difficult to get during the housing crash.

The major issuers of mortgage insurance have either gone out of business or substantially modified their business because they can't keep taking such losses.

Making Home Affordable Program Eases Up On Paperwork Requirements

Luke Ford — Wed, 10 Feb 2010 01:59:14 +0000

President Obama came out with his Making Home Affordable program. It's designed to help people struggling with their mortgage payments to modify their mortgages into something more affordable.

There's a big federal and state government push to reduce mortgage defaults. Home foreclosures drive down property values, which mean more people will go under water (owe more on their homes than it is worth).

Walk Away From Your Mortgage?

Luke Ford — Tue, 09 Feb 2010 23:03:03 +0000

When it is in the self-interest of businesses, they walk away from their mortgages all the time.

So what's good for the goose is good for the gander, right?

Lenders say there's something immoral about a homeowner walking away from his home. But what if it is the homeowner's self-interest? Why should he sacrifice himself for a bank?

Prime Jumbo Loan Delinquencies Rising

Luke Ford — Tue, 09 Feb 2010 22:33:57 +0000

Our housing crash started in 2007 with the subprime crisis. For weeks we debated whether or not it would be confined to the subprime sector.

Events seem made that discussion moot. The problem was not restricted to subprime. It was not restricted to prime loans. It was not restricted to real estate.

GSEs Such As Fannie Mae, Freddie Mac, Are Proven Losers

Luke Ford — Mon, 08 Feb 2010 17:04:05 +0000

Government Sponsored Enterprises such as Fannie Mae and Freddie Mac are proven losers.

The federal government is spending hundreds of billions of dollars to bail them out.

The politicians pushed Fannie Mae and Freddie Mac to buy all sorts of risky mortgages and this government intervention was a key reason for our housing crash.

The Health Threats Of Chinese Drywall

Luke Ford — Mon, 08 Feb 2010 17:00:55 +0000

When Will The Fed Sell Off Mortgage-Backed Securities?

Luke Ford — Mon, 08 Feb 2010 16:49:49 +0000

To prop up the housing market, the Federal Reserve has bought $1.25 trillion worth of mortgage-backed securities over the past year.

The housing market has stabilized. Now there's a call for the Fed to start selling off these securities and get back to more normal sized holdings.

Have You Heard Of The Cash-In Refinance?

Luke Ford — Mon, 08 Feb 2010 16:45:18 +0000

This is booming in popularity.

Leading up to the housing crash, people tended to use their homes as ATM. They'd take out massive HELOC (Home Equity Line Of Credit). They'd borrow against the equity they had built up in their home to pay off credit card debt or the like. Then they often built up that credit card debt again and when the value of their home plunged in the crash, they were in a very tough position.

A Small Sign Of An Increase In Home Sales

Luke Ford — Fri, 05 Feb 2010 17:03:59 +0000

This forward-looking index is still down 11% from a year ago.

Home sales plunged in November and December.

The supply of homes for sale keeps falling. Interest rates remain low. There are tax benefits for buying a home. Home prices are down.

Mortgage Rates Edge Above 5%

Luke Ford — Fri, 05 Feb 2010 16:50:15 +0000

This rise does not surprise me. What surprises me is that interest rates remain so low with the U.S. dollar so weak, and U.S. deficits so high.

The LAT says:

The Primary Mortgage Market Survey from the government-controlled mortgage company assumed that borrowers owned a 20% stake in the house, had good credit and paid 0.7% of the loan amount in upfront points and fees to the lender. Many people pay additional points to lower their rates.

Sales Of Million-Dollar Homes Drop In CA

Luke Ford — Fri, 05 Feb 2010 16:44:24 +0000

This is the fourth year in a row that such sales have dropped.

Sales were down about 24% in 2009 compared to 2008.

Many people who want to sell their expensive homes are holding back because the market is so weak right now. Mortgage financing is difficult to come by. Home values are down, dropping many homes below $1 million.

Yisroel Pensack: Is Sarah Palin a Follower of American Economist Henry George?

Yisroel Pensack — Fri, 05 Feb 2010 07:08:28 +0000

According to an AP report in The New York Times:

ANCHORAGE, Alaska (AP) — Records show that Sarah Palin has not paid any property taxes on cabins that have been built on two backcountry plots partially owned by the former Alaska governor.

The Bailout Tax Is Short On Deterrents

Luke Ford — Tue, 02 Feb 2010 17:07:14 +0000

Los Angeles Times financial columnist Michael Hiltzik was disgraced three years ago when he was caught making positive comments on his work through an alias.

While half of his peers have been laid off since then, Hiltzik still has a job.

Bond Investors

Luke Ford — Tue, 02 Feb 2010 17:04:31 +0000

A year ago, it appeared that many Wall Street firms would have trouble meeting their debt payments. This has not happened. Wall Street has been going up for the past few months (until the past two weeks).

Court-Appointed Caretakers For Commercial Real Estate

Luke Ford — Tue, 02 Feb 2010 17:01:12 +0000

There's one part of the commercial real estate market that is hot — court-appointed caretakers.

They are seeing business boom.

In every problem, there's an opportunity.

The old saw is right.

Can The Housing Market Stand On Its Own Two Feet?

Luke Ford — Tue, 02 Feb 2010 16:55:17 +0000

The federal government has intervened massively to hold up real estate prices and reduce foreclosures.

The result? Home prices and foreclosures have held steady for the past three months.

Now the FHA is tightening lending standards. Interest rates are edging up. The Fed's massive purchasing of mortgage-backed securities is coming to an end.

The Most Unpleasant Surprises When You Close Your Mortgage Loan Application

Luke Ford — Tue, 02 Feb 2010 16:29:45 +0000

I'm reading this excellent book by Carolyn Warren, "Mortgage Rip-offs and Money Savers."

In chapter eight, she lists the five most common unpleasant closing surprises:

* Denial of Appraisal
* Bait and Switch
* Mistakes
* Tricks at Signing
* Surprise Prepayment Penalty

Another Sign Credit Crisis Is Easing

Luke Ford — Tue, 02 Feb 2010 16:26:27 +0000

Since the subprime mortgage collapse of two years ago, banks have put in place measures to toughen up their lending practices.

You now have to demonstrate income to get a loan. You have to fill out more paperwork. There aren't many subprime loans around.

Securitization Industry Still Locked Up

Luke Ford — Tue, 02 Feb 2010 16:20:23 +0000

Until loans can be packaged up and sold as securities, lending will remain restricted around the world.

American Securitization Forum's conventions used to be in glitzy Las Vegas. Those were the days when mortgage loans could be easily sold as AAA bonds. After all, for a century, the mortgage business was the most reliable investment around.

You May Need To Document Your Finances

Luke Ford — Mon, 01 Feb 2010 16:51:40 +0000

President Barack Obama's administration likes to use bureaucratic rules and paperwork to determine much of the economy rather than the free-wheeling free market system.

One example of this is the new requirement to document your finances to modify your mortgage under Obama's new program.

FHA Subsidizing Very Practices That Got Us Into This Mess

Luke Ford — Mon, 01 Feb 2010 16:49:11 +0000

The reason we got into this housing mess is that the government massively intervened into the mortgage market to make it easier for people who would not otherwise qualify to find a mortgage.

How To Modify Your Mortgage

Luke Ford — Mon, 01 Feb 2010 16:46:10 +0000

The character traits that it will take to modify your mortgage will also do you well in life — patience, honesty, diligence and persistence.

How we handle money is a great tipoff to our character.

Good, Bad And Neutral Debt

Luke Ford — Mon, 01 Feb 2010 16:34:43 +0000

Not all debt is created equal. Some debt helps you build wealth. Other debt destroys lives.

Some debt is toxic. It ruins a person's financial position.

I should know. I have $30,000 in credit card debt.

Was The Housing Bust The Banks Fault?

Luke Ford — Fri, 29 Jan 2010 02:26:42 +0000

During his State of the Union address last night, President Barack Obama blasted the bank bailout.

It seems clear that Obama and the Democrats will make banks and Wall Street their enemy in the run-up to the 2010 elections. It was working in Massachusetts. Polls showed late-deciding voters edging to the Democrat. She had taken up this bank-bashing, Wall Street-bashing rhetoric in the last few days of the election.

Office Buildings Have High Vacancy Rates

Luke Ford — Thu, 28 Jan 2010 17:04:48 +0000

Commercial real estate will be the next shoe to drop.

That's the cliche we've been hearing for more than a year.

Vacancy rates at office buildings keep going up.

The LAT says:

Mortgage Applications Fall 11%

Luke Ford — Thu, 28 Jan 2010 17:02:28 +0000

They keep dropping despite interest rates near zero.

The refinance boom has gone bust.

What further tricks might the Fed have up its sleave?

I suspect they're running out of money and interventionist steam.

Dramatic Drop In CA Mortgage Defaults

Luke Ford — Thu, 28 Jan 2010 16:59:52 +0000

Defaults in California were down about 25% in the fourth quarter. Much of the credit for this belongs to the Obama administration's mortgage modification program.

How much significance can we give to these numbers? Only time will tell.

Interest Rates Remain Near Zero

Luke Ford — Thu, 28 Jan 2010 16:53:09 +0000

Fed chair Ben Bernanke is about to be confirmed by the US Senate to a second term.

The Fed says that prospects for the economy are looking up. Despite this, they plan to keep interest rates near zero.

Home Prices Increased In November

Luke Ford — Wed, 27 Jan 2010 17:01:33 +0000

The increase is so small that economists wonder about its significance.

With high unemployment, who can afford to buy a new home? Not many people — compared to past years — can handle mortgage payments now.

Home Sales Plunge In December

Luke Ford — Wed, 27 Jan 2010 16:58:10 +0000

The housing market remains weak despite trillions of dollars of government intervention.

How much lower would home values go if the government just left the market alone?

There are substantial tax incentives to buy homes.

Can The Housing Market Stand On Its Own?

Luke Ford — Thu, 07 Jan 2010 22:00:58 +0000

I doubt it can. It has been propped up by massive government intervention over the past couple of years. There was the income tax credit for purchase of a home and the Federal Reserve's $1.25 trillion purchasing of mortgage-backed bonds.

Housing Market, Economy Appear Frail

Luke Ford — Thu, 07 Jan 2010 21:56:47 +0000

Housing figures bounce up and down, but overall the past six months, the housing market has appeared steady.

That's largely because of massive government intervention to prop up home prices and reduce foreclosures.

Federal Reserve Conflicted Over Its Mortgage Intervention Program

Luke Ford — Thu, 07 Jan 2010 21:54:14 +0000

The Federal Reserve has a program in place to buy $1.25 trillion worth of mortgage-backed securities to keep mortgage interest rates low and revive the housing market.

This program has been credited with keeping the housing market steady over the past six months.

Mortgage Demand Low

Luke Ford — Thu, 07 Jan 2010 21:51:12 +0000

Despite near-record-low interest rates, the demand for mortgages in the U.S. is near a six-month low.

And with rates heading up, what next?

Can the housing market get worse?

Yes.

The Washington Post says:

Banks Warned To Prepare For Higher Interest Rates

Luke Ford — Thu, 07 Jan 2010 21:49:11 +0000

The Federal Reserve has kept interest rates artificially low for most of the past decade. That is what caused the housing boom and bust. Rising interest rates would lower home values and cause more foreclosures, which in turn lower. home values.

Federal Reserve Expects High Unemployment Indefinitely

Luke Ford — Thu, 07 Jan 2010 21:45:41 +0000

This is bad news for housing values. If people don't have jobs, they can't afford to pay for mortgages. This reduces demand for homes, which drives down prices, drives down housing values, ending people HELOC (home equity lines of credit), leading to more foreclosures, lower home prices, more foreclosures, defaults…

Mortgage Rates Drop

Luke Ford — Thu, 07 Jan 2010 21:42:13 +0000

This should pep up refinances.

Rates went down to a record low of 4.71% in early December. Since they've been heading steadily up. There are all sorts of reasons driving this increase in mortgage rates including huge government deficits, a weak dollar, surging commodity prices…

U.S. Government To Put $400 Billion Into Fannie Mae, Freddie Mac

Luke Ford — Tue, 05 Jan 2010 23:07:17 +0000

The government pushed Fannie and Freddie to buy $1.7 trillion worth of risky mortgage assets.

Priming the housing market pump?

Well, it flooded it. Why is the government subsidizing the buying of toxic mortgages?

Who Was To Fault For The Housing Bubble?

Luke Ford — Tue, 05 Jan 2010 23:02:35 +0000

Was it the Fed's easy money policy? That drove up commodity prices, real estate, gold and the like.

Was it lack of adequate regulation?

Until this bust, the mortgage market was reliable. Widows and orphans invested in its bonds.

It's Going To Be Hard To Forget 2009

Luke Ford — Tue, 05 Jan 2010 22:58:11 +0000

Sure, the Dow Jones average made a nice gain on the year.

Inflation stayed under control.

The rest of the economic news? Grim.

Banks believe they have a handle on things and don't seem eager to participate in the U.S. Treasury's trillion-dollar toxic asset program.

Mortgage Rates Above 5%

Luke Ford — Tue, 05 Jan 2010 22:53:46 +0000

I'm waiting for massive government borrowing to drive up interest rates.

Mortgage rates are now well above 5%.

This should choke off the refinance market and slow already low home sales.

Huffington Post Urges Readers To Boycott The Big Banks

Luke Ford — Tue, 05 Jan 2010 22:51:17 +0000

If banks make profits, they get to hold them.

If they make losses, then the U.S. taxpayer has to bail them out.

It went the same way with the U.S. savings & loans.

Commercial Real Estate Won't Cause Recession

Luke Ford — Tue, 05 Jan 2010 22:47:49 +0000

An economist says that even though commercial real estate is taking, it won't be a severe enough problem to cause the entire economy to return to recession.

Every time I read an article on commercial real estate, it keeps using the phrase "the next shoe to drop."

Who Wants To Buy Some Toxic Mortgages?

Luke Ford — Tue, 05 Jan 2010 22:43:28 +0000

Not TCW apparently. It is pulling out of this government program.

This can't be good news for the U.S. Treasury.

Report:

L.A. money manager TCW Group has dropped out of the Treasury’s program to buy toxic-mortgage assets from banks, and will return to investors the $500 million it raised for the program.

Home Sales Slide

Luke Ford — Tue, 05 Jan 2010 22:40:38 +0000

They were down 16% in November.

So much for Summer's tepid recovery.

No matter how many trillions of dollars of subsidies and low interest rates that the federal government throws at the declining housing market, it keeps going down.

GMAC Loses $5 Billion In Last Quarter

Luke Ford — Tue, 05 Jan 2010 22:36:15 +0000

We've invested over $50 billion in GM. That's $50 billion in taxpayer funds.

Do you think we'll ever get paid back?

No, I do not either.

Why are we subsidizing losers? Winners don't need subsidies.

The Haredi Housing Crisis

Luke Ford — Mon, 04 Jan 2010 04:02:16 +0000

Ultra-Orthodox Jews, the Haredim, try to live lives as separate from the world as possible so they can follow their religious commandments. But the real world keeps impinging on them.

Report:

Read more on The Haredi Housing Crisis…

The Housing Boom And Bust

Luke Ford — Fri, 01 Jan 2010 19:11:30 +0000

More here:

Yisroel Pensack: Ballot Measure to Overhaul California's Tax System Receives Clearance to Collect Voter Petition Signatures

Yisroel Pensack — Fri, 25 Dec 2009 03:34:37 +0000

The proponent of a constitutional amendment that would overhaul California's tax system by abolishing or reducing taxes on earned incomes, commerce and industry has received authorization from state officials to solicit signatures needed to place the measure on next November's statewide ballot.

How Capitalism Will Save Us

Luke Ford — Sun, 20 Dec 2009 03:06:42 +0000

On Dec. 14, 2009, Dennis Prager interviewed Steve Forbes about his new book, “How Capitalism Will Save Us.”

Steve: “When you look at economic disasters, it wasn’t some sudden failure of free people and free markets that caused the disasters, it was a government disaster that brought on the economic disaster. When free people and free markets with sensible rules of the road are allowed to operate, it a benign system that encourages trust because the only way you succeed in the free market is if you provide something that someone else wants.”

Tom Sowell Discusses His New Book – 'The Housing Boom and Bust'

Luke Ford — Sun, 20 Dec 2009 03:04:45 +0000

Dennis Prager talked to economist Tom Sowell, 79, on Dec. 15, 2009 about his new book “The Housing Boom and Bust”.

Dennis: “Who caused this bust?”

Tom: “Government. The people who were forced directly to make the bad loans under the Community Reinvestment Act (1977) and other legislation following it don’t constitute the majority of people who lend, that is true, but it is also true that about a decade ago, there was what was called a ‘voluntary agreement’ by those lenders not covered by the Community Reinvestment Act to in effect follow the same guidelines with the threat over them being that they would be prosecuted for discrimination if they didn’t. This prosecution…would be imposed if you were a lender who refused to lend on a house worth less than a $60,000 since low-income minorities are more likely to buy this kind of house and would be a ‘disparate impact.’”

Despite A Trillion Dollars In Mortgage Intervention, Refinances Hard To Come By

Luke Ford — Sun, 13 Dec 2009 06:06:46 +0000

Mortgage interest rates are at their lowest levels since the 1940s, but refinances are hard to come by. Regulators are pressuring banks to up their reserves, which means less money for loans.

Yisroel Pensack: Tax-Increment Financing for Transit Vetoed by Gov. Schwarzenegger

Yisroel Pensack — Wed, 09 Dec 2009 18:35:18 +0000

California Assembly Bill 338 (TIF for TOD) was vetoed by Gov. Arnold Schwarzenegger on Oct. 11.

"This bill would eliminate voter approval requirements for the creation of an Infrastructure Financing District (IFD) and the issuance of tax allocation bonds by an IFD," the governor said in his veto message.

The VA Streamline

Luke Ford — Tue, 08 Dec 2009 22:13:49 +0000

A guest post by Robert from VAloansguidelines.com:

With interest rates hovering near record levels, thousands of veterans and their families are taking advantage of refinancing options provided by the Veterans Administration. Even veterans who purchased their home with a conventional loan can capitalize on the VA's flexible and low-cost refinancing programs.

Low Acid Coffee

Luke Ford — Tue, 08 Dec 2009 17:09:45 +0000

I was a hardcore coffee drinker for years, someone who loved the great taste of a fresh brewed cup of gourmet java. Until my body said, Stop! The subsequent indigestion – call it coffee catharsis – was too great to bear . . . and I finally stopped drinking the stuff. Bear in mind I craved coffee because – surprise! – the really good beans taste great. And I had no intention of buying some medicated, diluted, mediocre "coffee flavored" substitute as a means of satisfying my longing for the real thing. No thanks. So coffee was like a former lover: something I remembered fondly, but could never have again. And then I discovered Puroast® Low Acid Coffee (www.puroast.com), the best thing to happen to coffee since, well, forever. This brand is gourmet – I repeat: this brand is gourmet coffee! – and the taste is incredible! Half the acid, all the taste . . . and the smoothest, tastiest Cup of Joe I've had in years. Best of all, I don't have any stomach upset when I drink Puroast®.

When Should You Stiff Your Lender?

Luke Ford — Tue, 01 Dec 2009 02:18:30 +0000

A large number of homeowners remain in home where they owe more on their mortgage than it is worth. People get attached to their homes and they don't want the hassle of a foreclosure, the significant hit it gives to one's credit score, and they don't want the bother of moving.

Mortgage Rates Are At Record Lows

Luke Ford — Tue, 01 Dec 2009 02:16:02 +0000

But can you qualify? That's the question. Do you have sterling credit scores? Do you have verifiable income? Do you have significant equity in your home (if you are looking to refinance)?

Federal Reserve Releases PSA About Wise Credit Card Use

Luke Ford — Tue, 01 Dec 2009 02:13:30 +0000

The Federal Reserve wants to improve its image. Currently, people think about it as an agency that facilitates bailouts of fat cats on Wall Street.

The Obama administration is more interventionist than the Bush administration. Even though the Fed is independent, I'm sure it knows who butters its bread.

Give The Gift Of Scene Seeker

Luke Ford — Wed, 25 Nov 2009 16:53:49 +0000

I have a new motto for holiday shopping this year: Fun but affordable. Forget expensive gifts that soon find their way to the remainder bin at some big box retailer, or presents that quickly fall out of style and gather dust. This time, I plan to go digital — with iPhone applications.

Qualifying For A Refinance

Luke Ford — Tue, 24 Nov 2009 02:28:01 +0000

Will you qualify? That's the first thing you should think about before going through the enormous paperwork necessary to get a refinance these days.

To get a refinance now you need sterling credit scores and abundant equity in your home. And even then a refinance is not assured.

Wall Street Applauds Home Sales

Luke Ford — Tue, 24 Nov 2009 02:25:40 +0000

Home sales were up 10.6% in October. They are up 33% since January. Wall Street is going up in part because of this.

I've heard lots of stories about bidding wars. I have a friend who spent six months looking for homes and bidding on them. Six months!

Renters Hurt By Rising Defaults

Luke Ford — Tue, 24 Nov 2009 01:32:49 +0000

As rental complexes go into foreclosure, renters are having a hard time getting necessary repairs.

Big surprise huh? Everyone is hurting in this recession, whether they are renter or home owners.

Mortgage Applications Drop Again

Luke Ford — Tue, 24 Nov 2009 01:29:25 +0000

Despite massive government intervention to subsidize the buying of homes with generous tax credits, applications for mortgages keep dropping. This now includes refinance applications.

All this comes while interest rates are at near record lows.

Housing Starts Down 10.6% Last Month

Luke Ford — Tue, 24 Nov 2009 00:39:50 +0000

Analysts were expecting an increase.

The building industry remains devastated. It is down about 30% from Oct. 2008.

Congress is subsidizing the purchase of new homes for a primary residence with generous tax credits.

More Prime Loans Going Into Foreclosure

Luke Ford — Tue, 24 Nov 2009 00:37:13 +0000

Our current economic downturn began with subprime loans. They were going into foreclosure at higher rates than expected, causing a sell-off that flowed through the entire housing market in the U.S. and then on to the world economy.

Foreclosures To Increase Into 2010

Luke Ford — Tue, 24 Nov 2009 00:34:40 +0000

We have Obama's mortgage modification plan. We have massive government intervention into the market to reduce foreclosures and to make the free market work less efficiently. Despite all this political and bureaucratic intervention, the free market is still ruthless and foreclosures are expected to rise into next year.

Mortgage Delinquencies, Foreclosures Hit Record High

Luke Ford — Tue, 24 Nov 2009 00:32:14 +0000

We're talking about one in seven homes have home loans that are past due. This is the highest rate since this statistic has been tracked.

And this is with massive government intervention into the mortgage market to reduce foreclosures.

FHA Going Broke

Luke Ford — Tue, 24 Nov 2009 00:29:42 +0000

I expect they'll ask for a massive government bailout. Politicians will keep using the FHA to subsidize homeowners risky decisions to buy more home than they can afford. I expect the FHA will keep guaranteeing mortgages with low down payments. I expect politicians will keep subsidizing the risky behavior that got us into this mess.

When To Give Up Your Home To The Bank

Luke Ford — Tue, 24 Nov 2009 00:26:26 +0000

Tens of thousands of people remain in homes that are underwater, that is, their mortgage is more than their home is worth. They're drowning. Yet they stay. Why?

It depends on how much people owe versus how much the home is worth.

San Francisco Bay Area Homes Inch Up In Value

Luke Ford — Tue, 24 Nov 2009 00:22:17 +0000

For the first time in two years, average home prices inched up in October.

I remember I was dating a girl in 2000. We met on a Jewish federation trip to Israel. She was working for Disney but quitting to take a job with Walker Digital in the San Francisco Bay Area.

Home Sales Rise 10% In September

Luke Ford — Mon, 23 Nov 2009 16:43:41 +0000

With a tax credit for new home purchases (as a primary residence) thought to be expiring, a lot more homes were purchased in September than expected.

The housing market has held steady for about four months. This is one of the first signs of a housing rebound.

Yisroel Pensack: Southern California Attorney Submits Ballot Measure to Overhaul State's Tax System

Yisroel Pensack — Mon, 23 Nov 2009 06:24:57 +0000

A Chula Vista attorney has submitted a proposal to the California Attorney General's office for a constitutional amendment that would overhaul the state's tax system via the voter initiative and referendum process.

Wall Street Finds Profits Again, Now by Reducing Mortgages

Yisroel Pensack — Sun, 22 Nov 2009 15:41:52 +0000

The New York Times reports:

…Wall Street has found a way to make money from the mortgage mess.

Investment funds are buying billions of dollars’ worth of home loans, discounted from the loans’ original value. Then, in what might seem an act of charity, the funds are helping homeowners by reducing the size of the loans.

Not Much Sense In Paying Off Early A Low-Rate Mortgage

Luke Ford — Sun, 15 Nov 2009 22:17:11 +0000

It's better to use that money to develop a nest egg for emergencies.

Mortgage debt is also tax deductible.

The Los Angeles Times says:

But you need to consider more than potential investment returns when deciding to prepay a mortgage. You have to look at your entire financial picture and make sure all your bases are covered before you pay off a low-rate, potentially tax-deductible debt.

Home-Account.com: A review of a new Web site for comparing mortgages

Luke Ford — Sun, 15 Nov 2009 22:14:16 +0000

Shopping for a mortgage online sounds like a great idea. Online shopping has brought down prices through increased competition across a broad swathe of industries.

Why should it not work for mortgages?

One In Five Homeowners Helped By Obama Mortgage Modification Scheme

Luke Ford — Sun, 15 Nov 2009 22:11:01 +0000

Lenders, politicians and homeowners are eager to avoid a flood of new foreclosures which would drive down home prices, leading to reduced equity and more foreclosures. It's a vicious cycle.

After a slow start, Obama's mortgage modification scheme has helped one in five of eligible homeowners.

Mortgage Modification Help

Luke Ford — Sat, 14 Nov 2009 00:28:52 +0000

Banks such as Bank of America are hiring staff to deal with the flood of requests to modify mortgages.

Politicians love to point fingers at the banks, saying they are not doing enough here, but why should banks modify mortgages? What about the sanctity of contracts? If people signed up to pay a certain amount per month, why should not banks hold them accountable to that deal?

Alabama Thrift Stops Mortgage Lending

Luke Ford — Sat, 14 Nov 2009 00:26:30 +0000

It got stung by its losses and realized it could no longer manage the mortgage lending disaster.

The AP reports:

The second-largest thrift in Alabama is suspending mortgage lending amid hefty third-quarter losses as real-estate values moved lower and foreclosure rates turned higher.

Inflation, Interest Rates Expected To Stay Low Into 2010

Luke Ford — Sat, 14 Nov 2009 00:22:09 +0000

The Federal Reserve is playing a dangerous game. The dollar is record lows. Gold is at record highs. Oil is at $80 a barrel. The economy is underperforming and inflation remains low.

Realtors Expect Home Prices To Rise 4% In 2010

Luke Ford — Sat, 14 Nov 2009 00:19:33 +0000

This sounds like a triumph of hope over experience.

I remember the chapter in the book Freakonomics about how realtors take much longer to sell their own homes, waiting for the best offers, than they do to sell your home. Why? Because of the incentives built into the realtor-client relationship.

Banks Limited On Overdraft Fees

Luke Ford — Sat, 14 Nov 2009 00:11:07 +0000

They can't charge you unless you volunteer in advance.

That's the upshot from the new Federal Reserve regulations.

"Regulation" is in in Washington because of the perception that the unfettered free market caused this housing mess.