A Frequent Target

Everyone here knows that the NAR is persona non-grata on this blog. I've regularly railed against them for their misuse of statistics. This next graph is no change from that modus operandiYou can clearly see how the NAR manufacturers some cheer.

Now we come to find that the NAR is lobbying against objective home appraisals. Business Week is running a piece that talks about their lobbying points. That’s fine, anyone and everyone is entitled to employ lobbyists to advance their cause in Washington. Its one of the great things about this country. However, don't stand there with a shocked look on your face and tell me that your innocent when I blame you for the current mess along with fools who signed for loans, Wall Street, 2 Presidents and a Congress who advanced a home ownership agenda that was at best faulty.

Here is a novel idea ... How about just letting values tank, find a true bottom and get on with the business of living life the way Americans have for decades, prior to the late 90s beginning of the real estate boom that has led us to ruin. It’s called taking your medicine.

Obama Sticks it to Renters ... Again

President Obama is going to let Fannie Mae and Freddie Mac refinance loans that are worth up to 125% of the collateral's value in an attempt to stem the tide of foreclosures according to an article on Bloomberg.

Other than sticking it to the third of the population who rents their homes in an effort to bail out the 10% who are over extended, President Obama tosses empathy under the bus for renters to save the fools who willingly over extended themselves.

Can anyone explain the logic in that? Anybody ... Bueller ... Bueller? Has anyone seen Ferris Bueller?

An Ounce of Common Courtsey Please?

So, I sent my Senator an email, expressing my rage at one of his potential votes. I used what he called a 3rd party website to send the email and this is the response that I got.

Unfortunately, due to the fact that your message was sent through an outside third party website, I will not be sending a detailed response. If you would like to receive a response, I would encourage you to visit my website at http://webb.senate.gov. By visiting my website directly, Virginians can request regular updates about my activities and positions on matters that are important to Virginia and our nation.

So, I went to his website, explained my position on the subject in a short email that used no big words and I closed by stating that I had emailed him previously and that I would be expecting a detailed and hopefully personal response. This is what I got back from Senator Webb.

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

If this looks like nothing, your seeing exactly what I got from Senator Webb and his staff. Nothing, which is roughly the odds that I will be voting for him when his job is up for reelection. As a pragmatic voter, I cross party lines voting for him in the last election, but I will not be making that mistake again.

Essentially what the man said to me was this ... I don't like getting spammed with messages that I don't like, so F you tax paying constituent. I don't like your message or view, but rather than just say that, I'll make your message appear unimportant because of the means of delivery. So, in response, I gave him what he asked for, a concise message submitted in a one off format. His response was nonexistent, because he couldn't find a logical or intelligent way to rebut my message. Thanks Senator Webb, I really enjoy paying you and your staff to not serve me. I look forward to voting you back to having to work for a living.

Terrific Michael Lewis Video

I'm Just Saying ...

Wasn't it George HW Bush who said, "read my lips, no new taxes? Wasn't it Barack Obama who said he wasn't going to tax health care benifits during his campaign? Look at how the ball is bouncing now. The senior George Bush was promptly voted out of office. I wonder how much coverage this comparison will get from the mainstream media. I am guessing little to none.

Option ARMs, Coming Home To Roost

As my regular readers know, this blogger has a big ego when it comes to big fat I told you so's. Mind you, I don’t think its funny for someone to end up homeless, but having to rent your home is completely different from being homeless.

Bloomberg is running a piece that says the option ARMs that are going to be recasting next year though late summer of 2011 will be a threat to the current housing recovery. Now, I dispute that we're in any kind of recovery, but I guess that’s semantics. Bottom line, I have been beating this drum since March of last year, that there would be no true recovery until at least 2012, once we're done with all the recasts. So, throw another log on the fire, we'll be torching another $750 billion for the pay option ARMs. Also, keep in mind, that $750 billion number does not include the pending Alt-A carnage.

Pay option ARMs are especially insidious, since the monthly payments started so low. Disgustingly low if you ask me. The article cites two cases, where payments started under $100 and will jump to over $3500. Once again, the ignorant consumer gets painted in a favorable light, but its high time the ignorant or foolish consumer get called out for their role in the current debacle. If people would have looked at these loan products as fools gold, instead of some get rich quick scheme, we might not be nearly the trouble we are in. We all learned at an early age that if something is too good to be true, it probably is. Home loans are no different, especially since its everyone's biggest expense and everything is handed to the loan recipient in black and white.

The phrase of the year for 2010 will be negative amortization.

Negative amortization, occurs whenever the loan payment for any period is less than the interest charged over that period so that the outstanding balance of the loan increases. As an amortization method the shorted amount (difference between interest and repayment) is then added to the total amount owed to the lender. Such a practice would have to be agreed upon before shorting the payment so as to avoid default on payment.

I just wanted to add this little nugget of info, because I so, despise the NAR and the cost added, faux innocent acting, constituency they represent. The NAR was well aware of the likely cave ins with option ARMs and Alt-A when they started running commercials this spring saying that "now" was a great time to buy. I find that highly unethical and self serving, but what else do we expect from an organization that pulls the strings on Lawrence Yun.

Need Affordable Housing? Call Your Senator

If you’re like me, you chose to sit out the tail end of the real estate boom while fools rushed in. Now today, as the fools wait for their bad loans to come home to roost, our elected leadership continues to meddle in markets which they are in part responsible for fouling up. Rep. Maxine Waters (D-CA) and Rep. Elijah Cummings (D-MD) spent hours on the phone trying to help constituents renegotiate the mortgages which they signed for and now can't afford.

I'll sum that for you, like this ... As tax payers, your paying the salary of these Representatives so that they can try and enact bills like the one sponsored by Illinois Senator Dick Durban that would continue to artificially prop up home prices that use your tax dollars against you, while at the same time, they pretend to be mother hen to undeserving home owners on your dime.

If your an aspiring home owner, these types of actions and legislation only prolongs the time in which you can achieve your American dream. If you’re a responsible home owner who would like to sell a home at a reasonable profit, this meddling in the markets will only put off the time in which you can sell your home at decent and historically typical profit.

So, I urge you to use the links on your right to find the contact information for your Senators and Representative. Call them, write them and email them to tell them that you want them to stop using your tax dollars against you. Tell them to stop meddling in markets which are in dire need of a natural correction, not more artificial fixes. Artificial fixes got us in this mess in the first place. If you want to tell them why they need to stop meddling in the real estate markets, direct them here, read my past posts, they explain the rationale for not tinkering with the real estate markets very plainly. I even used a lot of pictures so that they will be able to understand why proping up home prices at even the presently depressed levels is still unsustainable.