Why Was the Housing-Price Collapse So Painful? (And Why Is It Still?)

Foresight about the disaster to come was not the primary reason this year’s Nobel Prize in economics went to Robert Shiller (jointly with Eugene Fama and Lars Hansen). But Professor Shiller’s early claim that a housing-price bubble was full on, and his prediction that trouble was a-comin’, is arguably the primary source of his claim to fame […]

UK’s ‘Help to Buy’ Scheme Will Help Lift Housing Transactions

Many moons ago I suggested, drawing on Professor Nick Crafts’ research on the 1930s, that housebuilding was an essential route out of Britain’s post-crisis torpor. Some disagreed, suggesting that housebuilding was somehow wasted spending, and only “productive” investment, in plant and machinery and the like, is worthwhile. The answer is that you need both, and […]

Why the US Mortgage Market Will Remain Heavily Dependent on Government Support

In Senate Banking Committee testimony today, Georgetown law professor Adam Levitin explains why the private label (non-government guaranteed) mortgage market is a textbook case of what Nobel prize winning economist George Akerloff called a “market for lemons”. While that conclusion is not news to those who’ve been following the financial crisis and its aftermath, Levitin reaches a […]

The Incredible Con the Banksters Pulled on the FBI

This is the second in my series of articles based on the FBI’s most (2010) “Mortgage Fraud Report.” In my first column I began the explanation of how many analytical conclusions one can draw from a close reading of what is left out of the FBI report. In particular, I emphasized the death of criminal referrals by […]

US Mortgage Lending is Tumbling

Yves here. We had predicted that the sharp rise in mortgage rates precipitated by the Fed’s taper talk would put a damper on the housing “recovery” and could even send it into reverse if rates continued to increase. They’ve in fact fallen over the past few weeks but are still markedly higher than in the spring. The […]

Really? One Basis Point?

Bloomberg has a story with an ominous opening paragraph: Bank of Japan Governor Haruhiko Kuroda’s stimulus policies are backfiring in the housing market, where mortgage rates are rising even as the central bank floods the financial system with cash. Lions, tigers, and bears, oh my!  The next paragraph: Fixed 35-year home-loan costs rose to 1.81 percent this month, the first increase since […]

Understanding the Housing Bubble

A key reason that I was insufficiently worried in 2005 about bad mortgage loans being made at the time was that the people who funded the loans– most importantly, the packagers and buyers of private-label mortgage-backed securities– had more motivation and resources to evaluate the risks accurately than I did. That they made an incredibly […]

When Banksters Don’t Like the Law, Their Hired Hands in the Legislature Change It

 In an excellent piece, Lawyer Roy Oppenheim warns that the Florida Legislature is moving to legalize bank theft of homes. See his piece here.  As I’ve been writing for years, foreclosure is theft in most cases. You see, in their hurry to package mortgages into securities, the banksters virtually never followed the law. I won’t […]

Which Aspect of the FDIC’s Litigation Failures Is the Most Embarrassing and Damaging?

On March 11, 2013 the Los Angeles Times published a revealing article by E. Scott Reckard entitled:  “In major policy shift, scores of FDIC settlements go unannounced.” The article’s summary statement captures the theme nicely.  “Since the mortgage meltdown, the FDIC has opted to settle cases while helping banks avoid bad press, rather than trumpeting punitive actions as […]

Quelle Surprise! Having No Idea What Really Happened in Foreclosure Reviews, OCC Parrots ‘Independent’ Consultant Howlers

I was prepared to give the benefit of the doubt to incoming Comptroller of the Currency Thomas Curry. He did get rid of longstanding bank crony, the OCC chief counsel Julie Williams, and in an unceremonious manner meant to send a message to the rest of the organization. He’s supposedly trying to change the culture, […]

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