Since there are still no-downpayment loans being handed out, why don’t I get the biggest such loan that I can, never pay anything, and live free for a year until I’m finally evicted? Seems like a great way to save a year’s rent! And since CA is a non-recourse state, the lender could not take any of [...]

Since there are still no-downpayment loans being handed out, why don’t I get the biggest such loan that I can, never pay anything, and live free for a year until I’m finally evicted? Seems like a great way to save a year’s rent! And since CA is a non-recourse state, the lender could not take any of [...]

Psychological insight into the housing crash from Peter C: Denial: Example - “There is no bubble!” Anger: Example - “The media is making all this up!” Bargaining: Example - “OK there may be a bubble bursting in the East Bay but not in San Francisco or on the penninsula!” Depression: Example - “I’m ruined! I’m no longer [...]

Patrick: As you know, George W. Bush signed a bill into law last year which I call the “Deadbeat Specuvestor’s Tax Relief Act of 2007.” It makes forgiven mortgage debt not count as income. So if a bank forgives some houseflipper who paid $500,000 for a house that the bank can only sell for $200,000, he [...]

From http://seekingalpha.com/article/88725-is-the-u-s-banking-system-safe “Wells Fargo decided to extend its charge-off policy in the 2nd quarter from 120 days to 180 days, in an effort to give troubled borrowers more time to reach a loan workout. A skeptical person might think that they did not change this policy out of the goodness of their hearts. Maybe, just maybe, they [...]

Dear Patrick, After many years of saving and prudence, I have helped my parents find and purchase a home in the Central California town of Los Banos. Arguably, we could have waited a bit longer. After much wrangling they found a house at a very reasonable price and can now live in it comfortably, having paid for it with the [...]

Dear Patrick, After many years of saving and prudence, I have helped my parents find and purchase a home in the Central California town of Los Banos. Arguably, we could have waited a bit longer. After much wrangling they found a house at a very reasonable price and can now live in it comfortably, having paid for it with the [...]

From a reader: Patrick, Knowing that the RE market is declining, a friend of mine recently placed a bid on a condo in San Francisco that was much lower than the asking price. Then my friend was inadvertently copied on an email that her realtor’s parter sent to her realtor. I don’t have a copy of the [...]

Shit hitting the fan Splattering Fannie, Freddie Run for cover now What will happen? Possibilities: Fannie and Freddie allowed to fail, mortgage lending stops. Fannie and Freddie rescued by taxpayers, doubling tax burden on everyone. Fed destroys dollar yet faster, resulting in skyrocketing inflation, then fascist takeover, as in Weimar Germany. I think number one is the best option. Patrick

The relationships between inflation, interest rates, foreclosures, the Fed, banks, and the general economy can be explained better in terms of hours of human labor than it can in terms of dollars. A mortgage is a promise to work much more than it is a promise to pay money. A mortgage is technically written in terms [...]