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Housing Bubble Interesting Links (March 29, 2006)

The Rocky Mountain News: Foreclosure Shock: Rising interest rates, a glut of unsold homes on the market and falling home prices in some submarkets drove up Denver-area real estate foreclosures by more than 30 percent in the first quarter of this year compared with the first three months of 2005. Even worse, a bigger glut of speculators waiting to list their unoccupied homes is waiting around the corner.

Charlotte Observer: Lenders: No need for new laws: They acknowledged that some of their colleagues have inflated the cost of loans or the price of homes, or imposed unnecessary fees, helping push people into foreclosure. The banking industry took advantage of the power they have in their cartel: cheap and easy money and rewards if they continue to find people to borrow it no matter the risk. The laws are already full of loopholes, new laws would only make it harder for investors (foreign and domestic) to protect their investments.

Sacramento Business Journal: Mortgage defaults to rise as housing market slows: ForeclosureS.com President Alexis McGee said several one-time fast-rising housing markets are slowing down, especially in the West, and the residential real estate industry is returning to normal. Returning to normal would actually mean that people would buy homes with 20% down, extend their credit term to 25 years or less, and not spend more than 20% of their gross income on their mortgage. It would also mean realistic interest rates of 9-11%.

The Enquirer: Lending clampdown gets last-minute work: Ohio had more than 3.2 percent of its mortgages in foreclosure at the end of 2005 - higher than any other state, according to the Mortgage Bankers Association. The national average was just under 1 percent. As if more laws will really fix the problem of an oversupply of money at ridiculously low interest rates.

The Desert Sun: Mortgage payments coming a little late: In the Coachella Valley, most experts agree there is no imminent danger of a mortgage foreclosure crisis, although notices of default - indicating overdue payments - have recently been on the increase. The reason why we’re seeing more defaults but fewer foreclosures is that banks have access to more funds themselves (from the Fed and foreign investors) giving them more options to “help out” those in trouble — interest only loans, longer term refinances, and some are even starting to wait 6 months before sending foreclosure notices. 6 months of no payments isn’t what I consider default, it is what I consider squatting.

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