Office of Federal Housing Enterprise Issues First-Ever Mortgage Metrics Report

Real Information, Not Some Idiot's Guess

The link below takes you to a 30-page page official government report.

It's the first time this report has been issued by the government.

It is jam-packed with real numbers and real information.

It's long, but easy to read. And has easy to understand charts and graphs, presented in a clean format.

If you read it, you will have more real information on the mortgage market and foreclosures than 99.9999% of the people in the country.

And you won't have to rely on the erroneous reports posted elsewhere by real estate or mortgage brokers who have an axe to grind when it comes to these matters.

Link to FHFA Mortgage Metrics Report:
http://www.ofheo.gov/media/metricsreports/MetricsReport092408.pdf

Enjoy.

Birth of an American Fuhrer: The Paulson Bailout Act

Absolute Power....

The following is the text of the proposed legislation which I refer to as the Paulson Bailout Act.

I have highlighted some passages.The Act speaks to the powers granted to the Secretary of the Treasury. But it is best understood as granting these powers to the President of the United States, as the Secretary is appointed by and serves at the pleasure of the President.

The Founders would shit in their pants if they ever saw something like this. It is nothing less than handing dictatorial, new powers to the Executive Branch without regard to the "checks and balances" written into the Constitution.

If this has already been published here, sorry for the duplication.

________________________________________________________

LEGISLATIVE PROPOSAL FOR TREASURY AUTHORITY

TO PURCHASE MORTGAGE-RELATED ASSETS

Section 1. Short Title.

This Act may be cited as __________________.

Sec. 2. Purchases of Mortgage-Related Assets.

(a) Authority to Purchase.--The Secretary is authorized to purchase, and to make and fund commitments to purchase, on such terms and conditions as determined by the Secretary, mortgage-related assets from any financial institution having its headquarters in the United States.

(b) Necessary Actions.--The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this Act, including, without limitation:

(1) appointing such employees as may be required to carry out the authorities in this Act and defining their duties;

(2) entering into contracts, including contracts for services authorized by section 3109 of title 5, United States Code, without regard to any other provision of law regarding public contracts;

(3) designating financial institutions as financial agents of the Government, and they shall perform all such reasonable duties related to this Act as financial agents of the Government as may be required of them;

(4) establishing vehicles that are authorized, subject to supervision by the Secretary, to purchase mortgage-related assets and issue obligations; and

(5) issuing such regulations and other guidance as may be necessary or appropriate to define terms or carry out the authorities of this Act.

Sec. 3. Considerations.

In exercising the authorities granted in this Act, the Secretary shall take into consideration means for--

(1) providing stability or preventing disruption to the financial markets or banking system; and

(2) protecting the taxpayer.

Sec. 4. Reports to Congress.

Within three months of the first exercise of the authority granted in section 2(a), and semiannually thereafter, the Secretary shall report to the Committees on the Budget, Financial Services, and Ways and Means of the House of Representatives and the Committees on the Budget, Finance, and Banking, Housing, and Urban Affairs of the Senate with respect to the authorities exercised under this Act and the considerations required by section 3.

Sec. 5. Rights; Management; Sale of Mortgage-Related Assets.

(a) Exercise of Rights.--The Secretary may, at any time, exercise any rights received in connection with mortgage-related assets purchased under this Act.

(b) Management of Mortgage-Related Assets.--The Secretary shall have authority to manage mortgage-related assets purchased under this Act, including revenues and portfolio risks therefrom.

(c) Sale of Mortgage-Related Assets.--The Secretary may, at any time, upon terms and conditions and at prices determined by the Secretary, sell, or enter into securities loans, repurchase transactions or other financial transactions in regard to, any mortgage-related asset purchased under this Act.

(d) Application of Sunset to Mortgage-Related Assets.--The authority of the Secretary to hold any mortgage-related asset purchased under this Act before the termination date in section 9, or to purchase or fund the purchase of a mortgage-related asset under a commitment entered into before the termination date in section 9, is not subject to the provisions of section 9.

Sec. 6. Maximum Amount of Authorized Purchases.

The Secretary’s authority to purchase mortgage-related assets under this Act shall be limited to $700,000,000,000 outstanding at any one time

Sec. 7. Funding.

For the purpose of the authorities granted in this Act, and for the costs of administering those authorities, the Secretary may use the proceeds of the sale of any securities issued under chapter 31 of title 31, United States Code, and the purposes for which securities may be issued under chapter 31 of title 31, United States Code, are extended to include actions authorized by this Act, including the payment of administrative expenses. Any funds expended for actions authorized by this Act, including the payment of administrative expenses, shall be deemed appropriated at the time of such expenditure.

Sec. 8. Review.

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

Sec. 9. Termination of Authority.

The authorities under this Act, with the exception of authorities granted in sections 2(b)(5), 5 and 7, shall terminate two years from the date of enactment of this Act.

Sec. 10. Increase in Statutory Limit on the Public Debt.

Subsection (b) of section 3101 of title 31, United States Code, is amended by striking out the dollar limitation contained in such subsection and inserting in lieu thereof $11,315,000,000,000.

Sec. 11. Credit Reform.

The costs of purchases of mortgage-related assets made under section 2(a) of this Act shall be determined as provided under the Federal Credit Reform Act of 1990, as applicable.

Sec. 12. Definitions.

For purposes of this section, the following definitions shall apply:

(1) Mortgage-Related Assets.--The term “mortgage-related assets” means residential or commercial mortgages and any securities, obligations, or other instruments that are based on or related to such mortgages, that in each case was originated or issued on or before September 17, 2008.

(2) Secretary.--The term “Secretary” means the Secretary of the Treasury.

(3) United States.--The term “United States” means the States, territories, and possessions of the United States and the District of Columbia.

Capitalism Gets Its Biggest Overhaul Since The Great Depression, And Republicans Are Going To Do It

An article in the (London) Telegraph by its financial editor indicated that the Bush Administration, led by Treasury Secretary Paulson, and the Federal Reserve Bank, led by Chairman Bernanke may soon propose the nationalization of the United States banking system.

Huh? Yep, those free market in the pinstripe suits and power ties are certainly thinking the unthinkable, and very well may act on their thoughts.

THAT'S HOW SERIOUS THE CURRENT FINANCIAL CRISIS IS!

Talk is that the model being considered for emulation is Norway's, when that and other Scandinavian countries found themselves in a financial quagmire produced by private enterprise in the early 1990's. Reportedly, the actions then taken proved efficacious, in contrast to the drip-by-drip approach taken by the Japanese in the 1990's when their economy imploded. That approach still has not brought Japan back to where it was economically before the implosion.

Already here in the US, the Fed has opened its borrowing window to Wall St. "Investment Banking" firms for the first time since the Great Depression, at least; and, perhaps, for the first time ever. The Wall St. firms have not hesitated to that counter and borrow.

The Administration has released initial drafts of new regulatory powers that they propose the Federal Reserve System be given regarding Wall St. This would have been unimaginable even 3 months ago.

In short, while the mass media covers every detail of Hillary's ensemble of the day and Barack's reason for leaving "Barry" in the dust and McCain's confusion regarding four-letter words beginning with an "I" and others starting with the letter "S," the entire centerpiece of our capitalist economic system is about to undergo its most significant--and traumatic--overhaul in 80 years, all with less media coverage than Britney gets if she puts on or takes off a pair of dirty panties.

Finally, the Norway model mentioned earlier ensured that shareholders of the nationalized organizations came away with nothing, zilch, zero, unlike the Bear Stearns bailout,where those responsible still walked off with their pockets bulging, thought the bulge was much smaller than they expected.

San Diego Real Estate Foreclosures...What I Do for a Living

Today I submitted an offer for a client on a one bedroom/one bath condo here in San Diego.

The condo had been purchased in 2006 for $237,000.

It is in average condition in an average condition condo complex of 70 units.

It had been foreclosed on by the original lender, meaning it is owned by that lender.

The list price of this condo--which I personally inspected--was now $89,500.

I am not at liberty to disclose what my client offered, but this specific example is a fair representation of the values currently available in San Diego for single family houses, condos and multiple unit properties up to four units.

The losses taken by others, including lenders, are producing absolutely incredible opportunities for those able to buy while this highly desirable market (San Diego) is flat on its back.

My telephone # is: 619.743.1424.

I would be happy to chat with parties who have CASH and who can move FAST when presented with opportunities. Claims made will need substantiation before any information beyond the little snippet in this post will be divulged by me. I have no intention of giving away for free information that has taken me years & years to accumulate---and I can identify a BS artist in a New York minute.

Those who have BS or some ridiculous ideas from a real estate seminar will be dismissed out-of-hand.

My Response to (Another) Salon.com Article

http://www.salon.com/tech/htww/?last_story=/tech/htww/2008/03/27/the_end_of_laissez_faire/


Misunderstanding the Economics Debate


I agree with some of the earlier posters that not only is Keynes always already there when any discussion of macro-economics takes place, we have institutionalized his basic theories into our economic system, so whichever party may dominate in a particular time period, Keynesian economics is what they oversee, whether the are consciously aware of it or not.


Capitalism have proven to be the most effective economic model because it is so good at co-opting the best ideas of competing economic ideologies and subsuming them under the general rubric we still call capitalism.


There is no serious debate any longer between pure laissez- faire capitalism versus economic-totalitarian communism. The debate now, similar to the gun control issue, is simply: What is the optimum amount of regulation?


The latest banking/financial fiasco gives those favoring more regulation of that (and other) industries a nice, fresh supply of ammunition. The esoterica which the banking, lending and "investment banking" sectors (Wall Street) dreamed up to fuel the housing bubble were nothing short of brilliant when things were going well; and being "new," many of the activities were subject to minimal regulation and oversight.


When the worm turned, it was not only those who most benefited from "derivatives"--Wall St. investment banks--who would have to pay the price for the collapse of the very sophisticated pyramid scheme: it was--and is!--society as a whole. The damage, if not contained, will spill over the walls of The Street and impact citizens (in many countries) who could arguably be characterized as innocent bystanders.


The conclusion: There was an inadequate oversight/regulatory apparatus in place to protect the public from over-zealousness in one particular industry, an industry of such importance that the public weal has been put in jeopardy.


No serious person argues for ZERO gun control. And so too, no serious person argues for or believes in pure laissez- faire economics anymore.


It's about defining that optimum in regulation of guns and the economy that people disagree about.

Treasury Secretary Opens His Eyes

http://www.huffingtonpost.com/2008/03/26/paulson-says-new-financia_n_93527.html


This article is must reading for those interested in the current banking/financial world crisis, a topic I have blogged on here.

On a Personal Note: The San Diego Housing Market

I am involved in the San Diego real estate market, particularly in the housing sector.

It has been in a Depression for 2 years, with both prices and number of transactions taking radical hits.

But I have observed and am participating in what appears to be a bottoming process taking place in the market this year.

Buyers are suddenly crawling out from the caves in which they've hidden for the last 24 months as price levels have dropped to a point where "deals" are out there to be had by shrewd people. The availability of bank-owned, foreclosed properties has swollen; and this swollen inventory is priced to sell. Also, more homeowners facing foreclosure are listing their homes for sale at very attractive prices in an attempt to avoid the stigma of a foreclosure on their credit record.

This dynamic hurts "regular" sellers, but produces extraordinary opportunities for intelligent buyers to pick up properties for a fraction of their "bubble" highs.

If you read other posts on my Blog, I hope they convey that I am an honest guy giving his best opinions on various topics.

This post falls within my own guidelines of truthfulness---but it is only my opinion, and sometimes I'm just flat-out wrong.

Bear, Stearns and Future Ticking Timebombs

One of Wall Street's most aggressive--and admired--firms got their booties saved today by actions taken by the Federal Reserve System acting in conjunction with JP Morgan Chase Bank.

On the Street, once the other firms lose confidence in a firm's ability to perform on its trading commitments, most of which are made by two people from two firms talking on the telephone--no written contracts--the suspect firm is doomed. Who's going to make deals with a firm they may be out of business before the trade even "settles?" Nobody.

The Street lost confidence in Bear, Stearns (BS) and other firms would no longer trade with them.

BS is BIGTIME, the second largest player in mortgage-backed securities, next to Lehman Brothers. BS could not be allowed to wither up and die, not without a fight.

So the Fed used its most powerful and rarely employed tool--which I won't describe in detail here--to give the boys over at Bear at least a 28-day extension of their existence.

Of course, the poor slob who is about to have his house taken away by foreclosure gets no such individual attention. He either pays-up or gets the boot. He can fail; Bear, Stearns can't.

Yes, the scenario reeks of unfairness. Yet it is justifiable in a macro-economic sense.

The real problems are that the BS-bailout is unlikely to save the firm from extinction, merely to delay it; and that the Fed has found itself in a position of having insufficient data to accurately anticipate what is yet to come from the Depression in the Housing Market.

This Depression has been apparent to those in the real estate biz for quite some time. Yet the Fed could not seem to even see, yet alone connect, the dots that inter-relate the housing market and the explosion in shaky mortgage-backed securities to the rest of the economy.

The Fed believed to problems could be "contained" within the housing market itself, much like Saddam's ambitions to rule the entire Middle East could. The Fed was wrong. The Fed slept as the housing market collapse extended its tentacles to other sectors of the economy.

Now we have Time bombs waiting to explode all over the economy, particularly in the Banking/Finance sector. BS is small change compared to what lies ahead.