Irvine Housing Blog

How Hedge Funds Could Crush the Banking Cartel and Keep Original Buyers in Foreclosures

Loan modifications are no longer a borrower's only option to stay in their home. Hedge funds can buy up properties, rent it to the former owners, and offer to resell it back to them when they qualify for a loan. The hedge funds win, the buyers win, and the lenders lose. Perfect.    

Irvine Home Address ... 7 ROANNE Cir Irvine, CA 92604
Resale Home Price ...... $750,000

Total Delinquent Loans 21.3 Percent Higher Than Last Year; Foreclosure Rates At Record High

 Delinquencies and foreclosures and inventory are all rising. But the current market is controlled by the banking cartel who is hoping to limit available inventory to force you to over pay for a home.

Irvine Home Address ... 133 DANBROOK Irvine, CA 92603
Resale Home Price ...... Listed at: $320,000

Proposed Subsidies to Housing Market Prices Benefit Only Bankers

Many alternatives to large numbers of foreclosures are being proposed by pundits in Washington. Their only common denominator is benefit to the banks. 

Irvine Home Address ... 30 NIGHTHAWK Irvine, CA 92604
Resale Home Price ...... $720,000

Fannie Mae Encourages Strategic Default by Reducing Punishment Time for New Loan

Fannie Mae is encouraging strategic default in an attempt to qualify more borrowers for future loans. One more example of moral hazard. 

Irvine Home Address ... 36 PARKCREST Irvine, CA 92620
Resale Home Price ...... $915,000

Bubble Market Psychology - Part 3

Bailouts and False Hopes

One of the more interesting phenomena observed during the bubble was the perpetuation of denial with rumors of homeowner bailouts. Many homeowners held out hope that if they could just keep current on their mortgage long enough, the government would come to their rescue in the form of a mandated bailout program. Part of this fantasy was not just that people could keep their homes, but that they could keep living their lifestyle as they did during the bubble. What few seemed to realize was any government bailout program would be designed to benefit the lenders by keeping borrowers in a perpetual state of indentured servitude. With all their money going toward debt service payments, little was going to be left over for living a life.

All of these plans had benefits and drawbacks. One of the first problems was to clearly define who should be “bailed out.” The thought of bailing out speculators was not palatable to anyone except perhaps the speculators themselves, but with regular families behaving like speculators, separating the wheat from the chaff was not an easy task. If a family exaggerated their income to obtain more house than they could afford in hopes of capturing appreciation, did they deserve a bailout? The credit crisis that popped the Great Housing Bubble was one of solvency, and there was no way to effectively restructure payments when a borrower could not afford to pay the interest on the debt, and this was a very common circumstance. None of the bailout programs did much for those with stated-income (liar) loans, negative amortization loans, and others who are unable to make the payments, and since this was a significant portion of the housing inventory, none of these plans had any real hope of stopping the fall of prices in the housing market.

IHB News 4-24-2010

Is eight your lucky number? The seller of today's featured property certainly hopes so. 

Irvine Home Address ... 89 CANYON Crk Irvine, CA 92603
Resale Home Price ...... $8,888,888

The Ethics and Morality of Borrowing and Lending During the Great Housing Bubble

Borrowers and lenders behaved badly during the bubble. Some were unethical and some were immoral. Today we examine these distinctions to see what we can learn from their mistakes. 

Irvine Home Address ... 14522 MANGO Ave Irvine, CA 92606
Resale Home Price ...... $649,000