Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-59675 Sun, 01 May 2016 18:19:48 GMT The Real Story Behind The True Magnitude of The New Home Sales Collapse http://implode-explode.com/viewnews/2016-05-01_TheRealStoryBehindTheTrueMagnitudeofTheNewHomeSalesCollapse.html iehi-feed-59674 Sun, 01 May 2016 18:14:58 GMT UK housing crisis: four in 10 renters fear they will never own a home http://implode-explode.com/viewnews/2016-05-01_UKhousingcrisisfourin10rentersfeartheywillneverownahome.html David Cameron's pledge to build a property-owning democracy is called into serious question by a landmark survey revealing that almost four in 10 of those who do not own a home believe they will never be able to do so.

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The findings cast doubt on the prime minister's claim before last year's general election that Tory housing policies would transform "generation rent" into "generation buy". In April last year, as he launched plans to force local authorities to sell valuable properties to fund new "affordable homes", Cameron said: "The dream of a property-owning democracy is alive and well and we will help you fulfil it."

The poll -- which found that 58% of people want more, not less, social housing as a way to ease the crisis -- comes as the government's highly controversial housing and planning bill returns to the Commons on Tuesday.

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iehi-feed-59643 Tue, 26 Apr 2016 19:17:39 GMT 30-Year Fixed Mortgage At Root of Housing Instability; Should Be Nixed - Pinto http://implode-explode.com/viewnews/2016-04-26_30YearFixedMortgageAtRootofHousingInstabilityShouldBeNixedPinto.html The 30-year fixed rate mortgage should be retired -- for good. Despite continued proof that it fails to build up wealth for the most disadvantaged Americans, and that mortgage debt should not be a burden as homeowners approach their 50s and 60s, misguided advocates maintain that the 30-year fixed rate mortgage should be at the core of the U.S. housing finance system. The latest proposal by five respected economists including Gene Sperling and Mark Zandi aims to reformulate taxpayer backing of Fannie Mae and Freddie Mac in an effort to keep the 30-year fixed mortgage alive.

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The authors' reform plan, like virtually all the others before it, fails to acknowledge the government's role in past housing finance failures. Failures include the savings and loan (S&L) debacle of the 1980s, Fannie and Freddie's collapse into conservatorship, and the Federal Housing Administration's (FHA's) 3.4 million foreclosures (almost all with 30-year fixed rate loan terms). These crashes did not come about in spite of government support for housing finance, but because of government backing.

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Guaranteeing access to loans independently of market conditions creates an economics free zone, one where the FHA neither prices nor underwrites for risk, where the taxpayer-backed GSEs compete with the FHA for "affordable loans," and where government-backed lending is provided in both good times and bad... It is impossible to simultaneously keep the 30-year fixed rate mortgage at the system's core, protect taxpayers and provide broad access to meet the needs of underserved communities.

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This latest proposal is a policy cul-de-sac, repeating many of the same policy mistakes of the past decades. It is time to substitute shorter term loans of 15 and 20 years, designed to reliably build wealth and maintain buying power, while protecting borrowers and neighborhoods from high levels of foreclosure risk. Such a loan, developed by AEI's International Center for Housing Risk, is already being offered in different versions by a number of banks, credit unions and at least one non-profit. Several state housing finance agencies have also signed on.

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iehi-feed-59639 Tue, 26 Apr 2016 14:41:56 GMT US Home Prices Rise at Solid Pace, Even With Flat Sales http://implode-explode.com/viewnews/2016-04-26_USHomePricesRiseatSolidPaceEvenWithFlatSales.html U.S. home prices continued their steady upward march in February as buyers competed for a limited number of available properties. The Standard & Poor's/Case-Shiller 20-city home price index rose 5.4 percent that month compared with a year earlier, according to a report released Tuesday. That's down slightly from January's 5.7 percent rise.

Prices are rising even as sales have leveled off in recent months. The number of homes for sale last month was 1.5 percent lower than a year earlier. That's pushed buyers to act quickly, with homes on the market just 47 days in March, according to the National Association of Realtors.

Svenja Gudell, chief economist at real estate website Zillow, said the problem is particularly acute for first-time buyers and those looking at mid-level homes.

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iehi-feed-59619 Sat, 23 Apr 2016 17:20:47 GMT America's Wealth Effect From Rising Home Prices Has Been Cut in Half http://implode-explode.com/viewnews/2016-04-23_AmericasWealthEffectFromRisingHomePricesHasBeenCutinHalf.html iehi-feed-59596 Wed, 20 Apr 2016 18:00:21 GMT Missing for millennials: Down payment savings http://implode-explode.com/viewnews/2016-04-20_MissingformillennialsDownpaymentsavings.html Surveys show that most Americans under 35 lack adequate savings for down payments. The result is that many will likely be forced to delay home ownership and to absorb significant debt loads if they do eventually buy. Steadily rising home values in recent years have eclipsed pay increases, making it especially difficult to buy in major growth areas for jobs, such as San Francisco, Denver and Seattle.

Nationally, 37 percent of millennial renters have saved nothing at all for a down payment, according to a survey of 30,000 renters being released Wednesday by Apartment List, a company specializing in rental home searches. At the same time, 79 percent of millennial renters say they aspire to own a home, illustrating a troublesome gap between expectations and financial realities.

Even those diligent enough to set aside money are still short the cash to buy a home. Among larger metro areas, millennial renters who are saving have put aside an average of just $5,830. This marks less than one-fifth the savings needed for the typical 20 percent down payment on a starter home costing $175,000.

Obviously the "solution" is just to get rid of down payments (again)!

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iehi-feed-59595 Wed, 20 Apr 2016 17:58:44 GMT U.S. existing home sales surge; supply improves http://implode-explode.com/viewnews/2016-04-20_USexistinghomesalessurgesupplyimproves.html iehi-feed-59590 Wed, 20 Apr 2016 15:41:24 GMT Bernie Sanders' Wife Accused Of Bank Fraud http://implode-explode.com/viewnews/2016-04-20_BernieSandersWifeAccusedOfBankFraud.html iehi-feed-59588 Tue, 19 Apr 2016 22:10:14 GMT No consequences, no justice in Goldman Sachs settlement http://implode-explode.com/viewnews/2016-04-19_NoconsequencesnojusticeinGoldmanSachssettlement.html It's now clear from a review of the settlement that Goldman Sachs likely will pay much less in penalties than the Justice Department claims, due to special credits included in the deal and, unbelievably, tax deductions Goldman Sachs will receive for payments it makes under the settlement.

Disturbing as this may be, what's most troubling is that this settlement agreement -- like previous deals between the Justice Department and big financial institutions -- contains no consequences for the executives who drove or condoned wrongdoing. As a result, it will not deter future financial lawbreaking and will further undermine the public's faith in the fairness of our legal system.

... Apparently, if someone lies about 10 mortgage loans, they will face the full force of the law. If someone lies about hundreds of thousands of loans, then they can count on the shareholders of their company to pay their way to exoneration.

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iehi-feed-59582 Mon, 18 Apr 2016 19:48:59 GMT Ex-Goldman Execs Now "Help" Foreclosure Victims Buy Homes at Usurious Rates - Mandelman Matters http://implode-explode.com/viewnews/2016-04-18_ExGoldmanExecsNowHelpForeclosureVictimsBuyHomesatUsuriousRatesMa.html "Shelter Growth paid an average of $22,000 for the homes it bought from Harbour, according to public filings and RealtyTrac. Harbour, for its part, bought most of the homes in its portfolio for an average of $8,000, through bulk sales by Fannie Mae."

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The things is, as distasteful as this may feel and appear, Shelter Growth Capital Partners is far from being the only investment firm in this game of grotesque greed and inconceivable callousness. In fact, there are many similar firms all popping up to see if they can find themselves some poor folk to screw over... I mean to help buy back their American Dream.

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iehi-feed-59576 Sun, 17 Apr 2016 18:31:23 GMT Don't Put Fake Liens On Your Home To Stop A Foreclosure http://implode-explode.com/viewnews/2016-04-17_DontPutFakeLiensOnYourHomeToStopAForeclosure.html iehi-feed-59545 Wed, 13 Apr 2016 22:28:23 GMT Why younger people can't buy a house: money became too cheap | Dominic Frisby http://implode-explode.com/viewnews/2016-04-13_WhyyoungerpeoplecantbuyahousemoneybecametoocheapDominicFrisby.html There has been a failure in both the media and government to properly diagnose the cause of high house prices. Until the causes -- our systems of money and planning -- are properly understood, we cannot hope to fix the problem.

The standard solution is: "we need to build more", but this is not a simple supply-and-demand issue. Between 1997 and 2007 the housing stock grew by 10%, but the population only grew by 5%. If house prices were a function of supply and demand, they should have fallen slightly over this period. They didn't. They rose by more than 300%.

The cause of house price rises is the unrestrained supply of something else: money. Mortgage lending over the same period went up by 370%, thinktank Positive Money's research shows. It was newly created debt that pushed up prices in a decade of extraordinarily loose lending.. When you have runaway inflation such as this, the Bank of England has a responsibility to quash it, usually by putting up interest rates. But -- and here is the great sleight of hand -- the Bank has seen fit not to include house prices in its measures of inflation... The fraud persists today. The Bank of England says inflation is 0.3%. Really? With house prices up by 10% last year?

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2008 gave us the crisis we needed to address the problems inherent in our money system -- how is money created? Who gains and who suffers by this system? -- but our leaders chose not to. Instead interest rates were slashed, so mortgages and other debts became incredibly cheap... We got the great obfuscation that is quantitative easing; £375bn of newly printed money flowed into the financial sector and on into the London property in which it mostly lives. Asset-owners were bailed out and the next generation was made to pay the price...

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iehi-feed-59531 Tue, 12 Apr 2016 17:16:53 GMT Aussie Hazards From Mortgages to Mines Lift Macquarie Bond Risk http://implode-explode.com/viewnews/2016-04-12_AussieHazardsFromMortgagestoMinesLiftMacquarieBondRisk.html iehi-feed-59521 Mon, 11 Apr 2016 17:20:45 GMT Goldman Sachs Resolves U.S. Mortgage Probe for $5.1 Billion http://implode-explode.com/viewnews/2016-04-11_GoldmanSachsResolvesUSMortgageProbefor51Billion.html Goldman Sachs Group Inc. will pay $5.1 billion to settle a U.S. probe into its handling of mortgage-backed securities involving allegations that loans weren't properly vetted before being sold to investors as high-quality bonds.

New York-based Goldman Sachs, which announced details of the accord in January, will pay a $2.39 billion civil penalty, make $875 million in cash payments and provide $1.8 billion in consumer relief, according to a Justice Department statement.

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Monday's resolution is the fifth multibillion-dollar settlement reached with U.S. banks resulting from the government's push to hold Wall Street firms to account for creating and selling subprime mortgage bonds that helped spur the 2008 financial crisis.

Other banks, including Royal Bank of Scotland Group Plc and Deutsche Bank AG remain under investigation, people familiar with the matter have said.

Here's the NY AG's release.

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iehi-feed-59502 Fri, 08 Apr 2016 21:50:05 GMT Wells Fargo reaches $1.2 billion U.S. mortgage settlement http://implode-explode.com/viewnews/2016-04-08_WellsFargoreaches12billionUSmortgagesettlement.html this press release, but not much. ]]> iehi-feed-59475 Wed, 06 Apr 2016 13:49:39 GMT As Seen On One Billboard: The San Francisco Housing Bubble http://implode-explode.com/viewnews/2016-04-06_AsSeenOnOneBillboardTheSanFranciscoHousingBubble.html iehi-feed-59457 Tue, 05 Apr 2016 00:31:06 GMT Average Home Prices Are Irrelevant for You or Me | Mandelman Matters http://implode-explode.com/viewnews/2016-04-04_AverageHomePricesAreIrrelevantforYouorMeMandelmanMatters.html The average home price in California is impacted by homes in areas like San Francisco, Silicon Valley, the myriad of pricey beach communities... the OC, LA and Beverly Hills.  Those places have nothing to do with wherever it is that you live... I don't even think they have anything to do with reality as a whole.

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Recently, I was talking to a Realtor in Southern California. He was positive that his home had gone up in value over the last year, after reading all the press reports about home values having risen. He told me his home would appraise for $550,000.

The appraisal came in at $435,000.

Another homeowner in Northern California. Last year, his home appraised for $600,000. He assumed that this year it would be worth even more... and maybe he would have been right and it would have gone up some... except that the house next door went into foreclosure and is now sitting vacant.

Today's appraised value... $525,000.

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iehi-feed-59436 Sat, 02 Apr 2016 14:26:57 GMT Did San Francisco real estate values hit a peak? http://implode-explode.com/viewnews/2016-04-02_DidSanFranciscorealestatevalueshitapeak.html iehi-feed-59402 Tue, 29 Mar 2016 19:47:26 GMT Seller Gets 30 Months In Federal Prison For Bank Fraud Conspiracy http://implode-explode.com/viewnews/2016-03-29_SellerGets30MonthsInFederalPrisonForBankFraudConspiracy.html iehi-feed-59389 Mon, 28 Mar 2016 22:17:42 GMT The Seven Countries Most Vulnerable To A Debt Crisis http://implode-explode.com/viewnews/2016-03-28_TheSevenCountriesMostVulnerableToADebtCrisis.html