Real Estate

These two factors——low mortgage rates, and the fact that the country has filled up so much that our cars no longer marginalize location costs——go a long way toward explaining the surge in housing prices over the past decade or so. But they don’t go all the way.

The Times looked back on the Greenspan tenure as Federal Reserve Chairman by emphasizing a threatened “housing bubble” that Greenspan doesn’t even believe in. Reporter Edmund L. Andrews characterized a Fed chairman washing his hands of a looming threat. If “housing prices do turn out to be a bubble that bursts,” said Andrews, “Mr. Greenspan will no longer be around to take the blame – or clean up the mess.”

All around LA where the housing prices are a full 80% above the average income, houses have been bought at sky-high rates with “exotic” loans and now the predictions are out in full that in the next few years we’ll see a lot of bankruptcies and foreclosures. Possibly some cheaper housing prices, which will be nice, but this trend of living beyond a person’s means can’t be good, can it?

Mortgage insurance protects the mortgage lender against financial loss if a homeowner stops making mortgage payments. Lenders usually require insurance on low down payment loans for protection in the event that the homeowner fails to make his or her payments. When a homeowner does not make mortgage payments, a default occurs and the home goes into foreclosure. Both the homeowner and the mortgage insurer lose in a foreclosure. The homeowner loses the house and all of the money put into it. The mortgage insurer will then have to pay the lender’s claim on the defaulted loan.

The front ratio is the percentage of your monthly gross income (before taxes) that is used to pay your housing costs, including principal, interest, taxes, insurance, mortgage insurance (when applicable) and homeowners association fees (when applicable). The back ratio is the same thing, only it also includes your monthly consumer debt. Consumer debt can be car payments, credit card debt, installment loans, and similar related expenses. Auto or life insurance is not considered a debt.

Do any of you remember the old Wendy's commercial where Clara, the grandmotherly looking lady, demands, "Where's the Beef?" So where's the news here??? The story tries to reason that increases in the GSEs' loan limits PREDICT a still-vital housing market. That's bass-ackwards reasoning in my book. I would argue that loan limits rise because demand HAS BEEN strong and housing prices ALREADY have risen. If you look at it that way, it's a LAGGING indicator, not a leading one. It mirrors the market, not predicts it.

Mortgage rates have risen for the fourth week in a row as investors gradually realize that the Federal Reserve is going to keep raising interest rates.

Housing prices here have risen 165 percent during the past decade, making it one of several countries in Europe and elsewhere that have outstripped even the soaring U.S. market.

Some screwy stuff has been going on in real estate in Kansas City. Federal investigators say some of it involves fraud. They say unscrupulous mortgage brokers, loan underwriters and appraisers used inflated appraisals to sell 1,000 or more dilapidated houses in the urban core to gullible investors.

Basically, wholesale lenders use mortgage brokers as their loan officers. They offer a lower rate to the broker, the broker adds on his compensation, and the rate is usually about the same as you would get using a mortgage banker. Sometimes the rate is lower, sometimes higher, depending on how much compensation the broker adds on.

Problem: You can define the web either to be human readable or machine readable. It is not both. For instance I can present some data as a HTML table. This is presentation. For a user who would like to view this table differently, sort it, slice it, or combine it with data available from another source in one page is impossible. I cannot even have the simplest task of saving this data separately as a comma separated values (CSV) file for my offline analysis. Take the example of comparing housing prices side by side with school ratings, crime database etc so parents can determine which neighborhoods are well suited for their needs and means. Can we do this today? No.