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The Masked Tulip

Roubini: "it's Pretty Clear The Housing Market Has Already Double Dipped"

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http://www.zerohedge.com/article/roubini-its-pretty-clear-housing-market-has-already-double-dipped

Furthermore, another rather obvious observation by Roubini demonstrates precisely why the drop in home prices is just starting to be felt: "The shadow inventory of not-yet-foreclosed homes—due to the moratorium—will surge in the next year." In other words, "Supply will increase, demand will drop."

Also, keeping in mind that there are tens of millions of Americans who are underwater on their mortgages, and thus not incentivized to pay their bills, any ongoing price drops will create a vicious loop whereby more and more people walk away from mortgages, and otherwise stop paying, as a result of which, banks will be forced to REO at least some of these properties (it is well known that banks allow squatters to live under payment delinquency for up to 24 months: where else does America get the money for that 4th Kindle and 2nd iPad?), causing prices to drop even more, and make the Catch 22 even worse. Which means that very soon Ben will again be forced to do a ritualistic killing of the stock market, pretty much as what happened on May 6, to get the population out of stocks again and back into bonds. Because should the 10 Year pass 4%, it is game over for housing, no matter how much Goldman protests, and the Chairman knows it all too well.

Surely not!? :blink:

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Eh, where's the yield for the owners (banks) if they allow delinquent borrowers to remain in bank owned real estate?

They've all got a pile of non performing MBS shit cascading down the judicial stink pipe as it is - a free ride to non payers will not improve the aroma;-)

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So what is wrong with that. Provided the owner allows the house to be used as a house, does it really matter whether it has been foreclosed or not?

Eh? I didn't write the article.

It's a well known fact that during the last crash the banks sat on the foreclosed properties rather than put them up for sale. This was because they could value them more on their books than they could actually get If they sold them.

If they did sell them the lower value would affect all the other houses they had on their books. So they hoarded them to fiddle the figures.

If they are now forced to offload these properties then the prices will plummet, their balance sheet will shrink, and they will have to foreclose even more homes. Rinse and repeat. 8-)

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Eh, where's the yield for the owners (banks) if they allow delinquent borrowers to remain in bank owned real estate?

They've all got a pile of non performing MBS shit cascading down the judicial stink pipe as it is - a free ride to non payers will not improve the aroma;-)

Well for a start I didn't say they wouldn't be able to charge or receive rent.

Secondly where's the yield from a boarded up house that they can't sell.

Thirdly the value would be marked down crystallizing a loss.

Finally and more importantly is it better to have people living in tents and cars because houses have been foreclosed and are empty?

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Well for a start I didn't say they wouldn't be able to charge or receive rent.

No you didn't- But if the borrower can't meet their obligations they should be foreclosed and evicted.

The property can then be made available for re-occupation either through rent or sale.

Secondly where's the yield from a boarded up house that they can't sell.

None

Thirdly the value would be marked down .

Yep

Finally and more importantly is it better to have people living in tents and cars because houses have been foreclosed and are empty?

No, but equally a delinquent borrower should not gain benefit by defaulting on their obligations, moreover, the irresponsible lender should be forced to crystallize the loss and bankrupted as required.

My gripe (and its not with you swon) is that since the August 07 epiphany any semblance of financial rules and responsibility have been sealed in the can and kicked down the road to save the fetid corpse that is the banking system.

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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