Bay Area Real Estate Trends

Tonight, 60 Minutes explored how banks forged foreclosure documents and complications that mortgage securitization has caused with chains of title.

90% seems like a high number and it is. However, why would banks accept any “skin-in-the-game” risk, when they can easily dump all the risk onto taxpayers via Fannie and Freddie?

The five biggest US mortgage servicers were told this week at a private meeting with regulators to consider paying delinquent borrowers up to $21,000 each as part of a broader settlement of the foreclosure crisis.

These stupendous government interventions have simply staved off the consequences of the supply-demand imbalance for the past two years. At some point these interventions will fail and the returns on the investment will go negative: all the trillions of dollars committed to propping up housing prices will fail to boost prices at all.

At that point public support for the prop-job will evaporate and the market will finally get a chance to clear the imbalance between supply and demand.

Bair, the chairman of the Federal Deposit Insurance Corp., said in a speech Monday that Congress should consider paring back federal tax deductions for homeowners. She said these subsidies helped inflate house prices, harming the very consumers that many of the programs aimed to help.

The fundamental root of the housing bubble–the collusion of the Central State and banks to extend home ownership to millions of citizens who did not qualify for that burden– remains firmly in place.