If we watched European media in 2009 we saw that sovereign debt fraud taking place in European nations like Spain and Greece. The reports of developers building all kinds of high-end housing no one could afford. Spain went into bankruptcy because if this----the nation was filled with expensive housing subsidized by government funding and of course all that development FORECLOSED INTO THE HANDS OF GLOBAL BANKS.
THAT IS WHAT THIS JUMBO MORTGAGE LOAN FRAUD HAS AS A GOAL.
American spent these several years with national media telling us there was a housing boom of high-end housing. This drove much of the GDP during Obama. Wall Street creating mortgage tranches-----Wall Street Baltimore Development 'labor and justice' organizations pushing jumbo mortgage loans to citizens unqualified in US CITIES DEEMED FOREIGN ECONOMIC ZONES---LIKE BALTIMORE. So billions of Federal funding for housing went to Wall Street development corporations to build these houses-----then the financial real estate corporations took tens of billions from our Federal, state, and local coffers to pay for these loan processing steps-----and since these Federal Housing Agency loans are Federally insured up to $600,000 -----when these unqualified citizens FORECLOSE----that new high-end house will go to the Wall Street banks.
WATCH ALL THE STATE ATTORNEY'S ATTORNEYS---ALL THE WALL STREET DEVELOPMENT 'LABOR AND JUSTICE' ORGANIZATIONS, ALL THE WALL STREET POLS BE HOPPING MAD AFTER THE ECONOMIC CRASH EXPOSES THIS NEXT WALL STREET FRAUD. NOT BEFORE------ALWAYS AFTER.
How High Will Housing Prices Be in 2016?
Daily Real Estate News | Monday, September 24, 2012
A quarterly survey of more than 100 economists shows growing optimism for the real estate market when it comes to housing prices. The majority of the economists surveyed say they expect home prices to steadily increase for the next four years.
The economists surveyed expect home prices to rise 2.3 percent this year over the fourth-quarter of 2011, according to the survey conducted on behalf of Zillow. In 2013, they expect prices to rise 4.7 percent; 8 percent in 2014; 11.4 percent in 2015; and 15.2 percent in 2016.
"This is further evidence that we're seeing a true recovery in the housing market," says Stan Humphries, Zillow's chief economist. "Not since mid-2010—in the midst of the homebuyer tax credits—have we seen this group so bullish on housing. It's refreshing to see this optimism at a time when the market seems to be making an organic recovery, in the absence of an artificial stimulant like the tax credits."
We read that foreign rich were creating that housing bubble of expensive housing----look the housing is built and now they are selling just before this coming economic crash. This is why we call this a phantom economy-----it is not real. So, Jumbo Mortgage loans are now being used to place US citizens into housing that never should have been built.
US cities deemed Foreign Economic Zones have a goal of attracting the world's 1% and their 2% to their city centers. Build these Jumbo houses and they will come -----THAT IS THE GOAL OF ONE WORLD. If we look at the housing market in cities like Baltimore that's all we read----lots of high-end housing being built. Let's watch as we see JUMBO MORTGAGE LOANS attached to them with lots of foreclosures from all those IRRESPONSIBLE CITIZENS.
Our ONE WORLD pols Baltimore Mayor Rawlings-Blake and upcoming Catherine Pugh are sent by airplane to Las Vegas with the goal of snagging some of those global 1% and their 2% to Baltimore hoping to fill those HIGH END HOUSING.
This is of course how San Fran became too expensive for WE THE PEOPLE to live. Building for those to come inflates normal housing values making it too expensive for our long-term homeowners to afford. This matters to both mid-adults and young adults because it is that inability to keep homeownership that limits RETIREMENT EQUITY.
UK Housing Bubble Bursts: Sales Of Luxury Homes Crash By 80% As "Waves Of Wealthy People Are Leaving"
by Tyler Durden
Apr 12, 2015 4:56 PM
About a year ago, when the Chinese housing bubble had just begun to burst (as a reminder Chinese house prices are now crashing at a faster pace than in the US after Lehman) and forcing the real estate bubble blowers to consider a different venue, namely the stock market, another housing bubble several thousand miles away was in full blown escape velocity mode - that of the UK. In fact, as we showed in the following table from last June, the appreciation in UK home prices had surpassed that of China as recently as 10 months ago
Back then, this is what UK home prices looked like:
The problem with this relentless scramble into London real-estate, however, is that it was almost entirely driven by the high end, which as we have reported tirelessly over the past 4 years, has become - alongside the US ultra luxury real estate market - the new "Swiss bank account": a mostly anonymous place (with anonymous LLCs and Corps buying on behalf of uber-rich foreign oligarchs) where tax evaders can park their cash, with the NAR's, and the government's, blessing.
And now, the party is over.
As the FT reports, "sales of homes worth more than £2m have dropped by 80 per cent in the past year, according to Douglas & Gordon."
First the bubble in China popped, and a year later, the UK has followed:
Ed Mead, a director of Douglas & Gordon estate agents, said his company had carried out 37 valuations in the past month for owners of high-end homes who were thinking of selling up, when the normal level is about six.
"It is like the 1970s again, when waves of wealthy people left Britain and it was a disaster,” Mr Mead said.
Why did the UK luxury housing bubble? The same reason we previewed back in December 2013, when we warned that "Foreign UK Homebuyers To Be Subject To Capital Gains Tax" in which we said that "we would not be surprised if the ultra-luxury segment ... becomes just a tad wobbly as foreigners seek to quietly but promptly sell now and avoid capital gains."
Just as predicted:
Wealthy foreigners are shunning London’s luxury housing market following Labour’s announcement that it will end their “non-dom” status if it wins the UK’s general election, according to estate agents. Property deals have begun to fall through in the days since Ed Miliband laid out his plans, they revealed, with some foreign residents also putting their homes up for sale and fleeing the UK.
The announcement, combined with Labour’s plan to introduce a mansion tax on high-value homes, has led many foreigners to conclude that the UK is no longer an attractive and reliable home for the rich, agents said.
During the past two years Conservative chancellor George Osborne has also made tax changes that have increased the burden on the affluent. The introduction of capital gains tax on the proceeds of property sales came into force on April 6 and is believed by agents to have contributed to owners’ jitters.
Of course, rich foreigners know when they are not welcome and have the means to find alternatives. What they don't know is what happens when, following years of the ultra-wealthy buying up every piece of real estate in London, they all become sellers: a bidless market.
So what to do? Well, start by blaming the government, the same government that everyone loved when it was encouraging speculative gambling in every asset class, and now that the revulsion against foreign oligarchs is a front and center political issue (and the money has dried up) is roundly hated.
Charles McDowell, an independent agent who acts for some of the wealthiest families in London, said that two deals he was involved in had collapsed this week as a result of the non-doms plan, while two families he acts for had asked him to put their homes up for sale.
Mr Osborne is “the most anti-property chancellor Britain has ever had”, Mr McDowell said.
“Britain has gone from being a safe, predictable tax environment to being not predictable and not attractive financially,” he said. “My clients feel under attack, they are not going to invest in London any more.”
What happens next is that thousands of Ultra High Net Worth individuals will pack up and go, in many cases dumping their UK citizenship in the process, and take their spending habits with them, to whatever government has decided not to tax them through the nose. Yet.
Trevor Abrahmsohn, a veteran property agent at Glentree Estates, said the non-doms proposal was “completely mad”. About 50 per cent of the internationally mobile businesspeople among his clients were talking about “establishing citizenship elsewhere”, he said. “It is a very big topic of conversation.”
“The message [the non-dom policy] sends to my clients is that Britain is closed for business,” he said. “Don’t invest in this country, we don’t like foreigners, that is the message.”
Wealthy foreigners are a net economic benefit to the country, Mr Mead said. Research carried out last year found that the average buyer of a £15m home spent £4m-£5m a year on goods and services in Britain. In total the capital’s super-rich add £4bn a year to its economy, the research by Ramidus Consulting, an economic consultancy, found.
As for London real-estate price updates, it hasn't fully hit yet: "House price growth in London’s priciest areas has flatlined during the past six months, for the first time in five years, according to data from estate agent Knight Frank. Rents are rising strongly as the capital’s wealthy eschew buying and choose instead to rent."
Expect London house prices to crash in the coming months as those who refuse to hit bids, suddenly realize that he who sells first, sells best, especially with the taxman glancing over the shoulder. And once UK housing tumbles, watch as the entire economy follows suit, and leads to, you guessed it, another episode of QE from the BOE. Because in a world addicted to constant money flow from "outside" sources, if the wealthy refuse to be taxed, then the central bank will have to provide the funding on its own.
As for the world's billionaires, don't cry for them. Even without London, they will have plenty of other metropolises to pick from in the coming months, as we showed before...
Baltimore house prices were plunging as we are still working to send long-term homeowners into foreclosure. Lots of working and middle-class homeowners to clear to make way for the global high-end housing. If we look at sales of jumbo mortgage loans in Baltimore---
The subprime mortgage fraud bringing the crash in 2008 had financial analysts, states attorneys, justice groups knowing back in 2004 the mortgage market was being filled with fraud but it wasn't until 2006---two years before the crash that Wall Street went crazy giving mortgages to anyone. That is mirrored today as 2015 starts this flood of Jumbo Mortgage Loans two years before this coming economic crash.
Foreclosures on US city long-term homeowners but this article says there is an acute lack of supply.
'This time, the economy is more diverse, and there’s also an acute lack of supply'.
Mortgage Limits May Increase
With home prices still climbing, baseline jumbo-mortgage thresholds may be raised for the first time in a decade
July 15, 2015 10:22 a.m. ET Jumbo mortgages for single-family residences exceed $417,000 in most parts of the country and $625,500 in high-price markets. But with home prices climbing back to prerecession peaks in some markets, baseline jumbo thresholds may be raised for the first time in a decade.
Why Baltimore house prices are plunging
Published: Aug 4, 2015 3:27 p.m. ET
D.C. bureau chief
Fixes the percent of real-estate-owned transactions to total home sales for both Baltimore and the U.S. nationally.
At a time when home prices nationally are, if anything, showing signs of being too strong, the picture in Baltimore is the opposite.
According to CoreLogic, prices in the Baltimore-Columbia-Towson metro area were down 8% in the year ending June, the worst showing of the 100 biggest metro areas. Nationally, prices rose 6.5% in the 12 months ending June, CoreLogic says.
What’s driven that is a huge rise in foreclosure sales. Foreclosures — known in the business as real estate owned — accounted for 13.6% of all transactions in Baltimore in May — more than double the national average of 6.4%, according to Sam Khater, deputy chief economist at CoreLogic.
Maryland, despite being a so-called nonjudicial state where judges do not have to approve foreclosures, had a program that delayed foreclosures to give homeowners more a chance to fight them.
Excluding distressed sales, prices in the Baltimore metro area were up 2% year-over-year. That’s a huge divergence, especially given the gap between prices including and excluding foreclosures and short sales nationally was just 0.1% in June.
The rise in so-called REO activity is more an indicator of stalled foreclosures moving through the system than a sign of newer trouble in the city that was gripped by riots following the Freddie Gray death in April. Foreclosure inventories actually fell year-over-year in May, and job growth has picked up slightly in the Charm City, Khater says.
Notices of default number a few hundred per month — well below the peaks in 2009 and 2010 of around 1,700 per month, he says.
Other metro areas where prices have declined include Boston (-4.4%), Hartford (-0.1%), New Haven, Conn. (-1.8%) and Worcester, Mass. (-7%). Khater said that’s more a reflection of the languid economy in New England.
But 93 of the top 100 metro areas by population saw home price gains. Even with the massive drop in oil prices, the Dallas-Plano-Irving area saw an 8.6% gain and the Houston-The Woodlands-Sugar Land area saw a 7.4% gain.
“It’s very different than the 1980s,” Khater said, speaking of Houston in particular. Not only did oil prices collapse then, but there also was a commercial real estate crisis as well as farmland value drop that preceded the skid in energy prices. This time, the economy is more diverse, and there’s also an acute lack of supply.
We see below how European nations largely social Democracies were loaded with sovereign debt and fueled by a housing development no one needed.....the housing was simply built the larger the better to bring government funding to the developers and sending the distressed housing to foreclosure and banks. This was during the Bush years here in the US----and the Obama years have seen these European nations hawking these properties to the global rich---just as here in the US. If anyone thinks that a developed-nation MIDDLE-CLASS is going to be rebuilt in US cities deemed Foreign Economic Zones---I have swampland in Florida to sell. We already hear in media that the percentage of global 1% and 2% wanting to buy in America is already tapped. There are only so many global rich.
'Their website uses satellite imagery to show aerial pictures of dozens of Spanish neighbourhoods, before and after the boom. Where forests and farmland stood 10 years ago, now there are half-built homes, elaborate roundabouts and roads leading nowhere.
"It's mind-blowing," said Rafael Trapiello, co-founder of Nación Rotonda. "These were developments that were thrown together with little consideration of social needs, just big expectations of making money."'
What made it hard for Spanish citizens is global banking pols in their nation tapped Spanish PUBLIC BANKS----that was were all citizens' pensions and personal assets were saved. So, like US pols tapping our Federal Housing Agency were all our Federal tax revenue for housing is stored----global Wall Street imploded with sovereign debt creating a false sense of prosperity during what was the looting of the US and European nations.
DISTRESSED SALES BANK REPOSSESSIONS BARGAIN PROPERTY APARTMENTS FOR SALE MARBELLA PUERTO BANUS BENALMADENA COSTA DEL SOL SPAIN
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Welcome to the No.1 website for forced sale property deals in Southern Spain.
Spain's first dedicated bank repossession & distressed property sales website was set up by The Overseas Property Network in 2006 and with its number one ranked website for distressed sale deals, has now become the leading website for bargain hunters looking in Spain. The website is often used by Spanish banks, lawyers & liquidation companies to sell their repossessions and probate deals.
With regular radio and newspaper articles this repossession & distressed sales portal is also often used by many private owners needing to sell their spanish property quickly, making it one of the best places to find a genuine bargain in Spain. This website is often referred to by many of the top UK newspapers including "The Times" & "The Daily Telegraph" when writing articles on the Spanish property market.
Via its network of around 500 European agents & brokers the network markets/promotes Spanish bank repossessions, distressed sale bargains, probate deals, luxury re-sale property, new homes & off-plan developments. The network probably has one of the largest client databases in Europe with approx 26,000 potential buyers/introducers.
The company Directors have over 20 years of professional corporate real estate experience and extensive knowledge of both the Spanish & UK property markets having worked for asset management companies and banks.
The network also has a luxury property website promoting luxury apartments & villas for sale on the beautiful Costa del Sol, which is still Europe's most popular second home destination. This website is accessed via the main menu, listed under "Luxury Properties" and focuses heavily on properties for sale near either beach, marina or golf and luxury apartments & villas for sale in the most popular destinations such as, Marbella, Puerto Banus, Estepona, Elviria, Mijas, Benalmadena & Malaga.
The network only market and sell properties directly listed (taken on) by their team in Spain, unlike most Spanish agents that seem to offer hundreds of shared properties, often with inflated prices that they know little or nothing about. The network also have over 500 websites promoting their properties and advertise in UK & Spanish newspapers & magazines as well as some of the most popular radio stations up to 5 times a day. With this top radio, newspaper and internet marketing our valuers are out now, listing all the best property for sale on the Costa del Sol.
We all know here in the US our cities are not being developed for citizens today and what they call AFFORDABLE HOUSING is often simply university student housing in what will be a global 1% and their 2% city center. We are seeing in the US this same kind of housing development these several years of Obama with Jumbo Mortgage Loans and tales of high-end house construction that will end just as in Spain----development that no one can afford.
Spain's crash landlords: empty homes spawn black housing market
In Madrid you can rent a repossessed home from an unscrupulous squatter – or even 'buy' one for €1,000
Anti-eviction protesters in Madrid confront police as they try to stop the eviction of a disabled neighbour. Photograph: Juan Carlos Lucas/Demotix/CorbisAshifa Kassam in Madrid
Sunday 23 February 2014 16.32 EST Last modified on Monday 24 February 2014 02.16 EST
The hundreds of thousands of empty homes across Madrid has spawned a black market for cheap housing in which groups illegally break into, and then let, repossessed properties.Almost all the cases involving the properties, most of which now belong to Spanish banks, are identical, said Vicente Pérez, from a residents group, the Federación Regional de Asociaciones de Vecinos de Madrid: "Somebody goes and kicks in the door. Once he's in, the others come – and they sell the place."
While prices vary greatly, it generally costs from €1,000 (£830) to €2,000 to "buy" a repossessed property, El País reports. Those who cannot afford the fee can instead choose to rent for a few hundred euros a month. The price often includes electricity, gas and water, and sometimes even heating.
The homes are guaranteed until a judicial process issues an eviction order, said Pérez. That process that could take up to two years.
Exact figures on how many people are taking part in such arrangements were hard to come by, he said. "People are scared and they don't want to talk."
Nearly 15,000 households in Madrid were served eviction notices in 2012, according to official figures from the courts. Coupled with sky-high unemployment rates, this has led to "infinitely long" waiting times for subsidised housing, said Pérez. It has left families, immigrants and others desperate for affordable housing in the capital region.
"A few shameless people are taking advantage of the needs of the most poor to make a business out of it," he said.
The "landlords" of this black market range from people just looking to make some extra money to groups with criminal connections. "Some of them are mafia," said Pérez. "I wouldn't call them the Italian mafia, but they are highly organised groups."
Spain's Guardia Civil police force was forced to acknowledge the problem last month when it responded to neighbours' complaints about an illegally occupied flat. Police arrived at the building as a prospective tenant was being shown around the foreclosed flat.
Two siblings, aged 33 and 28, were arrested for breaking and entering foreclosed properties and illegally renting them out. They targeted immigrants, who were charged €400 a month for flats in the south of the city.
Manuel San Pastor, a lawyer for the group Plataforma de Afectados por la Hipoteca, said the root of the problem was Spain's "hundreds of thousands of empty properties". His group provides support to Spaniards facing eviction, be it by negotiating with the banks or backing movements to occupy empty houses.
Just 10 years ago Spain was in the throes of a construction boom, with developers building hundreds of thousands of homes a year. The bubble burst in 2007, leaving its relics scattered across the country, including more than 300,000 empty homes in Madrid.
Last year, in an effort to convey the staggering size of Spain's construction bubble, a group of civil engineers and an architect created Nación Rotonda (Roundabout Nation).
Their website uses satellite imagery to show aerial pictures of dozens of Spanish neighbourhoods, before and after the boom. Where forests and farmland stood 10 years ago, now there are half-built homes, elaborate roundabouts and roads leading nowhere.
"It's mind-blowing," said Rafael Trapiello, co-founder of Nación Rotonda. "These were developments that were thrown together with little consideration of social needs, just big expectations of making money."
The aim of their project is not to editorialise the changes, but rather to inform Spaniards of the dramatic changes to the landscape in the past 15 years. Particularly powerful, he said, were the rows and rows of empty houses across Spain. "
"What we've ended up with are ghost towns," said Trapiello. "There's not much to compare it to across Europe. It's pretty shocking to see."
San Pastor said: "They're still evicting people from their houses. They're leaving no other alternative but for people in need to enter these houses."
The lawyer condemned those whom he believed were taking advantage of the situation to make a profit.
Neighbourhood associations in Madrid have urged the owners of these empty properties to take responsibility. "If you own a home that's sitting empty, what's stopping you from renting it?" asked Pérez.
Instead of trying to let or sell the properties at the current market value, which had dropped an average of 45% in the Madrid region since 2007, he said, banks were holding on to the properties, hoping to sell when the market recovered. In the meantime, entire communities were paying the price. "It degrades the neighbourhood."
The latest census data indicate a total of 3.4m houses sitting empty in Spain alongside another nearly half a million properties that were abandoned part way through construction.
Other municipalities have launched initiatives to penalise the owners of empty properties in high-demand areas; in Barcelona threatening fines of up to €100,000, and in San Sebastián, in the Basque country, a 50% surcharge on property taxes.
The 5% to the 1% are often these Wall Street developers as we see in US cities deemed Foreign Economic Zones like Atlanta these homes built for citizens not able to afford them. This is where our US Trades Union members back a Wall Street Clinton/Obama global corporate neo-liberal because they are building and keeping what is simply the development trades working---often from the global labor pool. This is not an economy built for WE THE PEOPLE----and the long-term effect on housing is to load high-end in our US city centers pushing out the middle/working class. That is the only goal. US white collar professional thinking today they are earning a good salary are not looking a decade or two ahead. ONE WORLD ONE GOVERNANCE WITH FAR-RIGHT 1% WALL STREET LIBERTARIAN MARXISM---will have our American workers at the same wages and conditions as Foreign Economic Zones overseas-----white collar sweat shop professionals earn $20-30 a day....NO HOME-OWNERSHIP THAT WAY.
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Look at Jumbo Mortgage Loans for these foreclosures. This has expanded during Obama and will take our mid-size cities next.
3/23/2011 @ 5:50PM FORBES
Abandoned Mansions: Luxury Real Estate's New Housing Headache
By the time Thomas Brennan and Mary Alice Shallow bought their 5,000-square-foot farmhouse from Union State Bank, it had sat abandoned for nine months. At a paltry going price of $275,000, the Putnam County, N.Y. abode was nearly 60% cheaper than the other neighborhood homes, thanks to a foreclosure discount and years of neglect.
The property needed repairs, with some the worst damage having been inflicted by squatters, looters and vandals in the nine months leading up to Brennan and Shallow’s purchase.
“The copper plumbing had been stolen out of the house, the windows were busted, the front door broken down,” says Brennan. “Kids were inside vandalizing the house, and other people were stealing the antique furniture.”
Homes across the U.S. sit abandoned, empty and vulnerable to vandalism, due in large part to the ongoing housing crisis. The U.S. Census Bureau reported that the national homeowner vacancy rate for the fourth quarter of 2010 was 2.7%. That represents more than 2 million empty homes–including some mansions.
A quick search on real estate listing sites like Realtor.com and Trulia.com shows thousands of palatial estates deserted and patiently awaiting sale, as pools turn green and dust settles on granite countertops. Some of these abodes belong to owners who have listed the properties and relocated. Many more face foreclosure or are already bank-owned.
“What’s different about this foreclosure cycle is it has taken houses out of every aspect of the housing market,” explains Rick Sharga, senior vice president at RealtyTrac, an Irvine, Calif., foreclosure listing site. “You rarely saw mansions in foreclosure [until recently], and now you are seeing much more expensive types of properties in foreclosure.”
RealtyTrac has seen an unprecedented level of default activity in some of America’s ritziest neighborhoods. For example, Beverly Hills, the sixth-most-expensive ZIP code in the country, had a 700% increase in foreclosures of homes $2 million and up over the last three years.
We compiled a list of creepy abandoned mansions. They’ve all been empty for years. In a few cases, the homes have recently been sold to buyers willing restore them. Some are foreclosures; some the targets of longstanding legal battles; some are still actively owned from afar.
What do we mean by creepy? We confined our search to homes decaying into the ground, boasting spooky legends or tragic murders, or serving as sites for sordid illegal activities. Many of them are for sale: Boxer Mike Tyson’s deserted former Southington, Ohio, manor is listed for $1.3 million, and the allegedly haunted New Hampshire castle once inhabited by railroad tycoon Benjamin Ames Kimball can be had for a steeply discounted $880,000.
The bullet holes, gaping fissure in the wall and cracked windows have been patched up by new owners in the Florida estate vacated by Khalil bin Laden, Osama’s brother, following the Sept. 11, 2001, terrorist attacks. The asking price: $2 million.
For anyone tempted to take ownership of an empty estate, a plethora of challenges await. Creditors often hesitate to repossess them due to the high taxes and steep maintenance expenses they would assume. They can take ages to sell as well, partly because of a lack of available credit. Nearly 96% of mortgages currently being written boast backing from government affiliates like Fannie Mae , Freddie Mac and the Federal Housing Administration. Their loan limits are typically well below what would be needed to purchase a posh pad.
Since many mansions sit behind gates or in seclusion, looters can slip in unnoticed. Fixtures and construction supplies get stolen, as they were in Brennan’s and Shallow’s new home.
Sometimes “mansion squatters” move in. Last fall actor Randy Quaid and wife Evi were arrested for squatting in the guest house of a California home the actor once owned. In 2009 a former Wells Fargo executive got canned after crashing a $14.9 million Malibu manse repossessed by a bank.
Abandoned homes have also become a political hot potato across the country. Unfortunately there is no easy answer for what to do with empty structures, whether they’re mansions, more typical single-family residences or unfinished developments. One modest source of support is a federal abandoned property program set up under President George W. Bush and supported by President Barack Obama; it, however, may also fall into disrepair. The cost-conscious U.S. House of Representatives is looking to abandon the program–like a creepy home that costs too much to keep up.
Of course Washington DC leads in this kind of development------it has almost eliminated any middle/working class and pushed out the poor. Now, DC as a center of global corporations circling the beltway will probably attract that global 1% and their 2%. Our Montgomery County is an example of that enrichment. These homes are tied to JUMBO LOANS and the Federal Housing Agency insurance funding-----what will happen to these homes after this coming crash----it doesn't matter because the point was to take the city real estate and sending it to global banking in foreclosure meets that goal.
Baltimore can expect this same kind of development as we do whatever Wall Street Baltimore Development says. Wall Street developers are the ones getting UBER rich doing this all over the world. How many global 1% and their 2% will Baltimore attract?
It's no coincidence that a top selling of Jumbo Mortgage Loans is an originator located in these Washington beltway suburbs.
THIS IS ALL FEDERAL HOUSING FUNDING THAT WOULD COME TO BUILD LOW-AND MID INCOME HOUSING----WHEN THE FHA OPERATED AS IT SHOULD.
Booming luxury market drives surge in jumbo loans
Story by Michele Lerner
Illustration by Mark Allen Miller
Published on April 24, 2015
If you sold a house in Washington recently, you have an idea how prices are stagnating. The average price for most of the market rose by only 3 percent from the last quarter of 2013 to the last quarter of 2014, according to Redfin data.
But if you sold a house in the top 5 percent of the market, where properties average $2.402 million, you know how the luxury market is booming. Prices in that range rose 25 percent during that time, according to Redfin.
The District’s luxury market was so strong that it ranked No. 11 among U.S. cities with the highest number of homes selling for $1 million and up, according to a report issued this week by Coldwell Banker.
Soaring prices and sales in the luxury market are factors in the rapid growth of “jumbo loans” in the Washington area and around the nation. Nearly 1 in 4 mortgages originated in 2014 around the country were jumbo loans, spurred also by lenders’ efforts to make the mortgages more attractive to buyers.
Jumbo loans refer to mortgages that are above the conforming loan limit set by Fannie Mae and Freddie Mac, which is $417,000 in most areas of the country.
In the Washington metro area and other communities with high housing costs, the limit for conforming loans is $625,500; in a handful of areas such as Alaska and Hawaii, the limits are even higher. According to Inside Mortgage Finance, a publication for mortgage lenders, 23.5 percent of loans in 2014 were jumbo loans, the largest share since the publication began tracking those loans.
The trend has continued this year, with jumbo loan originations up by 9.8 percent in the first quarter of 2015 compared with the first quarter of 2014.
Limits for conventional conforming loans purchased by Fannie Mae and Freddie Mac are calculated each year, said Mark Deitz, a senior vice president at EagleBank in Potomac.
In 2006, the limits were $417,000 in all housing markets with the exception of Alaska, Hawaii, the U.S. Virgin Islands and Guam. Beginning in 2008, in response to the housing and financial crises, two sets of loan limits were created: “general” and “high cost” limits, which referred to areas with higher housing costs.
“Loan limits were expanded because there was a lack of a secondary market for non-conforming loans; no one wanted to buy them because they were considered too risky,” Deitz said. “Allowing larger loans to be considered conforming helped handle the threat of a complete lack of financing in high-cost markets.”
Aftermath of housing crash
Scott Davis, a branch manager and vice president with SunTrust in Sterling, says that most lenders withdrew from the jumbo loan market after the mortgage meltdown.
“Only a few niche lenders were left, and they typically raised interest rates on those loans and tightened the guidelines for borrowers,” Davis said. “Because of those higher standards, almost any loan written since the meltdown has been a pristine loan. Since 2013, lenders have been coming back and offering more jumbo loans. I wouldn’t say they’re loosening up completely, but it is a little easier to get an approval for a jumbo loan than in the past.”
Conforming loan limits for high-cost areas such as the Washington metro area were reduced to $625,500 from $729,750 in January 2014.
Deitz said that reduction helped expand the resurgence in jumbo loan lending that began about four years ago, since all conventional loans for $625,500 and above are now jumbo loans. The maximum amount lenders will offer varies, with many capping the amount at $3 million or $4 million. Deitz says the typical jumbo loan in the D.C. area goes up to $1.5 million. Borrowers of higher amounts usually need to make a significantly higher down payment, of as much as 40 percent or 45 percent.
Until recently, borrowers who needed jumbo loans expected to pay a much higher interest rate than those on conforming loans and to make a down payment of 20 percent or sometimes 25 percent or more to qualify for a loan. Today, the interest rates and down payment requirements are more aligned with conforming loans. Jumbo loan borrowers still typically need to prove they have cash reserves in the bank, a high credit score, a solid employment history and a low debt-to-income ratio.
“Private mortgage insurance is not typically available on jumbo loans, which is one reason borrowers usually need to make a down payment of at least 20 percent, although some lenders make exceptions for well-qualified borrowers,” said Craig Olson, senior vice president of mortgage operations for Pentagon Federal Credit Union, which is based in Alexandria.
Interest rates can be a bit higher on jumbo loans simply because of the amount of money involved and because it can take longer to sell a higher-priced home if the lender must foreclose on the property, Olson said.
“There’s definitely a difference now that the real estate market is recovering, with more lenders offering jumbo loans and even the ability to find a jumbo loan with a down payment of less than 20 percent,” said Barbara Roubo, a senior loan officer with MVB Mortgage in Reston.
Davis said that when lenders allow borrowers to make a down payment of 10 or 15 percent on a jumbo loan, they typically require more cash reserves in the bank. At a minimum, these borrowers would need to have at least six months of their monthly housing payment in liquid funds, including the principal, interest, taxes, insurance and homeowner association fee. Borrowers who own more than one property must have cash reserves to cover the payments on those properties for a specified time period. Roubo said that mortgage investors generally require between two and six months in cash reserves for jumbo loans, but Deitz said some require 12 to 24 months of reserves for the highest loan amounts.
Davis said that some lenders don’t allow funds in a retirement account to count as cash reserves, and that other lenders limit those funds to 50 percent or less of the reserve requirement. Even if retirement savings can be counted, only 60 percent of the balance can be considered as part of the reserves. For example, if a borrower has $100,000 in a 401(k) account, only $60,000 would qualify as cash reserves, and that $60,000 would have to be less than half of the reserve requirement.
“The biggest problem in this area is that there are lots of people with great income, with a low debt-to-income ratio and excellent credit who just don’t have enough cash to make a 20 percent down payment on a $1 million house,” Deitz said. “Allowing those well-qualified borrowers to make a down payment of 10 percent makes sense for some investors.”
A borrower would be able to keep cash in the bank rather than spending it on a down payment. In addition to the down payment, jumbo loan borrowers must qualify for a loan based on their credit profile, but Roubo said that different investors have different standards for credit and other loan qualification factors such as the debt-to-income ratio.
“The standard is still a 20 percent down payment and a credit score of 720 and above,” Roubo said. “But I tell borrowers we can ‘shop the circumstances’ to find an investor that might accept them.”
For example, Roubo tested a few scenarios to see if loans would be available. A consumer with a 720 credit score who wants to borrow $1.5 million and make a 10 percent down payment did not have any options, but loans are available for borrowers with a 740 credit score who can make a 15 percent down payment.
“Lenders charge slightly higher interest rates and fees to borrowers for different factors such as a lower credit score or a higher loan-to-value,” Roubo said. “They may be even a little tougher with these overlays on jumbo loans than conforming loans because of the higher risk associated with the higher dollar amount.”
For example, Roubo said that a borrower with a 680 credit score making a 10 percent down payment on a $750,000 loan would recently have been quoted a mortgage rate of 4.625 percent with 0 points. If that borrower had a 720 credit score, the rate would have been 4.125 percent with 0 points. The difference in the monthly payment would be about $193 purely because of the difference in the credit scores.
“There are lots of factors that go into whether someone can be approved for a jumbo loan and what they will pay,” Olson said. “Every situation is individual and depends not only on the credit score, but also on the loan-to-value, the type of property being purchased, the borrower’s employment history and their cash reserves.”
Jumbo loans are available as both adjustable-rate mortgages (ARMs) and fixed-rate loans.
Link: Lenders offer special mortgage program for recent college grads
“There’s always an ebb and flow in the number of people who choose an ARM,” Deitz said. “This area is transient, so for some people an ARM with a fixed period of five to seven years makes sense, especially because a difference of 1 percent in the interest rate can mean significant savings on a $1 million loan.”
ARM ARE THE KINDS OF MORTGAGE LOANS WITH BALLOON PAYMENTS THAT TOOK MUCH OF BUSH-ERA HOUSING SALES. THESE ARE VERY, VERY, VERY, VERY BAD AND EVERYONE KNOWS THIS.
Olson says that when interest rates crept up last year, adjustable-rate mortgages became more popular. Pentagon Federal offers a “5/5” ARM for jumbo loans in which the interest rate is fixed for the first five years and then adjusts once every five years. He says this loan program has been particularly popular because the interest rate is typically 1 to 1.25 percentage points lower than those for fixed-rate jumbo loans.
“In the D.C. area, most lenders have to do a lot of jumbo loans, so it’s important to work with a local lender, one that’s headquartered here, because they have a lot more experience with getting these loans approved so that your transaction can go through,” Davis said.
Consulting an experienced lender is the best way to find out whether you can qualify for a jumbo mortgage.
Here is the right wing media telling us the US middle-class isn't dying---it has simply gotten richer---moved to that newly rich. This is what fuels my debates with Republican voters who believe this----the percentage of the middle-class pulled up is that 5% to the 1%---with all other middle-class being eliminated. When that global 1% and their 2% eliminate our US 5% newly rich---and they will----we will see the end of any American citizens being able to afford real estate/homeownership.
If we look at Wall Street mainstream media they are selling as hard as they can that this movement up to being rich is the story of the disappearing US middle-class. That 5% of Americans being bought to break down America is not going to last. Notice it is our US city middle-class hit hardest.
'Middle class takes financial hit in most US cities this century
Household incomes have fallen in more than four-fifths of America’s metropolitan areas this century
May 11, 2016
by: Sam Fleming and Shawn Donnan in Washington'
More than four-fifths of America’s metropolitan areas have seen household incomes decline this century, according to new research that exposes the politically charged reality of middle-class decline at the heart of this year’s presidential election.
Sorry, Everyone: The American Middle Class Is Winning
Stop your whining, bourgeois! You’re basically the luckiest people to ever walk the earth.
June 22, 2016 By David Harsanyi
The American middle class is disappearing. This is what everyone says, all the time.
Although the notion propels many political debates, it’s simply not true. At the very least, it’s a debatable proposition. Yet I can’t remember a single journalist, debate moderator, or editorial board pushing back when a politician drops the usual trope about the middle class “shrinking” or “being squeezed” or “stagnating” or being “murdered?” It’s simply a given that the middle class is under duress.
A recent piece in the Wall Street Journal looked at some fresh studies and found, once again, that the “middle class” wasn’t shrinking because Americans were moving in large numbers to the lower economic rungs, but because they were moving to higher ones and becoming wealthier. The upper middle class is growing.
According to research by Stephen Rose at the Urban Institute, in 1979 38 percent of families in the United States were in the middle class compared to only 32 percent in 2014. Despite the endless political chatter about stagnant wages, Rose adjusted thresholds for inflation going back to 1979 and found that those moving into the middle class were earning more, and earning it through contemporary middle-class vocations.
From the article:
Using Census Bureau data available through 2014, he defines the upper middle class as any household earning $100,000 to $350,000 for a family of three: at least double the U.S. median household income and about five times the poverty level. At the same time, they are quite distinct from the richest households. Instead of inheritors of dynastic wealth or the chief executives of large companies, they are likely middle-managers or professionals in business, law or medicine with bachelors and especially advanced degrees.
AEI’s Mark Perry has long argued that upward mobility over the past 50 years has been historic. Perry found that the share of American households earning $100,000 or more per year has tripled since 1967, from 8.1 percent to 24.7 percent (in 2014). At the same time lower-income households, those making $35,000 a year, fell over the same period of time by five percentage points.
Let’s set aside income for a moment. Use any measure of quality of life—college enrollment, homicide rates, vehicular deaths, infant mortality, life expectancy, workplace injuries, pollution, teen pregnancy, access to health care, just to name a very few—and you will see an improvement for a majority of Americans over the past 40 years. As the economist Don Boudreaux recently argued, today’s middle-class American probably has a materially better existence than billionaires like the Rockefellers did 100 years ago. Yet we have political movements feeding the anxieties of millions of people, promising to bring back menial labor factory jobs and unproductive union-scale work to save the middle class.
Of course it could be better. It could always be better. It would be great to have more economic mobility. Fewer poor Americans, etc. But if voters happened to obtain most of their knowledge about the nation’s economic situation by listening to political candidates, radio personalities, and cable news hosts, how many of them would know that the percentage of Americans in lower-income brackets has shrunk over the past 40 years? All they would know is that the middle class was on an inevitable decline because the rich were sticking it to them.
Liberal canon says Reagan-era reconfiguration of tax policy and economic priorities created an acceleration of inequality, “destroying the middle class.” Today’s Democrats regularly claim that the majority of growth over the past 10 to 20 years has been gobbled up by plutocrats, causing widespread harm to the economy. (This notion is also highly debatable.) I suspect that liberals, who tend to conflate inequality (which has widened) with economic growth, wouldn’t see the expansion of the middle class as much of a victory, anyway.
As Thomas Sowell succinctly put it:
Many people believe in eliminating gaps and eliminating poverty. They don’t realize that in some sense those two things are antithetical. If you were to double everyone’s income, or if everyone’s income were doubled naturally over the course of time, then you would reduce poverty significantly but you would have also increased the gap. Now, I think the guy who is having trouble feeding his family and paying the rent is not going to complain if his income doubles over time, even though that means he is further below the Rockefellers than he was before.
Alas, the volatility and risk that comes with a dynamic economy is not only a problem for Democrats. The Donald Trump phenomenon is also, to some extent, predicated on the idea that elites have unleashed economic unfairness. Protectionist ideas will always be with us because, inevitably, progress disrupts the lives of the vulnerable, who are often the last to benefit from advances in innovations and often lack the skills to adapt to a changing job market. Yet all classes benefit from the creation of wealth.
The economy is complex like that. We can let economists debate how to most accurately measure inflation, inequality, and stagnation. But the middle class is not suffering some unique or historic misfortune. Although there are plenty of challenges out there, if you’re a member of the American bourgeois, you’re probably one of the luckiest humans to ever walk the earth.
Today's housing development is VITAL in being able to rebuild a middle-class and we will not do that with global corporate campuses and global factories. We know that SMART CITIES have a goal of much work being done by robotics. I watch in Baltimore as gentrified communities are being swamped in density under the guise of developing for the middle-class----AND IT IS NOT---these communities will all be taken by high-rise luxury buildings and global corporate campus offices.
Then these is this student housing disguised as affordable housing like the city center MICA for-artists only. The same is happen around Homewood, University of Maryland Baltimore, University of Baltimore, and East Baltimore Hopkins. All of these campuses will simply be greater global Hopkins and all of what is now called AFFORDABLE HOUSING going to university students will not be available to the 99% of people. A global 1% and their 2% circulating through these campuses will make the dynamics of Baltimore city center constantly fluid. This is not community planning.
Finally, we are seeing Wall Street Baltimore Development HOUSING NON-PROFITS hawking 'affordable housing' way out in rural counties or at city borders. MOVING FORWARD moving our current Baltimore citizens out---MIDDLE/WORKING CLASS AND POOR----all rental units.
THE NEW CITIZENS BEING BROUGHT TO OUR US CITIES DEEMED FOREIGN ECONOMIC ZONES ARE THOSE TEMPORARY MIDDLE-CLASS ----WE NEED EVERYONE WORKING TO STOP THESE FOREIGN ECONOMIC ZONE POLICIES.
The sad thing is we all know technology industry is about killing jobs----with robotics and online global industries. Technology industry is also the one most likely to bring that global labor pool to lower our US wages for professional jobs. WE KNOW IT'S COMING----engage NOW.
Want to help the middle class? More houses, pleaseThe U.S. is building new homes at about half the historical rate, and it's causing our cities to become unaffordable.
Glenn Kelman, CEO of Redfin
Wednesday, 13 Jan 2016 | 9:58 AM ETCNBC.com
America's future is happening first here, in Seattle. Just this year, Seattle technology jobs increased 21 percent. Housing prices rose 12 percent. And all the people who built this city out of coffee, lumber and airplanes have struggled to keep up.
Only a third of Seattle homebuyers outside of technology now report being confident they'll be able to afford to live here in 10 years. The same thing will happen in Austin, Boston, Denver, Portland and, eventually, to a dozen other American cities that will become less affordable over the next decade.
The problem is housing.
When we talk about a city's cost of living, we don't mean food, transportation or clothing, which cost about the same everywhere. We mean housing.
We need a government policy all-out in favor of more, denser housing.
Housing is in short supply. For the 40 years prior to 2008, ground was broken on an average of nearly 1.6 million housing units per year. Starts over the past seven years averaged 788,000; even in 2015, a boom year, starts were only 1.1 million.
What happened to the laws of supply and demand? From 2010 to 2013, home prices were 56 percent higher than construction costs, an increase from the 1990s when home prices were 33 percent higher than construction costs; most economists attribute this increase to zoning laws designed to preserve a city's character and to protect home prices.
In Seattle, there are 40 percent fewer homes on the market than just a year ago, yet this summer, the city council flip-flopped on the mayor's plan to support more high-density construction after neighborhood associations revolted; even with people marching in the streets for affordable housing, only 37 percent of Seattle homebuyers support denser development.
With Seattle's racial diversity a centerpiece of the failed plan, the fight to preserve local character has become fraught with uncomfortable implications. In Boulder, Colorado, this fall, the rallying cry of residents who attempted to prevent any zoning changes was, "They're coming for our neighborhoods." The maze of NIMBYs ("Not in my backyard"), pols and community organizations a mayor has to win over to get anything built in San Francisco is so complicated, it's now a board game.
There are small signs of change. Austin has a new zoning initiative explicitly defined to create a more affordable, integrated city. Seattle just announced $45 million in funding for affordable housing, raised in part from local developers. But this is a far cry from the all-out effort to keep housing costs low that we'd pursue if our priority was the people who need affordable housing, not the ones who already have it. As it stands today, housing is the only consumer good where any price drop is universally viewed by the government as a calamity.
On a national scale, the impact of this mentality is breathtaking. The migration from poor areas to rich areas that defined American history for a century is, according to academics, reversing, a phenomenon the mayor of Oklahoma City has described as the "Wrath of Grapes."
These same academics note that janitors now earn less in New York after housing costs than in the Deep South. They argue that limits in housing supply are driven by land-use regulations and increase a city's wealth disparity.
Employers are as sensitive to housing costs as their employees, which is why, when we build more houses, we create more jobs. Google and Facebook are opening campuses across the U.S. because even software engineers can no longer afford San Francisco, where the median home price just topped $1 million. Businesses move jobs across the country or overseas to find places where the same wages can still offer a comfortable life, which begins with a home you can afford.
This is a problem we can solve. It's hard to improve our schools. It's hard to redistribute wealth created by the concentration of technological and financial power or to increase middle-class wages. But it might be easier to lower middle-class costs by building more housing.
"Housing is the only consumer good where any price drop is universally viewed by the government as a calamity." -Glenn Kelman, Redfin CEOFirst, federal immigration reform would help. The top new piece of legislation on the lobbying list for the National Association of Homebuilders is immigration reform, to give builders more skilled workers from outside the U.S. How serious is the labor shortage? Builders today are hiring security guards to patrol construction sites, not to safeguard lumber but to prevent recruiters from poaching their people.
We also need federal support for low-income lending; at the moment in 2008 when home prices plummeted, the government essentially outlawed private lending to the working class without adequately funding public programs to fill the gap. The result was nearly a decade of profiteering from cash investors who bought distressed properties for pennies on the dollar, then rented them at above-market rates to folks who couldn't qualify for a mortgage.
Why people are flocking to Oregon
But the heroes in this story will be our cities. It should be clear by now to the mayor of every major city that deregulating new construction is key to preventing inequality, sprawl and job losses. And the time is now. When homes are built in an area, anyone can see that change in this boom-and-bust nation happens unevenly, with things staying the same for decades, then changing almost overnight.
A middle-class-friendly housing policy would be aggressively focused on causing a glut of housing, but current policy instead causes a shortage — of fairly historic proportions — causing our cities to become unaffordable, with lower job growth.
OH, REALLY?????? DEREGULATE THE DEVELOPMENT POLICIES?
It's a little scary to imagine how different our neighborhoods will be if we welcome the growth now coming to many American cities. But what will happen if we don't? Americans will always be protective of where we live, and rightly so. But improving the affordability and diversity of our neighborhoods can enrich their history and character and enrich this nation.
For these few decades the only REAL affordable housing has been built way outside of Greater Baltimore. All of what is already too little funding for affordable housing deliberately being used to move Baltimore citizens out. I listen to our low-income citizens being told to take jobs in Glen Burnie----well, it takes two hours to commute by public transit so the goal is of course to have these workers live where they are able to be hired. We know the race and class issues in Baltimore but we want to caution----this movement of Baltimore citizens OUT-----will include ALL but the global 1% and their 2%!
Please demand REAL mixed-income housing----stop allowing Wall Street Baltimore Development and its 'labor and justice' organizations pose progressive with these affordable housing gimmicks! We need public housing, low/middle-income housing along with the affluent ----THE TIME TO DO THIS STARTS NOW----NOT NEXT DECADE.
Glen Burnie low-income housing development gets green light
Council votes to grant developer tax break for $10 million project
November 24, 2011|By Nicole Fuller, The Baltimore Sun
The developer of a planned affordable-housing community in Glen Burnie will start construction on the project next month, after the Anne Arundel County Council voted to grant the company a key tax break on the project.
The council's 4-3 vote on the tax break for New York-based Conifer Realty allows the 36-unit project to move forward, despite complaints from residents who said the development has the potential to bring more crime to the area and decrease property values.
Those assertions were voiced by County Councilman John J. Grasso, who represents the Glen Burnie area and has said it already has an abundant stock of low-income housing. The Republican said the project would be a "cancer" in the community and that the low rents indicated that renters wouldn't be "quality people," — comments that Councilman Jamie Benoit, a Democrat, has rejected as "crazy."
Before Monday night's vote, Grasso, who opposed the tax break, said, "Glen Burnie has gone to the ghetto. If people wanted to live in Baltimore City, they'd move over there. But no, they want to live in Glen Burnie."
The $10 million project, called Marley Meadows, will be located in the 7700 block of Baltimore-Annapolis Blvd., and has been granted a $500,000 loan from Arundel Community Development Services, a quasi-public agency.
Additionally, the developer has received a $3 million loan from the state Department of Housing and Community Development that was contingent on approval of the $5,000 annual county tax break.
Patrick Wagner, vice president at Conifer and director of its Maryland office in Columbia, said he was pleased with the council's vote. Wagner said construction is slated to begin next month. The project is set to be completed in a year.
"We plan to continue to work with the community cooperatively to address community concerns," Wagner said.
Nancy Rase, president of the Anne Arundel Affordable Housing Coalition, testified before the council and said that Conifer has a good reputation for maintaining its properties in Maryland, including a development in Cambridge located near similar low-income housing that the coalition oversees.
"Conifer has an excellent reputation," said Rase. "Their properties are well-managed."
But residents of the Sun Valley community, located near Marley Meadows, weren't convinced.
Jean Settino said she's been paying taxes on her home for 52 years and resented the fact that a business would get a tax break.
"If you're a business, you should be paying your taxes," she said. "And low-income housing brings crime. Oh, yes, it does."