Fraud or Mistake?

moz

The U.S. Court of Appeals threw out the $1.3 billion judgement against BofA – here is the story behind it:

http://www.latimes.com/business/hiltzik/la-fi-hiltzik-bofa-mortgage-billions-20160524-snap-story.html

If I’m ever dragged into court for a financial fraud, I want to throw myself on the mercy of Judge Richard C. Wesley.

Wesley is the U.S. appeals court judge in New York who, with his colleagues Reena Raggi and Christopher F. Droney, found a loophole in federal fraud law big enough for the nation’s second-largest bank to fit through without even scratching a fender.

In a ruling written by Wesley and issued Monday, the three judges tossed out a $1.3-billion judgment against Bank of America for stuffing thousands of lousy mortgages into the portfolios of Fannie Mae and Freddie Mac in 2007 and 2008 by pretending they were high-quality loans. Their ruling turned on the curious question: “When is a fraud not a fraud, but just, sort of, a lie?”

Anyone concerned about white-collar crime should find the appellate court’s logic appalling. One who does is Dennis Kelleher, a former corporate lawyer who is now CEO of the financial watchdog group Better Markets.

“You wonder why the American people are so cynical,” he told me after the decision came down. “It’s because there’s an endless reservoir of ways to figure out how to hold no one accountable for illegal conduct.”

Read the full article here:

http://www.latimes.com/business/hiltzik/la-fi-hiltzik-bofa-mortgage-billions-20160524-snap-story.html

Pending-Home-Sale Index Surges

nirvana

A title rep came by the open house yesterday.  She said it has been so quiet over the last couple of weeks that she has had people call her cell phone just to make sure it was working!

http://www.housingwire.com/articles/37125-pending-home-sales-surge-to-10-year-high

Pending home sales overcame industry hurdles and increased for the third consecutive month in April, surging to the highest level in over a decade, according to the National Association of Realtors.

The Pending Home Sales Index, a forward-looking indicator based on contract signings, hiked up 5.1% to 116.3 in April from an upwardly revised 110.7 in March and is now 4.6% above April 2015 (111.2).

After last month’s gain, the index has now increased year-over-year for 20 consecutive months.

Lawrence Yun, NAR chief economist, says vast gains in the South and West propelled pending sales in April to their highest level since February 2006 (117.4).

“The ability to sign a contract on a home is slightly exceeding expectations this spring even with the affordability stresses and inventory squeezes affecting buyers in a number of markets,” he said. “The building momentum from the over 14 million jobs created since 2010 and the prospect of facing higher rents and mortgage rates down the road appear to be bringing more interested buyers into the market.”

Pending home sales in the South jumped 6.8% to an index of 133.9 in April and is 5.1% higher than last April, while the index in the West climbed 11.4% in April to 106.2, and is now 2.8% above a year ago.

Although the future of mortgage rates lies in question, Yun said, “Even if rates rise soon, sales have legs for further expansion this summer if housing supply increases enough to give buyers an adequate number of affordable choices during their search.”

As it stands, mortgage rates have remained below 4% in 16 of the past 17 months, and Yun predicts that they will continue to hover around 4% in coming months.

Looking ahead, Yun expects sales this year to surge higher than earlier estimates, coming in around 5.41 million instead, a 3% boost from 2015. After accelerating to 6.8% a year ago, national median existing-home price growth is forecast to slightly moderate to between 4% and 5%.

From CAR:

April REALTOR® Market Pulse Survey**:

In a separate report, California REALTORS® responding to C.A.R.’s April Market Pulse Survey saw a decrease in floor calls, open house traffic, and listing appointments/client presentations, likely due to the tight inventory and low affordability conditions constraining the California housing market. Floor calls and listing appointments both reversed three months’ growth in April. Open house traffic declined also but has been in positive territory since the beginning of the year.

• The share of homes selling above asking price in April shrank for the first time since December 2015, slipping to 32 percent from 34 percent in March and 36 percent in April 2015. Conversely, the share of properties selling below asking price rose for the first time in four months to 40 percent. The remainder (28 percent) sold at asking price.

• For the homes that sold above asking price, the premium paid over asking price declined for the second straight month to an average of 9.6 percent, down from March’s 9.8 percent and 10 percent in April 2015.

• The 40 percent of homes that sold below asking price sold for an average of 12 percent below asking price in April, down from 9.6 percent in March and 11 percent a year ago.

• Nearly seven of 10 properties for sale received multiple offers in April, indicating the market remains competitive. Seventy-two percent of properties received multiple offers in April 2015.

• The average number of offers per property decreased for the first time in three months to 2.9 in April, down from 3.3 in March and 3.6 in April 2015.

• With home prices leveling off in recent months, more sellers are adjusting their listing price to become more in line with buyers’ expectations. About one in four (23 percent) of properties had price reductions in April, down from 28 percent a year ago.

• Low housing inventory continued to be REALTORS®’ biggest concerns, cited by one in three (33 percent), while 16 percent indicated declining housing affordability, and 14 percent stated overinflated home prices.

• REALTORS® remained somewhat optimistic about market conditions over the next year, with the index increasing slightly from 60 in March to 61 in April. However, optimism is waning as the index is down from 73 a year ago, indicating fewer REALTOR® respondents are positive about the market.

Berlin

Thankfully, no musicians died this week, so let’s acknowledge Top Gun, which came out thirty years ago.  Those of us who are long-time San Diegans remember how popular it was here due to it being filmed locally. The Top Gun house in Oceanside can be seen at the 0.56-minute mark.

https://en.wikipedia.org/wiki/Top_Gun

In June 2013, Bruckheimer stated that: “For 30 years we’ve been trying to make a sequel and we’re not going to stop. We still want to do it with Tom [Cruise] and Paramount are still interested in making it.

What Tom tells me is that no matter where he goes in the world, people refer to him as Maverick. It’s something he is excited about so as long as he keeps his enthusiasm hopefully we’ll get it made.”

On September 8, 2014, Paramount and Skydance revealed being in negotiations to have Justin Marks write the screenplay. In June 2015, while promoting Terminator Genisys, Skydance CEO David Ellison confirmed Marks was writing the screenplay, with the plot emphasizing “drone technology and fifth generation fighters. It’s really exploring the end of an era of dogfighting and fighter pilots and what that culture is today.” Kilmer posted on his Facebook page that he will be returning as Iceman.

In April 2016, Marks told Creative Screenwriting that Top Gun 2 was a dream project for him, as Top Gun was the first movie he remembered seeing in theaters. “Just researching the Joint Strike Fighters, the F-35, the different notions of where the Navy is today was a very interesting insight and it started to give me ideas of what Top Gun would represent in a current era.”

RV Homes in the Yard

rv8

I’m surprised we don’t see more of these!  Hat tip to daytrip!

http://laist.com/2015/10/20/this_is_echo_park_at_2015.php

We know housing is expensive and it’s hard to afford up-and-coming, desirable neighborhoods like Echo Park, but we’re not sure about paying $850 a month to live in a Winnebago motorhome sitting in someone’s backyard.

A Craigslist ad posted over the weekend is offering a “unique rental”: a Winnebago motorhome that’s 215 square feet and advertised as a one bedroom, one bathroom. The $850 price tag seems a bit hefty to us, considering the home is on wheels, and it’s located near Belmont Avenue and Rockwood Street, which is not even in the fun, bustling part of Echo Park. According to the ad, you can get all this:

This motorhome was set to be a guest house, but we decided to rent it out to a student or anyone who needs to be close to DTLA. It is situated in the back parking area of a beautiful, 3 unit Echo Park Apartment house. There are citrus trees all along one side, and the other (entrance side) has a few large potted trees along it. There is off-street parking available in the parking lot next door Mon-Fri for $50, and then street parking on Saturday & Sunday (very easy street parking). The unit has an LP furnace, Ducted A/C, full bathroom with a shower stall, a small bedroom with a queen sized bed, full kitchen, dinette, and linoleum/carpet combo. It’s very nice inside, very well kept. Blue/Beige interior. All utilities and WiFi included. Washer & Dryer on site (laundry room attached to main triplex). Hot tub on site as well. Basement storage also available in addition to rental.

Okay…well, there is a hot tub at least! As for the view, you can look longingly at the beautiful apartment complex from the parking area. And you won’t have to lug your laundry basket to the laundromat since they have a washer and dryer on site. Though, we probably would rather live in the creepy shack up for rent in Griffith Park—at least that one has some character!

While you can live in motorhomes in trailer parks, and it’s legal to live in your car on the streets of Los Angeles, we spoke to Juan Hernandez, a clerk typist at Housing Authority of City of Los Angeles, who told us you’re not allowed to rent out an RV in the parking area of a home. It has to be in a trailer park, he says.

Well, there goes that dream. If you still want to live in Echo Park, as of September, one-bedroom apartments are averaging about $1,610 per month, according to real estate website Zumper. Good luck!

Real Estate and Airline Miles

FlyHome

They will still need great agents to produce the best results!

Buying a home will probably be the biggest purchase of your life. Imagine earning airline miles for it.

That idea was the impetus for FlyHomes, an online real estate brokerage and platform that rewards house hunters with airline miles when they purchase a home. Today, the startup is coming out of stealth mode in Seattle, where it has been operating quietly since late last year, and launching a beta version of its product in Boston. FlyHomes plans to expand service to Silicon Valley in early June.

FlyHomes works with Alaska Airlines to provide homebuyers with miles that can then be used with a number of carriers. The startup purchases miles from Alaska at a discounted rate and uses an algorithm to determine how many miles each house is worth. FlyHomes’ goal is to be in the ballpark of one mile per dollar spent on a home.

Read full article here:

http://www.geekwire.com/2016/startup-that-rewards-homebuyers-with-airline-miles-launches-in-seattle-boston-and-silicon-valley/

New-Home Sales Rise

If this sort of good news holds up, look forward to the Fed bumping their rate again. Mortgage rates have come down since the last Fed hike!

From MND:

http://www.mortgagenewsdaily.com/05242016_new_home_sales.asp

New home sales surged in April after a disappointing report in March.  The Census Bureau and the Department of Housing and Urban Development said today that sales were at a seasonally adjusted annual rate of 619,000, an increase of 16.6 percent from the previous month and 23.8 percent higher than in April 2015.  That said, it should be noted that this report has a notoriously high margin of error, with this month’s ringing in at 15.4 percent.

Sales in March were also higher than earlier reported.  Last month’s report had those sales down from February by 1.5 percent to a seasonally an annual rate of 511,000.  That number

On a non-seasonally adjusted basis there were 61,000 newly adjusted homes sold during the month.  In March sales totaled 50,000.

At the end of the reporting period there were an estimated 243,000 new homes for sale nationwide.  This is estimated at a 4.7-month supply at the current rate of sales, down from 5.5-months in March.

The median price of a new home sold in April was $321,100 compared to $292,700 a year earlier.  The average sales price was $379,800 compared to $334,700 in April 2015.

The Mortgage Bankers Association, based on the numbers of applications submitted to the mortgage subsidiaries of new home builders, had predicted sales to decline 11 percent from March.  On a non-seasonally adjusted basis they had projected sales at 48,000 units, down from 54,000 units in March.

Sales in the Northeast were up 52.8 percent from March and an astounding 323.1 percent from the previous year. Sales in the Midwest declined by 4.8 percent and 9.1 percent from the two earlier periods.

Sales of new homes in the South rose 15.8 percent from March and 18.1 percent year-over-year.  The West saw sales increase by 18.8 percent month-over-month and 23.6 percent for the year.

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