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Australian Housing Crash


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Ponzi borrowers inflating housing bubble


From: The Australian August 18, 2010


LOCAL property investors have become Ponzi borrowers in a market that is 40 per cent overvalued, Morgan Stanley's top strategist says.



At : http://www.theaustralian.com.au/business/p...x-1225906547850






Housing bear warns again of bubble waiting to burst


August 18, 2010


AN ARMY of loss-making landlords threatens to deflate Australian house prices, posing a risk to economic stability, a leading analyst has warned.


At : http://www.smh.com.au/business/property/ho...0817-128hl.html

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I'm not sure what the local real estate markets will do in the next couple of weeks but the coming week could be a huuuge one in the States, with "existing home sales [to] be released on Tuesday, new home sales on Wednesday, the MBA Q2 National Delinquency Survey on Thursday, and Q2 GDP on Friday".


There is a widespread expectation - based on already reported state figures - that existing home sales have absolutely crashed in July - and that the average time to sell a home in the US is now more than a year. To round out the week on Friday they come out with their amended GDP figure for March to June. The initial guesstimate figure was 2.4% annualised but because of already released revisions to components of the GDP calculation there are concerns the updated figure will be as low as 1% annualised.




An amazing aspect of the ongoing crash in US residential real estate is that apparently buyers are still trying to pick the bottom and are still expecting to make extraordinary capital gains.



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Mortgage Electronic Registration Systems (MERS)

If MERS does not hold the title of land and has electronically recorded a mortgage, I wonder what is actually on the paper copy of the title?


In other words

If the title is now electronicly recorded

- MERS holds an electronic copy.

- MERs says paper title distroyed after scan in computer (if I read that correctly)

- or MERS scanned title and filed so paper title kept but not modified.


Court requires the actual title and not a copy then -


Who really owns a house in the USA?


And how can you sell a house without the original title?

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if MERS was never the title holder, there is nothing to assign. The defaulting homeowners could wind up with free and clear title.


I cant see this happening. I think lawyers are going to have to sort it out or congress will need to move the goal posts and I know whose side they will move them closer too.


In Florida, Jacksonville Area Legal Aid attorney April Charney has been using the missing-note argument ever since she first identified that weakness in the lenders' case in 2004. Five years later, she says, some of those homeowners are still in their homes.


I'm guessing 61.5 million of them are watching reality TV and have no idea that Wall St f*ked up. They're not paying off the morgage anyway so they think they're doing alright as it is.


No idea how they will be able to sell them

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I enquired about bridging finance recently - the bank was only too happy to offer it but the real kicker was a $1500 govt fee on top of the already penal bank rates... fortunately the vendor was happy to accommodate our request for a license agreement for the 2.5 weeks of overlap.
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  • 2 weeks later...

Lenders back to throwing cash at buyers


September 12, 2010


Generous loans back in vogue

Experts warn of default danger


MORTGAGE lenders are returning to "reckless" practices last seen before the credit crunch, lending desperate homebuyers more than a property is worth in a bid to keep the market rising.


Next month, non-bank lender Mortgage House will offer a home loan equivalent to 105 per cent of the property's value - the most generous deal since the global financial crisis kicked in three years ago.



At : http://www.news.com.au/money/property/lend...0-1225918973988

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There are lies, damn lies and then there are statistics as Mark Twain once noted.


This story is a bit old by now but you would have to ask what Com Bank was thinking. Apparently they intended to send a team overseas to give a presentation to sophisticated investors. And they were kind enough to release to the market a copy of the presentation before the team checked in at the Qantas Club. But there have a more than a few less than flattering comments about the quality of the presentation. I would have thought that at least some sophisticated investors become sophisticated investors on their ability to smell a rat. So why would CBA think they could get away with going such obvious spin with that audience. Embarrassingly for CBA they were called out for the dubious effort even before they left Australia.


Steve Keen highlights one obvious clanger. How bad is that: whoever at CBA approved such a wilful distortion by allowing an analyst to cherry pick data from two different sources should be stood down imo.




Then David Llewllyn-Smith (who with Ross Garnaut wrote the excellent The Great Crash of 2008) did a more thorough analysis of the presentation and came up with a whole nest of rodents.




As Mr Llewllyn-Smith points out there is massive irony in that their ad campaign - which imo has to be one of the worst corporate ad campaigns ever - is all about some down-to-earth Aussies seeing through the bullshit spin coming from some smart alec yanks when in real life it is some air-headed Aussies expecting to spin some hard-nosed yank investors.


I continue to be wrong with my analysis of the local residential market but rubbish efforts like this from the biggest home lender in the country gives me encouragement that I may be less wrong for a shorter period of time than I feared. :rolleyes:



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