With 50 + listings in 2011 year's end and 50 + sales in 2011. I have received the following award.

I am now a 50/50 member with Coldwell Banker and have won the International President's Elite award for 2011.

COLDWELL BANKER REAL ESTATE LLC 1 CAMPUS DRIVE PARSIPPANY, NJ 07054-0642

February 2, 2012

Congratulations! You achieved impressive results in 2011 that entitle you to the use of the President’s Elite designation within the Coldwell Banker brand during 2012. As a member of this distinguished group, you are among the top three percent for President's Elite, for all Coldwell Banker sales associates, depending on the designation you earned. Wow!

The Wisconsin housing statistics are now in for December of 2011. Here is an excerpt from what the Wisconsin Realtors® Association (WRA) had to say:

"What is encouraging is to see monthly home sales continue to outpace last year's levels," said Rob Keefe, Chairman of the WRA Board of Directors, noting that home sales in December were 11.3 percent higher than December 2010".

"If home sales are to continue to grow, we will need more robust job growth going forward, but a falling unemployment rate is a welcomed sign" said WRA President and CEO Michael Theo.  The [Wisconsin] unemployment rate dropped more than a half percent over the last two months to 7.1 percent in December 2011.

Below are the number of Home Sales and Median House Prices for the state of Wisconsin, Rock County, and Dane County. These stats include Janesville and Madison. Feel free to contact me if you have any questions pertaining to these figures. As you can see, home sales have been increasing substantially this year. But as you can also see, all prices are dropping in this market.

If you would like some insight into how much your home is currently worth, I would be happy to provide you with a free comparative market analysis. This is a report that gives a close estimate to what your home might sell for in your current local Wisconsin real estate market. Has your home value fallen below what you currently owe? A short sale may be right for your situation. Visit the following page on Wisconsin Short Sales.

The Wisconsin housing statistics are now in for November of 2011. Here is an excerpt from what the Wisconsin Realtors Association (WRA) had to say:

"We are definitely closing out the year on a strong note," said Rob Keefe, Chairman of the WRA Board of Directors, noting that the seasonal pattern of home sales typically slows as winter approaches. "The strong market of the last few months has pulled sales in 2011 nearly even with the 2010 level," he said. Keefe noted that year-to-date home sales through the end of November are now less than 1 percent below last year, and that is without any bump from the federal government to stimulate existing home sales.

"This is clearly a buyer's market, and while inventories are down from October, they still remain high at more than 14 months," said WRA President and CEO Michael Theo. "This means buyers will be in the driver's seat for the foreseeable future. The economy did get a little good news in November with an improvement in the national unemployment rate and even an uptick in consumer confidence and consumer expectations"

Below are the number of Home Sales and Median House Prices for the state of Wisconsin, Rock County, and Dane County. These stats include Janesville and Madison. Feel free to contact me if you have any questions pertaining to these figures. As you can see, home sales have been increasing substantially this year. What I find most interesting in November's data is that Rock County Wisconsin home prices are actually increasing, while Dane County Wisconsin home prices have been decreasing. Both counties continue to have an uptick in the number of homes sold.

If you would like some insight into how much your home is currently worth, I would be happy to provide you with a free comparative market analysis. This is a report that gives a close estimate to what your home might sell for in your current local Wisconsin real estate market.

It's coming up on 2012 and I wanted to take a look at some predictions I had made for 2011 and just how well I did....or didn't do.

In my blog, "More Housing Predictions for 2011 part 2" one of my predictions was, "Lack of substantial job growth"

Well, I would say I was pretty on target for that prediction. I had mentioned that I didn't believe the underlying problems to the economy were going to be addressed and therefore, we couldn't expect a robust recovery, if one at all.

In my blog, "More Housing Predictions for 2011 part 2" one of my predictions was, "Government Home Retention Programs prevent a Real Estate Bottom."

Once again, I would say I was pretty darn accurate about real estate not hitting a bottom. The Federal Government hasn't released any new statistics on the recent success or lack of success on their foreclosure prevention programs however, with the increasing or steady number of NODs and Foreclosures, I would suspect that we haven't hit a bottom yet and yes, a lot can be laid at the feet of our government who is instructing banks to avoid foreclosing. I remember at the start of 2011, when I was out doing relocation assistance negotiations, people had been in their homes for 4-6 months before I showed up....now it's more like 14-24 months......no bottom in sight anytime soon.

In my blog, "More Housing Predictions for 2011 part 2" one of my predictions was, "Energy Prices will Rise to Un-precedent levels"

Now, on this prediction, I can't really say I was spot on but, I can say I was close. You see, we never made it to $5.00 a gallon for gas but, commodity prices in general are skyrocketing. In fact, most commodities like, cotton, sugar, gold and others are reaching record levels or surpassed record levels. This is obviously a sign of inflation concerns, higher cost, weak dollar. So, I won't say I was spot on but, I will say I was on track with this one.

In my blog, "More Housing Predictions for 2011 part 2" one of my predictions was, "Credit Tighterning"

I predicted that credit tightening would continue and it would become increasingly harder for the average citizen to get a loan......have you tried to get a loan lately......you better have a 650 fico and at least 15% down.

In my blog, "More Housing Predictions for 2011 part 2" one of my predictions was, " Unforeseen National Crisis"

More specifically, I predicted that obviously I can't predict a unforessen national crisis but, I am glad to say that on this prediction, I was wrong. At least, I am not aware of a "national crisis" of global concern.

All said and done, I would say I was pretty accurate....maybe a little skimpy on details but, 2012 predictions are coming and I assure you, I will detail those predictions up.

There are approx 2,169  Las Vegas Foreclosures for sale in the Las Vegas area per the local MLS.

This is for homes without contracts on them.

Foreclosure sales pending and homes with contracts on them are at .... 2,594

401 Foreclosure sales have sold so far this month.

This year approx. 15,400 foreclosures have sold in the Las Vegas area.

There are approx 5,056  Las Vegas Short Sales for sale in the Las Vegas area per the local MLS.

This is for homes without contracts on them.

Short Sale pendings and homes with contracts on them are at .... 7,089

248 short sales have sold so far this month.

This year approx 7,900 short sales have sold in the Las Vegas area

PLEASE READ THIS ARTICLE... makes one think of what is really happening with this bill when you take into consideration all the movement of large bank related corporations to buy up the "SHADOW INVENTORY" that the banks have been sitting on all this time. Default Redsources' REO Management branch has signed a deal with Georgia based United Bank, HomeLand Security Capital Corp, moved into a space by aquiring Default servicing LLC, Another lender, Stewart Lender services aquired PMH Financial which manages about $2.5 billion in properties, and First American Financial Corp. is finalizing deveolpment of a REO asset managment firm. These are large billion dollar companies making these moves within the last month or two.

Seems like a smart thing to do ....to control the housing so they can rent it all out. Is this what the banks have been looking to do by garnering control of the real estate industry? Eviction is easier than foreclosure and less costly. This would be a lifetime mortgage payment with control over the total asset all the time. No longer will home ownership be a possibility unless you can afford the 20-30% down which they are also pushing for.

Maybe I am just being paranoid...you make up your own mind...everyone scoffed when I said oil would go up to $70 a barrell back in 1999.

nuff said

Robert Moreno

===============================ARTICLE========================

Homeownership Rates Are Lower Than You Think

 August 2, 2011

Guest Contributor, Sean O’Toole. CEO ForeclosureRadar.com
 
This morning a headline in my inbox caught my eye: Homeownership Rate Drops to 13 Year Low. Seems the Census Bureau has tallied the homeownership rate to be 65.9 percent, down from nearly 70 percent at the peak of the bubble. Despite the drop, I believe this stat significantly over-estimates the real rate of homeownership today. With another 9.6 percent of homeowners with a mortgage currently not making their payments, I’d argue that its time to realize the real rate of homeownership is getting close to being in the high 50′s – which is closer to a 50 year low. Sure the policies of extend and pretend will keep the Census Bureau from reporting this reality for months or even years to come, but we all need to be thinking about the implications now.
 
For example, should the government and banks really be in the rental business? House representative Gary Miller (R-CA), introduced a bill with bipartisan support to authorize FDIC insured banks as well as Fannie and Freddie into entering 5 year lease agreements on REO properties rather than sell them. He says “Something must be done to reduce the inventory of available homes and stop the further decline in home prices,” so he obviously hasn’t spoken with Realtors or investors in the area he represents or he’d realize that inventories throughout California are low and that homebuyers and investors are having a hard time finding decent properties to buy. Plus unlike banks, investors fix properties up by hiring local contractors, use local property managers, and spend their income locally, all of which create much needed jobs. His bill, if it passes, is likely to hurt the CA economy more than it will help… at least in the near term.
 
Rather than massive government intervention, like Miller’s bill, I believe the better answer is to deal with the decline in homeownership by re-igniting real estate investing. In an environment of zero interest rate policy ,with baby boomers nearing retirement, this change in homeownership rate may provide just the opportunity boomers need to get decent returns on their retirement savings. The only problem with this vision is that it’s bad for banks and Wall St who can’t afford to have investors move assets out from under their management. As such, expect more policies that help banks and GSE’s keep homes off the market, further frustrating both homebuyers and investors.

This is HUGE!

FROM THE DESK OF THE MORENOWORKGROUP:

A new law signed by Jerry Brown in California has now made it easier for Californians suffering from the Real Estate dip to short sell their homes. The new law prevents the second lein hold nor the investors behind them, including any insurer to seek any type of deficiency judgement against the seller once the deal is closed. 

HERE IS THE LAW FOR THOSE WHO CAN NOT SLEEP AT NIGHT (like me).

http://ca.opengovernment.org/system/bill_documents/001/221/782/original/sb_458_bill_20110516_amended_sen_v96.html?1310498614

BILL NUMBER: SB 458 AMENDED
BILL TEXT

AMENDED IN SENATE  MAY 16, 2011
AMENDED IN SENATE  APRIL 4, 2011
AMENDED IN SENATE  MARCH 21, 2011

INTRODUCED BY   Senator Corbett
   (Principal coauthors: Senators Correa and Vargas)
   (Coauthors: Assembly Members Blumenfield and Skinner)

                        FEBRUARY 16, 2011

   An act to amend Section 580e of the Code of Civil Procedure,
relating to mortgages, and declaring the urgency thereof, to take
effect immediately.



LEGISLATIVE COUNSEL'S DIGEST


   SB 458, as amended, Corbett. Mortgages: deficiency judgments.
   Existing law prohibits a deficiency judgment under a note secured
by a first deed of trust or first mortgage for a dwelling of not more
than 4 units in any case in which the trustor or mortgagor sells the
dwelling for less than the remaining amount of the indebtedness due
at the time of sale with the written consent of the holder of the
first deed of trust or first mortgage. Existing law provides that
written consent of the holder of the first deed of trust or first
mortgage to that sale shall obligate that holder to accept the sale
proceeds as full payment and to fully discharge the remaining amount
of the indebtedness on the first deed of trust or first mortgage.
Existing law specifies that those provisions would not limit the
ability of the holder of the first deed of trust or first mortgage to
seek damages and use existing rights and remedies against the
trustor or mortgagor or any 3rd party for fraud or waste if the
trustor or mortgagor commits either fraud with respect to the sale
of, or waste with respect to, the real property that secures that
deed of trust or mortgage. Existing law makes these provisions
inapplicable if the trustor or mortgagor is a corporation or
political subdivision of the state.
   This bill would expand those provisions to prohibit a deficiency
judgment upon a note secured solely by a deed of trust or
mortgage for a dwelling of not more than 4 units in any case in which
the trustor or mortgagor sells the dwelling for a sale price less
than the remaining amount of the indebtedness outstanding at the time
of sale, in accordance with the written consent of the holder of the
deed of trust or mortgage if the title has been voluntarily
transferred to a buyer by grant deed or by other document that has
been recorded and the proceeds of the sale are tendered as
agreed. The bill would also provide that, in other circumstances,
when the note is not secured solely by a deed of trust or mortgage
for a dwelling of not more than 4 units, no judgment shall be
rendered for any deficiency upon a note secured by a deed of trust or
mortgage for a dwelling of not more than 4 units, if the trustor or
mortgagor sells the dwelling for a sale price less than the remaining
amount of the indebtedness, in accordance with the written consent
of the holder of the deed of trust or mortgage . The bill would
provide, following the sale, in accordance with the written
consent, the voluntary transfer of title to a buyer, as
specified, and the tender of the sale proceeds, the rights, remedies,
and obligations of any holder, beneficiary, mortgagee, trustor,
mortgagor, obligor, obligee, or guarantor of the note, deed of trust,
or mortgage, and with respect to any other property that secures the
note, shall be treated and determined as if the dwelling had been
sold through foreclosure under a power of sale, as specified.
The bill would prohibit the holder of a note from requiring the
trustor, mortgagor, or maker of the note to pay any additional
compensation, aside from the proceeds of the sale, in exchange for
the written consent to the sale. The bill would provide that
these provisions are inapplicable if the trustor or mortgagor is a
corporation, limited liability company, limited partnership, or
political subdivision of the state. The provisions would also be
inapplicable to any deed of trust, mortgage, or other lien given to

secure the payment of bonds or other evidence of indebtedness
authorized, or permitted to be issued, by the Commissioner of
Corporations, or that is made by a public utility subject to the
Public Utilities Act. The bill would provide that any purported
waiver of these provisions shall be void and against public policy.
   This bill would declare that it is to take effect immediately as
an urgency statute.
   Vote: 2/3. Appropriation: no. Fiscal committee: no. State-mandated
local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 580e of the Code of Civil Procedure is amended
to read:
   580e.  (a) (1) No deficiency shall be
owed or collected, and no deficiency judgment shall be
requested or rendered for any deficiency upon a note secured
solely by a deed of trust or mortgage for a dwelling of
not more than four units, in any case in which the trustor or
mortgagor sells the dwelling for a sale price less than the remaining
amount of the indebtedness outstanding at the time of sale, in
accordance with the written consent of the holder of the deed of
trust or mortgage. mortgage, provided that
both of the following have occurred:
   (A) Title has been the voluntarily transferred to a buyer by grant
deed or by other document of conveyance that has been recorded in
the county where all or part of the real property is located.

   (B) The proceeds of the sale have been tendered to the mortgagee,
beneficiary, or the agent of the mortgagee or beneficiary, in
accordance with the parties' agreement.
   (b) Following the
   (2) In circumstances not described in
paragraph (1), when a note is not secured solely by a deed of trust
or mortgage for a dwelling of not more than four units, no judgment
shall be rendered for any deficiency upon a note secured by a deed of
trust or mortgage for a dwelling of not more than four units, if the
trustor or mortgagor sells the dwelling for a sale price less than
the remaining amount of the indebtedness outstanding at the time of
sale, in accordance with the written consent of the holder of the
deed of trust or mortgage. Following the sale, in accordance with the
holder's written consent, the voluntary transfer of title to a
buyer by grant deed or by other document of conveyance recorded in
the county where all or part of the real property is located ,
and the tender to the mortgagee, beneficiary, or the agent of
the mortgagee or beneficiary of the sale proceeds, as agreed, the
rights, remedies, and obligations of any holder, beneficiary,
mortgagee, trustor, mortgagor, obligor, obligee, or guarantor of the
note, deed of trust, or mortgage, and with respect to any other
property that secures the note, shall be treated and determined as if
the dwelling had been sold through foreclosure under a power of sale
contained in the deed of trust or mortgage for a price equal to the
sale proceeds received by the holder, in the manner contemplated by
Section 580d.
   (b) A holder of a note shall not require the trustor, mortgagor,
or maker of the note to pay any additional compensation, aside from
the proceeds of the sale, in exchange for the written consent to the
sale.
   (c) If the trustor or mortgagor commits either fraud with respect
to the sale of, or waste with respect to, the real property that
secures the deed of trust or mortgage, this section shall not limit
the ability of the holder of the deed of trust or mortgage to seek
damages and use existing rights and remedies against the trustor or
mortgagor or any third party for fraud or waste.
   (d) (1) This section shall not apply if the
trustor or mortgagor is a corporation, limited liability company,
limited partnership, or political subdivision of the state.
   (e)
   (2) This section shall not apply to any deed of trust,
mortgage, or other lien given to secure the payment of bonds or other
evidence of indebtedness authorized, or permitted to be issued, by
the Commissioner of Corporations, or that is made by a public utility
subject to the Public Utilities Act (Part 1 (commencing with Section
201) of Division 1 of the Public Utilities Code).
   (f)
   (e) Any purported waiver of subdivision (a) or (b)
shall be void and against public policy.
  SEC. 2.  This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect. The facts constituting the necessity are:
   In order to mitigate the impact of the ongoing foreclosure crisis
and to encourage the approval of short sales as an alternative to
foreclosure, it is necessary that this act take effect immediately.

cont. .......I was having a conversation with my son about the housing economy the other day and he brought up Quantitative Easing ...or QE3. I had never heard of this term (QE3 or QE2) , I am ashamed to say until he brought it up. I knew about the FEDs plan to print more money and use this strategy to slow down the hemorraging that was happening in our economy. Yet I never heard it described as quantitaive easing.

So my little baby boy (32 years old) shared with me his knowledge. As he spoke he shared that he felt this would help for a couple of reasons. Simply put: First he explained that the banks are pretty flush and have their reserves pretty filled up and are feeling more secure. With this he felt that the FED executing another QE or QE3 it would open up the banks to loan out more money across the board, not only in housing monies but for all consumer goods. This he felt would be a good jump start to the economy as it would also drive the job market in the right direction...more monies means more spending means more products...means more jobs, means more houses sold means economy getting stronger.

It would make sense seeing as how we have an election year coming up and the DEMOs need to do something or Obama may be seeing his last days in office. So with this in mind your comments are invited. Please read the articles and let me know your thoughts. With all the negative "double dip" news I am trying to keep a more optimistic outlook...

LOOKS LIKE THE FEDS ARE HOLDING BACK ON THIS .....OR ARE THEY JUST WAITING FOR THE RIGHT TIME?

The Overnight Report: No QE3

June 7, 2011 9:13 PM EDT

By Greg Peel

The Dow closed down 19 points or 0.2% while the S&P lost 0.1% to 1284 and the Nasdaq was basically square.

It was a strong opening on Wall Street last night after successive miserable sessions based on weak US data, suggesting to commentators that bargain-hunters were being sparked into action at levels below previous technical support in the S&P 500 at 1295. However, any buying early in the session was always going to be a risk given Fed chairman Ben Bernanke was due to make a speech about half an hour before the closing bell. Given the apparent sudden deterioration of the US economic recovery, there was much anticipation of what the Fed's response would be.

In other words, expectations had grown that Bernanke would announce QE3 is ready to be rolled out as soon as QE2 expires this month. While the Fed has spent much time discussing inflationary pressures and exit strategies from QE and a near-zero funds rate of late, it had always added that were conditions to deteriorate notably, the central bank "stands ready" to do what it has to.

So it was that just after 2pm in New York, the Dow was up 90 points. But then it began to drift lower, possibly as day-traders took profits ahead of the speech. The drift soon turned into a steep drop such that by the time Bernanke opened his mouth, the Dow was almost back to flat on the day. As he spoke, the average fell sharply to the closing bell, at which point Bernanke was still speaking.

It looked like Wall Street had squared up before it learned what Bernanke had to say but copies of the speech were issued to the media prior and embargoed until speech time. Hence the guts of the speech was quickly disseminated before Bernanke even rose from his seat. It seems Wall Street responded beforehand to the fact traders didn't hear what they wanted to hear.

What the chairman said was that while the most recent data looked poor, the US economy was still recovering modestly. There will always be bumps in the road, oh ye of little faith, he suggested, but most importantly the Fed still expects the recovery to pick up again in the second half of 2011. Yes, the latest jobs numbers were bad, but if you look at the longer trend from 2008 you'll find that jobs growth is accelerating. It's just a frustratingly slow acceleration and the unemployment problem will not be resolved quickly.

There in a nutshell was the "no QE3" call. Bernanke reiterated that QE2 would end as planned this month but that maturities and coupons would continue to be reinvested, which we have dubbed QE two and a half. From the other side of the argument he reiterated that inflation expectations remained low and that recent spikes in commodity prices would prove "transitory". Food price movements in particular could simply be put down to unusual weather conditions prevailing across the globe in the past twelve months, meaning a normalisation of weather should lead to a pullback in prices.

The chairman went to very great lengths to address the common accusation that global headline inflation ? oil and food in particular but also base metals ? was simply due to a weak US dollar which in turn was due to accommodative Fed policy. He pulled out the charts, figuratively, to point out that the fall in the US dollar was minimal compared to the rise in commodity prices, and he also suggested the fall in the US dollar was mostly due to the withdrawal of the "flight to safety" which occurred in 2008-09.

The rises in commodity prices, he noted, were almost entirely due to the legitimate growth of demand from emerging markets. Add the recent supply disruptions (Libyan oil loss, weather problems for food) and the propensity for futures traders to anticipate increased demand (speculation) and what we have is price-spikes that will adjust themselves in the shorter term. In the longer term, Bernanke noted that the growth in global oil production is simply not keeping up with the growth in global demand. This means watching inflation carefully, albeit no immediate risk is seen for the US.

So the upshot is, the Fed funds rate will remain exceptionally low for an extended period but there will be no QE3. Bernanke did, however, warn that Fed monetary policy could be thrown into disarray by Congress. He agreed that the US deficit had to be addressed but pleaded that any resolution to sharply cut the deficit must have a longer term objective. To violently slash fiscal spending now would provide a negative shock to the US economy which could quickly derail the modest, bumpy, recovery.

Before Bernanke's speech, there were signs of an accelerating recovery from across the pond. Surprisingly good eurozone retail sales and German factory orders numbers sent the euro higher, and traders are now expecting the ECB will hint at a July rate rise to counter inflation when it has its June meeting on Thursday night. The stronger euro sent the US dollar index down 0.6% to 73.54.

The Aussie is steady after 24 hours at US$1.0719. The Aussie dipped yesterday when the RBA didn't raise and suddenly sounded a lot less hawkish than it did a month ago (RBA Backs Down) but last night's US dollar fall corrected the balance.

For commodity markets it was a largely steady night ahead of Bernanke's speech. Gold was as good as square at US$1544.60/oz while silver and base metals were mixed on mostly small movements. The exception is lead, which was up another 2%. It appears someone is trying to corner the lead market given one account represents 90% of long LME positions.

And a funny thing happened in oil. Having established a fairly consistent spread of around US$15 over past months based on storage cost discrepancy, Brent-WTI suddenly blew out to over US$17 last night as Brent rose US$2.30 to US$116.78/bbl while West Texas rose only US8c to US$99.09/bbl. I'll address that issue in a story today.

Ahead of the speech, the US Treasury auctioned US$32bn of three-year notes and despite the low yield, demand was buoyant with foreign central banks taking 36% compared to a 32% running average. The benchmark ten-year yield fell after the auction but recovered after Bernanke spoke to be little changed at 3.01%.

The SPI Overnight rose a fairly individual looking 21 points or 0.5%. One presumes that having had more time to absorb yesterday's RBA statement, the market is now confident there won't be a rate rise until at least August, and then maybe not even in August.

I was having a conversation with my son about the housing economy the other day and he brought up Quantitative Easing ...or QE3. I had never heard of this term (QE3 or QE2) , I am ashamed to say until he brought it up. I knew about the FEDs plan to print more money and use this strategy to slow down the hemorraging that was happening in our economy. Yet I never heard it described as quantitaive easing.

So my little baby boy (32 years old) shared with me his knowledge. As he spoke he shared that he felt this would help for a couple of reasons. Simply put: First he explained that the banks are pretty flush and have their reserves pretty filled up and are feeling more secure. With this he felt that the FED executing another QE or QE3 it would open up the banks to loan out more money across the board, not only in housing monies but for all consumer goods. This he felt would be a good jump start to the economy as it would also drive the job market in the right direction...more monies means more spending means more products...means more jobs, means more houses sold means economy getting stronger.

It would make sense seeing as how we have an election year coming up and the DEMOs need to do something or Obama may be seeing his last days in office. So with this in mind your comments are invited. Please read the articles and let me know your thoughts. With all the negative "double dip" news I am trying to keep a more optimistic outlook...

Nuff Said...    Robert Moreno

Quantitative Easing: What is it and why is it?

• October 10th, 2010 9:44 pm ET

Robert Kulak

• Hartford Independent Examiner

Ruminations, October 10, 2010

Quantitative Easing: What’s that?

When you want to institute a policy that is sure to arouse suspicions, the best thing to do is to use a new name for it. The Federal Reserve has recently announced that it is seriously contemplating instituting a policy of “quantitative easing.” Who could be against a policy of quantitative easing – that is, unless you realized that it is just a term for printing money and lots of it.

Now, we all know that printing money can lead to inflation or even hyperinflation (as in post World War II Hungary where prices doubled every 14 hours or so). So, why would the Fed even consider a policy of quantitative easing? They’re not stupid. There are upsides to that method, they believe – especially today – and here are they are:

1. The Fed is able to take on an expanded role of trying to help stimulate economy as well as stabilizing the currency. In days gone by, the primary role was stabilizing the currency and ignoring the economy.
2. Quantitative easing, some at the Fed feel, would avoid the risk of deflation – which we have not experienced since the Great Depression. They call the current inflation rate in the U.S. (virtually nil) “disinflationary” and posit that continued slowness of recovery could lead to deflation. In a deflationary economy, prices drop and continue to drop. Consumers postpone purchases reasoning that prices will be cheaper in the future; this action leads an acceleration of the economic downturn. And then there is the debt repayment problem; when an asset diminishes in value, such as in our housing market, people may abandon these assets.
3. By printing money and then purchasing government securities, the Fed increases the balances that member banks have in the Fed and thus the assets that banks have available for lending. With additional assets, it is assumed that banks will lend more to individuals and businesses, which will lead to a growing economy.
4. Trade balances improve. Printing money lowers the value of the dollar and, therefore, cheapens the price of U.S. goods. This can lead to increased exports and more jobs; hence, a rebounding economy.

So, it looks like a good idea and one that should be implemented. And, in fact, William Dudley, president of the Federal Reserve Bank of New York, said last week “We have tools that can provide additional stimulus at costs that do not appear to be prohibitive. Thus, I conclude that further action is likely to be warranted…”

 Is there a downside? Everything has a downside. Let’s look at some of the potential downsides.

1. The dual role of stimulating the economy and supporting the currency: You may recall that when Paul Volker assumed the position of Fed Chairman, he halted runaway inflation but, at the same time, contributed to the 1982 recession. Still, Volker’s actions contributed to the long-term stability of the dollar and the economic growth that followed for 25 years. This contrasts with the times when President Richard Nixon ordered Fed Chairman Arthur Burns and when President Jimmie Carter ordered Fed Chairman William Miller to print more money to stimulate the economy; the effects on the economy were virtually negative in that the money supply contributed to inflation and little else.
2. The risk of deflation: There are some economists (notably Robert C.B. Johnsson) who believe that the impact of deflation is relatively benign. Often the steps taken by a government to counter deflation, as in Japan from 1995 to present, prevent a free-market adjustment and can prevent or prolong a recovery.
3. The Fed’s purchasing government securities and increasing bank funds available for loans may not work. With banks sitting on a high number of non-performing loans (a euphemism for loans that a bank made that will never be repaid), it is likely that banks will hold-on to these new assets. Futhermore, in order to issue loans, there must be a demand. Given that businesses are currently sitting on almost $2 trillion of cash that they are reluctant to spend because of uncertainty in markets and with government policies, it is hard to see how this bank infusion of funds will help.
4. Quantitative easing may not help with trade balances as it is hoped. Countries depend on the value of their currencies to survive in the international market and, at the same time, the dollar serves as the world reserve currency and all countries have a stake in the dollar. When the U.S. acts counter to currency stability (i.e., lowering the value of the dollar) it can throw the world into potentially a disastrous situation by setting in motion a scenario where many countries devalue their own currencies. Between 1929 and 1933, when countries rushed to devalue their currencies, world trade fell by two-thirds.

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There are other concerns. Al Broaddus, former president of the Richmond Federal Reserve Bank, says that the amount of expenditure of quantitative easement may not produce much of a result. And add to that the psychological effect of printing money – it may indicate to people that the economy is in horrible shape and that investment and, therefore, expenditures should be avoided and resources should be invested in commodities.

And we can’t overlook one of the key commodities: oil. The Organization of Oil Exporting Countries (OPEC) currently prices oil in dollars. OPEC has discussed that, with the falling dollar, other currencies or a basket of currencies should be considered as a pricing mechanism. If we do adopt a policy of quantitative easement, the issue could be raised again. If the price of oil is linked to a more stable currency, then the dollar-price could rise to new heights and that would have exert upward pressure on our prices and downward pressure on our economy.

Upsides and downsides: Every policy has them but it seems as though the downsides quantitative easement would hurt a lot more than the upsides would benefit.

Will the last one out, turn off the incandescent light bulb?

When Congress passed legislation in 2007 banning the sale of incandescent light bulbs by 2014, they thought that they were making a cleaner environment and creating green jobs. Alas, they have evidently accomplished neither but have instead lost jobs and increased imports.

With decreasing demand, GE closed its last incandescent bulb factory in Winchester, Virginia, and laid-off 200 workers. GE had thought about converting the factory to manufacturing compact fluorescent light bulbs (CFLs) but found the conversion cost would be prohibitive. So, the bulbs will be made in China.

Well, at least the environment will be cleaner, right? Maybe not. In 1987 the town of Traer, Iowa, handed out CFLs to everyone. When people found out how cheap they were to operate, they left their lights on all the time resulting in an 8 percent increase in energy consumption.

It seemed like a good idea at the time.

Quote without comment

Polish central bank governor MarekBelka, prior to a meeting of the International Monetary Fund, October 8: "If you want to strengthen your competitiveness by devaluing your currency, this is a sign of despair, this isn't a policy,"

Can new home buyers afford a 20% down payment? Could you? Can you envision what this will do to limit the buyer pool  if new regulations governing Qualified Residential Mortgages (QRM) take effect this year?

Neither can we. And neither can many elected officials in Congress who did not intend for these regulatory provisions to be so narrowly defined. We must continue our efforts to explain how detrimental the new QRM rules would be to the ongoing housing and lending crisis in America.

According to NAR Research, 60% of recent home buyers made less than a 20% down payment, and it would take 14 years for a typical person to save up a 20% down payment to buy a median-priced home.

Please contact Congress today and ask them to make it clear to the regulators that this proposed regulation was not their legislative intent and to instead implement a more reasonable Qualified Residential Mortgage (QRM) that will keep credit-worthy buyers in the market and able to acquire a loan.

May 16, 2011

Guest post from Sean O’Toole, ForeclosureRadar.com

Over the past month we noticed that Bank of America has been resuming foreclosures on loans originated by Countrywide. As you may recall in October BofA voluntarily imposed a foreclosure moratorium following the robo-signing scandal. We actually expected an increase in activity as lenders began to catch up after these delays and were instead surprised to see foreclosure activity drop in April.

Even more surprising is just how old some of the foreclosures being resumed are.

In Contra Costa alone there are 123 homes now scheduled for trustee sale, with loans originated by Countrywide, where the foreclosure process began in 2008.  That is 3 years of missed payments, interest and fees. In just this one county that totals $71.5 Million in original loans with balances now nearly $19 Million higher.

Although all of these 123 properties have active sale dates many are still being postponed. In fact the largest loan, where the total debt now exceeds the original loan amount by more than 1 Million dollars, has been postponing since January, and was just postponed again until June.

We remain as convinced as ever that these delays are simply part of the current game of Foreclosure Roulette. Hopefully someday soon lenders stop playing games and begin really dealing with the looming shadow of delinquent and underwater borrowers. Whether through loan modifications, short sales, or even foreclosure it’s time to move forward.

Because the last prediction I wrote last week was such a success, I thought to myself, why don’t I blog a bit more about my predictions so, here it is.

I predict that 2011 may actually end up seeing the highest number of foreclosures in our nations recorded history.

Reason # 1: Lack of substantial job growth.

 I do believe that with the extension of the Bush tax cuts the Federal Government passed a couple weeks ago, our Government instilled some…….just some…..confidence in the business community to spur a very modest growth. You have to keep in mind, the extension of the Bush tax cuts was a tax hike prevention or, in other words, the business community is at a wash, one way or another. To elaborate a bit further, the business community had already been working under the cuts with no growth so, an extension of the cuts isn’t going to do much to grow the economy because, it really doesn’t change the underlying systemic fundamental problems. I am not saying that we should have allowed the tax cuts to expire because if that had happened, we would have made problems worse by raising taxes on everyone in a distressed, possibly depressed economy. I am for the cuts but, I don’t believe they are going to make that big of a difference because, the true problems are not addressed. The cuts were nothing more than a lesser of 2 evils.

Reason # 2: 5, 7 and 10 year ARMS (Adjustable Rate Mortgages) adjust in 2011.

During the height of the sub-prime mortgage bubble, we saw people getting  5, 7 and 10 year ARMS. Take 2011 and count back  5 years and you get 2006, the early days of the bubble build up, 7 years back you get 2004, when sub-prime lending was really breaking out of it’s shell and of course, 10 years back, 2001 when people hadn’t even heard of sub-prime lending. My point is, in 2011, 3 different types of very popular sub-prime, bubble building ARMS are going to reset, this is more resetting than we have every seen during this crisis. I can’t even imagine the carnage.

Reason # 3: Government Home Retentions Programs Prevent a Real Estate Bottom.

HAMP is the single greatest home retention failure of this Obama White House. 75% or more HAMP participants default out and end up in foreclosure however, what HAMP does do is buy these people time. In some cases a year or more. So, John Smith, homeowner is 3 months behind, applies for HAMP which takes an additional 2 months to get preliminary approval, John pays his preliminary discounted mortgage regularly for 5 months and then defaults off, 6 months for the bank to catch up with the default and file foreclosure paperwork and 3 months to foreclosure and evict, then 6 months before the home hits the market. Add it all up and you get 25 months or 2 years before a home hits the market from the time the homeowner defaults. So, look at it this way, Government has contributed 2 years worth of underlying inventory to an already 3-5 year inventory of distressed property simply because Government wants to save people’s homes in the name of reelection. This is bad no matter how you cut it.

Reason # 4: Energy Prices will Rise to un-precedent levels.

It was just 2 days ago that BP (British Petroleum) announced that they are re-working their 2011 budget with the premise that gas prices in the US will rise to $5.00 a gallon. Fuel cost effects every aspect of our daily lives. It’s not just how much you pay at the pump. It’s how much it cost the truck delivery man to deliver the goods to your local grocery store. Over 90% of the goods you buy at a grocery store get there from a truck and that truck can only get there when it fuels up its tanks. If that fuel increase goes up on that trucker we can expect to see prices for individual goods to increase as well. A absolute correlation between prices of goods and price of logistics is fact and this is a law of supply and demand that can’t be broken.

Reason # 5: Risk of inflation becomes a real concern in 2011.

Instead of speculating about inflation, 2011 will be the year we actually start talking about what percentage inflation will rise. Increased trade deficits, continual devaluing of the US Dollar, continual movement towards a green agenda and, high federal debt will move inflation up. This will be done in order to stem off a collapse of the dollar because of continual devaluation.

Reason # 6: Credit Tightening.

As a direct result of the foreclosure fall out that I predict will occur in 2011, we will see an increased credit tightening. Now, personally, I don’t see this as a bad thing, I am of the opinion, a home is not a right, it’s something you earn and if you can’t earn it, you don’t deserve it. None the less, since the Community Re-investment Act, this country has been on a drunken binge of “everyone deserves credit” and it had everything to do with our real estate bubble however, times are changing and banks are going to have no choice but to tighten credit standards so they can reduce their risk for losses. This will increase housing inventories and work towards a further across the board housing price drop but, it gets us closer to a bottom and the ability to rebuild.

Reason # 7: Unforeseen National Crisis.

It was once told to me that luck favors those who are prepared and bold. Unfortunately, this Country as a whole is not prepared and our threshold to make big bold global decisions has all but disappeared since the Obama administration has taken a apologetic, appeasement stance on the World stage. This has done nothing but embolden our enemies and provided safe havens in countries that are less than cooperative. I can’t predict an unforeseen national crisis but, I can imagine a “what if’ scenario and it’s not pretty. The best I can say here is that we should be preparing for the worse and hoping for the best but, that is most definitely not happening with most Americans, let along our Government.

In conclusion:

Any one of the above reason I listed is enough to truly hurt the housing industry. If you couple all of these things together in one hit, it stands to reason, can the housing recovery even take place in 2011. My opinion is no, a housing recover won’t take place in 2011 because if we were to resolve any one issue, we would still have 6 others threatening the recovery. In other words, the housing industry has too many uncertainties, Government influence and, was much more devastated by the Community Reinvestment Act and sub-prime lending than anyone wanted to really tell the American public. I hope for the best but, I have prepared for the worse.   

Housing Predictions for 2011

Normally, I am not in the business of predicting trends, simply because I believe all real estate is local. However, due to the economic condition of the Country and World, I do believe 2011 will be a year that either makes or breaks the real estate industry in the next 3-5 years.

A Government divided:

It is my opinion that a divided Federal Government is a lesser of many other possible evils. As we learned from the first 2 years of the Obama White House, a Government who is unified under one party banner is a Government run amuck. The citizens of this great Nation saw laws pushed through that in a time of a divided Government wouldn’t of had a chance in their current form. To broaden the perspective a bit more, I see a divided Government as a check and balance on the party agendas and special interest groups. Granted, with the size of the Government we have now, we will always have corruption and back room deals but, it is fairly certain now, with debts at their current levels, our Country can’t continue with the size of Government we currently have. In other words, a small Federal Government means less spending, less debt and a better ability to route out corruption, prosecute offenders and return God given freedoms back to the citizens.

By now, you may be wondering what a divided Federal Government has to do with housing in 2011. I predict that as a part of posterity measures that will be introduced by Tea Part Republicans we will see a draw back if not a complete withdrawal of many of the current failed housing recovery programs. I don’t know exactly what the fall out of these programs will be but, I submit for your contemplation that, we will see an increase in foreclosure inventories. An increase in foreclosure inventories means further drop in prices and hopefully a bottoming out so that we can rebuild the industry.

Local Government Bankruptcies:

I really do believe that 2011 may be the year we see small local Governments fail and declare bankruptcy. We are see huge debts that are causing local Government to straddle the line of financial failure and continued debt spending. With continued public pressure and Federal Government spending cuts, many of these debt heavy local Government could find themselves with no options other than Bankruptcy. Local Government will cut all spending except for necessary public works, like utilities and law enforcement. As part of their local Government spending cuts, unions will find themselves in courts fighting tax payers for their pensions and services will suffer.

This scenario will directly impact housing because buyers will keep their money in their pockets due to the uncertainty that will be created. Housing prices will further drop, equity will be lost, foreclosure inventories will rise.

In conclusion:

For many of us, this sounds like a epic tale of the fall of a great nation in history however, for some of us, we are able to see the signs, read them and understand what they mean.

Granted, the future is never written in stone and we do live in a Country with the most resilient people in the World so, I am optimistic.

How can I be so optimistic you may ask, well………it’s because I know this Country has within it’s awesome foundation a faith in all that is good and therefore, an ability to make tough decisions that will put us back on the right track. In the meantime, it could be hard, it could get nasty, we may see our fellow man hurt and suffer but, we will unite, we will come together and re-learn what it means to be charitable, what it means to be close to family, what it means to look out for one another. I believe we are a divinely inspired Country and as these times turn our face back into the light of inspiration our minds will be centered on the greatness of God and the darkness of the future lights up and becomes much less daunting otherwise.

The catalyst for a man to make a permanent change is when he is on the edge of an abyss. The abyss seems to be coming more into view.