Aaron Layman's Katy Texas Real Estate Forum

Mortgage Purchase, Refinance Activity Decrease Slightly - Rates Drop To 4.46 Percent

From the latest MBA weekly survey, both refinance and purchase activity dropped slightly from the previous week.  The rate on the 30-year fixed stood at 4.46 percent, and the 15-year fixed dropped to 3.64 percent.

Bank Of America Nears $8.5 Billion Settlement Over Faulty Loans

BofA, the poster child of bad behavior in the banking industry, is nearing a record settlement with MBS investors.

From the WSJ:

"Bank of America Corp. is close to an agreement to pay $8.5 billion ... with a group of 22 investors who hold mortgage-backed securities originally valued at $105 billion, including the giant money manager BlackRock Inc., the insurer MetLife".

The settlement is further evidence of the flawed logic in BofA's investment in Countrywide several years ago.  BofA had years to study Countrywide and their fraudulent loans, yet they still chose to go through with the deal.

 

How Greek Kleptocrats Beat Greedy Banks At Their Own Game

As the charade in Greece continues to play out, Chalres Hugh Smith offers this insightful piece on the Greek kleptocracy masquarading as solvent going concern.  Greedy political elites, European banks and a misguided ECB have created a house of cards doomed to failure.

"Here's the real dynamic in Greece:The Kleptocracy--broadly, the political and financial Elites of the nation--saw a stupendous opportunity to embezzle hundreds of billions of euros from greed-blinded European banks at super-low rates of interest.

Being kleptocrats, they sniffed out the basics of the bezzle right away, and have been playing it ever since: we're not paying any of these loans back, so go get the money from the European Central Bank (ECB) and the German taxpayers, or declare bankruptcy. Your choice.

The Greek kleptocrats knew all along that the German, Dutch, French and Finnish taxpayers were easy marks, just as they knew the European Union Power Elites would fall all over themselves to "save the euro" which was the centerpiece of their "one Europe" strategy of domination."

 

Low-Income Housing Projects Near Westheimer Lakes Unlikely To Receive Tax Credits

Plans for two high-density housing projects in near FM 1093 and FM 723 are unlikely to receive tax credits according to rankings by the Texas Department of Housing & Community Affairs.  The Landings at Westheimer Lakes and HomeTowne at Westheimer Lakes ranked 23rd and 20th out of a pool of applicants applying for some $10.1 million in tax credits.  The top eight applicants with the highest scores are likely to consume the entire allocation of credits.  The TDHCA will render a final decision on July 28.

Distressing Gap Between Existing And New U.S. Home Sales Continues

Great chart showing existing home sales and new home sales, 1994 through May of this year.  The gap increased as distressed sales flooded the market, keeping existing home sales elevated.  Builders can't compete on pricing with existing distressed inventory.  The Home Buyer Tax Credits only made the gap even larger. 

Existing Home Sales, Mortgage Purchase Activity Still Sluggish

From the MBA: Refinance activity decreased 7.2 percent from the previous week. Purchase activity was down 2.8 pecent.  Rates on the 30 year fixed were up to 4.57 percent.

Existing home sales continue to struggle, with all-cash transactions still comprising about a third of US market sales.

Bill Gross On The US Labor Situation

Interesting piece from Pimco managing director:

"Those who advocate that job creation rests on corporate tax reform (lower taxes) or a return to deregulation of the private economy always fail to address dominant structural headwinds which cannot be dismissed: 1) Labor is much more attractively priced over there than here, and 2) U.S. employment based on asset price appreciation/finance as opposed to manufacturing can no longer be sustained. The “golden” days are over, and it’s time our school and jobs “daze” comes to an end to be replaced by programs that do more than mimic failed establishment policies favoring Wall as opposed to Main Street."

Economics 101 - Why This Time Is Not Different

Basic lessons in economics are sometimes lost in political spin and obfuscation.  Sometimes the answers really are simple...

John Walsh, OCC Give Banks Another Rub Down

The Office of the Comptroller of the Currency, the regulatory agency which should be protecting citizens from Wall Street, is apparently intent on doing nothing of the sort.  John Walsh, the current head of the OCC, has doubled down on his effort to obfuscate the truth and provide cover for inept financial institutions.  Per the Financial Times, Walsh goes on the record as saying that existing capital levels are "extraordinarily high" and proposing a "fundamental rethink" of international liquidity standards.  Walsh goes on to say: "My view is that we are in danger of trying to squeeze too much risk and complexity out of banking as we institute reforms to address problems and abuses stemming from the last crisis."

Fortunately there are some people who've thought about issue of bank reform with a little more objectivity and realize that current proposed reforms are woefully inadequate.  Some highly educated people realize that the Eurozone is crumbling, as users of a fiat currency fall under the weight of gargantuan fraud-based debt.  The director of financial stability, Andrew Haldane, gives us a reminder that there are two realistic approaches to large companies that produces externalities (crises): taxation or prohibition.  The appropriate tool depends on the level of private costs versus social costs.  Haldane's calculations showed that taxation was grossly inadequate as a remedy.

There was a reason Glass Steagallwas enacted; it was a necessary prohibitive measure to curtail excessive risk in the market at the public's expense.  Senator Carl Levin has appropriately called Mr. Walsh out on his ludicrous remarks, stating: "It is past time for the president to nominate new leadership at the OCC to protect American families and businesses from the excesses of Wall Street."

New ExxonMobil Campus Creates Development Opportunities In North Houston

Exxon's new North Houston campus is creating new development opportunities in the Houston real estate market as the oil giant prepares to consolidate local offices into a new corporate campus just south of The Woodlands.  The new 385 acre campus, located just west of I-45 near the intersection of the proposed Grand Parkway extension, is expected to house employees beginning in 2014.

Beneficiaries of the move will include the new master-planned community of Springwoods Village, Spring ISD, and numerous other developments slated for the area.  Residential development, both commercial and residential, will be affected by the Exxon move, as vested interests position themselves to take advantage of the changing face of Houston's real estate landscape.  Exxon's move out of the 800 Bell location is a definite negative for the downtown commercial space, but other opportunities will surely arise from the consolidation as the process takes shape.