What recovery?

What inventory?

What demand?

Where are the first time home buyers?

These are some of the questions raised in an excellent and expansive article from Mandelman Matters, www.mandelman.mi-implode.com, see Archives, November 2013, Realtors and Mortgage Brokers: Toughest Year for Housing Market Since 2010 Ahead.

In a June 2010 article, Mr. Mandelman wrote: " For the last year, at least, I've been saying that there is no real estate market....that homebuyer tax incentives and the Feds buying of mortgage backed securities, along with the FHA acting as the new sub-prime, were propping things up artificially, and when stimulus ended, housing prices would commence falling through the floor."

Mr. Mandelman states that he is a writer, not in the real estate or mortgage industry. He has posted almost 1000 writings on his Blog and interviews countless industry people, he claims, to come up with his opinions and conclusions.

I like the simplicity of his writing style, and the easy but analytical way he presents his arguments. If you decide to go to his Blog, check out another great article -"Buy to Rent - a Stupid Idea" - where he chronicles the plight of firms that have bought thousands of homes and now find their equity positions minimized.

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A much shorter but just as interesting article comes from Mark Hanson, who writes: " Unless exotic loans are reintroduced and widely accepted literally overnight, incomes surge, rates plunge to sub 3%, or all cash buyers/investors substantially increase market share, house prices are in store for a period of retracement/mean reversion. And at present, all of these variables are going in the opposite direction. This data in this report present a big problem from housing market sentiment and consensus estimates."

Though he uses California statistics, his analysis is interesting, and may apply to other United States Metro areas as well.

www.mhanson.com, October 15, 2013, California Housing Bubble 2.0 in Pictures.

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"A government which robs Peter to pay Paul can always depend on the support of Paul." George Bernard Shaw.

"Giving money and power to government is like giving whiskey and car keys to teenage boys." P.J. O"Rourke.

"Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it."  Ronald Reagan, 1986.

"In general, the art of government consists of taking as much money as possible from one party of the citizens to give to the other." Voltaire, 1764.

"No man's life, liberty, or property is safe while the legislature is in session." Mark Twain, 1866.

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                   LENDERS TITLE POLICY

In the past few months, I have been involved in 3 transactions where a holder of an owner carryback note sold his note; but, we discovered the Title company neglected to issue the seller a Lenders Title Policy at the time he sold his property utilizing an owner carryback. In one of these circumstances, the closing statement clearly showed a charge for the policy. This occurred in 3 different cities, in 3 different states, with 3 different Title companies! The sellers of course, were unaware of this, as most folks don't do a lot of real estate transactions in their lifetimes.

We worked with the Title companies and got it straightened out. Title insurance, of course, provides protection for owners and lenders against forgery, defects of capacity and competency that can be found thru examination of public records, but can extend to off record matters such as unrecorded easements, discrepancies in boundary lines, etc. In the owner carryback business, the seller needs to have "perfect title" to cover the amount of his note, and to give him the protection he deserves against any defect in that title that could cause him great anguish and financial loss.

Sellers need to ask questions about their transactions, examine documents, and ensure that all parties involved are doing what we are supposed to be doing.

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"Confusion always comes before clarity." Syd Field, Screenwriter.

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                           ROGUE AGENCY

Many of us are alarmed by what we perceive to be the government's continuing spreading of it's wings, almost always in the name of protecting us, the people. The latest Big Brother, of course, is the Consumer Financial Protection Bureau. Read Ryan Smith's November 20 article about this "rogue agency" at www.mpamag.com

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 If you enjoyed this Newsletter, tell a friend.

If you know how I can make it better, tell me.

Merry Christmas and Happy New Year! 

 Denny Stanz

CA Broker # 01915404