REwired

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Open commentary on everything impacting the U.S. housing economy. The opinions expressed here represent the author's alone.

On the myth of walking away

The idea that home owners are walking away en masse is called out as an "urban myth" by the New York Times this weekend: The blogosphere is full of tales of homeowners who supposedly are choosing to mail the house keys to their lenders rather than keep their depreciating homes. And yet “jingle mail,” the term for those tinkling packages of keys, appears to be far rarer than many seem to think.
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Signs of recovery overestimated?

Here at HW, we've been covering what appears to be a potential rebound in the secondary mortgage market. But at least one senior exec is pulling a "not so fast" response to that sort of thinking. Via MarketWatch, late last week:
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Whoops

Stewart Information Services Corp. said last week that an "agency defalcation" will cause it to widen its net loss for the first quarter, forcing it to restate earnings. The "found fraud" will lead to a $4.6 million pretax charge to earnings, the Houston-based title giant said, widening its first quarter loss to $25.2 million, or $1.40/share. Stewart had originally reported its first quarter loss at $22.3 million, or $1.24/share.
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A boutique business in fraud

Because we've been talking about fraud here in the BuzzPost, a little blurb at the Wall Street Journal Friday caught our eye. It appears two gentlemen out of New York thought it would be a good idea (allegedly, of course) to skim off the top of refinancing activity sold to Fannie Mae, and to "recreate" payment histories for subprime borrowers that had, shall we say, histories more indicative of non-payments. From the story:
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If it weren't for bad timing, he'd have no timing at all

Some junk-bond investors -- yes, that's how we're going to refer to the market for subprime RMBS and related securities -- made a killing snapping up subprime-backed issues during the boom. James Kelsoe at Morgan Asset Management Inc. was certainly one of them, a star manager of seven funds at the company. He was also one of the fund managers that failed to see the train on the tracks:
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Is the housing crisis over?

Cyril Moulle-Berteaux, in an op-ed published Wednesday by the Wall Street Journal, looks at the argument for why housing is on the road to recovery already. Inventories are already falling, he writes, and homes are largely affordable again. (It's worth noting that he doesn't cite any sources for his data). The gem of it all:
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Worth looking back on

As the housing crisis spins onward, we thought HW readers might enjoy a blast from the past -- 2004, to be exact. That's the year the now-defunct Homeownership Alliance put out a report titled "America’s Home Forecast: The Next Decade for Housing and Mortgage Finance." The authors include none other than David Berson, David Lereah, Paul Merski, Frank Nothaft, and David Seiders; it's certainly amusing now to think about the fact that the NAR and Fannie and Freddie were once much more closely aligned than they are today.
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On market sentiment and the subprime debacle

Last Friday, the video that kicked off Warren Buffett's annual meeting began making the rounds, starring two British comedians and a pretty hilarious overview of the subprime mess and ensuing credit meltdown. See how how "dodgy debt" transforms into an "investment vehicle." And the discussion of "enhanced leverage" is not to be missed.
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Baseball star walks away from home, mortgage

Jose Canseco, the mercurial baseball star now turned steroid gossip king, has had his house foreclosed on after deciding to walk away from the home. Via the Associated Press: Canseco told the syndicated TV show "Inside Edition" that he walked away from his $2.5 million, 7,300-square foot home in suburban Encino because it didn't make sense to continue making payments ...
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