Rob's Rant

There has been a lot of activity this week.  Here is my perspective on some of it.

The $8,000 First Time Home Buyer tax credit has been subject to rampant fraud. (Source: http://www.marketwatch.com/story/fraud-found-in-home-buyer-tax-credit-claims-2009-10-22 ).  DUH.  Throw a bunch of money at something and con men will come out.

Home Sales up 9.5% for September.  (Source: http://www.realtor.org/press_room/news_releases/2009/10/rebound_shows?lid=ronav0021 ).  Throw a bunch of money at something and everyone (not just con men) will respond.  This is an effect of the $8,000 credit, and an effect of Fed buying Mortgage-Backed Securities to drive down yields (aka interest rates) on mortgages.  What remains to be seen is if this will be a short-term or long-term effect.  It is possible the Consumer will be reassured by the halt in price declines and look to buy again in 2010.  It is also possible that people will stop buying in 2010 because those who would have purchased in 2010 moved their purchase forward to 2009 to take advantage of the FTHB tax credit.  Auto sales fell off a cliff after Cash for Clunkers expired: watch for for home sales to do the same early 2010 before underlying market forces bolster the price.  Long-term, Real Estate makes sense as an investment (see previous posts about inflation, etc.).  Short-term is less certain.

TARP program has 1-year anniversary.  How much Toxic Assets did the TARP actually buy?  $0.  Ah well, I'm sure that money went somewhere.  In unrelated news, because Goldman Sachs paid back its TARP money, its Executives will not have their income capped like GM, Chrysler, B of A, etc.  Whew!  Those boys dodged a bullet there!

I read that $3 out of every $10 on deposit in the United States is at B of A, Chase, and Wells Fargo.  Small banks being pushed out and big ones benefiting.  I'm sure that's just a coincidence.

Congress today is working on creating another Federal Agency to oversee the banking industry to prevent future economic crises.  I'm sure that'll work.  Remember how the FBI prevented 9/11, the SEC prevented the Bernard Madoff ponzi scheme, and the Department of Energy was able to eliminate US dependence on foreign oil?

There's a Microsoft Store that opened yesterday right here in Scottsdale.  People waited outside the mall for 20 hours just to be the first to get inside.  It said on the radio it was opened to directly compete with Apple Stores.  Apple has stores?

FHA will now be suing FHA Underwriters directly in cases of losses.  This odd turn of events will make Underwriters more cautious then they have been already.  Times like these are when "the men get separated from the boys".  Sounds like fun to me!  Never before in my mortgage career has it been more critical to have experience, contacts, and a good reputation.  The harder things become, the easier it is for me to differentiate myself from the pack.

Thanks for playing.  Be good to each other and enjoy your weekend!