Contributing Member of the Legal, Economic & Regulatory Affairs Councils

GLG News by this Author

Growing Losses at FHA

September 4, 2009

Analysis of:Loan Losses Spark Concern Over FHA | online.wsj.com

While the FHA's market share has skyrocketed since the real estate bubble burst, the FHA has also been facing rapidly increasing losses that are likely to outstrip its reserves.  A taxpayer bailout is looming.

MBA Proposes Multiple MiniMaes and MultiMacs

September 3, 2009

Analysis of:MBA Offers Proposed Framework for Government Role in Secondary Mortgage Market | www.mortgagebankers.org

In a report entitled "Recommendations for the Future Government Role in the Core Secondary Mortgage Market," the MBA has proposed a structure for the federal government's future "post-crisis" involvement in mortgage securitization. 

GSE Takeover Will Not Materially Reduce Mortgage Interest Rates

September 11, 2008

Analysis of:Government GSE Takeover Could Reduce Cost of Mortgages | www.bigbuilderonline.com

The GSE takeover will not significantly reduce mortgage interest rates.  The GSEs will now be focused on propping up the U.S. economy--not on prudent lending and risk-based pricing.

Phoney Downpayment Grant Program Killed by New Housing Legislation?

August 11, 2008

Analysis of:Builders Feel Pinch of Key Omission From the Housing Bill | online.wsj.com

Many home builders are concerned that a provision in the new federal Housing Bill will reduce sales to borrowers that used phoney grants from charities to fund their downpayments.   The new legislation ends the circular charade of allowing builders and other home sellers to jack up the price of their properties by 3% and then use those proceeds to make a "donation" to a nonprofit organization that, in turn, would "assist" borrowers by making their 3% downpayment. 

Failure of Artificially Accelerating Homeownership

June 26, 2008

Analysis of:Rise in Renters Erasing Gains for Ownership | www.nytimes.com

During the residential real estate bubble, underwriting standards were relaxed so far that unprecedented numbers of unqualified borrowers became new homeowners and many existing homeowners serially refinanced into loans that that they could not afford. Once the air began leaking from the bubble, an unfortunately high percentage of these "at risk" borrowers defaulted, converting many of them into renters.

Will We Act on What We've Learned from the Collapse of the Housing Bubble?

June 18, 2008

Analysis of:Lessons From the Housing Bubble | online.wsj.com

Thsi WSJ article simply and clearly lays out the three key factors behind the current "housing crisis:"  financial engineering by Wall Street that increased risk, unconscionable enabling by rating agencies, and asleep-at-the-switch regulators.

Banks Begin Facing Losses on Highly Leveraged Development Loans

June 9, 2008

Analysis of:Real Estate Woes of Banks Mount | online.wsj.com

Many banks will no longer be able to deny huge losses on their portfolios of loans to residential and other developers.  Recognition and realization of these losses will seriously damage the financial strength of many banks, particularly smaller ones.  Expect increasing bank failures.

GSE Stand-Alone Ratings Are Irrelevant in Current Market

June 3, 2008

Analysis of:S&P cuts Fannie's "risk to the government" rating | www.forbes.com

Until the housing mortgage markets are no longer under severe stress, the federal government will do whatever it takes to ensure the solvency of Fannie Mae and Freddie Mac.  Therefore, rating agency downgrades of these government-sponsored entities are irrelevant for the foreseeable future.

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