The Fight Club: Are "Dignity Mortgages" Essential or Insane?
Editor's Note: There's a new idea sweeping through the country. It's called dignity mortgages.
Backers say this new financing idea will help millions of homeowners and get the middle class back to the heart of the American recovery.
Opponents think it's a recipe for disaster that will make the first financial crisis look like a cakewalk.
Today the Fight Club is taking on this growing issue — let's get ready to rumble…
Buy, Sell or Hold: Is Lennar's Big Move Just a Sign of Another Housing Bubble?
All you have to do is look at a price chart of Lennar Corp (NYSE: LEN) to see the proof that the U.S. housing market is on the mend.
Since January 2012, shares of the Miami, Fl.-based new homebuilder have more than doubled.
In fact, since the industry nearly collapsed six years ago, new-home construction for builders like Lennar is now clearly on an upswing.
According to the March 2013 report from the U.S. Commerce Department, new home construction was on pace for more than one million units for the first time since the gaudy days of June 2008.
Much of this home-buying fervor can be attributed to a few important points:
1. A pent-up demand that has built up over the last six years,
2. Low inventories,
3. And an outrageously low interest rate environment thanks to the Federal Reserve.
The question now is whether or not the "Housing Bubble 2.0" still has legs, making Lennar Corp. a smart new buy with plenty of room to run.
Is Lennar Still a Buy?
Of course, evaluating Lennar on its own merits is a fine exercise in due-diligence.
U.S. Housing Market: 5 Things Every Homebuyer Needs to Know Right Now
The U.S. housing market's recovery is gaining momentum, but there are still a number of issues for homebuyers to be cautious of.
To get to the bottom of what's really going on in the housing market, we talked to Gerri Willis, author of "Home Rich" and host of FOX Business Network's The Willis Report (6 p.m. weekdays), about the key things homebuyers need to know in today's challenging market.
The 10 Best U.S. Housing Markets 2013
The percentage of Americans optimistic about the U.S. housing market has reached levels not seen since rumblings of the financial crisis began.
A new Rasmussen Reports national survey found 37% of homeowners believe the value of their home will increase in the next year – thehighest since September 2008.
And 58% of Americans believe their homes are worth more now than when they bought them. That's the highest percentage believing this since fall 2011.
Is the Housing Market 2013 Being Propped Up by Wall Street?
The housing market 2013 is showing signs of improvement from last year – but there's reason to believe this recovery isn't sustainable.
Home prices and sales have been climbing, fueling optimistic outlooks for the rest of the year – but mortgage lending hasn't risen by a similar amount.
That's because it's not families or new home buyers driving the housing market rebound in 2013. There's another major buyer moving markets. And if that buyer stops purchasing homes, this "recovery" could lose its steam.
We caught up with Money Morning market expert Shah Gilani, who in the following interview explained this development in the 2013 housing market.
Here's Another Troubling Sign America is Circling the Drain
Don't blame yourself if you missed this tidbit last week…
On Thursday, the Consumer Financial Protection Bureau hit the nation's four largest mortgage insurers with a total of $15.4 million in fines for "allegedly" paying kickbacks to lenders to steer business their way.
Of course, they didn't have to admit they did it, and therefore, they didn't do what they were fined for.
Back in the summer of 2009, the Inspector General of the Department of Housing and Urban Development handed the Justice Department evidence that laid bare a scheme by lenders (the usual suspects: Citigroup, Wells Fargo, Countrywide, and so on) to get kickbacks from mortgage insurers for making borrowers – who had to buy mortgage insurance – purchase coverage from those companies kicking back profits to lenders. In the industry, it's called "forced placement"
Who did what here?
The Secret Behind the Housing Market "Recovery"
U.S. home prices climbed 10.2% in February, the biggest year-over-year gain since March 2006.
The data seemed to support that a housing market recovery is alive and well – or, is it?
Even though buying is up, banks aren't handing out mortgages at a high enough rate to support this climb.
We asked Money Morning Capital Wave Strategist Shah Gilani to explain what was behind this major housing market change. You might be surprised to learn who's driving the home buying – and what it means for the housing market recovery.
Watch his interview below for the answer.
Are "Wall Street Buyers" Like Blackstone Group Creating Another Housing Bubble?
Where there's smoke there's fire.
When it comes to rising home prices, the question is whether the on-fire price increases are a healthy sign of a housing recovery or a smoke screen masking another investor-led real estate bubble.
The answer is it's both.
So, the real question is: are the two compatible and is the trend sustainable.
The answer to that compound question is "yes" and "no," in that order.
On the surface, everything is coming up roses.
These 5 Charts Prove the Housing Recovery is for Real – and Just Beginning
The housing market has rebounded in a big way, with home prices increasing the most since the housing bubble burst in 2006.
Prices aren't the only indicator pointed toward recovery.
Housing barometers including sales, permits and housing starts have surged well beyond their recession troughs and back into healthy territory – and bullish analysts say there's plenty more room for growth after years of decreased activity.
The housing market activity has been driven by pent-up demand, improved consumer confidence, low interest rates and still affordable prices. And the industry's comeback comes at a time when supply is tight. The inventory of homes available is at near-historic lows, and foreclosures have declined.
Housing Bubble Threat Means Sell These Stocks
The recent rumors of a housing bubble have chilled the recent rise in homebuilder stocks, which were one of the great stories of 2012.
They had underperformed badly for several years in a row as a result of the credit crisis. Foreclosures and other distressed properties were clogging the marketplace and there was very little demand for new homes. Many of the stocks were still losing money and almost all of the homebuilders traded for less than their book value.
But the housing market began to show some signs of improvement during the year. The S&P Exchange Traded Fund (NYSE: XHB) rose by more than 50% during 2012 and many leading builders performed much better than that. Shares of The Ryland Group Inc. (NYSE: RYL) rose by more than 100% while Hovnanian Enterprises Inc. (NYSE: HOV) and PulteGroup Inc. (NYSE: PHM) saw their shares rise by more than 150% during 2012.
We have seen improvements in the Case Shiller Index of housing prices, up 4% through October of 2012. Housing starts in December were at the highest level since 2008. Foreclosures fell to an almost six-year low in December.
The end result of all this positive news is that Wall Street started falling all over themselves in a rush to upgrade and recommend the homebuilding stocks.
But before investors embrace the enthusiastic support of homebuilding stocks it might be best to take a step back and look at the whole picture.