Squatters in PORTLAND?!?!?!?

Oh dear, perhaps the housing bubble is NOT going to be all that different here in Portland. Take a look at this SE Lents Neighborhood Squatter Story. And of course our local activist friends are popping up around town and encouraging folks to "reclaim" vacant houses in Portland. Wait? There are vacant foreclosures here? "Close in" Portland?!? Oh my...

"Look for things like Tall grass, overflowing mailbox, newspapers piling up are signs of abandonment. It is recommended that potential tenants look for bank owned properties. It will be easier when you are making your arguments for defense, and with the overflowing amount of foreclosures the banks have many vacant homes throughout Portland."

Now on a more serious note, remember the MERS / LPS mess, where deeds/titles/notes were never properly recorded at the county level? Where millions of documents were forged? Remember how all 50 states attorneys general were forming a modern day posse to go after MERS as well as to get some justice from those damn TBTFail Banksters?

Well it's amazing just how cheaply a state attorney general can be bought and paid for these days. Sad. Truly sad that our local property rights are sold down the river for a song. And still no bank executives go to jail.

"The numbers are laughable. In 2006, out -of-state donors gave Miller’s campaign $10,508. For the 2010 cycle, that number was $497,357. Three lawyers by themselves – Al Gore’s attorney David Boies, plus Donald Flexner and Robert Silver, all partners in the firm Boies, Schiller and Flexner – gave Miller a total of $60,000."




Someday, this bubble is gonna bottom......................




.

Demographia 7th Annual Survey: Portland "Seriously Unaffordable" When Compared To Rest of World

The 7th Annual Demographia International Housing Affordability Survey shows some sobering data for the Portland housing market when compared to 88 other major cities in Australia, Canada, Ireland, New Zealand, the UK, US, and China.

"Among these major metropolitan markets, there were 20 affordable major markets, 25 moderately unaffordable major markets, 13 seriously unaffordable major markets and 24 severely unaffordable major markets.

All of the affordable major markets were in the United States while three of the moderately unaffordable markets were in Canada, with the other 22 being in the United States. The seriously unaffordable markets were concentrated in the United Kingdom and the United States."






Read all 52 pages from Demographia.

Core Logic: Four Months In A Row - Oregon Real Estate Prices Still Declining @ ~10% Year over Year

Sparing much additional commentary, let's just do a simple quarterly review of Oregon real estate prices when measured year over year:

November 2010 data

December 2010 data

January 2011 data

And now of course, we have February 2011 data from Core Logic:







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Opt-ARM Foreclosure Rate Now Exceeds Subprime, Average Time To Foreclose Takes A Record 537 Days, $50 Billion Per Year Free Money for Squatters

The housing bubble saga continues, and the banks continue their extend and pretend / kick the can down the road strategy. Lender Processing Services announced last week that the average delinquency period has reached a record 537 days, and 30% of delinquent loans have not made a payment in over 2 years. Banks are happy to avoid foreclosure for two significant reasons:

1.) When banks foreclose and return the house to the free market, they must realize a loss. As long as the mortgage is kept in limbo, they can continue to mark the asset to model (as opposed to marking it to market), lie about their solvency, and pay themselves handsome bankster bonuses.

2.) The legal mess with MERS has clearly turned into much more than a "paperwork" issue. Millions of deeds/titles were never recorded legally at the county level when the mortgage was sold, and re-sold, and re-re-sold in the ponzi scheme of mortgage backed securities.

Also in the LPS release, it is now abundantly clear that the Alt-A / Option-ARM time bomb will usher in the second major leg down in housing prices over the next few years:

"February’s data also showed a 23 percent increase in Option ARM foreclosures over the last six months, far more than any other product type. In terms of absolute numbers, Option ARM foreclosures stand at 18.8 percent, a higher level than Subprime foreclosures ever reached.

In addition, deterioration continues in the Non-Agency Prime segment. Both Jumbo and Conforming Non-Agency Prime loans showed increases in foreclosures and were the only product areas with increases in delinquencies."

Oregon and Portland has a healthy dose of Alt-A/Opt-ARM loans that were originated near the peak of our bubble in 2006 and 2007. The majority of these loans have a five year reset/recast schedule. This sets the stage for a major wave of defaults in 2011-2012, and the inevitable price declines from 2012-2014 (foreclosure and auction sales will continue to stretch out beyond 537 days from the initial default).




Lastly, a letter from JP Morgan's Michael Feroli on squatters in foreclosure and the annual size of their average 537 day personal bailout via living mortgage/rent free:

"first he debunks all myths that "rental income" is surging, as was reported in glaring headlines in a variety of propaganda media outlets following Monday's personal income report was released. This is patently false. As Feroli explains: "This rise has little to do with landlords getting more from their tenants. In fact, it has very little to do with what speakers of the English language would normally consider "rent."

Instead, it mostly reflects mortgage payments of the household sector coming down, in part because of the aggregate decline in household mortgage debt due to net cancellation of mortgages associated with foreclosures."

In other words, surging rental income is nothing more than "squatter's rent" saved by not paying one's mortgage. As to quantifying this amount - per Ferroli until recently it was $60 billion a year! This is a stunning 0.5% of GDP. Luckily there is good news: this unethical and artificial "boost" to the economy is finally declining... and is now only $50 billion on an annualized basis."