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Michael White is the CEO of The New Mortgage Company. He has seventeen years in real estate as lender, owner, and mortgage originator. He has purchased and sold more than 275 properties for his own account, made hundreds of real estate loans for his portfolio, and originated hundreds of mortgages as a broker.

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Here’s What the Housing Inventory Picture Really Looks Like

The federal government has tried every manner of strange intervention to foolishly support the price of real estate. The trend in unit sales shows very little evidence of success (see below).

Setting aside for a moment the massive stupidity of trying to uphold pricing created by a delirious and mentally-retarded credit bubble, the feds have failed in one obvious area: They haven’t been able to make the monthly mortgage payment for 15 percent of homeowners.

This wildly high number of individual financial failures makes the typical inventory of homes for sale petite and pretty. The consequences for the prices of homes is obvious. Massive new supply leads to massive new losses (see below).  I don’t know what fraud they are going to think up to try to cover this up, but I know it will be as dumb as what they have already tried.

The bubble began in 1990. For the last 20 years buyers bought a scam. The terms of the scan kept getting worse and worse until 2006. How many homeowners in the United States of Mortgage Fraud are living in a make-believe world of income-not-required lending and name-your-price appraisers? When do we return to a 120-year price trend (see below) which we ran away from 20 years ago? When will trillions of unaffordable mortgage debt be written off? When do we stop sending fools in to buy both their first home and their first financial failure?

We can break the credit bubble, but we must take chemotherapy. Burn up fake debts. Slash false prices. Fire sale failed banks. Convert equity to wall paper. Convert debt to equity. Rematch the price of housing to income. Make it cheap to own or rent.

We must re-balance the economy. Massacre mortgage debt. Tear up the other credit-bubble paper. It’s time to get to work. It’s time to get the real economy humming again. We can do that very easily. Crush, kill and destroy faux credit-bubble debt and we are ready to fly upward.

Print — The Financial Crisis Shifts

Please forward questions, reactions, and corrections in comments below or email me at: mike@mynewmortgage.com

Previous work by the author on financial-crisis management.

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Michael David White is a mortgage broker in Chicago.

There Are 11 Responses So Far. »

  1. Nicely done. Sharp and to the point.

    Takeaway line: “I don’t know what fraud they are going to think up to try to cover this up, but I know it will be as dumb [and criminal] as what they have already tried.”

    They, Obummer and company, are already implementing another backdoor bankster-crony bailout are they not with HAMP 2.0? As I understand it, they give (free-market) money to banks for them to wirte down principal. Good deal for the banks; bad for taxpayers; and does nothing to solve the bloated pricing you correctly identified as the fundamental problem.

    Thanks for your work.

  2. Excellent and to the heart of the matter! I’ve been in the default/REO biz for the past 20 years, (both in default servicing and as an REO agent), and little suprises me anymore. Eventually we have to realize that it’s the Congress who work for the Corporations who then make the accomodations/policies so that these Corps can hide their losses. Hopefully the truth will continue to be told and prices will come down to what households can really afford. Thank God for the Web. Keep tell’n it!

  3. I think the reason for the rapid increase in house pricing is due to the demand of market share created by Pension funds and 401Ks. With baby-boomers in the driver seat, due to their overwhelming power due to voting, I don’t see how the market will return to 120 year lows, unless the consumer wises up and refuses to take the easy money created by the Pension/MBS anomaly.

  4. Hi Michael… I write the blog Mandelman Matters on ML-Implode, and I’ve written extensively on the foreclosure crisis, the economic meltdown and the political climate I like to talk about interviewing you as related to your housing inventory knowledge for a feature article/cover story in The Niche Report magazine that I’m working on for the June issue. Email me if interested, but even if not for whatever reason, I’d like to say hello. Martin Andelman

  5. Danny, did you suffer a coma and think you woke up in 2006???

    “I think the reason for the rapid increase in house pricing is due to the demand of market share created by Pension funds and 401Ks.”

    Did you mean “was due” not “is due”???

    And this left me scratching my head: “With baby-boomers in the driver seat, due to their overwhelming power due to voting, I don’t see how the market will return to 120 year lows, unless the consumer wises up and refuses to take the easy money created by the Pension/MBS anomaly.”

    Huh??? I’m a baby boomer, don’t recall any “easy money” being offered to me by any pension/MBS anomolies. And “in the driver’s seat” are we? Huh? I “musta mist” that “Too Big To Fail Boomer Bailout”, can you send details and numbers so I can go get mine??

    You are so far off, gravity has no effect upon you any longer…..

  6. My grandpa is also a Baby Boomer and we love him a lot.*::

  7. I like the granpa baby boomer love comment

  8. my grandfather is also a baby boomer and he is also a war veteran*;:

  9. my grandfather is a baby boomer and i am quite proud of his longevity all these years-~~

  10. my grandfather is a baby boomer too, he is very old now but he is the best grand daddy*`;

  11. [...] China – BBC Is Greenspan Kidding? He Was “Right 70%” of the Time? – HuffPo Here’s What the Housing Inventory Picture Really Looks Like – Implode-O-Meter Consumer Credit in U.S. Fell by Most in Three Months – Bloomberg [...]

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