Crisis will be postponed again!

Marc Faber, Gloom, Boom and Doom Report editor/publisher, said in the following CNBC interview below.

“The end crisis will be postponed until the sovereigns go bankrupt,” Faber said. “They can postpone the end-game endlessly…say another five to 10 years. Each money-printing exercise brings about unintended consequences. These unintended consequences are higher inflation rates than had no money been printed.”

“I think I’m very constructive and I’m a great optimist in life. Otherwise I would commit suicide in view of the kind of governments we have nowadays. For sure they will take wealth away from the well-to-do people one way or the other, and from the middle class they will take it away through inflating the economy and lowering the standard of living.”

“If the Chinese bubble bursts one day, which inevitably will happen — maybe not tomorrow, maybe in three months, maybe in three years — when it happens it will have devastating consequences for the global economy.”

Refinance Program for Underwater Borrowers

Administration Announces Refinance Program for Underwater Borrowers

It’s official. The Federal Housing Finance Agency (FHFA) unveiled a new, revamped government mortgage refinancing program Monday.

The initiative involves a series of rule changes to the Home Affordable Refinance Program (HARP) to allow more underwater homeowners to reduce their mortgage debt by taking advantage of today’s rock-bottom interest rates.

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Under the revised HARP guidelines, the 125 percent loan-to-value (LTV) ceiling has been eliminated. Previously, only borrowers who owed up to 25 percent more than their home was worth could participate in HARP. That limitation has now been removed. The program will continue to be available to borrowers with LTV ratios above 80 percent.

See the whole article here.

This is very positive for US housing market and should prevent 25% of the home owners who are underwater, giving up, walking away with strategic default and causing more foreclosure in the future.

Rental Shows Positive Movement

I have recently talked with property managers in San Francisco bay area. They all told me that rents are going up and demand is strong now just like in 1999. See the following article as well as one of the supporting news.

See the article of Multifamily Sector Shows Positive Movement on 10/18/2011 here.

While the homeownership rate falls, rental demand rises bringing rental rates up and apartment vacancies down – all of which has led Freddie Mac’s chief economist to label the multifamily sector “a positive signal for the U.S. housing industry.”