Whew! A New Housing Bubble?

A lot of pundits have been predicting a new housing bubble, one even worse than that of 2008-2009. In this economy, of course, anything is possible.

But Bloomberg News now reports that the Fed is requiring a dozen major banking institutions in 2014 to stage a series of ‘war games’ if you will, stress-testing their ability to endure a plunge in the value of their portfolios.

How would they fare in another massive housing bust?

Hmmm, let’s toss into the mix a few factors that nobody ever talks about. 24% to 50% of the mortgageĀ portfoliosĀ held by some major lending institutions are in homes located within American Homeowners Associations.

Several recent studies have shown that home values don’t appreciate or hold their value in Homeowners Associations as they do in properties outside of HOA control.

As documented in my new book, Neighbors At War, every foreclosure in a Homeowners Association drives down surrounding home values by several percentage points.

What’s that again?

Uh oh.

(Bloomberg News report)

http://www.bloomberg.com/news/2013-11-02/fed-gives-banks-new-dire-scenarios-for-2014-stress-tests.html

 

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About

Ward Lucas is a longtime investigative journalist and television news anchor. He has won more than 70 national and regional awards for Excellence in Journalism, Creative Writing and community involvement. His new book, "Neighbors At War: the Creepy Case Against Your Homeowners Association," is now available for purchase. In it, he discusses the American homeowners association movement, from its racist origins, to its transformation into a lucrative money machine for the nation's legal industry. From scams to outright violence to foreclosures and neighborhood collapses across the country, the reader will find this book enormously compelling and a necessary read for every homeowner. Knowledge is self-defense. No homeowner contemplating life in an HOA should neglect reading this book. No HOA board officer should overlook this examination of the pitfalls in HOA management. And no lawyer representing either side in an HOA dispute should gloss over what homeowners are saying or believing about the lawsuit industry.

1 thought on “Whew! A New Housing Bubble?

  1. Nila Ridings

    Somebody’s bubble is going to burst when these people who are barely able to scrape together their HOA dues will now be paying that money to a healthcare program.

    Reply

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