DELINQUENCIES OUTPACE HOME SALES

Another excellent chart from Chicago mortgage broker Michael David White. In a few words, monthly delinquencies on home loans are 16 times larger than average monthly sales.

What this means is that, with 4.63% homes currently in foreclosure, we could see another 5 million homes added to our nation's housing inventories over the next two years. This is especially the case because while housing prices have collapsed homeowner mortgage debt remains relatively the same ...

As the chart shows, while housing values fell from $20 trillion to $13 trillion (34%), total mortgage debt has barely nudged from $11.95 trillion to $11.68 (about 2%). With President Obama's Making Homes Affordable Program in shambles, and with banks foreclosing on homes with positive equity, it's clear that the banks - rather than homeowners - are the only ones benefitting from the banking/mortgage market crisis and the subsequent bailout.

No wonder the market conspiracies are starting to pop up again. Because Wall Street and the banks didn't have to take a hit from the market collapse, it's easy for some to believe the kooks and tin foil hat crowd who think some evil Dr. Doom is behind all of this. In fact, it's tied to political and regulatory capture in Washington, and a lack of political will. President Obama needs to find his FDR moment ...

- Mark