“Hello, Has Anyone Got A Flare Gun?”
The News Press reports from Florida. “Property owners hoping for a quick profit left disappointed Friday as bids were low during the first day of a land and home auction in Fort Myers, where 68 residential and commercial lots were on the block.”
“Ariel Crespo put two lots in the auction. He had both listed on the MLS for more than $60,000. The bids came in at $22,500 for each. Both lots were off water in northwest Cape Coral. ‘I just won’t take a bid that low,’ said Crespo. ‘That’s just way too low.’”
“‘I’d say they will be lucky to get 10 percent of the sellers to accept bids,’ said Cape Coral resident Jim O’Day. ‘I wanted at least $145,000 minimum.’”
“Two other lots, desirable because of their size at 11,934 square feet, and waterfront location on the Caloosahatchee River, drew bids at half of their $799,900 listing price.”
“Despite the low bids at Friday’s lot auction, Cape Coral’s Ginnie and David Ward remain optimistic about the sale of their home in the auction today. Their three-bedroom, waterfront home in Cape Coral with deep-water canal and easy access by boat to the Gulf of Mexico lists on the Lee County Property Appraiser Web site at $862,410.”
“‘The auction today (Friday) was full of speculators,’ Ginnie Ward said. ‘The auction Saturday will have more end users, people who want a great home. That’s a big difference.’”
The Herald Tribune. “Financial problems that have paralyzed a large regional home builder are now smashing into Coast Financial Holdings, a Bradenton-based community bank that loaned about $110 million to the builder’s customers.”
“The Herald-Tribune reported last week that CCI customers had been hit with a slew of construction liens after the home builder failed to pay electricians, drywall experts, plumbers and a variety of other subcontractors and suppliers.”
“The bank warned that if the home builder failed to complete the homes, it could threaten the ability of borrowers to repay their loans, which in turn might damage the ‘value of the bank’s collateral.’ Several banking and foreclosure experts contacted by the Herald-Tribune believe that Coast’s loan problems are grave and foreshadow more problems for both the home building and banking industries.”
“‘It’s an alarming amount,’ said George Huhn, a Venice-based commercial Realtor and foreclosure specialist. ‘One hundred and ten million in loans represents 25 percent of the bank’s entire loan portfolio. Hello, has anyone got a flare gun?’”
“Marilyn Schwegman, a St. Petersburg resident who contracted with CCI to build a house in North Port, said she first learned about the company from a local Realtor in 2005. She said CCI officials told her that if she bought a house in North Port, Battle Realty would have it sold again by the time construction was finished.”
“CCI also promised to make the payments on Schwegman’s $237,150 mortgage from Coast Bank until construction was finished. Schwegman said she had no trouble getting the loan from Coast. ‘They came to my house. Filled out a very sparse financial record, and bang, you get the loan,’ she said.”
“Schwegman now faces more than $25,000 in liens from several subcontractors. ‘It’s been a rather disappointing and frightening situation really,’ she said.”
“What amazed consultant Jack McCabe, and other analysts and bankers, is how much of its financial risk Coast was willing take on a single partner. ‘I’ve never heard of so many construction loans funneled to one particular company,’ McCabe said.”
“Steve Jonsson, chief executive of Bradenton’s Flagship National Bank, agreed. ‘Four hundred and eighty-two contracts seems like a ton of loans with one bank,’ Jonsson said.”
The Naples News. “The Naples Area Board of Realtors no longer will provide monthly home sales numbers to the statewide association that calls itself the voice for real estate in Florida. The local real estate board says it doesn’t think the way the Florida Association of Realtors reports the numbers is relevant and that it can do a better job with its own reports, and better reflect what’s going on in the local market.”
“This comes as the state association’s numbers have shown sharp drops in home sales and median home prices during the past year in the Naples area.”
“The numbers aren’t truly reflective of what’s going on in Naples because they include sales made outside the Naples market, in such areas as Cape Coral and Lehigh Acres, said Joe Ballarino, president and chief executive of Amerivest Realty in Naples. Some Naples members’ sales even extend beyond Lee County to Charlotte County. ‘They are accurate numbers,’ Ballarino said. ‘They are just not relevant numbers and that is an important distinction.’”
“Currently, there are 11,000 listings in the Naples area. That’s an 18-month supply. ‘Buyers have a lot more choices available to them this season,’ said Spencer Haynes, NABOR’s president. ‘Now is a good time to buy,’ Ballarino said. ‘But the buyer confidence is not there.’”
The Ledger. “The coming months will be a proving ground for local Realtors. They will have to decide who can stick out the market slowdown without suffering an empty stomach. The market is flooded with listings.”
“‘I believe some (Realtors) are looking for day jobs,’ said Judy Cleaves, a Realtor in Winter Haven. ‘Real jobs we call them.’”
“The current abundance in new home inventories has builders undercutting existing home sales and making it difficult for local Realtors and their clients. New homes are being priced in the $150,000 range, a significant drop from asking prices a year ago.”
“Many real estate agents entered the Polk County feeding frenzy in 2005, looking to make a quick buck. But it was only temporary. And now those Realtor speculators have returned to other jobs.”
‘Coast Bank’s filing stated that liens have been placed on several of the existing construction projects and the developer in question, along with its affiliates, “has effectively ceased construction activities.” The roughly $55 million in funds already paid out represent almost 10 percent of the bank’s total loan portfolio of $531 million, reported in its last quarterly report filed in November. At the same time, Coast Bank reported that it had set aside an allowance for loan losses of only $3.7 million.’
‘Industry watchers also have suggested that Coast Bank has tried to grow too fast. The company attributed part of its net loss the last reported quarter to opening eight of its 20 branches in a year’s time. Coast Financial Holdings’ stock dropped almost $4 a share - or 25 percent - to close Friday at $12.10.’
Crunch…Crunch…Crunch…..
Does anybody know CCI’s current CD rate offering?
Oh my god, it’s official, another crooked clinton is running for president.
I was also reading somewhere online yesterday that margin debt is approaching levels of the tech bubble.I am wondering just how much time is left for this stock orgy?
I share your frustration with our political system, but never more-so than with the current administration. It used to be fraud involved a little back pocket greed, along the lines of former GOP CongressMan Cunningham here in San Diego, but in Iraq, companies with strong ties to the Bush Administration have cleaned up on no bid contracts. Big oil has so much cash they don’t know what to do with it all and similarly, after granting billions in (again) no bid contracts to companies with ties to the bush administration, much of New Orleans still looks a lot like it did after the Hurricane. These days back pockets are gone - now they are backing up semi’s and shoveling in cash …
Oh yeah, I forgot to tell you about the catastrophic housing bubble …
I’ll take crooked over incompetence any day. That’s why I liked Nixon as a president…the communists knew he was somebody you didn’t want to meet in a dark alley.
I’ll stick with “none-of-the-above,” thanks.
[Non-voter since summer '04.]
There are people that will always vote for party X no matter what that party does. That amazes me.
If you’re angry about corruption, lying, fiascos, blunders, cronyisms, elitism, arrogance etc., I think your anger is misguided.
He said person Y, not party X
They can’t recover from this. Too much. Well how much equity do they have on their balance sheet?
I wonder how much collateral they hold on the construction loans?
I think we’re about to go in S&L bank crisis #2…
Neil
I did a bank audit in the mid 90’s the exact same thing happened and they went under. The funded a massive condo project in Long Beach and the owner went bk…
*they funded
I used to be a corporate lender at a bank. We were required to aggregate related loan exposure. If it exceeded a certain dollar levels (based on our bank’s capital) the loan had to go to higher and higher levels of loan committees. Some could just not be done because of aggregate risk. Common ownership was not the only test for aggregation. I can’t believe that federal or state bank examiners didn’t see this as effectively one loan that should be measured against bank capital.
This will change their CAMEL rating if their is a bank left. Out all the banks I audited I only saw one that had CAMEL rating of 3 all the others 2.
The acronym “CAMEL” stands for Capital, Assets, Management, Earnings, and Liquidity, five components of a bank’s financial operation that are examined by the regulators. In the late 1990s a sixth component was added to the CAMEL rating system, recognizing bank and thrift Sensitivity to interest-rate or market risk (CAMELS). CAMELS ratings are assigned on a scale of 1 to 5 with 1 being the highest and 5 the lowest. Because the empirical portions of our analysis relate to ratings assigned before the late 1990s, we reference the five-component rating system in effect at that time.
Ariel Crespo put two lots in the auction. He had both listed on the MLS for more than $60,000. The bids came in at $22,500 for each. Both lots were off water in northwest Cape Coral. ‘I just won’t take a bid that low,’ said Crespo. ‘That’s just way too low.’”
how insulting! if that is the bid, deal with it dude.
the market makes the price not you jerk
‘The auction today (Friday) was full of speculators,’ Ginnie Ward said. ‘The auction Saturday will have more end users, people who want a great home. That’s a big difference.’
This is the same lady that was quoted in the desk clearing last night. ‘Goodbye Florida’ indeed!
The trouble with “end users” is that their bids are maybe 40% below those of last year’s equity locust’s best offers.
This entitlement mentality must be squashed.
The entitlement mentality is just out of control.I have seen so many worthless pos thinking that they are just geniuses because of this real estate ponzi scheme.I think a lot will be shacking up with mom and pops soon.Time to turn over the leased BMW to the dealer, take the 20″ rims back to walmart and give the rolex back to Ben Bridge.
That’s too low, I’m not going to take that. So it just sits there, and sits there, and he bleeds and bleeds, and then finally his pride is hurt and he HAS to sell and he takes a loss. Then he says, I WILL NEVER DO THIS AGAIN and it will take years for speculation to reenter the market.
NO, then he looks for someone to blame and sue. It wasn’t that he was stupid. He was lied to.
End users are just not desireable people to have bidding on home in S. FL. Speculators don’t care about price/rent ratios or median income numbers. They just want to flip for a profit to another specualtor.
Those stupid end users have to examine their options (which, I really hope they are doing now) and look at the financial impact of hanging a 500K depreciating asset around their necks. Can you afford to lose 20% over 2-3 years on 500K? I can’t, and I make a large multiple of the median in the area. So, the question, remains, who can??
Professional RE investors will also bid40% below 2005 prices. It was only the imbeciles and criminals that ran prices up.
I went to an auction in Sacramento CA in November. They had 23 houses on the auction block. 21 houses did not even get a first bid. Only one sold, located at 3**6 Milburn Street in Rocklin. I looked up the stats last night and it closed escrow at $337,000 ($152/SF). Here is the interesting fact: The seller purchased it for $336,000 in 2003. So after 3 years of ownership, the house appreciated $1,000 (1/3 of 1% over 3 years!). After selling costs, he lost a lot of money.
I wonder what the full haircut looks like when they add in three years of net carrying/holding costs.
Seller lost money but the seller was smart to sell now. Better to lose a little now than to lose a lot more in the future.
And I believe the purchaser paid too much.
My folks live in Fort Myers. I was down in mid December and everyone I spoke with refused to believe the market was/is collapsing. So many of these folks have nothing but their homes to rely on for any type of retirement. Many of the younger folks thought they were real estate investment gurus until last summer. The unraveling of this market will squash a huge number of people, young and old. It was so funny to think way back to 2004 when my mom told me I better buy now or be priced out forever. I never let her forget that BS. Maybe that’s why I won’t be visiting again anytime soon.
“The unraveling of this market…”
This is beginning to resemble the aftermath of the tech stock bust. Is a soft landing still in the bag?
According to several economists this soft landing is starting to turn around.Housing has bottomed man, get on board.Gas prices are coming down, housing stocks are a bargain and borat obama is here to the rescue.
OK, I get it. You’re not a big fan of the Democrats.
Borat Osama will rescue us?
Is it true that his middle name is Hussien?
“Hussein.” True. And he hates it when anyone makes fun of his huge ears. Wait until the caricaturists start working on him.
Those younger people will soon find out that THEY were the greater fools!
Why is it that everybody thinks that it’s ok for “end users “to overpay. ? All the speculators waiting for “end user” dolt bagholders willing to pay whatever inflated price a sub-prime lender will allow ,even at a auction .
When you have to rely on a dumb-as- end user to sell your property you are on sinking sand in this market .
I feel you. I have otherwise beloved relatives who have been telling me that for the last several years, despite my being extremely vocal that buying now was irresponsible. They recently have amped it up again. Thinking my wife would be the easier target, two of them separately moved in on her during our Christmas visit. She politely shot them both down by referring to relative costs and to insurance–I was so proud!
‘The auction today (Friday) was full of speculators,’ Ginnie Ward said. ‘The auction Saturday will have more end users, people who want a great home. That’s a big difference.’
And when that doesn’t happen there’s always Sunday where rich immigrants will show up with suitcases of cash willing to pay full price.
Dreaaaaaaam-Dream-Dream-Dream
She’ll be coming down the mountain when she comes, Yee-Haw!
She’ll be coming down the mountain when she comes…
Don’t forget the Tuesday early bird auction with the retiring Baby Boomers.
Funny thing about Florida and Baby Boomers though is the sellers featured in the story about this auction ARE retired boomers and they are selling in Florida to go back to N.Y….so much for all the boomers wanting to retire to Florida. Not any more!
“Many real estate agents entered the Polk County feeding frenzy in 2005, looking to make a quick buck. But it was only temporary. And now those Realtor speculators have returned to other jobs.”
would you like to supersize that valuemeal?
lmao
“Property owners hoping for a quick profit left disappointed Friday as bids were low during the first day of a land and home auction in Fort Myers, where 68 residential and commercial lots were on the block.”
It sure takes these dumbsh!ts a long time to get it into their thick skulls that there are absolutely no bids forthcoming at last year’s wishing prices.
It will take till the Fall this year to weed out a bunch of this thinking and another round in 2008. Spring 2009 will begin to look like a bottom, but then, we need to see where we are with foreclosures and prices. (and energy prices).
I’m starting to think it will be 2009 or even later before the excess is squeezed out of the market. It takes time before people realize they aren’t going to get their “wish price” or even anything close. Unfortunately, incomes in this country don’t allow people to pay those “wish” prices.
The only thing that “allowed” paying those “wishing” prices was subprime debt, which drove a wide chasm between household incomes and home purchase budgets.
Right, and now we have a bizarre situation where loans are still available to buy these places, but without the required fundamentals buying now is effectively financial suicide, given prices are no longer rising and incomes are not doing much better. What clearly needs to happen is credit and income requirements need to tighten A LOT!
Tampa is flooded with rental houses. I overheard a friend who bought a 3/2 sfh for $320K last year ask another friend about moving to a new house by asking “you bought a house?”. “No” was the answer, ” I am renting one 4/2 for $1100 a month in a brand new subdivision”. Apartment are now having to compete with new houses for occupants and this has started.
What is the value of $1100/month from a rental in Tampa. What will the landlord have left over after taxes, insurance, HOA, bonds, and maintenance? $500/month? A 6% ROI calc says that 4/2 home is worth $100,000! That is all a smart real estate investor will pay for it. Hard times are on the way.
What happens when the rent keeps going down?
And the interest rates shoot up?
Maybe $50K to get 6% ROI? Or $25K?
Any yet, every couple of weeks the MSM in my neck of the woods (Dallas) floats the idea that rents are going up nationwide. We’ve got a similar building craze and record numbers of empty homes on the market with a huge number of new condos, townhomes, etc. coming online in the next year. I just love it when the Morning News floats the rising rents BS w/out any supporting documentation.
All the talk yesterday in my area was about how rents are going down in this area, vacancy rate is high, and an unprecidented number of new units are coming on the market.
My fiancee and I were considering renting a large two bedroom… now, its cheaper to rent new a 3 bedroom, single floor townhouse with all the goodies. Professional landlord, etc.
This has only started.
Got popcorn?
Neil
I believe this will start to happen all across the country. And, thanks to the folks at BLS, this will again put downward pressure on their fictional CPI numbers. This whole housing bubble will have the perverse effect of suppressing CPI on the way up and on the way downthanks to OER. On the way up, everyone was buying which held rents down. Now, on the way down, there will be many more places to rent which will also hold official CPI releases down. Perverse, I say … perverse.
“Financial problems that have paralyzed a large regional home builder are now smashing into Coast Financial Holdings, a Bradenton-based community bank that loaned about $110 million to the builder’s customers.”
Correlated risk can really bite you in the back of the neck during the unraveling of a record bubble.
We have a local bank here in Bakersfield and in reading their latest 10K they had “80% of their loans in the local residential real estate market”. No risk here, move along…
Don’t be a tease! Give us the name!
“The local real estate board says it doesn’t think the way the Florida Association of Realtors reports the numbers is relevant and that it can do a better job with its own reports, and better reflect what’s going on in the local market.”
That’s great. Destroy any shred of credibility that might be left.
And the beauty of the situation is that with less credible statistical bullsh!t getting spread around, risk-averse buyers become even more hesitant to buy, which tends to drive prices down more quickly. The action of the invisible hand is a beautiful thing, even when Realtor efforts at baking the numbers impede it from operating under idealized competitive conditions.
After the WSJ expose, it dawned on Naples realtors they were losing the information war. As a result, they decided to take their ball and go home, ruining the game. Naples realtors are a bunch of sour pusses. Time2GetReal scumbags!
The tone of the report was interesting. Sort of like the Santa Barbara paper when the realtors out there did the same thing, except they refused to give the numbers to the press, not the state group. IMO, this is a big sign.
You know an area is collapsing when realtors ™ deny information.
I hope this becomes a big nastly legal fight.
It couldn’t happen to nicer people. 
Got popcorn?
Neil
I wrote the Naples Assoc of Realtors this morning with my thoughts about their refusal to provide their [sinking] sales price data. gordo nyc
The Naples Realtor Association dues for 2007 were due and payable by December 15th. Of the 4,800 Realtors, 2,500 (40%) did not pay the renewal fee. The Association has taken the unprecedented move of extending the deadline until later in January.
There unhappy with how the state association “groups” there numbers with nearby communities? They may be unhappier when they are singly accountable for the drastic downturn in Naples.
“The local real estate board says it doesn’t think the way the Florida Association of Realtors reports the numbers is relevant and that it can do a better job with its own reports, and better reflect what’s going on in the local market.”
The local Realtors have a stronger interest than the FAR in hiding or distorting the local statistics, and less of a reputation to protect. So it makes perfectly good sense for them to assume local control of propaganda efforts.
Good one. All propaganda is local.
Well, not all of it. Don’t forget the NAR’s $40m dollar national propaganda campaign. I wish I knew whether they bribed newspaper editors to help get their message out. (Of course, this would just be icing on the cake, as newspapers make more money when real estate is selling like hot cakes, and hence they have a natural incentive to suppress stories or expert opinions that would cause buyers to exercise financial prudence.)
Sales in Naples last year according to the local realtors was around 4,200 houses. According to this article there are 11,000 houses listed for sale with many more to be listed in the next six weeks. This means by my math that there is around 30 months or 2 1/2 years supply. The Naples Daily News article quotes realtors as saying its 18 months.
The realtors here are a bunch of self serving liars.
“…around 30 months or 2 1/2 years supply.”
And that doesn’t include the shadow inventory of stuff that is being held off the market but that the owners want to sell, or FSBOs.
“‘Now is a good time to buy,’ Ballarino said. ‘But the buyer confidence is not there.’”
Don’t blame the markets’ problems on the buyers. What is missing from the situation is a lack of realism on the sellers’ parts. The bids are not there any more at last year’s wishing prices, but seller denial has not yet given way to panic, desperation and, ultimately, acceptance.
“‘The auction today (Friday) was full of speculators,’ Ginnie Ward said. ‘The auction Saturday will have more end users, people who want a great home. That’s a big difference.’”
Yeah, Ginnie, after a big bowl of Captain Crunch and an hour of Teletubbies, I’m absolutely fired up to buy on Saturdays!
Catherine, LOL, I don’t think your 3-year old can legally enter into a valid purchase contract. Even though that may be the last buyer willing to pay Ginnie’s price.
I’m sure we could find some lender willing to find a 3 year old an exotic mortgage. They just need to be creative!
Technically, Ginnie’s probably right. More people who actually want a home to live in might show up on a Saturday than a Friday (after all, having a job can get in the way of attending auctions on weekdays).
However, she’s just rationalizing - we all know that. Whatever helps her sleep at night.
I just want Ginnie’s take on Monday after her wonderful crip still belongs to her. Good luck paying for this year’s hurricane coverage, if you can find someone to write the policy.
Florida just passed a new law that makes it illegal for companies to offer things in the state of FL like auto insurance and not offer property insurance like they do in other states.
It’s a simple problem to solve really. They just price their policies so much higher than everyone else, and insurance is being offered, but who in their right mind would pay that much? It’s a bill without teeth really.
Its really a crazy idea, all that will happen is the companies that only write auto policies will undercut the combined property/auto companies and said combined companies will have another reason to leave FL.
Oops, I should read before I post
Actually, more offers are written on Tuesdays. (I read that somewhere and heard the same from brokers). Saturdays are for looky loos and low ballers. Really.
Just the idea that this woman thinks the minivan will be pulling up with the pre-approved family ready to make a bid is…nuts. It’s an auction, for God’s sake, and people that go to auctions do not make nice offers to the nice sellers.
The idea that they think an auction is a great marketing tool (Wee!) is the next rung down on the ladder.
And as they refuse bids, then fewer people want to deal with auctions. There goes the pool of potential buyers. They are just killing the market. Auction or not, there will be NOTHING!
Hey pal, there are thousands of others houses just like yours to choose from. CYA!
The market cannot be killed. What will get killed is the folks who hold on to their deflating inventory all the way down to the price trough, instead of biting the bullet and pricing low enough to sell before everyone knows what a terrible investment real estate is.
Many ziprealty listings in my area hint at bank REO sales; these are priced below the rest of the market ($230-$235 / sq ft versus $300 / sq ft and up for the clueless used home sellers). Guess who gets to set the comps for the next leg down in the price correction?
Catherine,
Here in Colorado Springs I’ve noticed a recent proliferation of “auction” signs posted at intersections [always a sure indication of legitimacy, right?]. Most of these are pure flipper gimmicks, i.e. the reserve bid is about 5% over the market value. Happily, these “auctions” are very poorly attended, as the word is getting out that these are stupid flipper tricks.
The cool part is, when the REAL firesale auctions start ramping up this Spring, a lot of buyers are going to assume it’s still a scam and won’t even bother showing up.
“…Cape Coral’s Ginnie and David Ward remain optimistic about the sale of their home in the auction today. Their…home…lists on the Lee County Property Appraiser Web site at $862,410…”
Ginnie and David Ward got $525,000 for their lovely waterfront home on Saturday…per the auctioneer’s website…Now that’s a spanking!!!!!!!!!!
“The coming months will be a proving ground for local Realtors. They will have to decide who can stick out the market slowdown without suffering an empty stomach. The market is flooded with listings.”
‘Coffee is for closers.’
http://en.wikipedia.org/wiki/Glengarry_Glen_Ross
“The bank warned that if the home builder failed to complete the homes, it could threaten the ability of borrowers to repay their loans, which in turn might damage the ‘value of the bank’s collateral.’ Several banking and foreclosure experts contacted by the Herald-Tribune believe that Coast’s loan problems are grave and foreshadow more problems for both the home building and banking industries. ‘It’s an alarming amount,’ said George Huhn, a Venice-based commercial Realtor and foreclosure specialist. ‘One hundred and ten million in loans represents 25 percent of the bank’s entire loan portfolio. Hello, has anyone got a flare gun?’”
Nothing here that a few helicopter drops can’t patch up, right?
My new blog on the Madison, Wisconsin housing bubble is now online:
http://madisonhousingbubble.blogspot.com/
Welcome to the blogosphere!
You rule! I’m about to move back — and rent.
The Naples News. “The Naples Area Board of Realtors no longer will provide monthly home sales numbers to the statewide association that calls itself the voice for real estate in Florida. The local real estate board says it doesn’t think the way the Florida Association of Realtors reports the numbers is relevant and that it can do a better job with its own reports, and better reflect what’s going on in the local market.”
Ah yes, they are essentually saying “We can cook the books better than the FAR”
So, could Sarbanes Oxley spread over to industries like RE where they have to have financial controls in place and show a paper trail of who cooked the books?
That $100 million we had for an ad campaign is gone, we have to now upgrade our IT systems $$$ cha ching for companies like Microsoft, IBM, Oracle LOL
So true Tom !!!!!
After the fallout, I see there being a national law about disclosure, what they can and can’t say. I saw up there some lady said a mortgage company promised her they could sell her property before construction is finished. Well that is kind of true, but it could be at a loss! If you price something low enough, it will sell
and you will lose your shirt.
To paraphrase: Coast Financial is screwed. The bigger surprise, though: A regional bank heavily reliant on a residential mortgage portfolio. I think the common consensus is that the regionals were getting their tails spanked by the humongous mortgage players like WFC, WM, CFC, couldn’t compete and concentrated on commercial loan portfolios, instead. Maybe the consensus needs to be revisited.
If you have over 100k in Coast Bank, I would take a withdrawl now! FDIC only covers the first 100k.
If I had any money in Coast Bank, I’d take it out NOW. Even if it is FDIC insured, how long do you think you have to wait to get that back? Remember this is the feds: They makes snails look fast.
The bank is on it’s way to be insolvent especially if savy people cause a run and withdraw their deposits.
As I read this article, it was the first time since the S&L crisis that I would advocate a bank run (on Coast).
Coast is Toast. And you are right, it takes 6 to 8 months for the FDIC to issue a check.
Of course, you know who will most likely have > $100k in the bank? A flipper who actually sold. Awwww…
Got popcorn?
Now don’t take it the wrong way, I know bank failures are a painfull event. Its sad… It is scary. But there is nothing I can do so instead of getting an ulcer, I’ll spectate.
Neil
I have seen disclaimers by the FDIC that they don’t provide coverage in the event of ‘evil’ by the bank. Might some of these situations be the result of evil?
Found some more on the FDIC.gov site. It appears they probably would cover a bank failure caused by insider evil. But if the insider evil is caused directly TO YOU, they don’t cover it. Their insurance would have to cover it:
from fdic.gov:
Furthermore, the FDIC does not insure against loss of funds due to robberies and other thefts. Stolen funds may be covered by what’s called a bank’s Hazard and Casualty insurance, which is a policy a bank purchases to protect itself from fire, flood, earthquake, robbery, and physical damage. In those rare instances where a bank employee may tamper with a customer’s account, the bank’s blanket bond insurance (also called fidelity bonds) may cover the loss and the funds would be returned to the customer. Consumer protection laws such as the Electronic Funds Transfer Act offer protections if a third party somehow gains access to a customer’s account.
-
Stolen funds may be covered by what’s called a banker’s blanket bond, which is a multi-purpose insurance policy a bank purchases to protect itself from fire, flood, earthquake, robbery, defalcation, embezzlement and other causes of disappearing funds. In any event, an occurrence such as a fire or bank robbery may result in a loss to the bank but should not result in a loss to the bank’s customers.
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Some depositors who use the services of a fiduciary, such as a deposit broker or a real estate agent, to deposit funds on their behalf at a bank have unwittingly exceeded the insurance limit when the fiduciary and the depositor have both opened deposit accounts for the depositor at the same bank. Since deposit insurance coverage applies to the owner of the funds, not the party placing the funds, the account opened by the depositor directly is added to the account opened by the agent or broker, and the total is insured up to the limit for the applicable insurance category. Both the depositor and the agent or broker need to know where the other is depositing funds.
http://www.fdic.gov/deposit/deposits/financial/misunderstandings.html
On the plus side, the FDIC is New & Improved! Now with Diversity, “Our Greatest Strength!” http://www.fdic.gov/about/diversity/index.html
No need to pull your money out of Coast; they’re backed by Diversity!
It’s pretty sad when you talk about investment diversity, only to find out that they meant multiculturalism…
Run on the bank…
OK I agree. Take all money out of Coast Bank.
Also, any other local/regional banks who are heavily leveraged in RE loans, I would consider doing the same thing.
Coast Bank of Florida has a CAMEL rating of 3 (out of 5) according to bankrate.com. 3 is pretty much average, I think. This really makes me wonder what CAMEL ratings are worth as a measure of a bank’s well being.
The worm has turned. For the last few years we’ve been focusing on the FB’s (F@cked Buyers), but I think from now on we’ll be hearing a lot more about the FS’s (F@cked Sellers). That’s where the real pain will be seen.
Actually, “FB” refers to F’d Borrower, not buyer.
I’d say they’re pretty much the same. It seems in these days 99% of f’d buyers are f’d borrowers.
Btw: I just looked at Coast Bank to see if I could short it and find out what charts look like. Boy did it cough up a furball on friday. (-24%).
This is what they have on their key executives. http://finance.yahoo.com/q/pr?s=cfhi
CEO, aged 44 got paid $178k. COO, aged 48, $140k. VP lending, aged 54, $100k. That is based on 2005 data but is it just me but that does not strike me much for Officer positions.
‘Pay peanuts, get monkey’s’ come into mind.
This so hysterical you can’t even make this stuff up. The local Naple realtors won’t send data to the state realtors because the number put Naples in a bad light. They weren’t concerned about the numbers on the way up.
How self serving! Realtors are worse than used car sales people.
And if the State board had any integrity they would start publishing the numbers with a big blank where Naples ought to be with the space filled in with ” Local Board Refuses to Provide Numbers, proceed with Caution”
What impact will their action have on the State and National RE reports? No wonder the NAR is predicting an uptick in prices for 2007. Don’t count the markets with the biggest price declines and walla — prices stay flat or increase.
Can NAR or FAR cut the Naples branch off the MLS as a discipline measure for non-compliance?
Integrity and realtors are mutually exclusive.
The article indicates that the Naples realtors think the state organization’s stats are rigged because they include sales outside of Naples. If this is so, it isn’t the Naples realtors trying to cook the books, but the state organization. Have I misread this? I went back and read again, and this certainly seem to be what the article is saying.
both are trying to cook the books, but the city doesn’t like the way the state is cooking them.
to clarify: Naples realtors don’t want to include sales outside of Naples - not because they’re rigged but because they suck. Get it?
I do get it. The lower priced houses outside the city ruin their comps. Thanks.
In the Naples Daily News article they write that 2006 sales were around 4,200. They later mention 11,000 listings. They then claima 18 month supply of housing. If you divide 4,200 into 11,000 you get around 30 months supply.
It is worse because the season for listings is February-April so listings are going higher. In Naples there has been a great increase in for rent signs and owner sales. I suspect owner sales are realtors in trouble.
It just breaks my heart.
In keeping with the “Anyone got a flaregun” theme I created a cartoon that y’all may enjoy. I dedicate it to Ben and all of you who have kept me laughing and out of financial harms way in the debacle debubble. For your viewing pleasure
please see http://www.ewee.com/SinkingShip.jpg
Reporting here from Winter Haven.
On the third weekend of every month we have a downtown event called “BikeFest”. It is attended by poseurs who like to show off their Harleys and their cosmetic bling and their tatoos and their boob jobs. Such was today..
Anyhow, I went over to check it out. LOTS of bikes were for sale. I mean LOTS….more than I have ever seen. All the “players” are starting to sell off their toys.
Anyhow, they tore down and scraped some property down by Lake Howard at the site of an old marina and decided to offer condos starting at $ 300,000. The lot has been sitting vacant for over a year now and nothing is happening. I doubt that the condos will ever get built.
The Great Florida Real Estate Bust is now fully underway down here. There are still some pockets of resistance and denial; but the asshat Realtors(tm) and Flippers are being pounded to a fine dust.
Polk County property taxes came out in November 2006 and are due by March 2007. That will be the first litmus test. Then we have Federal income taxes due by April 15th. This will be the second waypoint in the journey down. Also, we will have a flush of inventory on the market this spring as the Asshat Realtors(tm) desperately try to unload their rapidly depreciating, illiquid “investments”.
They have built THOUSANDS of houses in this agri-community. Five years ago you could buy a VERY NICE 3/2 home for around $ 125,000 - $ 150,000. Median income here in Polk county has gone unchanged and sits at around $ 35,000. Housing prices went nuts down here and will quickly correct to a rational level.