Nationwide Slowdown A Natural Reaction
The Journal World reports from Kansas. “Mayor Mike Amyx knew this news was coming. As a follower of the local real estate market, Amyx has been hearing for months about Lawrence residents struggling to sell their homes. ‘You hear the stories over and over again that people aren’t getting anything close to their asking price,’ Amyx said.”
“Dale Roubison has been trying to sell his house for 13 months. His original asking price was $365,000, but now it’s down to $338,000 for the four-bedroom, three-bath custom-built home. That’s $18,000 below the market value the county has placed on the property.”
“‘I had to drop it down because I wasn’t getting anybody to offer anything on it,’ Roubison said. ‘I think it will bounce back, but I’m stuck in the middle of a bad time right now. I had no idea it would take this long to sell.’”
“Lawrence real estate agents say the moderation is part of a nationwide slowdown in the real estate market. Gary Nuzum, president of Coldwell Banker McGrew Real Estate, said the slowdown was a natural reaction. ‘We had five to six tremendous years, and there is just not a lot of pent-up demand,’ Nuzum said. ‘That time period really opened the door to home ownership for about anyone who had any aspirations to buy a home at all.’”
“‘The $200,000 to $400,000 market has taken some licks this year,’ said Mark Buhler, VP of Stephens Real Estate. ‘Oversupply is part of it. You are seeing a lot of homes in that price range that are being shown that are vacant.’”
“Douglas County Appraiser Marion Johnson said some homeowners should be prepared to see their home values actually decline from where they were a year or two ago. ‘We probably have had to adjust more values downward than we’ve ever had to since I’ve had the job,’ said Johnson, who has been the county’s appraiser since 1991.”
The Herald Leader from Kentucky. “Ohio leads the nation with a 3.32 percent foreclosure rate, compared with Kentucky’s 1.76 percent. Chris Evans, president of the Mortgage Bankers Association of Kentucky, said the state’s economy is ‘the true driving force’ behind the delinquency rate, but there are other factors.”
“‘I think we have had some aggressive lending practices in Kentucky,’ Evans said, especially involving so-called sub-prime loans made to borrowers with credit problems or low income.”
“‘In the process of growing the number of people who have home ownership in Kentucky, you are ultimately going to grow the number of foreclosures,’ Evans said.”
“Borrowers aren’t the only groups affected by rising foreclosures, however. ‘We have seen numerous sub-prime companies literally close — companies that were buying loans from brokers and banks,’ Evans said. ‘They shut their doors because they had gotten a little bit too broad on what they were allowing to come in the door, and their delinquency rates are hitting them.”
“‘The industry can’t survive with excessive delinquency rates,’ he added.”
The Cincinnati Enquirer. “Foreclosure notices were tacked to the front doors of more than 10,000 homeowners in almost every neighborhood of Greater Cincinnati and Northern Kentucky last year. For the seventh straight year, foreclosure filings hit record highs not only here but in all of Ohio and Kentucky.”
“Foreclosures rose disproportionately across Greater Cincinnati in 2006. The number of new filings rose an estimated 27 percent in Butler County and 22.8 percent in Clermont County.”
“Real estate broker Butch Magner in Fort Mitchell, sells foreclosure homes in ‘as is’ condition for about 10 lenders. Most properties, he said, fetch less than their previous selling price. Most bring down the value of homes around them.”
“‘Over 2½ years, foreclosures have tripled or quadrupled,’ he said. ‘They’re everywhere, from the inner city of Covington and Newport up to Edgewood and Burlington and Fort Mitchell.’”
“Homeowners aren’t the only losers when foreclosures happen. Banks themselves stand to lose a bundle on loans that go bad and collateralized homes worth barely more than the ground they stand on, said Kirk Sampson, a Cincinnati lawyer who has filed foreclosure cases for lenders for 32 years.”
“‘Lenders are getting killed by this stuff,’ Sampson said. ‘Lenders lose a lot of money on foreclosures. By the time they complete the foreclosure process in Ohio, they take a huge bath - 50 cents on the dollar sometimes.’”
“Among lenders, the biggest losers are those that lend to the riskiest customers, so-called ’subprime’ borrowers with the worst credit.”
“The combination of easy credit and free spending is fuel on the foreclosure fire. ‘It’s a social epidemic, but one that will eventually run its course because lenders will realize that their rate of return on these loans is not what they expected and they’ll stop making these types of high-risk loans,’ Sampson said.”
From Indiana:
‘The familiar Century 21 logo lent instant credibility, but their alleged victims say that’s where the legitimacy ended. Inside the Edison Park East strip plaza office and a title company office elsewhere, they say they were conned into real estate deals they would soon come to regret.’
‘Avgerinos, who had no experience with real estate investing, says Gertzas approached him in February with an offer to sell him 12 South Bend properties for $49,000 each — and Avgerinos would not have to invest any of his own money, according to court records.’
‘Gertzas and Ivanovich pledged to find tenants for the properties and make the mortgage payments with the rental income.’
‘According to the suit, Gertzas and/or Ivanovich then persuaded appraisers to certify that the properties were worth far more than their actual value, up to $80,000 for a house at 920 Sherman St., for example. At closing, lending companies cut checks based on those inflated appraisals, and Gertzas and Ivanovich fraudulently pocketed some $273,000 — the difference between the bogus appraisal amounts and the lower prices that property sellers were willing to accept, the suit alleges.’
take s 2 to tango
road work for all= free roads !
You guys will love this!!!
Just talked to a long time friend (concrete guy now). In new subdivision in north Stockton (CA) Asian gangs are buying homes with corrupt lenders/agents/builders on Adj/IO/stated income/no SS# required/cash back to buyer loans then having contractors come in and gut the homes and set them up with all needed gear (lights, wiring, plumbing, etc.) to grow pot!!!!
They buy the homes, gut them, grow one harvest and then walk on the loans!!!!
The local cops have been making many bust out there due to huge electricity usages.
The corruption (cancer) has spread from the toes of this patient to the top of the brain!
I thought this was going to be bad all along, but the extent of these bad loans is staggering!
These new home developments will drop so low in prices and the areas will get so bad that they won’t be worth owning, except for the most hardened slum lords! This crap peddled to real buyers and crooks alike will decimate the real buyers. The will see their 400k+ dream home in a nice hood fall to around 100k+ horrors!
link about bust, not specifically the homes.
http://www.recordnet.com/apps/pbcs.dll/article?AID=/20060930/NEWS01/609300325/0/A_NEWS13
From the article:
Tom Emery, 50, lives down the block from one raided Spanos Park West home.
He said this week he’s not surprised that most residents knew nothing of what was going on inside the homes.
“Everyone’s too busy,” he said of his neighbors, many of whom are commuters.
Great. So while the “commuters” are driving 2 hours to pay for their houses, these guys are busy ruining the neighborhood.
The bane of America. Everyone is working so hard to “get ahead” that they’ve lost all sense of community or neighborliness.
Sorry don’t know how to shorten these addresses, but here is more on this.
http://www.recordnet.com/apps/pbcs.dll/article?AID=/20060923/NEWS01/609230330/0/a_news13
San Joaquin pot houses had one Realtor.
http://www.recordnet.com/apps/pbcs.dll/article?AID=/20060916/NEWS01/609160329/0/a_news13
Fookin’ underwriters for the wholesale secondary market are all women making $30k.
I knew one mortgage operation which had “in-house” underwriting.
The sleazebag male L/O’s used to “lean” on this woman to change appraisal report ratings and falsify income forms to get their dirtbag deals thru.
And this was a two-bit hackshop.
Imagine the heavy-hitters.
They do exactly the same thing in Montréal. And usually they get the help of a chineese speaking real estate agent to do the cover up.
new topic: how fast is your county changing assessed values ?
I’m anxious to see what happens here in Mi with state assessments. From what I see changing hands, valuations should be reduced about 5-8% statewide. Mi is running a 800 mil deficit now and the gov wants to apply taxes to everything you can think of from newspaper boys to dentists collecting a tax on services. They sure won’t want to see reduced property taxes. And from what I’ve read about the deficit issue, the prospect of reduced property tax income hasn’t even been mentioned.
this may be the biggy for 07
gov dpshts always spend all the money
so what’s next
“gov dpshts always spend all the money
so what’s next”
Let’s see…let me guess…lower government worker’s salaries?
Strongest unions in the country, especially in education. Won’t happen…not with all the suffering of the ‘children’.
“Let’s see…let me guess…lower government worker’s salaries?”
Good one! I see a successful future in stand-up comedy for you!
Thanks, turnoutthelights, for aiming a well-deserved kick in the pants at the teachers’ unions. I was once a MEMBER of a teachers’ union, and that increases my disgust with them far above what it would be if I were just a libertarian with little direct information about these jerks.
It means the tsunami is coming together. How long do you think FB will happily pay taxes on inflated assessments without screaming bloody murder? If the ATM closes for homeowners, it will spill over to governments, and I don’t know that I want to be there to see the blood….
Market value is set by the buyer - NOT THE COUNTY ASSESSOR !!!
Sure seems like a lot of states are claiming to be the ‘foreclosure king.’ Texas, Colorado, and now Ohio. Which state really does have the highest foreclosure rate?
The foreclosure services use different ways to get their numbers, so there are multiple lists. Also, some may be highest total, or per capita, etc.
They’re all just pretenders keeping the throne warm for California.
Although Florida and Arizona will give Cali a run for its money…
CA is the FORECLOSURE KING already, in raw numbers. They trail in per capita, for now. Where they will ultimately absolutely blow any competition away is in “value” lost. This number will be in the many $TRILLIONS range, much of it in REAL LOSSES, by lenders…
I won’t argue with you on the amounts involved (I don’t have any opinion there), but how can you be so sure the lenders have not already figured out how to pass the trash on to pensioners and taxpayers, the logical bagholders of last resort (never forget that sh!t rolls downhill!).
I would imaging MBS simply lose value - real $$$s.
Lenders? That depends on the lender and what the USG decides to do. Member banks enjoy special privileges. We already have the precedent — RTC and Katrina bailout programs.
At least 10% of Americans are a Cali residents so absolute numbers are not going to capture what’s happening. I’d also argue, because prices prior to the bubble were higher in Cali, that total dollar amount lost isn’t as good an indicator of a bubble pop as percentage value lost.
e.g. A Palo Alto, CA starter home might drop an ave. 10% and lose 100k in value. How would that compare to 100k losses in AZ or CO?
The interesting measure (to me) is the percentage value lost and (difficult to forecast) the years the market takes to recover.
??? I’m not sure you get it.
$100K is the same in CA as it is in FLA or AZ. When a lender loses $100K do you think they care where the loss came from?
Percent lost is almost irrelevant. Are you arguing that If I spent $100 on a house and it lost 50% in value, it’s the same as losing 50% on a $1M house?
This is about dollars - PERIOD. That’s why the CA bust will be the elephant in the living room.
Lawrence was always overpriced compared with the rest of Kansas anyhow. Lawrence is a typical college town with a plethora of $8/hr jobs so most people there commute to Topeka and Kansas City for “real” jobs. Yet, Topeka and Kansas City have much lower housing costs. The beautiful people of Lawrence think it is simply because everyone wants to live in their town, but how many times have I heard that same comment by others in any other portion of the country? About the most entertainment people in Lawrence find is hanging out at polluted (and, this time of year, frozen) Clinton Lake. You have to drive 8 hours for any mountains or scenery of any sort. Yet another price bubble popping.
Actually, I probably should amend that: Lawrence has a plethora of $2.35/hour job. Kansas’ minimum wage is actually that–and that is the base wage many non-salaried people make: waiters, for instance.
Anthony you spent some time here in the Central Valley. I overheard a guy telling another guy that Exeter was alot like Carmel with all it’s charm. I almost fell out of my chair. You know everyone wants to live here. LOL
Not Mssing It,
I love that one! It is almost as bad as saying Exeter is a lot like Beverly Hills, just without the Beverly part and, also, without the Hills.
As many places as I’ve lived, most all of them have their share of residents who believe it is Heaven on Earth and everyone is just breaking down the gates to get in.
Certainly that is the attitude here in Morro Bay, but the slow motion of the MLS listings tells a different story.
“I overheard a guy telling another guy that Exeter was alot like Carmel with all it’s charm.”
Funniest thing I have heard all day! Maybe Carmel could take a cue from Exeter and put in some produce packing and storage facilities, a truck stop, and some tract houses?
““Dale Roubison has been trying to sell his house for 13 months. His original asking price was $365,000, but now it’s down to $338,000.
Dale needs to get that puppy down to about $208,996.00.
Lawrence is the best place I’ve ever lived — far better than dullsville DC. As for housing, houses are cheaper (or were in the 90s — the last time I looked) in Lawrence than in Champaign by quite a bit (and the property tax is half as much).
BTW: it was much cooler to hang out at The Bottlenck or Freestate than Clinton Lake.
You are soo on the money when you say that the people of Lawrence believe EVERYONE wants to live there. I grew up there and while I enjoyed my time there I do not want to live there any more. Every time I go back people who never left say look how great Lawrence is. I always tell them Lawrence is a great town but there are hundreds of great towns across the US and thousands across the Globe. They could not imagine leaving their little world for the big unkown that lies outside Kansas. I guess you gain perspective once you explore past your comfort zone!!
“Dale Roubison has been trying to sell his house for 13 months. His original asking price was $365,000, but now it’s down to $338,000…..but I’m stuck in the middle of a bad time right now. I had no idea it would take this long to sell.’”
What the frock is with sellers thinking this little pitty-pat price reduction is going to attract anyone?!? If I were trying to move some property because I were stuck in the middle of a bad time right now I would seriously be considering some real price reductions. All sellers cant be blind to what has been going on. You missed the party, get over it!
A $300k+ existing house in the MW is not a starter house, but a high-end house (newbuilds cost that much, but few existing houses do.) There are a number of custome existing houses for sale in my neighborhood. This one probably sits on 1.7acres, has 3400sq ft, and lots of custom stuff the seller thinks is great. But most people I know look at a house as: how much sq ft, how many beds/bath, how much land, and overall condition. I don’t know a single person who puts a premium on granit countertops or hottubs when buying an existing house. All of the “custom houses” I see forsale in the MW keep asking $365k for a house that has the sq footage, beds/bath, land, and condition of something you can get in a non-custom version for $250k. The customization is non-descript in most cases. Certainly not value added to midwesterners, except in the sellers mind.
Thanks, I was wondering about the $300K house in Kansas. In parts of Texas, a house can be had for $30K.
If you look at some of the debt bond funds that hold MBS, they have not done well this year. Their normal return is around 5%, but they have been hovering around 4% and will be even lower the next few years.
Ben,
In Terlingua, Tx, a $30K house WOULD be living large….. a little off the beaten track but missing the sad (to me) gentrification that Marfa is enduring
Let’s all take a moment to contemplate… $338,000 for a house in KANSAS!!!!! People have lost their minds. It’s that simple. 10 years ago, I doubt a house like that would have even fetched $100K.
Actually, 10 years ago it probably would have fetched $150K-$175K.
“Among lenders, the biggest losers are those that lend to the riskiest customers, so-called ’subprime’ borrowers with the worst credit.”
Ya think?!? The implode-o-meter needs to be fed!
http://mortgageimplode.com/
Got popcorn?
Neil
Thanks Neil,
Gotta love that site.
Sub prime Armageddon in real time
Neil: Which publicly-traded entity owns Orville Redenbacher? You should buy some stock - !
ConAgra Foods (NYSE: CAG) Probably not a bad buy. I got in on P&G (another huge one) 13 or so years ago and their stock price has quadrupled. Food/household product staples tend to be fairly good buys in downturns.
“‘The industry can’t survive with excessive delinquency rates,’ he added.”
Someone finally figuring it out…
“Real estate broker Butch Magner in Fort Mitchell, sells foreclosure homes in ‘as is’ condition for about 10 lenders. Most properties, he said, fetch less than their previous selling price. Most bring down the value of homes around them.”
This is what will ultimately reset the comps at much lower levels and put FBs is a deep corner with no way out but to join the ranks of other foreclosed properties. This is the cycle of negative appreciation, price collapse, freefall, that’s looming… not too far in the future. When price support simply isn’t there. I can feel it - capitulation.
Fear is already apparent. Despair isn’t far behind.
If this spring is a selling bust, then the fear will be real. That’s when I grab some of Neil’s popcorn.
“If this spring is a selling bust”
The question is: What could keep it going?
Already took every cookie from the cookie jar and left IOUs. Anyone with a pulse already took the bait. There neds to be first-time buyers for the move-up market to work. Now what?
I agree with you completely. It’s just that this thing has had more lives than a cat, and I’ve given up calling it. Neil, popcorn please.
You did call it, and I think you’re right. When, not if, the spring selling season ends without any selling and a new torrent of properties listed, that’s when we’ll see a surge in foreclosures. FB’s are hanging on by fingernails for spring. After that, they simply let go…
I have a bottle of champagne in my fridge…
“Anyone with a pulse already took the bait.”
I didn’t ! Shucks, I missed the show. *pouting Maybe its not too late to get in… NOT ! *laughs
I live in Kansas City. I know Lawrence and Topeka both well. I was looking over a Topeka paper that was brought to me by a family member over the weekend. I couldn’t believe the prices of junk homes in the paper. I thought the nice Kansas City suburbs (Olathe, Overland Park) were overvalued. Wow, Topeka and Lawrence are in for a rude awakening. People here just don’t get it yet. They don’t think that the bubble was experienced here. Maybe not to the extreeme as other places but everyone thinks that realestate will not go down. Lucky me is renting on the sidelines. Sold In April 05. On a side note, the neighbor across the street is filing BK. They went to the school to ask about keeping their daughter in that elementary school. Our neighbor mentioned that the person at the school said that question was asked by around 100 families in that elementary school. 100 families moving for various reasons or another? WT…? I went through the surrounding neighborhood since it had snowed Friday night. You could tell how many houses were vacant due to the unaltered snow in the driveway. Wow. On another note, the homes that are vacant are not on the market, not on the forclosure websites…Am I missing something? I see and hear lots of troubling things but for some reason I don’t see the fallout that should be showing up. Ideas?
I grew up in Topeka; during the 1980s my parents owned a $150K house which put us in a neighborhood full of denstists, doctors, surgeons, and even the school superintendent. Interesting, though, that the same neighborhood doesn’t cost much more ($150K-$250K) but the new construction near Lake Sherwood and points west are almost as bad as some west coast areas (lots of “starter” homes in the upper $200s to mid $300s) with high end homes up to $1 million (and even these have less than 1 acre). I would say that Topeka’s prices have surged probably 50% since 2000, of course without a customary increase in wages. As bad as it is, it is nothing like California, where in many parts of the state the median income is below Topeka’s but houses cost 2-4 times as much.
I see and hear lots of troubling things but for some reason I don’t see the fallout that should be showing up. Ideas?
Joe Q. Public doesn’t have a clue.
He’s too busy watchin’ American Idol.
It’s like in WW II.
The Germans under Hitler never knew what the fook was going on even as the Lancaster bombers of the RAF and B-17’s & 24’s of the Mighty 8th were torching their cities.
Downed crews were often lynched by incensed townspeople “outraged” by the killing of innocent civilians.
Little did they know the SS and Gestapo were busy liquidating millions of their counterparts on the Eastern front and Poland concentration camps.
Joe Gobbels and Co. controlled the information.
Think the US government is any different relative to this housing debacle?
Not much has changed sociology-wise in 65 years.
They all knew what was going on.
They saw the people with the Star of David on their clothes. They saw them taken away never to return.
They all talked with their sons on leave from the fronts or got letters of condolences.
They knew all along.
Daniel J. Goldhagen’s book Hitler’s Willing Executioners: Ordinary Germans and the Holocaust is an interesting book on the subject.
Plus, the VI rocket attacks on London civilians was broadcast everywhere in the Reich via newsreels.
Worth knowing that the Germans had the highest literacy rate in Europe–Mein Kampf and innumerable Nazi broadsheets from 1933 on made clear exactly what was up. And newreels, radio broadcasts and massive marches reached everyone. Even if you were illiterate and deaf, just watch what happened to your neighbors.
I think the Germans in WWII aren’t unique in their ability to close their eyes and ears to what was going on around them, to “go along to get along” rather than bring trouble on themselves.
A few years ago I read about the White Rose resistance movement to the Nazis - idealistic and principled young people and even a few military officers. The statements they gave at their trials, which they knew would end in death sentences - why they felt they had to act to resist tyranny and evil - should be required reading in every American High School.
“Real estate broker Butch Magner in Fort Mitchell, sells foreclosure homes in ‘as is’ condition for about 10 lenders
And I say to Butch “”"BS”"”. Only a Season Pro would buy your REO, as-is house to fix up, and almost any seasoned pro would be out of his mind to spend money and labor for fix up, when the market is “going down”..How is the purchase going to pencil out BUTCH!
I would have to steal the REO at less than 50 cents on the dollar to think I could fix up and ride out the falling prices, and I seriously doubt Butch can talk the banks into blowing out their REO’s at 50 cents on the dollar. Hey, Butch, you are just another real estate hypester. That’s my opinion, and I am sticking with it.
Not so sure I agree with you. Ft. Mitchell is on the KY side of the Ohio river across from Cincinnati proper, the ‘other side of the tracks’ side. Probably less than 20% of the people are working professionals. The remaining 80% have manual jobs. A lot of these include the trades - plumbers, electricians, lanscapers. People pretty handy at fixing things up to some degree. I suspect that a young trades guy with his girlfriend will buy a house like this, fix it up to some degree, live in it for, say 40 years, and get married/raise a family of 3 kids in it. Being familiar with the area, I have a 90% confidence in this happening.
Just because the property is “as is” doesn’t mean the place is a fixer. It just means the bidder cannot ask for minor repairs or new carpet and paint etc. Of course the lender may put in cheap HUD carpet and a cheap coat of paint eventually if it doesn’t sell after a year but that is in the bottom of the line properties.
To clarify, it snowed Friday night, went through the neighborhood Sunday night.
I can top you, ylekiot1. We had snow in Tucson last night. It’s still melting.
I can top both of you. We had three ice storms in a row 10 days ago and lost power for 8 days. Not just our house, office, town, etc. but the entire region! Some people still don’t have power. During and right after the storms the daily highs were 17 degrees and the lows around 5 degrees. In our office (where we all went to “live”) the temperature dropped to 46 degrees and stayed there.
Ice storm of ‘96 in Maine, and Quebec Canada knocked out power for a month in the dead of January w/ temp’s down in the single-digits.
If you didn’t have a woodstove set up you’ve were totally fooked.
All I could remember was all those stoves sitting in people’s garages and basement’s of homes I visited as an appraiser after they ripped them out all when the price of fuel oil crashed.
Stress and tension of the event took out half of ME’s dairy farmers.
It was a bad time.
Casey Serin’s Flow Chart
http://www.flickr.com/photo_zoom.gne?id=366076208&size=o
ROFLMAO
Sweet mother of all laughs!
Casey’s comment:
“This was contributed by a IamFacingForeclosure.com fan and even though its a bit on the vulgar side I decided to post it here”
1. he thinks a “FAN” posted this
2. with concise humor, this clearly “charts” his delusions. Casey, Casey, Casey, step away from “the bong”
To who ever created it, that chart was comedic genius
That chart was great - I love the “bit on the vulgar side” comment by Casey - it sounds like he almost understands he’s being mocked. (Of course, if he totally got it he would have either chosen the run away to Mexico or declare bankruptcy option on the left….)
damn that is funny.
His site is one of those you won’t admit to visiting regularly. Its sooo funny I can’t help it.
I have to admire his willingness to put his dumb self out there to be mocked endlessly.
“I have to admire his willingness to put his dumb self out there to be mocked endlessly.”
I have to admit, I admire that too.
ROFLMAO
that’s classic!
OMG thats funny
We had five to six tremendous years, and there is just not a lot of pent-up demand,’ Nuzum said. ‘That time period really opened the door to home ownership for about anyone who had any aspirations to buy a home at all.
Finally, an honest man.
Let’s just agree that all the pent-up demand was spent-up by last year.
and that a lot of pent-up supply is beginning to bust out all over
“Let’s just agree that all the pent-up demand was spent-up by last year.”
Exactly, once you eliminate down payments, credit standards, etc. there is nothing restricting demand.
“Foreclosure notices were tacked to the front doors of more than 10,000 homeowners in almost every neighborhood of Greater Cincinnati and Northern Kentucky last year. For the seventh straight year, foreclosure filings hit record highs not only here but in all of Ohio and Kentucky.”
Hmm, so much for my Brother in law the Realtor’s Claim that the banks would stop foreclosing once there was too many of them. Of course maybe he is right, this is California after all and all those lenders might just collude with each other to slow the foreclosure process right ? I mean an industry rife with fraud and screw the little guys mentality would always look out for each other right ? right ?
Sarcasm at its finest. Lenders will be/are racing to dump properties faster than the next GF and/or bank. They are non-earining assets and must be purged from the books. The bubble in reverse - big time.
non-eariningnegative-earning assets“‘Lenders are getting killed by this stuff,’ Sampson said. ‘Lenders lose a lot of money on foreclosures. By the time they complete the foreclosure process in Ohio, they take a huge bath - 50 cents on the dollar sometimes.’ Among lenders, the biggest losers are those that lend to the riskiest customers, so-called ’subprime’ borrowers with the worst credit.”
It seems like the newfangled business model (pioneered by Enron) is to gut the value of your company while hiding bad news off balance sheet until the day of reckoning. At that point, the owners and managers have already flown by night and the remaining shareholders become bagholders.
I believe this is what will happen with many builders and lenders as the correction turns out to be neither short nor soft.
why are the big boys hangin in
boa,wf,wm have to get hit soon
nes paw?
whee whee, flatff.
only us aging girls may escape unscathed
I have a story you all should appreciate, during our relocation to SoFl we looked at several rentals, one of which we were interested in but the owner said he had changed his mind and wanted to sell it intead of leasing (about 8 mos ago) we received an email from him this week asking if we would be interested in purchasing or renting it and if not, did we know anyone who else who might be.
In-laws live in Union, KY and Dry Ridge, KY, both right outside on Cincinnati. MIL lives in a house in Union that only 3 years ago was in an older hood with a 2 lane rd leading to it. Now, that road is 4 lanes with subdivision after subdivision under construction, as I saw at Christmas. All along US 42 in Union (where yet another Bengal was arrested yesterday btw, haha, Ravens fan here but hubby is Bengal’s fan) there is so much new residential construction it makes my head spin, and there is also tons of newly built retail space sitting vacant.
FIL lives in Crittenden, where the zoning laws require a min. of 5 acres per homesite, but two people just got exceptions and man is my FIL pissed. They are building two homes on top of each other when there is acres of land all over, and the KY version of McMansions going for over $200K, which is alot in that area, and they can’t sell them. But man, I do love going there and getting some Skyline! How does the rest of the country live without it?
LaRosa’s breadsticks! Gotta have em whenever I visit my parents in the Cincy area.
“The combination of easy credit and free spending is fuel on the foreclosure fire. ‘It’s a social epidemic, but one that will eventually run its course because lenders will realize that their rate of return on these loans is not what they expected and they’ll stop making these types of high-risk loans,’ Sampson said.”
Agreed. The invisible hand will clean up the mess left by regulatory negligence.
“Lawrence real estate agents say the moderation is part of a nationwide slowdown in the real estate market.”
How can there be a nationwide slowdown in a nonexistent national real estate market?
“That’s $18,000 below the market value the county has placed on the property.”
Where else will you find pearls like this?
Hey guys……..what’s the go here?
http://www.marketwatch.com/?avatar=seen&dist=ctmw
Not sure, but I do like the sub-heading where Bloomberg and Schumer and Spitzer say Wall St needs help lest NY lose its role as the center of the financial universe. Duh, you guys are late. Beijing did the biggest-ever IPO some months back.
I like the whining for protection and relaxation of the rules by a group that just took home Christmas bonuses larger than most third world countries GDP. Go suck an egg.
Even better, the ibanks have been doing deals out of their London offices to endrun Sarbanes-Oxley. This is rich, squeeze Joe6pack to help an ibanker in need.
Zzzzzzz…
Wake me up when the market drops 500 pts on one day. (I assume that the PPT keeps a floor of 100 pts on the daily declines, so I can expect to keep sleeping for quite a while…)
Beware the Ides of March
Take a look at Coast Bank in Florida.
http://finance.yahoo.com/q?s=CFHI
Huge mortgage collapse in process.
They lent out $100 mil to one builder, out of a total loan portfolio of $550 million.
Only $2.5 mil in loan loss reserves.
The builder folded, and the bank was apparently advancing funds to the builder without verifying completion of the construction.
Any bank that advances funds without at least a pencil walk of the proposed general contractor’s sworn statement prior to the draw being funded through construction escrow deserves whatever stupidity is coming their way.
Considering that 1/5 of the bank’s entire portfolio was lent to one builder, I’m going to go out on a limb and say that this was no accident.
Someone will go to jail for this.
Currently isn’t loan fraud, as well as, SS number fraud for the sole purpose of employment a victimless crime. Thats because we haven’t really hit the skids. Should we hit the skids they will figure out everyone that was involved in the fraud.
Talking of fraud I am paying a arm and leg in TAXES since I don’t have RE to write-off.
Banco rotto.
The builder folded, and the bank was apparently advancing funds to the builder without verifying completion of the construction.
Muthafooker!!!!!!!!!
I’ll bet the builder’s were kickin’ back big $$$ to Cayman Island bank accounts for this “oversight”.
“‘Lenders are getting killed by this stuff,’ Sampson said. ‘Lenders lose a lot of money on foreclosures. By the time they complete the foreclosure process in Ohio, they take a huge bath - 50 cents on the dollar sometimes.’”
YES ! Burn baby, burn !
“‘I think we have had some aggressive lending practices in Kentucky,’ Evans said, especially involving so-called sub-prime loans made to borrowers with credit problems or low income.”
“‘In the process of growing the number of people who have home ownership in Kentucky, you are ultimately going to grow the number of foreclosures,’ Evans said.”
There has been a growing population of Bosnians relocating in Bowling Green, KY. They have been buying homes, and also rental property. No doubt, these people have been using liar loans to get these properties. Most of these buyers do not speak very good english, which may be a problem for somebody renting an apartment from them.
On sundays I used to walk across the street from my apartment in Bowling Green to sneak into a residential construction site. Three story apartment buildings going up without the benefit of an underground footer for the exterior walls. The concrete blocks are sitting on a thin layer of a concrete mix substance to level the blocks, and the concrete mix substance is laid on top of compacted soil.
I told my landlord about this but he laughed and was not all that concerned. This is the same landlord who told me about a “crooked builder” who built apartment buildings for him some years ago in Bowling Green. The lesson here is if it isn’t your building then why should you care? The locals tell me that Bowling Green is not known for having any building codes, or at least not that anybody from the city is going to inspect.
These owners of these three story apartment buildings are building the cheapest way possible and as quickly as possible, to sell at a profit over the loan value once the buildings are occupied and the sellers will be long gone once these buildings start crumbling. Sometime before these buildings completely crumble they will become section 8 housing.
Section 8 housing in Bowling Green, KY is not a good place to live. Across the street from my old apartment address and half a block down there was a double homicide a few years back. Recently, I was told this same area was in the news with police yellow tape on the TV, another homicide maybe? Across my bedroom window was another section 8 complex complete with the most obnoxious, loud, and uncivilised noise coming out of cars that have gigantic earth-shaking speakers in the trunk.
It is like dominoes, one apartment complex after another in the Shive Lane/Bryant way/Pedigo Way area going section 8. It is a shame because Shive Lane is a very good location; restaurants, mall shopping, access to I-65 all within one mile. Now it is becoming a crime infested ghetto.
About twenty years ago the area South of the Mall (Pascoe Blvd area) was developed with mostly condominiums. It was a very desiralble area at one time, but now it is mostly all trashed out section 8 apartments.
Within a stone throw away west of the Mall even more condo buildings have been built recently. These are very nice “luxury” condos, but for how long?
“‘Lenders are getting killed by this stuff,’ Sampson said. ‘Lenders lose a lot of money on foreclosures. By the time they complete the foreclosure process in Ohio, they take a huge bath - 50 cents on the dollar sometimes.’”
Good. They richly deserve the disaster that’s overtaking them. A long-overdue tightening of credit, and a reversal of Uncle Sam’s War on Savers, are the only things that will impose fiscal sanity on the American public.