Bits Bucket And Craigslist Finds For January 23, 2007
Please post off-topic ideas, links and Craigslist finds here.
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Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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does anyone have a number on how many cars,motorcycles and other toys are on 30 year payment plans now ?
Can’t tell… I’ve never been able to tell if the things I buy from Craigslist are coming from desperate sellers or not. Except a while ago I did buy a 80cuft aluminum tank from a craigslister and he said he had bought a new condo because it was supposed to be a good investment, and it was troublesome and he had to unload it. I told him sorry, even though I make good income for the region I can’t afford any of the homes anymore as the prices are out of line with the marketplace. Not much of a response.
Wow - something with a potential five or ten year useful life financed with 30 year loan? Frightening.
Of course — that’s essentially what you get if you buy something like that with HELOC $$$.
LOL - I have a ‘91 Ford with 60,000 miles on it in great condition. Nobody wants to be seen in it! It will probably be good for another 15 years. NFS
I’ll one up you. I drive an 83 300D Benz w just a hair over 200K on it. It’s the poor man’s (and really old ladies) wheels of choice around here in So. Cal. It’s actually appreciated in value over the past few years.
Unfortunately my understanding is that somewhere around 250K I’ll have to decide whether to put in another engine or to use it as an anchor. But my commute is minimal, so the day of diesel reckoning is about 10 years from now.
Sell it at 240K and don’t explain the transversality condition to the buyer.
I have a 81 240D stick and its just a hair under 200K, still get 32mpg if I am careful. If you change the timing belt every 150k, oil every 3-5k, change out the fuel filters and run diesel purge every so often and reset the valves a 300D should be fine to 500k. The 240D/300D/300TD are some of the best and longest living engines ever built.
“… if you buy something like that with HELOC $$$.”
Or if you buy a new car (or exotic vacation) along with your newly constructed McMansion. If a material portion of the value of the incentives are implicitly included in the loan proceeds (based on what the market value of the home would have been if sold w/o incentives), then the buyer (and maybe the lender) is helping to pay for them on a long-term installment plan.
I bought a new car in Dec with cash.
The sale manager said he hadn’t seen a cash purchase in 6 mo. He mentioned that most of the traffic coming in has crap credit scores, are over-leveraged, and are underwater on their current auto loans. This is in the Sacramento area.
You point out why it works out to the disadvantage of a saver to buy a car (or a house) when credit is flowing freely with no risk underwriting. Because the price you paid implicitly reflects the competing bids of people who will never be able to repay their debt, but were nonetheless loaned the money.
Great question; I don’t know the answer.
But I have a follow on question:
What is the cost to society of having so many short-lived toys financed on thirty-year payment plans?
One thing for sure… it’ll make it psychologically easier for them to part with their toys for minimal cash when they’re desperate, since the toys are “paid off”. Otherwise, they’d be tying their wishing prices to their outstanding loan balances.
The cost is going to be very little for some of us who will have the cash flow to pick up dandy toys for little more than salvage value.
The current SUV/pickup market is a perfect example of the 2009 market for sports/luxury cars. (I say 09 because many people can hang on for another year + 1 error term year). Three years ago, worn out SUVs were selling for decent money. Today, real nice pickup trucks are selling for a pittance.
I once read that the payment should never outlast the product. I’ll admit to knowing a couple people who are currently paying for cars that have been gone for 5+ years (keep rolling over loans - a loan makers’ dream).
Sorry stucco, didn’t even answer your question in my earlier post.
The cost to society will be high. Lots of business failures due to overabundance of products (boats, campers, cars, trucks). We’ll all be bailing out Ford soon.
This whole credit/housing bubble has been a horrible waste of resources (welfare loss).
Moman –
Said like an economist, pal!
From yesterday’s discussion about building a “green” kit home, I would like everyone to take a look at this concept from Enertia homes.
Constructed from sustainable forrest, shipped to your site like log cabin kits, designed to heat and cool itself through solar and thermal heat exchange.
EquityRefugee,
Thanks for the link…Alternatives are so welcome.
http://www.livinghomes.us/
These are interesting.
I like these: http://www.rocioromero.com/
I’ve been to see these homes…her showplace is in SE MO. They really are fabulous but not inexpensive. However, a much better deal than a McMansion!
i would settle for 50 square miles of virgin forrest a wickiup a horse and a nice apache girl.
More alternatives, designed to cope with northern winters.
http://weehouses.com/interest/downloads.html
And these, designed to be mold & flood proof.
http://www.cusatocottages.com/index_content.html
And for anybody who’d like to avoid killer heating/cooling costs, there’s geothermal systems. Widely used in Scandinavia, Buckingham Palace now has a system installed.
http://en.wikipedia.org/wiki/Geothermal_heating
wake me up when they have a desktop nuke
Those are nice but I don’t like the log cabin look. Anyone interested in prefab and that sort of thing, I’d urge to look at the Dwell Magazine forums. Many many very interesting things there. http://www.dwellmag.com
I’m a long time subscribed to Dwell. I’d love to see more people embrace these homes. MKD’s breeze plan is my dream home. I’m just waiting until I can pay cash for the structure.
Gwyn: Have you seriously looked into this yet? I didn’t notice your comment before I posted, but I’m loving the MKD breeze house too.
I’m liking the Sunset Breezehouse. You can get it for around $150/sq. foot. Not bad at all. There’s a lot of other stuff involved though, aside from having to buy the land.
http://www.tumbleweedhouses.com/houses.htm
And for FBs on the rebound, here’s a better alternative to trailor parks.
They should open a franchise in Weed Patch, CA…Bakersfried refugees could then take the bus “home”.
I bet those houses sell for 60k. I’ve seen houses in San Diego about the same size that sell for 450k.
Don’t people even think anymore?
Thinking is work.So, most people (myself included) attempt to do it as little as possible.
“Thinking is work.So, most people attempt do it as little as possible.”
Isn’t that the truth.
“Je pense, donc je suis.” Descartes
I think, thus I am. The problem is that most people think that they think, when in reality they are just little stinking banana grabbing monkeys.
Monkey see see monkey do do.
Rene Descartes walks into a bar. The bartender asks him if he would like a drink. Descartes replies, “I think not.” Then he ceased to exist.
I wouldn’t get too excited about how “green” these houses are. They make some extraordinary claims on their website. I’m not saying it’s fake, but should be looked at very carefully before buying into the concept.
Here’s one that jumps out…..
Pine is the fastest growing softwood and is replanted after clearcut. However, to use “large timber”….their term….in construction, it takes around 40+ years of growth to get that size. Since there’s no economic incentive for tree farmers to grow large trees, where’s the material going to come from?….the National Forests are the only source that comes to mind and we all know how political that can be.
Again, not a bad idea….but it raises more questions than it answers.
I’m with you Dan. There are a lot of false claims out there. Besides, building “green” is a state of mind. If you really want a green building try building one that’s no bigger than you need, carefully built using quality materials, and use the best energy saving products and appliances you can afford. I’m always amazed at the crappy insulation jobs my building inspectors run into. Yesterday I went onto a commercial LEED “green” building site. They were using portable propane heaters to heat the building at a cost of over $1,000/day. How “green” is that?
Add to that skilled, legal labor. Any contractor who uses illegal labor gangs is a sure bet to be burying substandard work and illegal/cheap endruns in anything they build.
Yesterday’s discussion made me look at modular, pre-fab and kit homes. Some of these are green as well. This site has a lot of links to various designs, including the Kartina houses and small home kits (as well as large ones).
http://www.scrapbookscrapbook.com/DAC-ART/modular-kit-houses.html
It’s official: The UK housing mania has jumped the shark. You may have seen this in today’s paper:
http://louminatti.blogspot.com/2007/01/uk-housing-bubble-is-over.html
But I don’t get it. Evidently it’s rational to pay $350,000 for a shoebox in a basement.
UK is an enigma- don’t completely discount the same thing happening here- 1 year dip-low-dokus
then up again
No it’s not. It’s just a big Monaco or a big Switzerland. You have a lot of money. No questions asked.
Well if it’s filled with cocaine or gold bars. Maybe ?
The same closet has been bought and sold a number of times each time it makes the news.
“Vodka-to-banking billionaire Rustam Tariko made a fortune by introducing Russians to consumer credit, helping millions to buy their first television, refrigerator or car.
But he won’t pander to the latest aspiration of the emerging middle class — a mortgage to buy a new home — as long as Russians are gripped by what he calls a “crazy” property boom.”
http://www.moscowtimes.ru/stories/2007/01/23/046.html
It’s not crazy. Here is why. The monetary aggregates increased in Russia last year by PLUS 45% !!!!! Can you imagine that. There is 45% more rubbles in circulation compared to last year. Thus the mad mad mad rush to buy things like real estate but also gold bars.
According to the government inflation runs around 12-14% over there. But what puzzles me is that a rubble is more expensive now than it was six years ago. How can that be?
Ah Russia is still a screwed up country. The only probable explanation is maybe OIL OIL OIL. Kak abitchna. Comme d’habitude. As usual. Anyways Russia as a country is not indebted like the USA. They are almost finished paying theirs debts. And soon they will be able to say to the US dollar, “go screw yourself”. Russian central bank is buying a lot of gold and Euros. Putin is no dumb moron.
Russian has almost no foreign debt, 3rd or fourth largest largest USD reserves in the world, 13% flat income tax, 18% value added tax (sales tax), budget surplus, and a trade surplus. Of course the phenomenal result has been built on high commodity prices.
I know this is old news for many here but in keeping with my tin foil hat tradition, I thought I’d reintroduce the work of GATA (Gold Anti-trust Action) group. They held an invitation only event last year (Gold Rush 21) in an attempt to brainstorm their ongoing efforts to expose the manipulation of gold.
The following is an excerpt from an article on GATA’s website.
……”GATA says this because we know the Russian government has been following our work for some time and sent an economic adviser to President Putin, Andrey Bykov, to Gold Rush 21. To come to Dawson City, Bykov skipped the simultaneous mainstream gold conference in Perth, Australia. Gold was trading at $436 at the time.
Two days after the conference the gold price exploded, breaking what we had been calling the $6 rule. Gold has not looked back since. There can be little doubt that Bykov gave the sign to Russia to buy gold in earnest.
It is no accident that the two heads of state who had mentioned gold in public since Gold Rush 21 have been the presidents of Russia and Iran, who are geopolitical strategic partners.
Further, in recent months Iranians have been buying all the gold they can. Just this week NewsMax reported that Credit Suisse has sold hundreds of tonnes of gold to Iran, confirming what GATA continually reported via my commentary for more than six months.
Bykov wasn’t the first representative of the Russian government to take note of GATA. On June 3, 2004, a year before Gold Rush 21, the deputy chairman of the Russian central bank, the Bank of Russia, Oleg Mozhaiskov, addressed the London Bullion Market Association at the Baltschug Kempinsky Hotel in Moscow.
He said there was a “dualism” in the determination of the gold price that — and I quote –
“distinguishes it from other commodities and makes the movements in the price sometimes so enigmatic that market analysts need to invent fantastic intrigues to explain price dynamics. Many have heard of the group of economists who came together in the society known as the Gold Anti-Trust Action Committee and started a number of lawsuits against the U.S. government, accusing it of organizing an anti-gold conspiracy. They believe that with the assistance of a number of major financial institutions (they mention in particular the Bank for International Settlements, J.P. Morgan Chase, Citigroup, Deutsche Bank, and others), some senior officials have been manipulating the market since 1994. As a result, the price dropped below US$300 an ounce at a time when it should, if it had kept pace with inflation, reached US$740-760.”
http://www.gata.org/RCBTakesNote.html
* * *
Gold went from $436 at the time of Gold Rush 21 to $740 at its recent high, an increase of 70 percent in 10 months.
Clearly, something decisive happened in Dawson City in August 2005.
I am going to come back to the video of Gold Rush 21, but first I would like to highlight the public record of the gold price suppression scheme, a public record nervously overlooked by much of the gold industry.
*To begin with, Federal Reserve Chairman Alan Greenspan confessed to the gold price suppression scheme in testimony to Congress on July 24, 1998. Greenspan said:
“Central banks stand ready to lease gold in increasing quantities should the price rise.”
http://www.federalreserve.gov/boarddocs/testimony/1998/19980724.htm
That is just what the central banks did.
*The Reserve Bank of Australia confessed to the gold price suppression scheme in its annual report for 2003. “Foreign currency reserve assets and gold,” the RBA said, “are held primarily to support intervention in the foreign exchange market.
http://www.rba.gov.au/P
ublicationsAndResearch/RBAAnnualReports/2003/Pdf/opera
tions_financial_markets.pdf
There is much more to this story but I thought I’d highlight the Russian angle since it was brought up in the preceeding comment.
My wife pointed this out after watching the news last night. I bet this is the new NAR strategy - buy without the buyers knowledge. Hey, buy now or be priced out forever - these things will be worth millions in a couple of months.
http://www.kstp.com/article/stories/S26002.shtml?cat=1
“If found guilty on all 15 charges prosecutors said James will likely spend seven years in prison.”
Note to myself:
email to Casey
Mortgage Fraud and the IRS: A lot of bloggers have been wondering where the IRS falls into the overall scheme of mortgage fraud. Normally, financing or refinancing a property is not a taxable event. There are tax implications if a property is foreclosed. In that case all proceeds above the cost basis, plus all uncollected interest owed to the lender, become subject to ordinary income tax. That is correct, folks, you no longer get the $250,000 ($500,000 if married) tax-free homeowners exclusion if your house if foreclosed at a loan amount exceeding the cost basis. You do not even get the long-term capital gain election!
Furthermore, when proceeds are gained thru deceit, it now becomes money laundering. Examples are many, such as using two sets of closing statements to induce a lender to provide funding in excess of the true property value, or, more commonly, falsifying employment or credit histories for the purpose of qualifying a borrower for a loan.
You will be pleased to know the IRS has doubled their investigations into mortgage fraud and the federal judges are handing out sentences averaging 45 months, plus full restitution to any victims. And then you still get to pay your taxes. The IRS is auditing over 4,000 returns related to real estate and mortgage fraud and that number will increase dramatically.
So, the mortgage fraudsters have a real dilemma on their hands, come April 15th, 2007. Do I report my ill-gotten gains on the 2006 tax return, or do I face 4 years in the federal penitentiary? Do I pay my taxes due in April, or do I incur the cost of 10% penalties and 8% interest compounding over and over and over, until they exceed my (negative) net worth? Decisions, decisions.
Oh, and the IRS number to report suspected fraud? 800-829-0433. We will be putting it on speed dial! The web site to report fraud should be up soon. We ran into some problems with domain name registration, but should have it worked out.
Paladin
Have Gun Will Travel
Wire Paladin, San Francisco
They’re gonna need to turn all those new condos into jails to hold all the fraudsters.
You go, Paladin.
And, for all of you fraud-watchers, here’s a news tidbit from Tucson:
http://www.azstarnet.com/business/165745.php
Of course, this WASN’T a problem when real estate was going up.
Interesting the motivation is “Hoping to avoid a real estate crash.” Eliminating fraud will probably hasten a real estate crash.
Righto. Fraud is one of the chair legs of bubble pricing.
Good points, Paladin. This may actually be a way to make some money from your efforts through the new IRS whistleblower statute.
If the link I’m attempting to post works, you can read more about the IRS whistleblower provisions of the Tax Relief and Health Care Act of 2006. Here’s a quick summary in any event:
“Generally, the provision establishes a reward floor of 15% and a cap of 30% of the collected proceeds (including penalties, interest, additions to tax and additional amounts) if the IRS moves forward with an administrative or judicial action based on information brought to the IRS’s attention by an individual. Under certain specified circumstances, the provision permits awards of lesser amounts. The provision allows an above-the-line deduction for attorneys’ fees and costs paid by, or on behalf of, the individual in connection with any award for providing information regarding violations of the tax laws. The provision allows the whistleblower to appeal the award determination with the Tax Court.”
The tip must relate to an individual whose gross income exceeds $200,000 for any taxable year subject to such action and that involves tax, penalties, and interest of over $2 million. So it wouldn’t be for a run of the mill “homeowner” who fails to report a couple hundred thousand dollars. But it could definitely apply to some of these small rings of people who are engaging in fraud on multiple properties. Unfortunately, you only receive the reward on collected proceeds and many of these people will not have much to collect from.
Slater, that is sweet. I am going to report, report and report some more. These fraudsters are pulling $250,000 out of each house, foregoing $50,000 in payments to get to foreclosure. That is $600,000 of ordinary income tax right there, since they each buy two houses. And I get 15-30% of the tax? Let’s see, 36% of $600,000 is $216,000 times 15% is $32,000 per fraudster. Oh, wait, they have to actually collect it? That could be a long time coming, but, I think I will do and IPO and sell stock in PaladinReports.com (not operational yet), and split the revenues with people supporting the effort.
And, I will supply the IRS with a direct deposit bank account. That way BofA won’t charge me an account fee.
Paladin
Have Gun Will Travel
I see that my initial attempt at pasting a URL didn’t work. Maybe this will. Google is your friend as well, of course.
http://66.98.181.12/whistle124.htm
Ha ha !!! I was planning to ask about this today in the ol’ bits bucket. Thanks for bringing it up in a more comprehensive manner than I every could.
My simple question is …. what happens to the “seller” when his title company reports a $300,000 sale (with, say a $100,000 capital gain) to the IRS — but the seller has kicked back $50,000 to the buyer, and he really only had a $50,000 gain?
I guess this scam only really works when you have the title company involved — but, of course, the exposure for a title company is soooo much larger if they get involved.
Thanks as always for your commendable and entertaining-as-hell efforts in this area, Paladin.
This is an interesting point. The relatively new (1997 or so) $250,000/$500,000 (single/married) exclusion for sale of a primary residence makes this a non-issue for many sellers. They are okay with reporting an inflated price. Without the law, they would not be as it would increase their taxes.
However, for flippers, assuming they are not cheating on their taxes, it would matter because they would not qualify for the $250k/$500k exemption.
I bet that flippers fraudulently claiming the primary residence sale exemption amount has been a big source of tax evasion.
Frustration and fraud discussion on Broker’s Outpost:
http://forum.brokeroutpost.com/loans/forum/2/87442.htm
Too bad the mortgage brokers can’t seem to wrap their heads around the fact the appraiser’s job is to protect the lender, NOT to facilitate more & more loans.
Those guys are morons.
Their not worried about the lenders funds, all they care about is the commission. Its not real money anyways, right.
Im not a broker but, in all defense the whole game is rigged by the lenders. The brokers are just playing within the rules established by the lender. If the lenders were really concerned about LO’s influencing appraisal value then they would enact policies to prevent it. They could order the appraisal thru a third party , do field reviews and such. Im not saying there isnt alot of slime in the LO business, there is. All im saying is that the buck stops and starts with the lenders on this issue.
“the whole game is rigged by the lenders”
Again, I’m going to have to say that the buck stops with the INVESTORS that buy the Mortgage Backed Securities…they are either OK with the bad practices, or they haven’t done their due diligence. Once the investors finally wise up, stuff like this should stop. Or at least one would hope.
Arroyogrande,
This is exactly what we will be addressing with identifying mortgage fraud from all the bloggers in the field. We will notify the rating agencies (Fitch, S&P, and Moody’s) and freeze these loans out of the RMBS pools. We will also make the database available to the RMBS buyers, particularly the “B” piece buyers who take the high risk first lost positions. They will kick the fraud loans back to the lenders BEFORE they buy into the pool. GAME OVER for lenders not weeding out fraud. The success of this strategy depends on the blogging world to identify and report suspicious RE sales, where mortgage fraud may be fueling the GF!!
Pray for success. This will rock the sub prime world faster than any other strategy.
Paladin
EXCELLENT!!
Unlike the apathy you’ve encountered at various state & federal agencies, you KNOW the IRS is extremely interested. BTW, I hope you make a mint turning these crooks in!
I think I will steal my co-workers identities so I can get promotions in 10 different divsions at work. Imagine the paychecks that I will be receiving.
Paladin,
Have you considered forwarding your “book” to the OCC as well? I once had an issue with HSBC, and the OCC was very responsive. They are also one of the parties involved in the recent mortgage guidance. Just a thought…
http://www.occ.treas.gov/
How come they haven’t arrested her? I know it’s only white collar crime, but we are talking about 15 counts of identity theft (all felony charges).
–
Test Your Housing Knowledge
NASDAQ peaked in march of 2000. The homes that sold in March 2000 closed escrow in April 2000.
What are the housing price (all homes — new & resale, SFH and condos) increases from April 2000 to December 2006 in Santa Clara County and in LA County?
Take your best guess without looking at the data.
Jas
110%.
–
paladin,
For which county? Or, do you mean both?
jas
jas, I only know Santa Clara County. Paladin
–
Wrong. Wait for my report on Silly.con Valley within a day or two.
Jas
I’d guess both counties, averaged together, are up around 250% from 2000 to 2006. Close?
–
Wrong big time. Can you guess the number (price gain Apr’00 to Dec’06) for Santa Clara County only?
Jas
Jas, give me hint. I said 110% increase, you said wrong. Am I too low? I am revising to 150% now. Am I getting warmer?
Paladin
Paladin,
You are way too bubbly!
Jas
Start in 1998 and it will look a lot bubblier
http://tinyurl.com/yrah6j
from September 2000:
Real estate markets in California also boomed during the late 1990s. Figure 3 shows the median house prices for the Bay Area, Los Angeles, and San Diego. The median house price in the Bay Area currently stands at $466,630–up 23% from the year before and up 56% since January 1998. Much of the increase in the Bay Area median price comes from appreciation in Silicon Valley. The median house price in Santa Clara County is $554,550–which is 35% higher than the year before and 70% higher than in January 1998.
150%
I’d guess LA County went up 100% and Santa Clara County went up 120%.
–
You are off by 65% in one case and 95% in another case!
Jas
Are you talking price appreciation from 2000 to 2006?
–
Paladin: “Are you talking price appreciation from 2000 to 2006? ”
Is this an ambiguous question?: “What are the housing price (all homes — new & resale, SFH and condos) increases from April 2000 to December 2006 in Santa Clara County and in LA County?”
My Townhome in Ventura County was worth about 175K in 2000 and sold for 410K in June 2006. Over 100% gain.
Back up to 1998 and it’s a lot bubblier
http://tinyurl.com/yrah6j
I’m with you Fed Up. Seattle prices DOUBLED in ‘97 (or was it ‘96) and then went up “more slowly” (lol) from there.
This bubble started 10 years ago. And it started with a BANG! We’ve got a long way to fall.
Jas,
From my own experience…a house bought in 1998 for less that $120K was selling for around $475 in mid-2005. That’s a 296% increase. I’ve seen numerouse examples like this in So Cal, but know the median can muck things up a bit (hides the real increase).
I think that house was going for $200K in 2000, so…that’s a 138% increase.
I’ll drop it down a lot and totally guess the increase in median home price in Santa Clara county between 2000 and 2006 was…$70%.
Is that closer???
Looks like Spring has started early. Listings are back up to September levels where I am watching.
Where are you in MD?
Nikki i replied in another post but dont think you saw it. We are practically neighbors, i live on millwheel ct which is right in between of perry hall blvd and honeygo. cheers
Odenton/Crofton/Gambrills area
If you go to Zipreality and click the MD link it shows the total number of homes for sale in the area. I have been tracking it for the last week and currently stands at 46k, up about 1000 from a week ago.
Correction - my bad. Not September levels yet. Late octoberish, early novemberish. Looked at the graph wrong…
–
In Santa Clara County Listings are up 10% in three weeks (up 20.6% from a year ago) but nowhere near the Sept levels.
Jas
In Portland we are rapidly catching up to inventory levels of last Sept/Oct. I would say we will hit 16,400 by early next week. Last year this time we were at 7,100. This will really be our year to see rapid inventory growth!
Check out the action on CFHI - Bank in Florida. Pull up a 5 day chart
D.R. Horton First-Quarter Earnings Plunge 64 Percent to $109.7 Million on Charges
Scrambling to unload houses = Great time to buy? Not yet.
And Goldman upgrades the HB sector to neutral from sell.
http://tinyurl.com/ywyfyu
More plunge protection is on the way, then. That is the only possible way to turn these dogs into Keynesian beauty contest winners.
What’s happening in Portland, OR?
I was speaking with relatives who sold their house in Campbell, CA (Silicon Valley) in 2005 and bought in Portland, OR (retirement). They say the prices are going up…up…up…in Portland. Anyone have any facts? Thanks.
After about 3-4 months of relative stagnation, Portland seems to be moving again. And virtually every sold sign (at least in my neighborhood) is accompanied by California plates. The Northwest is the last stronghold in this and Portland has the distinction of being the least expensive big city up here. So, I think we’ll see more of the same for awhile, perhaps years. Days on market average about 50 days for all home prices.
Having said that, inventory in Portland’s core jumped from 1000 around the holidays to about 1600 in recent days. Don’t know if that’s a normal increase. That doesn’t include the 800+ condos on the market for that area. (Glad to not own one of those)
Thanks for the info.
While HousingTracker shows a decrease in availible inventory for sale in the Hampton Roads (Norfolk/Virginia Beach/Hampton/etc) market, Craigslist is hopping with what looks to be desperate sellers. Motivated, Must Sell, Closing Cost Assitance, and other things stand out on the Housing For Sale forum.
Maybe it will head north to DC area.
CL’s DC listings have jumped too… lots of them say “get it now before it’s listed in the Spring rush!” ha! HA I say.
also several say “buy it now at the price I paid two years ago”. i’ve already seen a few Hawthorn listings at 820 N. Pollard and 1800 Wilson condos for sale and those places JUST got their certs of occupancy.
It is interesting that this Craigslist sub market seems difficult to quanitify. I do not run “for rent” adds in the paper any more. I pop the adds onto Craigslist and the calls start coming in. It is so much better, with pictures, plenty of ability to provide full descriptions. And of course, it is free. The newspapers must miss the revenue. I wonder if the same holds true for the Realtors and the MLS system.
Another interesting thing is the property management company I rent from has a record number of availible units in the building I rent, and rents have gone down on the new listings! That doesn’t mean they won’t try to increase my rent above those numbers, but it’s a sign!
Our local newspaper now has a free online advertisement system. As the masses here wake up to Craigslist, it will get that much more popular. I’m sure shows like flip this house have helped. I’ve gotten some wonderful deals on various hobby related things from Craigs. Selling is a pain, many buyers don’t come on time or come thru at all. But it’s free!
Also, postaroo.com is out there too.
A useful tip for Craigslist - probably you all know it but it makes it great for searching multiple states etc.
Try using CRAZEDLIST.ORG
More Rats Leaving Sinking Ships:
http://www.ajc.com/news/content/business/stories/2007/01/23/0123homebanc.html
This one looks ready to fail.
He’d better cash that check quickly.
Goldman upgrades HBs because they think it’s the bottom….five minutes later wci pre-announces cancellations in excess of orders. oops.
Goldman Sachs is a criminal organisation. Goes well with the Democrats and the Republicans.
WCI expects to post fourth-quarter loss, estimates charges
(9:30 AM ET) BOSTON (MarketWatch) — WCI Communities Inc. WCI21.75, -0.25, -1.1%) , a builder of tower residences and communities, said Tuesday it expects its fourth-quarter results will be “below prior expectations due to a higher level of defaults than expected in both … traditional home-building and tower home-building operations, longer tower construction cycles, and the recording of significant impairments and write-offs.” Said Chief Executive Jerry Starkey in a statement: “The operating environment in Florida continued to be challenging during the fourth quarter and resulted in cancellations outnumbering new orders in that market.” The Bonita Springs, Fla., company said it expects to record a loss for the fourth quarter, while booking impairment charges of $75 million to $90 million and write-offs of land options of $25 million to $30 million
wci was a buy,buy from cramer
Somebody should cram acid in the mouth of Cramer.
That guy is a crook.
–
This was justed broadcast on CNBC:
CANCELLATIONS IN FLORIDA OUT-NUMBERED NEW SALES!
Jas
I just saw that. Thousand people a day are moving to Florida, a thousand a day. They buy they cancel then they leave.
ROTFL
How about Veni, vidi, so stinky?
Florida is toast. We’ve all noted that before. If cancellations outdo sales, that means the “ghost inventory” is exploding.
Got popcorn?
Neil
They are going to have to finda new paradigm for empty houses.. use them for classrooms? hold debtors anonymous meetings in them, allow dogs to get mortgages… I shouldn’t crack jokes but when you drive past development after development you really wonder WTF on how they got financing, of course during the dot com boom you could get vc for a powerpoint presentation…
veni, vidi, wetmyself
The ‘buy-and-cancel’ touroperators and travel agents say their industrie is booming. Book now, before there’s nothing left to cancel!
Its the new Florida paradigm! Floridians can achieve the maximum because for us there is no minimum!
Is it like pump anf dump ?
“CANCELLATIONS IN FLORIDA OUT-NUMBERED NEW SALES!”
I’m confused. I thought cancellations were sales.
And There Were Echoes Throughout the House:
http://wallstreetexaminer.com/blogs/winter/?p=345
This covers a point I have been making for some time, and was taught to me by the most intelligent real estate investor I know: Housing Elasticity. All this talk about vacant standing inventory is important, but the even bigger picture is the number of empty bedrooms across the nation. As the economy continues to tank, the kids will move back home. The Yuppies and Gen Xrs will start teaming up and vacate four 2 Bd apts for a single 6 Bd, 4 Ba McMansion at 1/2 their previous combined rent.
I was golfing in Florida last week and it amazed me at all the vacant rental condos along the course. 100’s of them and not a sole to be found inside. This nation could actually have 3-4 years of “vacant bedrooms” inventory available, even if it did not build another home after today. If we go into a recession, they Housing Elasticity effect will further exacerbate the drop.
Paladin, that is a great point. One of those McMansions can easily fit two or three standard families, especially if they are desperate.
Can you imagine what that will do to the move-uppers w/1.5 kids who bought the house next door?
I guess it’s easy to assume they won’t be amused…
Yesterday there was talk about the illegal immigrants, and posters on this board seem to take the attitude that it’s a-ok. They supposidly do better work, and get paid above minimum wage because they are such great workers (and it helps avoid legal woes). Of course, they are probably working more hours than recorded.
Here we are cursing the home market and the home builders for making record profits. We slam the construction quality of many of the new properties. All the money from the housing boom isn’t lost, it ends up in the pockets of the Robert Tolls and other people… yet it’s supposed to be a-ok that the illegals are breaking the law, using stolen identites to work, meanwhile the companies that are using this labor are recording record profits?
Who’s to say the poor people of America aren’t willing to work that hard? I don’t see pickup trucks driving around offering them a good day’s pay and transportation to the jobsite. I do see the poverty levels increasing in our communities though, and large corporations recording record profits.
My friends cars have been hit by illegals, and the police won’t do anything (parking lots are private property, INS is too overloaded). There has been rises in accidents in our area from illegals hitting and killing citizens. Family that work in hospitals talk about how the illegals (and to some degree the poor) go to the ER for every medical condition because they receive some form of treatment free.
I challenge you to watch the documentary called “American Jobs,” and check out the hours the American workers were working to earn their lifestyles. I don’t really buy that the illegals are harder workers. Perhaps they are unwilling to call out abuse (working more hours for less) and seem like a good deal. But in the end, your socializing the costs of your labor, and privitizing profits while helping to kill the American middle class.
I’ve seen plenty of illegal aliens working on Arizona construction sites. Although it may appear that they’re harder workers, I find that they work faster and sloppier.
This is true, and I have mentioned before that many illegals relieve themselves in the framing before drywalling. They also leave food in-between the drywall and then most new homeowners gets ants and wonder where they came from. I have also seen firsthand someone leave an opened container of caustic material in-between the drywall and then the homeowner had to tear out the whole section of the home because the material had spilled.
There are some very good Mexican contractors and woodworkers that I have met in business, but the general rank-and-file worker has no clue about building a home. Most two-story homes built in the last five years have sagging second-floors. And dont get me started on plumbing issues, for both the interior and exterior.
If they don’t have permission to be in the US (tourist visa or a working visa) I say round them up and send them home and send the bill to the country of origin. Illegals should be considered invaders and should be afforded the rights of a cigarette butt found in the street gutter.
I agree with most of your points. I think that Americans are going to learn all about the willingness to work hard and take whatever job they can get, in the coming years as Globalization takes increasing hold of the world’s economies.
An example would be the Mattel company. They used to have all of their operations in the US (Los Angeles area). Then they began to move their operations into Tijuana so they could get away with only paying a dollar or two per hour to the average workers/assemblers. Then, just a few years ago they moved the whole operation to China since they determined that they could pay as little as one dollar per day per average worker. Thus you had thousands of workers in Tijuana now looking for work, and where do they go - to do construction in the U.S. Many have little if any experience. But they did manage to take jobs away from Americans - good jobs that paid an above-average living. Now if you are in construction, you make very little and must compete with these same people. I am not condemning the illegals, they have to feed their families as well. I put the blame solely with the globalists who will constantly look for the cheapest labor and move factories and industries wherever that labor can be found.
As I have mentioned before, I have worked for one of the largest HB’s in the world and I have seen first-hand the level of quality of work (of lack thereof) that has gone into the typical SFH in most of the Western states. But you will never see the builders go to jail, nor the subcontractors, nor any other employers that cheat their fellow Americans and the government (from a tax standpoint).
Further, I applaud Paladin for his efforts, but I dont think you will see any of the real players go to jail. Like the former head of Ameriquest who is now an ambassador. I have been/worked through three major R.E. downturns and everytime they hang a few poster boys out to dry, but the real crooks never see any jail time. You will see millions lose their butts this go around and what may be one of the largest shifts of wealth ever in this country, but there will be no ramifications for those that caused it - whether Republicans or Democrats.
The goal of the globalists is to make everyone have the same standard of living in all countries. What this means for us is that our standard goes down to just above the lowest standard in the world - and theirs will go up just a bit as well. I see rough times ahead - this R.E. debacle is just the beginning.
Illegal Alien Meat Packing Plant Raids Raise Wages
Immigration agents raided 6 Swift & Co. meat packing plants in 6 states and rounded up over a thousand people. The result? Large numbers of US citizens queued up in line to get the new job openings created by round-up of illegals.
…The United Food and Commercial Workers filed grievances over the company’s interviews, although after the workers left, the Marshalltown plant raised its starting wage from $9.55 to $11.50 in an attempt to fill the vacancies, said Jim Olesen, the union’s local president.
http://www.parapundit.com/archives/003974.html
When you watch ‘Flip this house’, especially the San Antonio Montelongo work, clearly they are banging this flips out as cheap as possible using the cheapest labor possible. I’d bet almost 95% of the workers are illegal immigrants. the bang it out fast, but it looks really superficial.
I’m with you. Let’s require documentation.
Every other country in the world does. You can’t go anywhere without a passport. Try it some time.
And, yes, I have personal experience with illegal Mexicans driving drunk without a license and plowing into the car of my former girlfriend. Her aunt and mother were permanently disabled, in wheelchairs and homebound. They had NO INSURANCE.
Fortunately we did, but re-insurance is very expensive.
And you are correct. I worked very hard doing manual labor as a young man. People with no money and no welfare benefits are willing to work hard to get ahead. The “doing the work Americans won’t do is a LIE”.
But it makes people hiring them at substandard wages feel like they are doing them a favor, and let’s them excuse themselves for taking advantage of poor people, which is basically what it is.
I think three people have been killed in car accidents in my county in the last 2 years by illegal Mexicans.
My roommate’s BF is “undocumented”. I’m getting to be the world’s expert on Corona la cerveza mas fina.
One night in November he was taken out in cuffs on a DUI, after leaving scene of accident, fleeing to the place I’m staying, and expecting my roommate to shelter him. She was going to, until the cops jumped ugly. I thought for sure she’d cut him loose after that, but no…she LOVES him, oh papi, papi mi amor…
The vehicle he totalled was registered in her name. The day after the accident I told her she dodged a major bullet because he didn’t hit another car with passengers. That guy is a disaster waiting to happen, and I’m in the process of finding another rental, since it’s not Time2buy yet.
The housing market is overheated because of illegals?
One could certainly make that point, at least in So Cal.
As the number of illegal immigrants rise, the demand for housing rises. Since many of them are willing to live with more people per housing unit, they can afford higher prices (in either rent or mortgage payments). After all, if 6 adults are contributing $400/mo, each…that’s $2,400.
Don’t know about you, but I think $2,400/mo. for a 3/2 in a “bad” neighborhood is a bit steep, no?
Most definitely, illegal immigration affects everything from housing prices, healthcare (quality and cost), infrastructure demands, education (quality and cost, again), etc.
The VIX has jumped 38% this morning!! Looks like my end-of-January crash beginnning may come true!!
Hold on to your hats!
what was that VIX spike???
“Vixious” turn of events are usually an indication that something big and mean has a good chance of happening.
Came back to earth, but was up over 100% shortly after my first entry…things are getting shaken up…
Holy crap. I didn’t see that, and wouldn’t have believed it. Yeah, shot up to 27 — WELL above its highest trade of the last 52 weeks. Wow. Maybe this was a mistake of some sort? To go from 10 to 27 implies massive put buying. Txchick, you still following this thread, did you see this? What do you make of it? Computer glitch, perhaps?
Everytime the discussion of illegal immigrants arises someone inevitably mentions amnesty. They says, “Make them citizens.”
And everytime, the very first argument, and I mean everytime, someone says, “They’re paying taxes…” That’s the strongest argument they have for amnesty. They’re paying taxes. It’s pathetic.
And my response is, could I please get on the same tax plan. If they are all paying their way (tax wise) why can’t we just do away with pesky things like income and payroll taxes?
That’s a joke. Check out the tax amnesty on offer on the stalled immigration legislation offered by the repubs. Illegals would make good on past failure to pay taxes by sending a check for 5k. Know any citizens who’d like a chance at that?
Please remain calm. All is well. Former Dallas Fed governor Bob McTeer says so, in today’s WSJ (yes, you heard it there first):
Our economy is remarkably healthy. Inflation has crept above our comfort zone, but current policies are bringing it down without a recession. Monetary policy is just about right, and is being helped in its fight against inflation by other factors: the Internet, globalization, China, India and other new players. Let’s not be afraid of growth.
All is always well for these folks. They speak for themselves. These people do not live in the real world. Always the same bullsh-t. Nothing changes.
Marc,
That’s not quite fair. SF Fed Pres Janet Yellen broke the “new ghost towns” in PHX and LV to the MSM, St Louis Fed Pres Bill Poole has been highly critical of the big GSEs for years, and not too long ago Ben himself outed the Fed stats suggesting subprimes fall disproportionately on minorities.
The article in WSJ today by McTeer is about how supply side economics is going to solve the problems of this economy which he thinks in general is actually doing quite well. I couldn’t find a link to freely available version of the article, if there is one. I read it in the print version.
Agreed. Anyone who draws a strawman characterization of the Fed as a monolithic institution is either ignorant or lying.
Frederic Mishkin, Federal Reserve Board Governor
“Monetary policy makers should restrict their efforts to achieving their dual mandate of stabilizing inflation and employment, and should not alter policy to have preemptive effects on asset prices.” – January 18, 2007
Susan Schmidt Bies, Federal Reserve Board Governor
“Inflation appears posed to decelerate in coming months as energy prices stabilize and resource pressures ease. But a decline in the inflation rate is not assures…Given the strong growth in most sectors of the economy, the risks to inflation are still on the upside.” – January 18, 2007
And From Europe
Lorenzo Bini Smaghi, European Central Bank Executive Board Member
“Interest rates are still accommodating…if the growth scenario is confirmed, not adapting interest rates would mean excessive increasing liquidity.” – January 23, 2007
Axel Weber, European Central Bank Governing Council Member
“Bearing in mind the risks to price stability in the medium term, I see room to act (by the ECB on interest rates).” – January 23, 2007
Erkki Liikanen, European Central Bank Governing Council Member
“Today, the risks on prices are on the upside, there is ample liquidity…Every decision (on rates) is made based on the latest available information and we have not decided beforehand on any actions.” – January 22, 2007
Hoz what do you think of the McTeer article in WSJ today? It’s on the opinion page with title P=MV/Q
excerpt:
___________
While inflation may respond to a reduction in aggregate demand, it would also logically respond to an increase in aggregate supply. In the simple equation of exchange, MV=PQ, so P=MV/Q. In other words, other things equal, prices respond positively to an increase in MV, or aggregate demand, and negatively to an increase in Q, or aggregate supply. This is not rocket science.
But it is a truism rarely articulated. The Phillips Curve is rarely mentioned anymore, but it still pervades the common view that inflation can be tamed only through a weaker economy. Disinflationary growth is not considered an option, probably because we think of output as responding only passively to changes in aggregate demand, so that they rise together or fall together.
That may be the usual case, but it doesn’t have to be. Supply-side factors may stimulate output independent of aggregate demand, through shifts in investment, exports or shifts from imports to domestically produced goods. Or animal spirits.
Monetary policy is currently in pause mode as far as interest rates are concerned, but moderate increases in the monetary base must be considered anti-inflationary whether output remains weak, or strengthens, as I expect.
Supply-side economics is out of favor at universities that don’t have good football teams. But that’s largely because its bar for success has been raised too high. Tax-rate cuts may not fully pay for themselves at current rate levels, but they certainly have gone a long way in that direction, as the recent sharp decline in the budget deficit despite rapid spending growth clearly indicates. Tax-rate cuts that substantially pay for themselves in higher tax revenue are clearly a good thing.
Our economy is remarkably healthy. Inflation has crept above our comfort zone, but current policies are bringing it down without a recession. Monetary policy is just about right, and is being helped in its fight against inflation by other factors: the Internet, globalization, China, India and other new players. Let’s not be afraid of growth.
“Let’s not be afraid of growth.”
Does the composition of growth affect the fear factor? So, for instance, would it be good to grow the home construction sector a lot more, so we can have more ghost McMansion tract home developments out in the middle of the southwest desert?
IMHO this article is unsubstantiated BS. from Wikipedia: As a member of the Federal Open Market Committee on the Federal Reserve, he was considered “dovish” on inflation and was one of the most consistent opponents of raising the federal funds rate in the late 1990s. He has stated that he doesn’t believe in the NAIRU and Phillips curve.
Now to rebut: 1) ” moderate increases in the monetary base must be considered anti-inflationary “. Current monetary increases are running 10%; GDP adjusted for PreClinton inflation CPI is currently NEGATIVE 3%. The build up in inflationary pressures has been delayed by exporting work and wages overseas. This is defined as wage exploitation. As the dollar devalues and the cost of imports rises, the build up in inflation will accelerate.
2) “Tax-rate cuts may not fully pay for themselves at current rate levels, but they certainly have gone a long way in that direction, as the recent sharp decline in the budget deficit despite rapid spending growth clearly indicates.” There is no decline in the budget deficit! Using GAAP standards the deficit expanded by 1.2 trillion dollars fiscal year 2006 “The last duty of a central banker is to tell the public the truth.”
– Alan Blinder, Vice Chairman of the Federal Reserve, on PBS’s Nightly Business Report in 1994
3) “Inflation has crept above our comfort zone, but current policies are bringing it down without a recession” Damn, I hope he is right, but in every instance in the past that current account deficits were greater than 7% of GDP hyper inflation followed. Why is it different this time?
4) and lastly “Our economy is remarkably healthy”. Tell that to the 50% of Americans that believe we are currently in a recession.
I read the article and thought I was reading a Realtor spiel - “buy now before you are priced out forever”.
References for above mentioned figures can be found at
Nowandfutures.com
shadowstats.com
Now and Futures has some wonderful charts on the exploding money supply as well as a reconstructed M3 - Mish’s M’ chart is also well worth a review.
I think it is important to remember that 1st class passengers were dancing on the Titanic after it struck a small piece of ice. I think the same is true today.
Check this article out… What is wrong with people who think they can only have $15K in the bank and afford a $500K house???!!! What is wrong with bankers that will give these idiots $500K houses with only $15K to come to the table with???!!!
Put in prison the bankers.
In London, a 77-square foot apartment is on the market for $335,000:
http://news.yahoo.com/s/ap/tiny_apartment
“With no electricity or heating, Scott said it would cost an additional $59,000 to make the room habitable.
“It is an investment,” he said, as he stretched his arms the width of the room, laying his palms flat on opposite sides of the wall.”
At $4,340 a square foot shouldn’t it be a mansion? $4,340 a square foot and it is not even habitable! Going to go take a bunch of sleeping pills. Somebody wake me in four years when these idiots have already gone under and they are just stories of the good ole days.
Dataquick/CAR YOY numbers for December 2006 for select California cities (this is different than the Dataquick/LA Times data posted 2 days ago):
http://www.dqnews.com/ZIPCAR.shtm
Someone was asking about Monterey:
Area, # sold, dec ‘06 median, dec ‘05 median, % change:
Monterey County 230 $589,500 $606,000 -2.72%
MONTEREY 17 $700,000 $1,109,500 -36.91%
Without looking any deeper, I would guess the 36.91% drop confounds a decline in the price of similar housing with a shift from high-end to low-end sales.
Those numbers for monterey are almost meaningless with such low volume. Median Price/sq. foot is better.
Unfortunately, the Dataquick/CAR numbers reported don’t list the $/sq. ft. The Dataquick/LA Times numbers DO list $/sq. ft., but only list counties and cities in SoCal.
sorry, here’s the article … http://finance.yahoo.com/expert/article/mortgage/13600
77 sq ft “apartment” in London for over $300K
http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2007/01/22/international/i111243S85.DTL&hw=cadogan&sn=001&sc=1000
A converted church. Maybe it’s “foreclosure proof”.
Check out the red bathtub.
http://www.homerome.com/HTML/Properties/triadelphia-14290/index.html
I love that! I’d buy that in a heartbeat!
How awesome would it be to have sex every night right on whatever’s left of the altar? I always wanted to do that….
Now, to find a hot, desperate realtor babe® in the area….
“In talking with Realtors, Mr. Warren said, there is a concern that any increase in foreclosures could put more housing on the market, exacerbating the situation.”
- - - - - - - - - - - - - - - - - -
Boy, who could have possibly seen that coming? Oh wait - everyone on this blog.
and two YEARS ago!
After a couple of years of informing my parents of the housing bubble they are ready to sell and rent. I wished it was last year but at least they are commited to doing it now. Does anyone know a reputable RE agent in the south LA/Orange county area. they are in cerritos.
Give April a shout she was straight with me a few years back.
aprilrealtor@hotmail.com
–
“Based on the average number of home sales in California on an annual basis, there are about five home sales and purchases per agent.”
Totally false. In 2005 total of 600,000 homes (new & resale; SFH and condos) were sold in all of CA. It is a good guess that in 2006 500,000 total homes were sold. And “as of December there were more than 521,000 licensed Realtors in California.” More than one Realtor per home sold new and old. I don’t know how many new homes are sold thru a realtor and then there are home resales (sale by owner, to relatives, etc.) that don’t use a realtor, so I would guess and I come up with 5, or 6, realtors (maybe half are part-timers) for every 4 homes that were sold thru a realtor in 2006. Assuming that there are two agents per sale, I still come up with 5 or 6 agents per 8 sales and purchases combined. Tough business, I would say.
Jas
-x-x-x-x-x-x-x-x-x-x-x-x-
http://www.presstelegram.com/business/ci_5058311
Realty Bites: No. of Realtors [In CA] at all-time high
Don Jergler, Staff writer
Article Launched: 01/22/2007 12:00:00 AM PST
When talking on the phone with Tom Pool you can almost envision some spooked character in a B-movie waiting out a zombie invasion in a boarded house.
“Our licensee population is still going up, even though we’re in a transitioning market,” the California Department of Real Estate spokesman said.
It may sound ghastly, but for the last year people continued to mob the real estate industry despite the market downturn.
About one in 70 Californians is now a licensed Realtor.
–
BTW, 2006 data was just posted by DQ. Total sales were close to 480,000, down about 20% from 2005.
Jas
File this one under “California Dreaming”:
This pitiful, if cutely painted shoebox (850 sf) near the corner of one of the worst streets in Berkeley, CA (San Pablo Ave.) was on the market for AGES last year. The owners had treated the place to a tacky-ass “refurbishment” job then put it on the market early last year. Over the months, the asking price eventually fell to $575,000. It sold in 7/06 for $560,000. Now it’s back on the market in exactly the same shape — for $649,500.
http://www.idxre.com/idx/detail.cfm?cid=1&bid=2&pid=40237065
Says the seller is “motivated”. LOL!
I had an odd experience yesterday. One of the screws holding my sunglasses together fell out, so I stopped at one of those Sunglass Hut stores that you see at the mall. It was quiet when I walked in. There was just one woman talking with the man behind the counter. While I waited to speak with the clerk, I overheard the woman saying “Yeah, if you describe yourself as self-employed, we can REALLY work with THAT! No problems documenting your income.” Then she gave her card to the guy and left. I couldn’t help but think about all the articles and discussion I’ve read on this blog about mortgage fraud.
Wow. Just, wow.
Did the man behind the counter resemble this fellow?
http://timstvshowcase.com/tzone.html
She probably just got a deal on a $360.00 Oakley sunglasses for her 14 year old son, who needed them to dim the resolution on 55″ Plasma.
hwy, lol.
Waiting for that 100%
A look at that other white elephant of Sacramento’s housing bubble.
Not exaclty a news flash, but still timely:
Court tells Bethesda bank to rescind option ARMs
NEW YORK // A federal judge in Wisconsin ordered Chevy Chase Bank to rescind loans made to some borrowers who took out so-called option adjustable-rate mortgages, The Wall Street Journal reported yesterday.
The ruling was in a case against the Maryland-based bank brought by Susan and Bryan Andrews, who took out an option ARM in the belief that a 1.95 percent introductory rate was fixed for five years. Two months later, they received a statement showing the rate had risen to 4.375 percent, the newspaper said.
U.S. District Judge Lynn Adelman ruled that the disclosure statement about the loan terms was confusing. The words “five-year fixed” in the statement referred to minimum payments but not to the interest rate, the Journal reported.
Borrowers affected by the decision will get back any payments to the bank, including closing costs and lawyers’ fees, the newspaper said, citing Kevin Demet, the attorney who filed the case.
So there’s a precedent. Can you say multiple option ARM class actions?
I think Wisconsin is very ‘anti-business’ or pro consumer.
I always see ‘not valid in Wisconsin’ on ads for credit cards and crazy ‘offers’.
For some reason CA is supposed to be liberal pro human hippies but in reality its a playground for predatory lending, mortgage fraud, scammy dot-com debacle, fake company IPOs,
How about prop13 screwing a whole generation or two or three? how is prop 13 a liberal concept when it creates ‘classes’ of homeowners who pay 10x the tax of the next guy? Liberals won’t mention that.
–
Yes, with all those Germans who hate schemesters and value productive work ethic. Germans hated and distrusted the financial manipulators for that reason.
As we can see, the financial manipulators have enormous power and control over the economy these days. You can almost see how it is going to end.
Jas
CrashLanders, I know prop 13 is not a good thing, but you have to think that when it was passed the idea was that government could not increase taxes as it pleased. I don’t think they had in mind the kind of appreciation that took place in the past few years and the inequities it brought with it. Really, I think it was a misguided law that became very, very unfair when the bubble was added into the cocktail.
You’re wrong; Prop. 13 is very fair. Why should long-time residents’ taxes go up because politicians can’t control their spending? End all gov’t programs and all property taxes-that would be even more fair.
How do you close Pandora’s box once it has been open for over half a decade?
–
You don’t. You keep opening it wider and wider until things go crazy.
Jas
If history is any indicator…with disease & pestilence…
Merriam-Webster’s Medical Dictionary - Cite This Source
Main Entry: pes·ti·lence
Pronunciation: ‘pes-t&-l&n(t)s
Function: noun
: a contagious or infectious epidemic disease that is virulent and devastating; usually fatal.
The NASDAQ liquidity fan must have been set to High Blast after the index landed at the opening bell price around 2:30pm.
http://www.marketwatch.com/tools/marketsummary/
Come buy a new home in San Diego…
http://www.4sranch.com/
Unreal how big some of those houses are. Seems the builders don’t even know what to do with all the space, so they add things like a “hobby room” off the laundry room.
Or you could come to Tucson and get wined and dined by condo developers:
http://www.tucsoncitizen.com/daily/local/39537.php
South Korean Bubble Pricker
“South Korean home prices increased 11.6 percent in 2006, the biggest gain in four years. Government officials, including President Roh Moo Hyun, have said since September that they intend to bring down prices.
Finance Minister Kwon Okyu and central bank Governor Lee Seong Tae both have warned that swelling household debt could threaten the nation’s longest economic expansion in a decade.
The government’s measures include home-price caps, stricter screening of borrowers and curbs on the number of loans an individual can take out.
Kookmin, based in Seoul, pre-empted the restrictions by tightening its rules on mortgage loans exceeding 50 million won ($53,000), starting Jan. 3. The bank limits paybacks, including interest, to 40 percent of a borrower’s income.”
” Initial concerns that tighter credit conditions would stunt bank earnings are receding as investors bet lenders will respond by lifting borrowing rates.”
“Higher interest rates are positive for banks’ profitability,” said Kim Hyun Wook, who manages about $210 million at KB Asset Management Co. in Seoul. ”
http://www.bloomberg.com/apps/news?pid=20601109&sid=aN4qPBBc5g78&refer=home
I came to the realization today that there are still MANY Greater Fools out there. This I’ve learned from personal contact with co-workers and aquaintances. Is anyone else seeing the same thing? I guess it makes sense since common knowledge is that today is still a good time to buy.
–
The supply of suckers is never exhausted; it does go down as the bubble matures and starts to burst. Only at the bottom the suckers are all sucked! We are years, if not decades, away from that condition.
Only be surprised if you stop seeing suckers. And don’t neglect to let us know when that happens.
Jas
test
History repeats itself (from the OC Register archive):
Making the best of it
Real estate ads promote up side of a down market
February 13, 1991
The Orange County Register
Coldwell Banker Residential Group, the Mission Viejo-based real estate giant, will begin a groundbreaking national advertising campaign this week that acknowledges the sluggishness of the current housing market while suggesting that there’s never been a better time to buy or sell. While many advertising and real estate experts agree with the campaign’s central theme — “Now’s the time to make your move”
Condo hell — four 1/1 581 sq ft units in the same hood, priced on the range from $215K to $264K. Who wants to pay the $53K premium for the same identical unit?
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13059 WIMBERLY SQUARE #130, SD - Rancho Bernardo, CA 92128
1/1 581 N/A 08/08/06
$215,000 - $229,000
13282 WIMBERLY SQUARE #234, SD - Rancho Bernardo, CA 92128
1/1 561 N/A 11/20/06
$219,000 - $219,000
10915 SABRE HILL DR #362, SD - Rancho Bernardo, CA 92128
1/1 581 N/A 01/15/07
$225,000 - $235,000
13206 WIMBERLY SQUARE #173, SD - Rancho Bernardo, CA 92128
1/1 561 N/A 09/18/06
$264,000 - $284,000