“The Repercussions Of Bad Decisions”
The Denver Post reports from Colorado. “Brian and Selah Davenport were two days away from closing on a townhouse in Parker when their mortgage broker called on Valentine’s Day. Their lender, Las Vegas-based Silver State Financial Services, one of the country’s bigger subprime lenders, had ceased operations. That forced the couple, who were looking for a zero- down loan, to scramble to find another lender and save the purchase.”
“‘I didn’t know a lender could shut down all of a sudden and there would be nothing for you as a consumer,’ said Selah, who hopes to close Friday.”
“Subprime loans accounted for 18 percent of all home mortgages in Colorado, compared with 13.6 percent of all home mortgages in the U.S., according to the Mortgage Bankers Association. At the end of the third quarter, nearly 13 percent of all subprime mortgages in the U.S. and 10.4 percent of subprime mortgages in Colorado were delinquent, according to the association.”
“‘You are starting to see the repercussions of bad decisions,’ said Mike Thomas, managing partner with mortgage provider Hyperion Capital Group in Aurora. ‘These lenders are having to eat these loans that they made on 100 percent financings.’”
“The solvent lenders still serving the market are setting aside large loss reserves and warning mortgage brokers that stricter loan-qualification guidelines are on the way. ‘Their underwriting criteria are tightening and their price is going up,’ said Chris Holbert, president of the Colorado Mortgage Lenders Association.”
“One of the first products expected to disappear are zero- down mortgages, known as 80-20s, made without verification of income to borrowers with impaired credit ratings.”
“Tim McDonald, who oversees subprime lending for a 10-state region on behalf of Wells Fargo, said most in the industry understood a day of reckoning was coming. But what has surprised him is how quickly some of the more reckless lenders have been forced out of business.”
“‘What is going to happen is that 25 percent to 30 percent of the subprime market is gone,’ he said. Borrowers who took out riskier adjustable-rate and option ARM loans on spoken assurances that they could easily refinance in a year or two also need to be careful. That’s because many of the mortgage brokers and lenders who made those promises may not be around.”
The Pueblo Chieftain from Colorado. “So why does Pueblo have so many foreclosures? Pueblo County has the seventh highest foreclosure rate in Colorado, according to recent state statistics, and Colorado itself leads the nation in people starting to lose, or losing, their homes to foreclosure.”
“And, gauging from January’s foreclosure filings and the comments of Pueblo experts, this year is going to have even more. ‘I think it’s going to get worse before it gets better,’ said Judith Lopez, head of the economic crimes unit at the Pueblo District Attorney’s office.”
“Rita Godfrey, a loan education specialist at Neighborworks of Pueblo, works with people facing foreclosure and said many of them had the adjustable-rate loans. ‘Two years ago the interest rates were really low,’ she said. ‘Since it was at a bottom, the only way rates were going to go is pretty much up. People are starting to realize their mortgage payments are increasing more than $100 a month.’”
“Some of the foreclosure problem has been driven by fraud, misleading loan officers and complicit real state agents and appraisers. ‘We still see it happening, to a degree,’ said Pat Flanigan, supervisor of residential appraisals at the Pueblo County Assessor’s office.”
“Even without outright fraud, there is a lot of pressure on real estate professionals to find a way, any way, for someone who wants a home to buy one. Local appraiser Ivor Hill said there is no other way to explain why foreclosures are increasing when interest rates are still fairly low.”
“‘You have one or two real estate agents, you have a loan officer and an underwriter for a lender, you have a buyer and a seller, and all those people are dependent on that (house) sale closing to get paid,’ he said.”
“Kevin McCarthy of U.S. Bank said many buyers who used adjustable-rate loans also were borrowing as much as 100 percent of the cost of the home, plus other expenses. The cumulative effect is that the buyer has little or no equity, McCarthy said, little incentive to save the home and a huge-and-growing amount of money to pay off.”
“‘Anytime you borrow too much money it’s harder to pay it back,’ he said.”
“Mortgage broker Sean McCarthy (no relation to Kevin) said part of the problem is that lenders set their lending requirements much too loosely during the last few years. ‘You have a bit of a perfect storm,’ McCarthy said. The industry is learning its lesson now, he said, but it will be a painful one, both for buyers and the lenders who lose money on each foreclosure.”
“‘The market is healing itself,’ McCarthy said. ‘But it takes a year or two of bloodletting.’”
Newszap.com reports from Arizona. “A report released earlier this month showing area real estate resale numbers at their lowest hits close to home for Pinal County resident Brian Schumann. He lives in the northern portion of Pinal County, just outside of Queen Creek and has had his house on the market since May 2006.”
“‘It wasn’t working with a Realtor. We had dropped the price so much,’ he said.” “The home is now on the market, for sale by owner, but there has not been too much interest shown. ‘We have some people call,’ Mr. Schumann said. ‘Sometimes investors call, they want to know if that’s our lowest price.’ He is not alone.”
“Pinal County’s total home sale transactions reached 6,115 in 2005. The 2006 total dropped to 3,860. The median price for homes in Pinal County decreased as well; from $220,000 in the last quarter of 2005 down to $191,500 in 2006.”
“‘Each month has been a little bit lower,’ said Jay Butler, director of Realty Studies. ‘(It has been) progressively going down from a year ago. Pinal (County) was such an aggressive market, it would be expected to come down,’ Mr. Butler said.”
“Real estate agent Bill Smith has experienced the downturn first hand. He works in the Queen Creek and Pinal County area and said the challenges for those looking to sell are many. ‘I think a lot of it is that people who built in 2004-05, they may owe what the house is going to sell for right now,’ he said. ‘The market’s down right now and Pinal County has been hit.’”
“Besides not seeing the big profits from years ago, Pinal County sellers must compete with builders who can offer new homes with multiple incentives. ‘They’re still building new homes,’ Mr. Smith said. ‘Some of them are considerably less than the same homes they built last year.’”
“‘I’m seeing some of the properties on the market as long as a year,’ said broker Bob Russell. He said the competition with builders is immense and has seen price reductions up to $90,000 with $40,000 in incentive packages.”
“‘It’s tough. People unrealistically are thinking their house is worth more than it is because they’re personally involved with it,’ he said.”
“Mr. Smith feels home sale prices in Pinal County have gotten as low as they can and also sees a rebound coming soon. His advice for now is to stick it out. ‘Stay in it until 2008, because the market already is starting to show life,’ he said.”
“Mr. Butler is not so sure another boom is in on the horizon. He said the key aspect to the first housing explosion in the area had to do with a high number of investors looking for inexpensive properties. Those investors have since left the area, he said.”
“‘Pinal County was sold on affordability,’ said Mr. Butler, adding the prices steadily increased, taking away one of the major incentives to buy in the area. ‘You add to it, the not fully developed infrastructure … that just builds more issues for the housing market to deal with.’”
is this a typo- I know CO is in the tank but the enitre US ??
nearly 13 percent of all subprime mortgages in the U.S. and 10.4 percent of subprime mortgages in Colorado were delinquent,
That’s a point I keep hoping some lenders here will address. I read back in 2004 that subprime is expected to default at 12-14% in the first 5 years or so.
“‘The market is healing itself,’ McCarthy said.
12% seems low subprime should be at least 40-50% and 5% for the regulars like during the previous cycles. That would net out to 1.5-3 trillion a reasonable number.
between 19-35% for first lien subprime… not even talking about second lien thingies tht were written to cover the 80-20s and other stuff.
http://www.consumerlaw.org/action_agenda/predatory_mortgage/content/SenateRespondingCMC.pdf
“‘The market is healing itself,’ McCarthy said.
ha ha ha. Even Boulder currently has 3 times as many foreclosures as sales.
http://boulderrealty.blogspot.com/2007/02/foreclosures-update-valentines-edition.html
Market is healing itself….
Sure, Welcome to Zen Real Estate.
GMAB
It’s going to be more like 60% when it’s all over.
The part that has surprised most is that there weren’t supposed to be these defaults early-on in the lending process. The typically highest probability of default occurs at 3 to 5 year. By that time, everything was supposed to be firmly in the investors’ books. By the defaults occuring earlier than expected, they are being pushed back, and hence the folding subprimes.
Chuck Ponzi
http://www.socalbubble.com
Why are these lenders even making these loans anymore? It seems a no-brainer to shut off the no down crap.
“The biggest no-brainer in the history of mankind” We will beat em up and down the block.. everytime.
LA Ad for sub-prime AM1070
Gotta love the punching sound that goes along with that “beat ‘em up and down the block” line. What a schtick!
You gotta have no self respect to do a commercial like that.
AM radio commercials are amazing in general. They seem to be pitched at a demographic with an extremely low IQ. Nothing like saying to your audience: “we think you’re really stupid!”
“Why are these lenders even making these loans any more?” If they are still making them, it’s because they can still securitize them. Fees, fees, fees. Real Lenders (i do eat quiche) do not make such loans.
“Borrowers who took out riskier adjustable-rate and option ARM loans on spoken assurances that they could easily refinance in a year or two also need to be careful. That’s because many of the mortgage brokers and lenders who made those promises may not be around.”
Does anyone else get the sense that subprime lenders operated like legally sactioned Boiler-Room operations?
I just finished reading a great history of the Chicago mafia called THE OUTFIT by Gus Russo. Highly recommend - it will disabuse anyone of the notion that the USA is a squeaky clean country free of corruption.
Anyway, this whole real estate boom-bust cycle and credit bubble could be a chapter out of that book. What’s truly scary is that we didn’t need an Al Capone or Sam Giancana or Curly Humphrey’s to mastermind this rip-off. I’m guessing that MOST people committing this kind of mortgage fraud are in mom-and-pop shops, are “normal” law-abiding citizens.
Scary how quickly people can be turned into criminals and con men.
Not sure this is the appropriate place to share this, but I have to vent…
We finally found the house/neighborhood of my dreams after months of looking following a cross-country relocation. We have the cash to buy and plan to stay for 10+ years. Really cute house that had been extensively updated, including a bedroom addition and a finished basement. Very good price. Seemed too good to be true.
It was. Fast forward to my visit to the city office that deals with building permits. You guessed it… the flipper has finished the basement without proper permits and inspections. I called the Chief Building Officer to find out what kind of quagmire we would be facing if we pursued the house. He laughed and said we could be in a mess because those violations travel with the house not the owner. In other words, we would be responsible for getting the house into compliance.
I called the agent to ask about the property status. I told her that I was interested, but I understood that there were some major issues with the property. She played dumb. I got right to the point and told her I knew that the property was being advertised fraudulently because the owner had failed to apply for a building permit. She then complained that the building inspector took way too long, and that the owner needed to get the things finished so he could sell. She then asked if we had an agent, hoping that to win us as clients. I was incredulous! I told her that I wouldn’t touch her with a ten-foot pole, because she had just admitted that she knew about the violation beforehand and had aided and abetted her client in tax fraud. (The city still believes that the house is a 2BR/2BTH, rather than a 4BR/3BTH, so the house has not been reassessed. That’s tax fraud.) Fortunately, the City Building Officer is onto the game and is pursuing them, and I plan to enjoy the up-coming show when they get nailed.
She and her client are exactly the reason I don’t trust anyone in real estate. What nitwits!
P.S. I recently found out (Google is great thing!) that the flipper is a former stockbroker who was sanctioned by the NASD for fraud four years ago. Leopards never change their spots.
Thanks for the venting session!
You might think about offering to buy the house at a further $100,000 discount, provided that you felt you could work with the inspector and settle the problem. Make the seller pay through the nose for her sins.
Nicely played in walking away from that one, redhead68.
They actually have a buyer, believe it or not, but I suspect the minute the buyer finds out about the permit issue, he’ll walk.
I was mistaken when I said earlier that the flipper is committing tax fraud, it’s actually tax evasion. Either way, he is in for a rude awakening, because the Chief Building Office is pissed, and he has forwarded the file to the Assessor’s office.
Where’s Neil and his popcorn when I need him?
‘Stay in it until 2008, because the market already is starting to show life,’ he said.”
It’s showing something all right, but I doubt it’s “life”.
Queen Creek is a disaster, totally. There’s no profitable way out for the sellers there…they would be smart to just get out at whatever price…but that’s even dicey…there is NO ONE buying. I used to think that maybe groups of illegals, but most have lost their construction jobs and are back in Mexico.
Queen Creek has become a real estate pariah.
We cannot even speak of an uptick, until there is capitualation.
An old sage from Wall Street, with 30 years on bond trading, gave me the advice of a lifetime “The Trend is Your Friend” Every expert that predicts the bottom is fighting this powerful advice.
There is no debate when all the numbers, all the charts, all the news are pointing downward. Sellers are still overpricing their listings. No capitulation, no upturn
I think you have to look at parts of queen creek seperately.Part of queen creek falls into maricopa county and part falls into pinal county.Within the area that is near gilbert I think prices are doing a lot better than areas such as johnson ranch.I just talked to a builder a couple days ago and he said he sold 20 homes last month in queen creek by the gilbert border.The further you go out the farther prices have dropped.I am seeing homes in the 130’s in some parts of queen creek by new builders.I know they are doing a lot of road work out there too.They just widened ellsworth road almost down to rittenhouse.They are doing a major commercial development right near downtown queen creek.Will include circuit city, walmart, target and several other major retailers.
“They are doing a major commercial development right near downtown queen creek.Will include circuit city, walmart, target and several other major retailers.”
The whole Phoenix area is practically devoid of culture and originality. They simply build the same thing over and over and over. For someone from out of town, you would never know if you were in Chandler, Mesa, Gibert, Tempe, etc. They all look like carbon copies of one another. And with that summer heat, criminy. I went swimming for 15 minutes after golfing one day, and received a blistering sunburn, the worst of my life. I don’t know why people choose to live in that godforsaken place.
Driving around Maricopa County is like being Fred Flintstone running through his house. Same stuff keeps going by over and over.
“Same stuff keeps going by over and over.”
I agree Albrt, but you can say the same thing about every new suburb nationwide. I personally do not like to have to drive 45 mins. each way to get the everyday stuff sold in these stores. I want these stores in my neighborhood.
uh…I hear those builder stories all the time. But when the pedal hits the metal, many of those “sold” houses fall out of escrow. I had one builder flat out say, “Hey, it’s all good, I sold 10 houses last month!”…but what he really meant was, “Hey, I opened 10 esrows last month!”…it’s very hard to track that in and out of escrow data. BTW, that same cocksure builder just had contractor’s license yanked for not paying subs.
I agree, it’s an uneven market, but on a whole, that whole area is not going to recover anytime soon. Regardless of the big box crap that actually does get built. Profits off 28% for good ol’ Home Depot. It won’t stop there, for sure.
And that infrastructure going on? Big ol’ debt for the town, they are praying retail pays for eventually. Since most of the developers skipped town after mothballing several projects.
I just talked to a builder a couple days ago and he said he sold 20 homes last month
and you believed him?
“One of the first products expected to disappear are zero- down mortgages, known as 80-20s, made without verification of income to borrowers with impaired credit ratings.”
Hmmm. Zero Down. No doc. Bad Credit. Are these referred to in the trade as “trifecta mortgages?”
I’ll believe it when I see/hear it. Those loans are still being pitched everywhere, especially radio.
They’re still being pitched, but your FICO score will determine whether or not you get it.
The 80/20’s need to die. If they all disappeared tomorrow, everyone would be singing a different tune.
I put 20% down on my house in addition to paying the closing costs. I advocate a buyer being required to table 20% CA$H. On a $200K home in FL you’ll need $7K in closing costs and prepaids. If you’ve got $40K in cash you shouldn’t be turned down for the loan because you’re $7K short of being at 80% LTV.
80/20 no docs need to go away, but I have no issue with 90% LTV with full documentation and PMI until you’re at 80%.
“trifecta mortgages?”
More like the “Un-Holy Trinity”
This quote stood out to me:
Tim McDonald, who oversees subprime lending for a 10-state region on behalf of Wells Fargo, said most in the industry understood a day of reckoning was coming. But what has surprised him is how quickly some of the more reckless lenders have been forced out of business.”
The fact is, anyone who has experience following the subprime lending industry should NOT be surprised by the speed of the downturn. When things get ugly in this business, they get REAL ugly, REAL fast. That’s exactly what happened in 1998 when the Long-Term Capital Management fiasco caused the secondary market for subprime paper to seize up.
Oh, and slightly off-topic, inventory for sale in my area is setting new highs. This is what I was afraid of — the “return of the re-listers.” If the same thing is happening nationwide, a lot of the cheering over the late-2006 decline in for-sale inventory is going to look foolish. More details and a chart at my blog:
http://interestrateroundup.blogspot.com
Brilliant chart, a picture is worth 1000 words from NAR. Sellers still in Denial. Then comes Fear, Depression, Panic, Capitulation.
I’m seeing the same re-listing stuff going on too.
It’s rather hilarious…some are at higher prices, some with inane incentives…like, at Valentine’s time…”seller will send roses once a month for a year to buyer!”
Okkkkk. That’ll work.
A statement like that is reason enough to skip looking at a seller’s house. That’s standing out in a very lame way.
Sounds like someone who read a “How to Get Rich in Real Estate” book. Kind of sad actually when you realize they think they are being clever.
Well…..if I was looking at incentives, the dozen roses/month sounds better to me than the one free pizza/week that I saw yesterday.
This is getting too funny. I suppose, sooner or later, these silly sellers will realize that their crappy house may have *seemed* to be worth 200/400/600/million whatever in a manic market but that many Americans would rather, when all’s said and done, get the house for half the price and buy their own gd pizza.
Also, am I imagining things or are these incentives getting lamer by the minute? Whatever happened to those “free” hummers of last year? Is that now being looked upon as illegal in some way, so they’re trying to slip the smaller stuff like pizzas and roses through?
What’s next, a penny a week for the rest of your life?
I’m supposed to believe that they will put the pizza money in escrow?
The seller promises to come over once a week, and continue feeding the squirrels
Mike-
Foreclosures and NOD’s are going hyperbolic in the San Diego area. It’s what was predicted, but it’s still more than a little scary to see it start to come to fruition.
I just hope this hill I’m on is high enough …
As an orbit mechanic, I think you may not mean hyperbolic: after all, hyperbolic is the very definition of “what goes up never comes down”
and the foreclosures will level off (eventually).
Hmmm. Greed + Loose Lending Standards may be a hypergolic mortgage mix though. (Ignites spontaneously when the two substances come into contact with each other.)
“‘I didn’t know a lender could shut down all of a sudden and there would be nothing for you as a consumer,’ said Selah, who hopes to close Friday.”
OMG, these people are victims! Perhaps HUD or even FEMA can step in and give thme free money to buy their McMansions.
I thought the Bill of Rights guaranteed sub-prime mortages?
So, instead of closing on Feb 16, it looks like they will close on Feb 23 with 100% financing. Yeah, looks like that was quite a setback. Plenty more subprime still out there waiting to step in and help.
‘‘I didn’t know a lender could shut down all of a sudden and there would be nothing for you as a consumer,’ said Selah, who hopes to close Friday.”
Apparently there is A LOT that you do not know about Selah. One of those things is called SAVING FOR A DOWN PAYMENT. Do not worry, soon enough you will know all about it when the sub-prime market no longer finances train wrecks like you.
Another thing you will soon learn is to NEVER buy in a declining market, you will be finding this out the hard way when you start missing those mortgage payments and you have to sell, but you find out that your house is now worth a fraction of what you paid. That is going to be an even greater real lesson for you, soon, real soon.
SKB
To these people without a down payment, I feel there should be a way of dismissing them… something along the lines of…
YOU ARE THE WEAKEST LINK.
As to never buying in a declining market… I’m not 100% convinced on that. As you approach the last 10% in price drop inventory explodes. So if you are looking for something precious or unique… it might be the only time to get it at a discount. At some point the tax advantage is worth the risk.
However… That is fall of 2008 at the earliest. So if you disagree, we have a long time to chat about it.
Got popcorn?
Neil
Hey, I will gladly buy at the last 10% drop, but “Selah” bought at the first, what a sucker.
I agree on Fall 2008.
SKB
“However… That is fall of 2008 at the earliest.”
Neil, we usually agree!!! This time I’ll say no. I think we’ll see bottom at the end of ‘07 or the first part of ‘08. I think ‘08 will be a flat year and we might even see a slight uptick before a return to business as usual in ‘09.
There is nothing to compare this to. We’ve never seen the market in the state it’s in. In past cycles, we see a slight drop followed by a steep drop and a level period. Then we see a slight and very slow increase before we start to see the normal 3-5%. To me it’s just a matter of when we might see that level period. I’m thinking ‘08.
Bad Andy,
Interesting… Your timeline is more in line with my timeline of about a year ago. Since then I’ve come to realize that flippers will avoid the pain until they get foreclosed in fall of 2007 to spring of 2008.
Since foreclosures take 10 months to hit the market… that drives my timeline.
The nice thing is… we can discuss this for a year before making a decision.
And if I miss the bottom by 3%… yawn. I’ll consider that perfect. 
I’m worried about $250k+, not $25k. 
Andy,
do you have a link to my blog?
http://recomments.blogspot.com/
Got popcorn?
Neil
First time I’ve seen the link to your blog. I just stumbled across quick delivery homes in Olympia for $330K. That’s right about where they were in 2002. If they break the $300K mark I don’t really know how low we’ll go. That’s really the target number.
I just remember in the OC peak was reached in the summer of 89 and the bottom did not occur until 1996. I sold my new FieldStone house (1200sqft) on a lot of about 3,000 sq ft in Sep of 89 for $245K (Paid $175K). Moved to San Diego in 1996 and bought a 3,000 sq ft house for 287K in September of that year with a beautiful view of the ocean and canyon.
Sorry, my point is that this has only been going on for 2 years and this bubble as we all know has no comparison.
No matter how well intentioned you might be OR how skillful you might think you are at persuading people to do what is best for themselves, Dumb trumps everything.
What would you say to someone with perhaps no down payment but is buying a house at the correct ratio to income (2.5 x income) and has no other debt? They’re not all train wrecks.
Txchick, I agree with you. We did that exact thing, after moving away from the Bay Area. After my divorce, I had decent income but not many assets. We put 5% down, stayed well within reason, and have been paying our place off early.
We did an 80/10/10 at for purchase of 1.9x income (5yr Average AGI), no PMI or escrow. Smaller down payment because we were planning on some extensive updating and wanted to preserve cash (also had baby on the way at the time). At a sub 5% rate and montly curtailments, the balances are now about 64%/2%, and the house is nicely updated and furnished. We’re (high probability) not going anywhere for a long while, and the mortgages will be paid off well before the kids get ready to leave for college.
Sorry for this, but yeah, they are. At 2.5X income, the median house should run about 125K for the median house, which is currently 225K nationally. To afford that house (225/2.5) calls for a 90K income, nearly double the national mean income. People earning double money had damn sure better be saving a fair amount, instead of spending it on Asian-made consumer goodies. If not, I suggest they are train wrecks.
“At 2.5X income, the median house should run about 125K for the median house, which is currently 225K nationally. To afford that house (225/2.5) calls for a 90K income, nearly double the national mean income.”
I don’t think you can compare the median income to the median house purchase price. The bottom 30% of income earners rent. We need the median of the current home buyers to do a proper analysis which would be much higher.
I and my wife can wait for ever to buy a home with little negative impact on our life style. However, when we had 3 school aged kids, a dog and 2 cats plus a house full of dusty old stuff, we would not consider renting and spending our spare time looking for a house bargain in one of the few areas with a good school system. If a 2.5X income house suits your needs, I have no problem buying now if it met all my needs. There is a time to settle in and get on with your life (IMHO).
Sorry hon but I work in the sub-prime credit card market and I have to say I have not seen one yet.
The mentality is different for someone that has bad credit, it’s like that for a reason. The reason is always the same, they overspend on stuff and under pay their bills.
True, but that would undoubtedly be a statistically insignificant subset of all buyers over the last 6 years.
“True, but that would undoubtedly be a statistically insignificant subset of all buyers over the last 6 years.”
I think the numbers would be significantly higher than what you are saying.
It is the sub prime market that seems to be the fat lady singing of this credit bubble.
SKB,
Actually I was agreeing with you –that comment was in response to txchick57’s original post.
Oh Sorry Harm,
Gets crazy on this blog sometimes keeping up with the responses and who said what to who.
Its all good reading and I love how everyone has their own take on things.
SKB
SKB
“What would you say to someone with perhaps no down payment but is buying a house at the correct ratio to income (2.5 x income) and has no other debt?”
I would say that it is unwise to compete with GFs using subprime loans that allow them to buy at 10X income.
It’s weird that you wrote abut saving for a down payment - in Austin, it’s estimated that 1/3 of our market is 80/20 loans (both prime and sub-prime depending on credit scores). The developers here all advertise the no money down loans on billboard and on the radio. The idea that a young couple has to save for a down payment (even just 3%) is about as quaint as sending a letter via the post office.
If these loans truly leave the market it’ll be a disaster. I am wondering if 80/20 loans in the prime category have come under scrutiny.
Probably no scrutiny yet. Banks loosened to the loan regs 80/20, ARM, low-FICO + exotics, in that order, freeing up more buyers each time. They will tighten in the reverse order that they loosened, choking off more buyers each time. They may not even have to get to all the way to tightening piggys.
Did you see the news release today that Austin area homes had a 7% decline year/year from last year? And that the number of homes sold was the lowest month since Jan 2005. Hopefully this will mark the top of the market here, a year or so later than most markets.
Wow - I just looked at the Statesman.com - I thought it was a misprint. Very strange indeed. I wonder if the times are a changing.
I think the answer will come next month. Looking at the ABOR stats, sales in Feb 2006 totalled 1722 , with median at $169,900. With the median at $170,000 for jan 2007, we could possibly have a year over year price decrease. And with the ice storm, etc in January, I wouldn’t doubt the closings in February will go down.
But I still wouldn’t expect the newspaper to report anything other than, “experts predict great spring selling season”
From an outsiders perspective, Austin really seems to be a tale of two cities when it comes to prices. The first market is central Austin area — Hyde Park, Tarrytown, Westlake, Bryker Woods, Enfield, Zilker/Barton Hills, etc. — that has seen tremendous appreciation over the past three years. This is the land of the $500K 3/2 with 2000 sq ft (and a property tax bill of $11-12K a year!!)
Then there’s everything else: Round Rock, Pflugerville, Georgetown, Dripping Springs, and all of the master planned communities on the outskirts. For most of these places appreciation has been tepid at best because you are competing against developers who can throw up houses with abandon.
So it looks like the Austin market as a whole has slowed down. But the outskirts were never that hot. Would you Austin experts say that appreciation in central Austin has cooled and that we’re seeing the beginnings of a downturn?
“Even without outright fraud, there is a lot of pressure on real estate professionals to find a way, any way, for someone who wants a home to buy one.”
All I seem to see on tv and the radio are re-fi commercials. Very frustrating, since it seems to be an “out” for all of these people who bought with 80/20’s (including a few of my friends), thus delaying the crash. In the meantime, they comfortably live in the colonials they paid “nothing” for.
On the other hand, I read that MA is never going to come down, and that if it does, it won’t be a significant amount. I want to settle and raise a family in a home. When is enough enough?
Oh, Mass will come down… My family has lived there off and on for the last twenty years. We’ve been through two cycles. Mass will crash, it’s only a matter of time. However, gov’t defense spending has to come down or move to another state for the real pain to begin.
Sucks to be you, though … Mass rent is way too high! I was living in Worcester a few years ago and taking the train to my job in Boston and it was too high. They say $23K+ is the poverty line in Mass.
Thanks for the reassurance.
I rent a 2 -bdrm. outside of Boston for $1400. That’s with a pro-rated “2-months free”. It’s ridiculous. I don’t want to leave because my family and friends are all here. IAdditionally, I teach and leaving my job here would mean taking a radical pay-cut. And God forbid I’d actually want to live in the state I grew up in.
Don’t worry, MA will come down just like anywhere else that is not affordable. I keep hearing the same thing here in UT but my answer for all of there arguments is affordability. None of the experts have an answer but suggest that we should get use to the 50 year mortgage or multi-generational homes. They can choke on their ignorance for all I care, they are wrong and everyone (besides us bloggers) is just starting to realize it. I’ll trust in my limited knowledge of human nature and history over some expert who thinks anyone area come away unscathed from this mess. Just give it time, another 6 months and no one will doubt the worst is not over.
Bis, bis!
This is far from novel, but I think that 90% of all of this is fueled by lies (lenders/realtors) and denial (sellers). None of them want to admit to a falling market, and that’s slowing things down a bit. They’ll be facing facts soon enough, though.
There will be at least 6 bottoms called between now and six months from now…
This past weekend I went to three new listings in Long Beach, 90815. Two of them were empty (one probate, the other BK) and the third was a move up sale. The BK was priced at $550,000 but needed tons of work and had something called the “first right of refusal” and was as is. They currently had one bid in for full price. The move up sell was nice but was like a feathers throw from the 405 freeway. This one was listed at like 629,000 or something like that. I just had to say “good gad ya’ll, are people still desperate enough to pay these prices.”
People need to realize quite a few greater fools were priced out beyond their own wills and couldn’t buy their god-granted piece of wealth-generating miracle soil in SoCal. They still want to play the bubble game, god has promised them. This market in SoCal has a few more fools to wipe out before the real decline can begin. Psychology hasn’t changed. The alter has plenty of worshipers still.
Oh don’t worry. The REOs will soon overwhelm demand of the dwindling supply of remaining worshippers.
Amen!!
“‘Anytime you borrow too much money it’s harder to pay it back,’ he said.”
Some of the quotes on this blog are priceless.
Local true story: 80/10 + 10% down 5 years ago, followed by recent heloc to pay off credit cards, followed by unsuccessful trip to bank after being laid off. Followed by (stress induced?) health problems (and now without health insurance).
Borrower would be in much better shape without the car payment for the $50k sports car…
(…point being, sorry): that after “borrowing too much”, the interest rates keep going higher and higher.
“‘It wasn’t working with a Realtor. We had dropped the price so much,’ he said…. ‘The home is now on the market, for sale by owner, but there has not been too much interest shown.’”
Do you think the price dropped so much there was no room left to pay a realtor commission and there is no savings to pay off the note at closing? Is this what it means to be a F’d Seller? It looks like an opportunity for a well organized flat upfront fee realtor alternative.
All the RE cheerleaders can bite me! I’m tired of their mindless hash. I hope they all get caught in the avalanche. Good friggin riddance!
BRAINIAC ALERT!
note to all HBBers - Kevin McCarthy’s following quote may require some extra mind energy for those with an IQ lower than 163.
“‘Anytime you borrow too much money it’s harder to pay it back,’ he said.”
Well then, how ’bout, “Anytime you see someone borrowing too much money for them to reasonably ever pay back, there’s a good chance they never intended to pay it back in the first place”.
“‘Anytime you borrow too much money it’s harder to pay it back,’ he said.”
Almost anytime. Don’t forget states of the world with high inflation…
Those states have astronomical interest rates, way on the upside. Lenders are not stupid.
> Lenders are not stupid.
So you are saying that laid off U.S. mortgage brokers aren’t qualified to loan in third world countries?
Mmm, not unless wages are inflating.
Turkey does not have mortgages that are worth getting as the interest will kill you even with the massive inflation.
People there get together to buy/build houses, that’s why there are scads of half built homes.
“that caused the couple to scramble to find another 0 down loan”….
Well those 2 really missed their “sign from the Heavens”.
Hopefully, in the next couple months, more Americans will begin percieving refusal of a risky loan as a sign that maybe they should just wait a bit, chill a while and observe what the heck is going on in the market place.
Add them to the list of people I don’t feel sorry for when things go south for them.
I do not know if it was a “sign from the Heavens”, but wouldn’t a rational individual ask “what is happening here?” and take a break from the spiel that “this is the last chance to own”?
It would take Thor’s hammer to knock these morons out to keep them from throwing moneys away!
The latest from Richard Loughlin, chairman of the Greater Boston Real Estate Board:
“Buyer, do not wait and get caught in the squeeze. If interest rates start to rise or inventory starts to drop, you don’t want to get caught.”
http://www.boston.com/business/articles/2007/02/18/signs_of_solidity_seen_for_07_housing_sales/
Thoughts?
Realtor statements about a “stabilizing market” should be becoming laughable to even the most optomistic bulls.
Within a few months, everyone’s going to know that these realtors are completely clueless salespeople who have no idea what is actually going on.
Outside of a fhandful who’ve got some common sense, as a group, realtors literally can’t grasp it.
So iIshould have added to the above, although the bull realtor comments used to be interesting in a perverse sort of way, I’m not even bothering to click on “this optomistic realtor says…” links anymore.
Frankly, they are just a huge waste of brain space/time.
So Massrenter, no other thoughts on that link.
It may be a waste of time, but I still feel it needs to be addressed. When people ask “how can these idiots think…” - Well, here’s the answer. They read these articles (Boston Globe), and they get caught in the hype and lies. We may not bother to read it anymore, but awareness is everything. When I go to work and my co-worker shows me the latest report, I want to be prepared to have that conversation. It is a lack of awareness by the general public that is stagnating this whole thing. They live in a dream world and anything in print is gospel.
MassRenter-
A few months back, I would have agreed with you. It is true that these articles and proclomations still have some influence on people.
However, the lending mess is coming front and center now, rather quickly. That trumps everything. In response to coworkers, you might do a basic mention of the lending problems and how they have contributed to the strip off from fundamentals.
In my experience, when you mention to people “isn’t it odd that most salaries have not grown much in the past 6 years but housing has inflated by hundreds of thousands of dollars?” they get an “aha” moment.
Besides the dark side of lending being exposed, have you noticed that for the past week there has been an increasing exposure of people calling “realtor BS” in the media?
I’m thinking this can only get louder.
It’s a shame that there are still those who think housing is a good investment or that 250K for an 80K POS is a “good deal”. But the tide has really turned so I wouldn’t worry so much about ignorant co-workers anymore. They’ll be waking up to the truth soon. Hopefully, most of them will not have taken the plunge into homebuying before the truth hits them.
As I’m writing this, Fed Gov Susan Biers is on TV announcing that “the bottom for housing is a year or two out”.
At some point, it does not matter that some folks would rather hear David Lereah and your local realtor announcing the upturn is “just around the corner”. I’m thinking that “NOW” is that point.
This whole mess has been controlled by money from elsewhere (ie. not consumer money). The people in control of that money will not be looking to David Lereah and local realtors for wisdom on what to do with their cash/credit.
If I were you , I’d relax and wait for my dream home at a dream price in MA.—-and do my bit to point co-workers away from the lies and toward the truth, for those who want to hear.
Good luck. Mass. is a great place to live. As an aside, I know people who were chased out of Boston a few years ago to upstate NY because of high housing prices. Their home in NY has been on the market for a while now (several months) and they’re looking to move back to MA. when RE implodes.
Agreed. I will shortly be signing a new two year lease. I don’t even want to be tempted to buy for the next 18 months.
seattle price drop, you’ve already influenced me. A month ago (before reading this blog), I was ready to buy - and regret. Now I’m planning to negotiate my lease renewal.
MassRenter:
First, consider the source. A realtor will always say it’s a great time to buy or sell (just look at the NAR campaign).
Second, he never addresses the issue of foreclosures. There were articles a couple of weeks ago stating that foreclosures in Mass reached an all-time high, and were still trending up. What caused these foreclosures? Will they continue at the current pace, decline, or increase? Personally, I think they’ll increase because they were caused by people buying houses they couldn’t afford using toxic loans that are now resetting.
Third, consider the fundamentals. What is the price/income ratio? What are the demographics? I’ve heard that Mass is losing population. If that’s true, it makes it hard to justify increasing prices.
Fourth, think about credit. This bubble was caused by loose lending. Lending is just starting to tighten, but it will continue to tighten. The tighter the lending standards get, fewer people will qualify for loans, thereby decreasing demand. Also, people whose loans are resetting will have a harder time refinancing, leading to more foreclosures.
Finally, notice that he did not mention anything about prices. All he stated is that he believes that sales (i.e., transactions) will be “solid” (whatever that means). All he (and those he works for) care about are transactions because they get paid only if a sale closes. Also, his basis for believing that sales will be solid in 2007 is because sales appear to firm during the last few months of 2006, and so he is basing his entire forecast on the fact that this has established a trend. Maybe he’s right, maybe he’s wrong. But in the end, he really has predicted much, and he has ignored a lot of reality.
Anyhow, these are just some of my thoughts. Hope this helps you with your arguments with co-workers.
You have to wonder how much of the relentless hype and RE industry agenda that is pumped out through newspaper articles is a product of the large amount of advertising $$ these same papers must get via their RE advertising sections.
This is stupid.
If rates go up, prices will come down even more. If inventory starts to drop, so what? Its got a long way to go before it reaches equilibrium with demand. From what I’ve seen around Boston….there’s still a lot being built and a lot not being sold.
Wages aren’t accelerating in Boston. Major employers are getting fewer, not increasing. Until those two factors change and the exodus of people from MA changes exactly who is going to be left to bid up prices? And what will they bid them up with if they can’t get liar loans anymore?
Typical shill hype. Play to the emotions, in this case; fear. Before it was greed. Too bad the dolt doesn’t provide a bit of economic or financial fact to back up his “squeeze” scenario. This kind of hype is the last bastion of scoundrels. When you’ve got nothing I guess this is the best you can do; try and frighten the remaining fools into bailing you out.
Ya’ll see this?
http://www.usatoday.com/news/nation/2007-02-19-affordable-homes-marin_x.htm?csp=1
Completely in character for Marin Co. Exactly what you’d expect from a bunch of greedy Bay Aryan NIMBY hypocrite Limo-Libs who want you to do as they say, not as they do.
It gets better, wanna see something really funny? Scroll halfway down Marinite’s page, there are pictures of the homes and cars of the folks complaining about these houses.
http://marinrealestatebubble.blogspot.com/
Wow. Did you read his post from yesterday? It looks like death threats are running Marinite away.
BayQT~
Mr. Jones, have you ever heard a Real Estate agent say this, ” you don’t want to offer a low ball bid because that will be like a slap in the face to the seller. And if you do get a counter offer it will probably be the same as the list.” I just smiled and thought that that was so funny in this climate. I wanted to say, and I should have said that that slap was your wake up call lady.
My understanding is that the RE agent is REQUIRED to present all offers - period. They don’t make a single decision. They’re merely “innocent” skimmers in a transaction. You may want to remind her that the buyer is the ONLY one that brings $$$ to an RE transaction (EXCEPT IN A SHORT SALE) and it’s in her interest to present any offer.
Ah, but remember, the Realtor only represents the seller!
The MSM is finally connecting the dots!
CNBC just did a segment on housing. Began with Fed Gov. Susan Bies stating that nobody knows how much hidden inventory is out there but it could be as much as another year or two’s worth. Then she mentioned that loans are going bad within a few months now, rather than the typical couple of years.
Then on to 2 commentators who agreed that the MBS/CDO’s were in trouble, only disagreement was as to degree.
Not one housing bull on board, that might have been a first.
Have you noticed how the tone and content of these articles has changed ? Two years ago we are arguing about how overpriced things were and IF there would be a correction. Today we read about the foreclosure problem, the problems in the subprime industry, tighter renting regulations and how deep the damage is going to go.
We are making progress.
“Subprime loans accounted for 18 percent of all home mortgages in Colorado, compared with 13.6 percent of all home mortgages in the U.S., according to the Mortgage Bankers Association.”
I recall last year how many of the readers on this blog were scratching their heads (as was I), wondering why there were so still so many buyers in a market that had so much bad news about home prices. With all of the recent news about how much of the volume was from sub-prime, 10% financing, it’s pretty obvious that it was this segment of the market that was propping house values up more than they would have been otherwise.
Now that the underwriting is finally changing, we should start seeing bigger drops in prices. As that happens, it could have an effect on primes that were poorly underwritten as well, causing even more havoc in the world of financing houses.
IMO, most of people buying in the past two years are in the bottom of the barrel as far as the gene pool is concerned.
“IMO, most of people buying in the past two years are in the bottom of the barrel as far as the gene pool is concerned. ”
Hey! I’m in that stat! Don’t put me at the bottom of the gene pool as I put 20% down and did a traditional loan. Got a fixed rate at 5.75% too. Since I bought the house to live in and it’s cheaper than rent I’d say I did OK.
As far the credit belt, I think we have at least another 6 months of free for all lending. Once a few more sub primes drop like flies we’ll see that belt get real tight. That will bring prices in while the market corrects. 2007 will drop all year…like a rock in many areas, 2008 will be flat or slightly up, normal market will return in 2009. Slightly different than my previous prediction, but still in line.
I don’t think so. By 2008 at the latest the housing bust will have triggered a real recession in the US. So the earliest you could see a recovery is probably 2010. Plus remember a lot of people buying now are still using exotic loans so they will be foreclosing in two years.
The recession will have its normal downward effect on housing as even normal people lose their jobs and then their houses.
Now once all this starts to clear out we have to deal with serious effects from peak oil and peak NG about 2010 or so. Mexico will not be exporting oil at this point and gas is probably pushing 5+ a gallon.
Also the aforementioned recession plus high oil prices would have started to cause a global recession. So after our local recession we have to deal with a global one. Might as well call it a depression.
And guess what ?
The baby boomers are starting to retire and put their houses on the market. They can afford to undercut most of the recent buyers.
By 2012-2015 we are in a a real energy crisis with 25% less oil than today and 50% less NG in North America. Buying McMansions will not be high on peoples agenda. To add insult to injury the cost of road construction and maintenance will sky rocket and at the same time many cities will be facing bankruptcy so expect taxes esp on the larger home to be very high. As cities try to stave of bk.
Sure anyone with money can buy a good house cheap but I suspect few will have the cash.
I think the American dream is DOA.
So I think at best we will see pockets of stability closer to town or in regions that are desirable but in general I think suburbia is dead.
“It’s really the lack of affordable housing,” Roman said. “We have a huge affordable housing crisis in this country.”
http://news.yahoo.com/s/ap/20070220/ap_on_go_ot/homeless_grants
Catherine…..
This is very much the point……affordability is what has popped the bubble
so, send em a check
whoops, if you’re a taxpayer you just did
“‘You have a bit of a perfect storm,’ McCarthy said. The industry is learning its lesson now, he said, but it will be a painful one, both for buyers and the lenders who lose money on each foreclosure.”
I thought they had already learned this lesson from the last major housing recession…..
Repetitio mater studiorum est.
Just posted this: USA Today has a story that states that 1 in 5 home sales in Sacramento is a short sell. The number is about the same for Santa Barbara County.
“‘You are starting to see the repercussions of bad decisions,’ said Mike Thomas, managing partner with mortgage provider Hyperion Capital Group in Aurora. ‘These lenders are having to eat these loans that they made on 100 percent financings.’”
As a dog returneth to his vomit, so a fool returneth to his folly.
Proverbs 26:11
Well said, GetStucco.
I apologize for overusing this quote the past couple of days. But it just has so many applications at the moment…
Can you trademark ™ a bible quote?
No. This is also in the Talmud
(cf.
http://www.jewishworldreview.com/jewish/ethicist_forgive_forget.php3?printer_friendly ).
This link also contains the following timeless words of wisdom:
“Law and custom provide various ways for debtors who are in over their heads to make livable arrangements with creditors and to move forward in life. Do your best to live up to the arrangements you negotiate in the wake of your business failure, to put the whole situation behind you, and to make a new start with joy and hope, and without dwelling on past mistakes.”
just want to see if the code works ™
nope
Del Sur in San Diego is struggling…homes aren’t selling, they are lowering prices and its a disaster. So what do they do? They hold a seminar! Here is the title: WHY BUY 2007 WORKSHOP AT DEL SUR!”
Love it. Details below.
George Chamberlin
Del Sur, San Diego’s award-winning new master planned community located between the I-5 and I-15 freeways, just off SR56, is hosting a free home buying seminar on Saturday, February 24 from 8:30 a.m. to 1 p.m. in the neighborhood models and at the Ranch House community information center.
The seminar will offer up-to-the-minute real estate market information, tips on buying and selling in today’s market, energy and water efficient options for today’s homes, and more. To RSVP for the free event, call (858) 481-4200.
“This seminar is designed to help educate home buyers about how to make a smart home buying decision,” said Tamara Tatich, director of marketing for Black Mountain Ranch LLC, developer of Del Sur. “Our buyers are savvy, and they’re asking the right questions - we’re simply responding to their interests in one seminar series.”
“On the one hand, making a smart choice means understanding the market, learning how to interpret the value of a community, and knowing what your financing options are,” explained Tatich. “On another, it’s knowing how to sell your own home, what the pros do to make a home as marketable as possible. On yet another front, it’s learning about ways you can maximize efficiency in your new home with green practices that save energy, water and money - we call it ‘smart living.’”
From 9 to 10:45 a.m. at the Ranch House, respected financial journalist George Chamberlin, Executive Editor for The Daily Transcript, Money Advisor for NBC 7/39 and host of “Money in the Morning” on KOGO radio, will moderate a session on the economics of today’s market featuring noted analysts Russ Valone and Al Nevin of MarketPointe Realty Advisors.
Beginning at 11 a.m. and 12 p.m., attendees may visit the models for various targeted hour-long workshops.
“Our buyers are savvy”
And buyers of other properties are….dopes? What a wonderful appeal to snobs.
“we call it ’smart living’” and the great unwashed who do not engage in “green practices” are, again, dopes?
Hey Tamara, does the word “arrogance” ring any bells?
I saw that email this morning…I was thinking about attending the seminar and asking some difficult questions about why it is a good time to buy! Del Sur would be nice with 50% off!
I have been tracking a six-zip-code area which includes Del Sur. My estimate of the combined market value (by list price) of homes currently on the market exceeds $1.5b (for under 1000 homes).
“there is a lot of pressure on real estate professionals to find a way, any way, for someone who wants a home to buy one.”
———————————————————–
so there is your main prerequsite- if you WANT a home, everyone will bend over backwards to make sure you have it. Not can afford, but WANT.
As far as I’m concerned the sub-prime lenders had no business making loans to these borrowers . The sub-prime lending was the single biggest factor driving the prices up coupled with the hyped up “real estate always goes up cheerleading “.
Sub-prime lenders gave a punk like Casey over 2 million and that’s just crazy .And people wonder why the crooks have been coming out to play so much with the way these lenders have been going on anything . Just give anybody a loan because the prices of homes were not affordable and the industry needed buyers to keep the demand going . No way is it a good time to buy until this big mess get sorted out ,which will mean major price corrections in many areas .
HW - I do not blame the sub-prime lenders, I blame the loan officers and realtors that duped people (admittedly thru greed) into buying overpriced POSes. The banks and lending institutions are going to be blamed, but they followed the laws. The LO’s and Realtors that collected the buyers information are the liars.
“No way is it a good time to buy until this mess gets sorted out”
that is exactly how I feel - the lending mess has to get straightened out before anybody can reasonably make even a stab at figuring out what these homes are rerally “worth”
And now I’m adding the following to the list of what needs to get straightened out before anybody can determine the price of a home here in the USA: this incredible mount of illegal activity that’s been coming out the past few weeks with outright fraud.
So we’ve got to deal with the negatives that were, 1) technically, legal (lending to people who flat out weren’t good for the loan) and then onto the 2) illegal stuff (cash backs, appraisal fraud , mortgage fraud, god knows what else).
the thought of buying before either of those have begun to be addressed gives me the heebie jeebies. God only knows what’ll happen to the market once they’re taken into account.
You are arguing that he shouldn’t have received any of the loans (can’t argue with that.) But as I understand the scam, he bought them so quickly the banks didn’t have much chance to detect they were all lending to the same proto-deadbeat.
“‘The market is healing itself,’ McCarthy said. ‘But it takes a year or two of bloodletting.’”
Heh… a market in for “a year or two of bloodletting” isn’t exactly ‘healing’.
Maybe some of the posters here can help this REIC professional articulate the situation better.
A slow scabbing?
I agree with him. Gotta have some pain before it gets better.
the whole reason we’re in this mess is because we tried to avoid the pain of the last stock market crash.
I want real health this time, no matter what it takes. Absolutely sick of the fake/debtors/surreal economy.
Bring on the pain please, so that we can finally recover .
The REIC’s glorification of homeownership as American as Mom, Chevies and apple pie has led us to a homeownership rate approaching 70% (cue God Bless America playing in the background) despite the increasing affordability issues of the past 5 or 6 years (when I think the ownership rate was around 64%). Where have all these new homeowners come from? They must represent the absolute margins of the pool of potential homeowners (mirror fogging ability, etc.). I hope others can chime in with some math help and data - but I think the country has somewhere around 75 to100 million “households” depending on how you count. If we’ve overshot the ideal or more normal rate of homeownership by about 5% or so aren’t we looking at about 5 million too many current homeowners? If these numbers are even close - that’s a lot of potential devastation.
‘…75 to100 million “households” depending on how you count.’
Around 114m according to how the Census Department counts.
http://www.census.gov/population/projections/nation/hh-fam/table1n.txt
Better (more up-to-date numbers) are available from the CPS (est. 2005 = 113,343)
http://www.census.gov/population/www/socdemo/hh-fam/cps2005.html
A slap on the wrist…..
OFHEO CONCURS WITH FANNIE MAE BOARD REMEDIAL ACTIONS REGARDING FORMER AND CURRENT EMPLOYEES
Washington, DC – OFHEO concurs with the decision of Fannie Mae’s Board to withhold all the remaining Performance Share Plan (PSP) bonuses for 46 former and present senior executives for the years 2001-2003 and 2002-2004. Approximately $44 million was withheld. The Board concluded that the then-management team did not meet the prescribed performance standards. The action today in denying these benefits included all individuals eligible for the plans. It was not directed at any specific individual but rather reflected the performance of Fannie Mae in the years 2001-2004.
http://www.ofheo.gov/media/pdf/PR8kfnm.pdf
A step in the right direction! Good news!