Making The Necessary Adjustments
It’s Friday desk clearing time. “Real estate prices on Cape Cod dropped again in April, said Barnstable County Register of Deeds John Meade yesterday. The median sales price in April was $340,000, 8 percent lower than at this time last year, marking the sixth consecutive month of declining prices.”
“‘The fact that the market’s more active is a good thing and outweighs the slight decrease in value,’ Meade said. ‘Prices are coming down a little bit and as a result we’re seeing more activity. It’s Economics 101.’”
“It’s getting harder to sell a house in the Capital Region. The inventory of available houses is growing. And buyers are getting choosy, demanding that sellers drop their asking prices.”
“‘The price of the house has to come down to sell,’ said Geraldine Abrams of Geraldine and Associates in Saratoga Springs. ‘What people thought they could get is not in line with what’s real.’”
“Rhode Island’s spring housing market opens this year with real-estate agents making a new pitch, lower prices. The statewide median price of a single-family house during the first quarter fell nearly 3 percent, according to two separate real-estate reports.”
“The town-by-town breakdown of sales by real-estate agents showed that on Providence’s East Side, the median house price during the first quarter plunged 26.5 percent, or $152,000, to $422,500 from a year earlier, according to the Association of Realtors.”
“‘Prices kept going up for years,’ said real-estate agent Karen Tomaskzewski, ‘and now we’re making the necessary adjustments.’”
“The soft Sydney residential market is good news for home buyers with Australand forced to cut house and apartment prices in its developments in Sydney by up to $100,000.”
“Werriwa MP Chris Hayes said the rate of mortgagee-in-possession sales in NSW had jumped by 75 per cent since 2004, with a significant number of these in western Sydney. ‘Land values have been decreasing and housing prices are down, so a lot more people owe more money than what their homes are probably worth,’ Hayes said.”
“It’s a real estate reality check. In Sioux Falls, South Dakota, the number of foreclosures is holding steady, but the reason people can no longer afford their homes is changing. Some people who took advantage of sub-prime mortgage offers—are now having trouble making their payments.”
“‘Money was cheap and a lot of banks gave loans to borrowers who probably shouldn’t have been buying a house,’ said Steve Messerschmidt. Messerschmidt has been a realtor in Sioux Falls for more than 20 years.”
“More than 5,000 new foreclosures were filed in Montgomery County in 2006, a 25 percent jump over the previous year, according to data from the Supreme Court of Ohio.”
“‘Our fear is that at this point this is sort of a telling sign of things to come for 2007 and 2008,’ said Bill Faith, executive director of the Coalition on Homlessness and Housing in Ohio. ‘We’re afraid that we could look back to 2006 as the good old days.’”
“The total number of foreclosures in El Paso County, Colorado, during the first quarter of this year was 828, a 42.3 percent increase from the first quarter of 2006 and more than the annual totals from 1993 to 1998.”
“A tightening of the market might be a good thing, because it was probably too aggressive, according to mortgage specialist Dan Bathje.”
“‘Just about every company I know did some kind of ARM loan. Now there are just less sub-prime loans out there,’ Bathje said. ‘So, it might not be as easy for some people to get a loan these days, but that’s OK. There are still things available, but it may mean they have to have a down payment or wait six months to a year.’”
“The news: Foreclosures of homes are up 51 percent this year over 2005. But the Tucson Citizen’s online community places most of the blame on home buyers.”
“‘People are responsible for what they do, including reading and understanding a contract before signing it,’ Rick M. says. Echoes Tmoonz: ‘People, just because someone tells you that you are qualified for a $250,000 home loan does not mean you can afford it!’”
“And O., quoting the 19th-century French political philosopher Alexis de Tocqueville, chalks it all up to good ol’ covetousness: ‘It is odd to watch with what feverish ardor Americans pursue prosperity.’”
“When I bought my first home in 2005, I did everything right. All of those smart moves won’t save me from taking a loss, though. I bought almost at the peak, spending $240,000 on a two-bedroom condo in the trendy Chicago area of Lakeview.”
“I’m suffering a big hit on the condo. My situation is known as an ‘underwater’ sale, meaning my selling price came up short of what I owe on the mortgage. Counting commissions, closings costs, and all the rest, I’ll be out roughly $20,000.”
“Most of that is coming straight out of my pocket. Uncle Sam won’t offer any solace: Because of long-standing tax rules, I won’t be able to write off the loss from the sale of my home.”
“I remember vividly the pride I felt on the first night in my new place. Now the experience conjures up anxiety, restlessness, and regret. It’ll be a long time before I jump back into real estate. But at least, as I’ve reminded myself during the darker days of this ordeal, I love my job.”
Another great week! My thanks to those who support this blog. Please check back this weekend for news, your market observations and topics.
I am posting on the top because this article is absolutely a must read.
Banksters beg government for sub-prime bailout.
Only get $50 billion in commitments more than $6 trillion required.
As regulators are moving for write downs—-see
“Securitizers who created the big bubble NOW hide BIG losses”!
http://www.larouchepub.com/other/2007/3418mbs_losses.html
Inspired…..the dominoes are cascading - this helps to explain 24-27 up days in DJI
interesting note from today’s news… The Dow has now risen in 23 of the last 26 sessions, marking its longest bull run since the summer of 1927,
Excellent article.
I was curious about the history of securitization of mortgages and other credit vehicles, if anyone has the time or inclination. Is this a historically new concept?
Fairly new. I know that the commercial MBS market really started with Tax Reform act of 1986, and accompanying deregulation. IIRC that was when the agency MBS, non-agency MBS (non-commercial) started taking off. The first CDOs arose in the late 1980s.
Larouche thinks that there should be no more foreclosures. does that mean Casey Serin and other flippers get to keep all of their properties? Maybe I should go borrow a few million dollars to buy property and the government will allow me to keep it without paying back the loans. Maybe renters shouldn’t have to pay their landlords either. At least it would result inthe destruction of the banking system. Everyone who gets a loan can just not make payments and live in the house for free.
These government nitwits don’t have a clue. The scary thing is that these are our leaders.
more than $6 trillion required
hmmm…must be in deeper shit than I thought…I pegged
the losses at only $5 trillion.
Oh well…like the Big Dig here in Mazzholeland budgeted at $2.9 billion and with a final tab @ $15 billion.
What’s a trillion to the banking sleazes when the fix is in in Congress their expectation is the sheeple taxpayer will cover the tab.
“I remember vividly the pride I felt on the first night in my new place. Now the experience conjures up anxiety, restlessness, and regret.”
Like the dude that gets laid for the first time, only to find out weeks later he got a good case of gonorrhea.
or that he got the girl pregnant and will have to pay child support for the next 22 years
Great work again this week ben.The stories get better as time goes by.Seems like we are hearing a lot about victims and cases where ignorant buyers appear to have been duped by the industry.As usual no one wants responsibility and the lawyers are backing up the truck once again.Next week will be interesting in the stock market too.
I signed an enlistment contract without reading it in 1978. I kept signing them every 4 years afterward without reading them until 1995. I receive a retirement check but I am very distraught that nobody explained to me what would come afterwards.
My question is: Who can I sue?
Mugsy:
Your teachers or your parents..?
Great! I’ll sue them all :>
What do you think is going to be interesting next week concerning stock market?
DNDN
“And O., quoting the 19th-century French political philosopher Alexis de Tocqueville, chalks it all up to good ol’ covetousness: ‘It is odd to watch with what feverish ardor Americans pursue prosperity.’”
“When I bought my first home in 2005, I did everything right. All of those smart moves won’t save me from taking a loss, though. I bought almost at the peak, spending $240,000 on a two-bedroom condo in the trendy Chicago area of Lakeview.”
Ah, the American version of the Story of O.
The new sadist game: buy a house, then watch slow bleeding, and final foreclosure pain.
He bought at the peak but he “did everything right”. Do people listen to themselves when they say incoherent stuff like this?
I know, I know…. 1+ 1 = 3.
“”Ah, the American version of the Story of O.”"
Could be worse, it could be the grapes of wrath
Better: Flowers for Algernon…
They were nobody who became SOOO genius overnight, only to end up back where they started as quickly.
I disagree. I read the Story of O and got aroused. This exercise does no such thing.
IIRC, the guy in Flowers for Algernon was worse than a nobody, mentally he was very subnormal.
In one sense, that gave a “relatively” soft ending, because when he fully reverted he couldn’t remember being a genius, or the anguish he felt on the way back down.
“Man is a strange animal. He generally cannot read the handwriting on the wall until his back is up against it.”
Adlai E. Stevenson, Jr.
“a number of the large, import-intensive retail chains in the United States are focused on low- and moderate-income consumers, who benefit from being able to buy a wide variety of lower-priced goods.”
Ben S. Bernanke
May 1, 2007
Why doesn’t he just say walmart and get over it.Without walmart a lot of people would be really screwed.
My point was the inability of Bernanke, his back to the wall, unable to read the writing.
Reading between the lines, Hoz?
Let’s say wally world goes tits up?
Why would target or k-mart or anybody else survive, as they have the same exact business model?
Korporate Brobdiangians chased out the little merchant a decade or 2 ago, on the heels of quantity, not quality.
Who will pick up the slack when these “too big to fail” concerns, do just that?
“People shop at Walmart because it’s cheap. Walmart is cheap because they forced my manufacturing job overseas. I buy at Walmart because it’s all I can afford. It’s a vicious cycle.”
“I work at WalMart because it is a really vicious cycle.”
http://www.jibjab.com/originals/originals/jibjab/movieid/122
ROTFL
Nice video.
However, I do not blame the box stores… I blame Americans unwillingness to work in factories. Ok… I’ll also blame the currency pegs and a few other things… but efficient stores? Nyet.
Got popcorn?
Neil
Neil, an extreemly inefficient retail sector didn’t help Japan in the 90s either.
From BusinessWeek:
“Even neighbors take a hit, since foreclosure can have a ripple effect on property values. One foreclosure can cut the price on nearby homes by 1.4%.”
Of course the flip side is that during the boom unqualified buyers, like shill bidders on ebay, jacked up prices to artificially high levels.
Good point. I’m guessing a disporportionate percentage of those unqualified buyers who managed to get themselves into half million dollar houses, didn’t really fit in with neighbors who had the income levels to afford to live in those neighborhoods. Similarly, I bet a lot of subprime buyers tended not to be the sort of neighbors you want living next door, and more reputable residents won’t be sorry to see them forced out.
“I’m guessing a disporportionate percentage of those unqualified buyers who managed to get themselves into half million dollar houses, didn’t really fit in with neighbors who had the income levels to afford to live in those neighborhoods.”
And then there’s the flip side in flyover land.
Neighbors with larger but conservative homes who are here because they enjoy untouched nature and love of the outdoors watching the neighborhood destoyed as the Time Warner exec builds some huge monstrosity on their street. It looks like it belongs on some beach in Miami or SoCal. Perhaps they thought the horse barn made them look like they fit in.
If only people would stay with their own kind, huh?
This is exactly what happened in my old neighborhood in Las Vegas. I bought my house for $300K in 2002. I could easily afford it and so could the neighbors. Then starting about a year later, some not so desirables started moving in. Prices by then were in the $375K range. By 2004 prices were in the $500K range and a whole lotta nasty people started coming in. It was weird cuz the homes were getting more expensive and the quality of people was getting worse. Well by late 2005 the first wave of default notices started going out. April 2006 saw the first foreclosure in the ‘hood and by December 2006 seemed like a foreclosure a week was happening. Luckily I escaped and got out with a handsome profit thanks to those people. But the neighborhood sure went downhill and now prices are plummeting.
another business week post:
journalist writes an apology ro real estate doomers…Las Vegas market. See further decline to 2008.
http://housingdoom.com/2007/05/04/las-vegas-housing-market-slumped-in-april/#more-644
Are we confusing cause with effect here? If the market price were still going up there would be no foreclosures, as the FB’s would just be able to refinance or sell.
except for that pesky affordability problem.
Need advice.
Looking at a brand new construction in Miami. The neighborhood sucks (inner city slum) but a lot of stuff being build there right now, so it might improve… a definite maybe. The house is a 4/2.5, 2200 sqft + 2 car garage, 2-story. The equipment is decent, cheap kitchen, nice tile flooring, privacy fence, good insulation & windows, SEER 16 HVAC. The asking price is $317K and they won’t negotiate, take it or leave it. That’s a pretty good deal in Miami, about 20-25% below market value, so they got a point there. The builder claims that’s just covering his cost, no more no less, end of story.
The construction cost in Miami are hight due to the hurricane building codes, block construction with plenty of rebar.
You I buy or should I wait for a tsunami of foreclosures? What ya’ll think?
Mike, I’d tell the builder his take it or leave it and covering cost…end of story comments are so yesteryear. YOU are the buyer for 2007 and YOU are now the one that can make the “take it or leave it” statements END OF STORY!
“What ya’ll think?”
I think you know the answer to that. BTW, HousingTracker.net shows 111,605 units of inventory for Miami. If you think this unit is a better deal than the other 111,604 then go for it.
just wait, please, just get your mind off the entire subject of BUYING a house, but do stay tuned to this blog… for about the next two years.
about the right timeframe…
Its going to get ugly fast. I just don’t see the Dow getting to 15,000 before Joe Sixpack has trouble leveraging enough credit for a beer.
Got popcorn?
Neil
Maybe you missed my dire warnings about the drought ALL over F el lay?
How about all the fires that will be hard to stop, because you have no water?
http://www.local6.com/news/13255628/detail.html?rss=orlpn&psp=news
LMAO. You are asking us?
I say buy and report back to us as things progress. Make sure you secure a future URL, maybe IAmFacingForeclosureInMiami.com
Good luck!
Do you really want to live in an inner city slum?
Consider everything the builder tells you as lies, after all, he’s trying to sell you a house in an inner city slum.
builders lie.
With so many FB bringing money to the table…..why shouldnt the builder, because that stands for effed builder as well.
Tell him, “Well I’ll just wait till the bank has the auction, and see if I can save myself a little money. Im in NO hurry to buy.”
“The builder claims that’s just covering his cost, no more no less, end of story.”
You didn’t really buy this line, did you?? I seem to recall a used car salesman tried to use that tactic on me. I told *him* to take *my* price or I’m walking (standing up, purse tucked under my arm). Of course, I had cash…so I could call his bluff. DAMN ,it felt good. ROFLLLLL!!
Oh…sorry. Lost control of myself for a moment.
What a nice flashback, though.
BayQT~
BayQT~
Rock on Bay-
When I bought my last vehicle, I had the maker do a search and had quotes sent to me. Then contacted the lowest bid in the area, offered 1k less (they were way lower already) and told them to add some goodies. They thought they were going to get me on the financing end - surprise! I paid cash. Why do men always assume it’s the woman who is going to be the push over?
“Why do men always assume it’s the woman who is going to be the push over?”
Sad, isn’t it? But I’m sure it’s because traditionally (back in the day) women didn’t know that much about finances…the men worked and managed the family funds. Fixing things were all up to the men, knowing about cars was a “guy thing”, too. But I was always one who asked questions, changed washers in the faucet, learned how to change tires, relays and the lamps and fuses in my car. On the other hand, it works for some women to do the opposite, and many men still think that the average woman is helpless and clueless when it comes to the traditional “guy stuff”. Less intimidating for them. Helps them feel more like “manly men”. LOL!!
Finances, however, isn’t “guy stuff”. It’s something that EVERYONE should be schooled about, and I practiced what preach even when my kids (now 28 and 22) wanted to buy things at the flea market (garage sale, tag sale, etc) when they were like 4, 5 years old. I’d give them a dollar and we practiced addition, subtraction, and figuring out if they had enough money to buy “whatever”. They are WONDERFUL with their money now. My youngest graduated from college last year and with her first job she has saved $10,000 for her relocation to NY this summer. She always saw herself as broke even though she has money in the bank. That’s my girl!
I had to chuckle to myself just now…it looks like a lot of the GFs didn’t spend enough time with the addition and subtraction at the flea market when they were 4 yr olds. Sucks to be them right now.
BayQT~
First, put down the crack pipe. Then consider this before you buy: iffy neighborhoods are NOT going to get any better given the accelerating pace of foreclosures and dropping property values, not to mention the shrinking tax base that will put a hurt on services like policing. The ‘Hood will reclaim itself and send the Yuppies packing.
If you buy now, you face a huge risk - an outright inevitability in my opinion - that in a year or two you’ll be kicking yourself big-time as prices and neighborhoods continue to deteriorate. Only a fool would buy in this scenario, when the unpredictabilities, and potential for a much deeper and longer crash than even the most convinced bears in here believe is possible, run right off the scale.
SS,
Very good point about the hood reclaiming itself…I can’t tell you how many times I hear about the rapid gentrification and resultant drastic increase in values that will continue ad infinitum here in DC. I suppose it’s only human to see a trend and assume that it will continue, but completely discount the idea that it might actually reverse. I recall reading a post/article/comment about humans having trouble w. recognizing non-linear trends…I think it’s a variation on that.
This phenomenon peaked this past fall, when I read a story about luxury condos (starting in the 600’s) in the Logan Circle area inhabiting the top floors of a building. The bottom floors, you ask…well, they housed a homeless shelter…
I daresay that was the tipping point for mean reversion of these “transitional areas”, at least in DC.
Not on your life.
If it’s a bad neighborhood now, it’ll be a war zone in a year or two. Gentrification happens when real estate is rising in value, not the other way around. Everyone’s already bought their homes, already maxed their Home Depot card. It’s all downhill from here.
You’ve so got to be kidding, your not seriously thinking about buying now. Especially in a slum neighorhood that may have upside potential. NO WAY DON”T DO IT. Have you learn anything from this blog??????????
This is the place where I was convinced to buy a house. A house that fit my budget, A house that wasnt too bubblishious, a mortgage thats not toxic..
If you cant understand your own fundamentals: I have “x” saved up, I can afford “y” payment, Im committing to “z” number of years in this house….then why bother even thinking ABOUT HOUSING? People come here to learn how to buy a house, this blog taught me a lot. I may have overpaid a bit, but the reality is I am in my own house, a house I put 30% down on, a house that me, wife, daughter, and grandmother share (yeah its 5 bedrooms), and its on a 15yr fixed, pmt =$900.00
So no need to chase people away, but I have to say if this person contemplating a 300k+ ponderosa, aint raking down 100k plus a year with 100k down payment …….get to know your FUNDAMENTALS.
Mike: you answered your own question by your lack of enthusiasm about the neighborhood. Wait - you will be richly rewarded.
“You I buy or should I wait for a tsunami of foreclosures? What ya’ll think? ”
If you buy, you should also consider buying Casey Serin’s website. I don’t think can use it, unless he can get internet in his car…
“The builder claims that’s just covering his cost”
Then tell him the land is a sunk cost. Don’t offer more than $80/sq ft for the construction…
Mike, c’mon now, if you want someone to push in your stool, just ask for it in a direct manner.
That’s a pretty good deal in Miami, about 20-25% below market value,
Another 25% more to go.
I read in more than one source, everybody in FL is tremblin’ in their shores as hurricane season evolves.
Another couple of Cat 5’s will have the herd stampeding to get out.
Do some DD. Maybe the builder is on the ropes with the whole deal ready to go down the shitter. You could score for pennies on the dollar.
“When I bought my first home in 2005, I did everything right.
Everything except that part about the 2005
Avoid overpaying for the largest asset in your portfolio? OOPS!
Beware of the huge bubble being inflated? OOPS!
Skip paying a premium by buying in a lesser area? OOPS!
Buy a unit near the low end to maximize ability to resell? OOPS!
Only finance what you can walk away from? OOPS!
Make that a situation of having done nothing right.
‘Nature is indifferent to the survival of the human species, including Americans.”
Adlai E. Stevenson, Jr.
I’ll put this in my own words since I can’t remember the exact quote but someone on this blog said something akin to the following and they were spot on:
“Anyone who mentions the phrase “it’s Economics 101″ to support their view has usually preceded it or will follow it with complete unsubstantiated blather and utter lack of comprehension.”
usually something about commodities and the Fed garnered from a site favored by the gullible
Honestly Brad, what happened to you? You sound like you’ve gotten burned at some time in the past.
we have all manner of econ experts now that they have read 3 entire articles on a site that wants them to buy PM- track records anyone? Well track records aren’t important because this time the sky really IS falling
That’s about the time line like this spews out:
“It’s the biggest
no-brainerEconomics 101 in the history of mankind!”“Werriwa MP Chris Hayes said the rate of mortgagee-in-possession sales in NSW had jumped by 75 per cent since 2004, with a significant number of these in western Sydney. ‘Land values have been decreasing and housing prices are down, so a lot more people owe more money than what their homes are probably worth,’ Hayes said.”
mortgagee-in-possession sales are to Australians what foreclosures are to Americans.
And I have actually heard someone claim that - you guessed it - they are running out of land in Sydney.
Even if it were true, like there’s no other place to live in Australia?
Laxman on Kudlow & CO. Totally clueless perfect caniddate to take over from DL @ NAR.
But by being so bullish he makes repeat appearances on the show.
Batapaglia was bearish I don’t think i’ve seen him bearish in a while.
Who, Laxman or Kudlow?
Laxman - totally clueless, even when other guests interrupt him to tell him “you are wrong dude”
Forget to mention he pulled a statistic right out of his A$$hole taht median price of a new home has gone up 10-12 % since last September. Resale home prices up 2%
Felt like sending him “the ring” DVD so he would stop talking with a straight face.
Got guest info for Kudlow 5/4/07
THE ECONOMY & FED…Joe LaVorgna, chief US economist at Deutsche Bank will debate Lakshman Achuthan, Economic Cycle Research Institute Managing Director.
How can you guys manage to watch that stuff? It’s almost as revolting as Cramer.
I agree sm_l. Definitely DVD time when that stuff is running.
‘Prices are coming down a little bit and as a result we’re seeing more activity. It’s Economics 101.’”
Is this really economic 101? From my viewpoint, if I see the price of an asset falling, I’m less likely to jump in and buy. But that’s just me.
assets = baby donkeys
(sorry, getting tired)
“Is this really economics 101?”
No. It is the Roadrunner cartoon when the Roadrunner hands the Coyote an anvil, just as he drops off the edge of the cliff.
Oh… Its the Roadrunner cartoon.
Except Willle E. Cayote is running half way across the canyon with that Anvil. Its ok, the Roadrunner has loaded up the turntable with the “Anvil Chorus.” (Yea, I’m mixing up cartoons, but that’s about to happen.)
Got popcorn?
Neil
“When I bought my first home in 2005, I did everything right.”
Well, I think we can see this poor FB didn’t do everything right. He failed to take into account that he could be transferred and that the market might not continue with the double digit gains. But he didn’t have to take the loss, are there no other jobs for whiney writers in Chicago? Instead he went for the big time in New York and wants the tax payers to subsidize his loss.
This guy is a financial writer for Business Week, and they think so highly of him they’re bringing him to NY. Tells you a lot about the financial acumen of the editorial folks at BW. “I’m a financial writer and I could never have imagined that there was a housing bubble.
Gee, why didn’t someone tell me”
Trust the blogosphere, the MSM are dumber than monkeys.
“It’s getting harder to sell a house in the Capital Region. The inventory of available houses is growing. And buyers are getting choosy, demanding that sellers drop their asking prices.”
One hopeful effect of the Congressional taxpayer-funded FHA bailout measure: It is sure to add to the glut of homes built across this great nation. Higher supply of homes tends to reduce prices, and I hope the Demo-rat Congressmen who support this proposal own homes which drop in value by $100Ks.
GS, my friend, Please do not worry about the FHA bailout…it is and will be a non issue. The FHA is a bandaid on a severed artery and the way the proposal reads “requiring sufficient Upfront Mortgage Insurance to insure the loan”, guarantees that few will be able to qualify. Enjoy your weekend!
They must have changed the game considerably in the last few years. Becuase that has never stopped a gardner from buying a house before. Hoz you or ex-nnvmtgbkr are really going to have to show me something to convince me this is not a government helium tank for the bubble. I just don’t see it. The last FHA deal I did which granted was a few years back the buyer put in a grand total of $1,500 dollars on a $250k deal. i don’t see why guys keep saying that this isn’t going to stabilize the market and keep prices from deflating significantly. Especially if the interest rate drop wishful thinking in the summer comes through.
Guys disregard I just saw something very disturbing… Bubble Burst is still in effect.
White light moment?
Nah, more like a spreadsheet moment, had title send me over the foreclosures since Jan 1…
04, 05, 06 all coming back and not just houses. For what I would consider astronomical amounts of money. A lot of obvious fraud. 80/20’s with thirds. I mean come on a 3rd after you did a 80/20 in less than 3 yrs, bad bad news. The sad thing is that was just for 1/4 th of L.A. County. No bracing that up… you were right. There’s a lot of garbage out there. Seeing a lot of small income units coming back also, 2-4 units, during the last downturn that was rare. I mean they were there but mostly in really bad neighborhoods. For the sampling I had the number was way too high and neighborhoods weren’t exactly Beverly Hills but it wasn’t Compton either… Bad news on the horizon. I wouldn’t touch anything right now.
I just saw this on the link from one of Ben’s posts:
“The problem isn’t likely to go away any time soon. More than $1 trillion in ARMs are scheduled to reset in 2007, the majority this summer, according to several industry experts.”
Is that $1t in resets (’t’ is for TRILLION) sleighted for this summer accurate? If the answer is yes, then THIS WILL NOT BE A CORRECTION.
THIS WILL BE A BLOODBATH.
THE U.S. REAL ESTATE BLOODBATH OF 2007.
Spread sheet moments turn into white light moments, with angels singing and all that crap. I too am a fan of digging through the numbers for enlightenment. It’s gonna be a heck of a ride, no doubt about it.
I like to look at the credit Suisse report…
Mortgage resets have been creating the pain…
For June on, the reset rate double (or more).
It will be scary in 2007.
Not to nitpick, but the bloodbath will be in 2008. 2007 ugly? Oh yea. 2008 will be worse.
Got popcorn?
Neil
Glad you’re back, GS. The governments time to act was two to three years ago (actually, a lot longer ago than that) Too late now. This baby’s a monster.
If 1 trillion in resets are yet too come, by September housing here in L.A. is going to be in a world of hurt. One thing I noticed that struck me as odd is that there were not a lot of condo’s in the list. I also came to the conclusion that MSM is not telling the full story not news here but yet it’s a little unnerving how severely they are underreporting the situation.
You know another thing comes to mind, With the paper being dealt to Wall Street. I’m wondering what kind of service agreements are in place to get rid of these R.E.O.’s. I’m wondering if slash and burn is going to take place. Private tends to mork eons faster than public. If they just dump them on the market wow that’s going to be bad news. ex-nnvmtbkr you’re right they should have slayed this monster 3 yrs ago.
mork=work
Hoz is right GS, you need to chill on the FHA thing. If I wasn’t so burnt out right now, I’d spend time enumerating the reasons why revised FHA guidelines will do squat to save the sinking ship. I’ll save it for the weekend or next week, ’cause I’m sure it’ll come up again. Meanwhile, go have a beer and simmer down.
Hey, I really appreciate it. And regarding burnout, don’t worry, this too will pass. I’ve been there, done that, survived that. You are bright and have much to offer, so just chill out and wait for your next great opportunity in life — it will come in due time.
Sincerely,
GS
Maybe the new FHA structure is aimed at people like me who, unlike most of you, doesn’t make a cr@pload of money but has some tucked away, great FICO scores, and very secure jobs but just needs that final push to purchase?
The problem for me is unless they give me a 0% or 1% loan using conventional standards, not a damn thing in my area is affordable. Maybe this is the politicans polite way for telling me to move someplace cheaper?
Thanks GS.
The other thing, exnnv, is you are helping many many of us with your posts here. I hope that helps you feel some deserved satisfaction.
Also, note that an almost identical bill , The Expanding American Homeownership Act of 2006, was passed by the house last year, endorsed by both Repubs and Dems, endorsed by the president:
http://www.hud.gov/news/release.cfm?content=pr06-069.cfm
http://www.whitehouse.gov/news/releases/2006/07/20060726.html
But the Senate shot it down, mainly because of the idiotic terms they were going to offer (especially zero money down). So this tells us that (1) the Repubs and President are as likely to jump on the bandwagon as the Dems, but (2) the Senate has the thankless role of killing the turkey before it breeds. I’ll bet the same thing happens this year.
BTW, if you want to read the 2007 bill (it IS interesting):
http://thomas.loc.gov/cgi-bin/query/z?c110:H.R.1752:
Among lovely bon mots, there is a suicide clause that essentially cuts of the toxic loans if the default rate rises very much (Sec. 6), restarting Mortgage Insurance requirements (Sec. 7), looks like they are going for the 40 year limit instead of 30 year.
By the way, does the name of this bill make you giggle:
Expanding American Homeownership Act …
Sounds like housing for obese people
True, but housing is much more of a problem this year. Plus it’s almost an election year. What’s scary is they have the power to do this in the first place.
NNV, Please read this and tell me there is nothing to worry about:
http://www.hud.gov/news/speeches/2007-04-25.cfm
From the speech:
“I think we have some better solutions to the problem, both short-term and long-term. We can re-ignite the housing boom if we are prepared to make some important changes.”
I know he’s a politician, and that’s what politician’s do, but obviously the intent is there. This isn’t some local refinance 10,000 borrowers. This is much bigger
should say refinance for 10,000 borrowers
Read it. Sorry, not impressed. The monkeys are workin’ the football at full speed in that peice. Listen, you need to step back from housing a little bit to see the bigger picture here, of which housing is but a part. Trust me, I’m scared - but my fright goes far beyond housing. The US economy is headed for ruin, and all they can do at this point is push out the inevitable a little further down the line (actually, not much further - they’ve gone about as far as they can go with this one) Think I’m being a Chicken Little here? You seem to like research. Dig a lttile deeper then and see where the rabbit hole takes you. Let me warn you - you’re not going to like it. Worrying about housing reinflating should be the least of your concerns.
My advice: live as simply as you can in the days ahead, and try to build a safety-net for everything you do.
Sleep well.
Thanks. You too. I don’t think you are being a chicken little at all. The picture isn’t pretty.
You might enjoy this, it is very well written. I think this type of outcome is very likely:
http://www.financialsense.com/fsu/editorials/andros/2007/0504.html
The US economy is headed for ruin,
I’m absolutely in your camp.
What astounds me, is how quickly the government was able to bring it all about.
Superpower to 3rd World trash in a generation.
GS - Anyway, aren’t there a lot of foreclosures in your area - you’re in SD, right? It seems like FHA bailout or no, you’re going to have some buying opportunities out there…just be happy you’re not waiting for a house in LA, because this ship just won’t sink.
GS - Anyway, aren’t there a lot of foreclosures in your area - you’re in SD, right? It seems like FHA bailout or no, you’re going to have some buying opportunities out there…just be happy you’re not waiting for a house in LA, because this ship just won’t sink.
We gotta get you out of LA. What’s it going to take?
FROM THE DESK OF ALI RAMATH
THE HEAD OF FILE DEPARTMENT, AFRICAN
DEVELOPMENT BANK (ADB)
OUAGADOUGOU BURKINA-FASO WEST AFRICA.
CONTART NO _76-50-92-77
(”REMITTANCE OF $5 MILLION U.S.A DOLLARS
CONFIDENTIAL IS THE CASE”)
COMPLIMENT OF THE SEASON,
FIRST, I MUST SOLICIT YOUR CONFIDENCE IN THIS TRANSACTION.THIS IS BY VIRTUE OF ITS NATURE AS BEING UTTERLY CONFIDENTIAL AND TOP SECRET.
HOWEVER AFTER SERIES OF PETITION WAS RECIEVED BY THIS PRESENT REGIME FROM FOREIGN CONTRACTORS AND INABILITY OF THE AFRICAN DEVELOPMENT BANK(ADB)TO FULFILL THEIR OBLIGATION FOR THE PAYMENT TO ITS FOREIGN CREDITORS, IN CONJUNCTION WITH THE COUNCIL OF MINISTERS, THEY MANDATED US TO CARRY OUT A CAREFUL AND COMPREHENSIVE REVIEW OF ALL OVERDUE PAYMENTS TO FOREIGN CONTRACTORS AND TO EFFECT THE PAYMENTS IMMEDIATELY.
DURING THE ABOVE MENTIONED PROCESS, WE DISCOVERED AN ABANDONED SUM OF US$5 M (FIVE MILLION US DOLLARS) IN AN ACCOUNT THAT BELONGS TO ONE OF OUR FOREIGN CUSTOMER WHO DIED ALONG WITH HIS ENTIRE FAMILY IN A PLANE CRASH THAT HAPPENED IN (MONDAY 31ST JULY 2000).SINCE WE GOT INFORMATION ABOUT HIS DEATH,
WE HAVE BEEN EXPECTING HIS NEXT OF KIN TO COME OVER AND CLAIM HIS MONEY BECAUSE WE CANNOT RELEASE IT UNLESS SOME BODY APPLIES FOR IT AS NEXT OF KIN OR RELATION TO THE DECEASED AS INDICATED IN OUR BANKING GUIDELINES AND LAWS BUT UNFORTUNATELY WE LEARNT THAT ALL HIS SUPPOSED NEXT OF KIN OR RELATION DIED ALONGSIDE WITH HIM AT THE PLANE CRASH LEAVING NOBODY BEHIND FOR THE CLAIM.
IT IS THEREFORE UPON THIS DISCOVERY THAT I AND OTHER OFFICIALS IN MY DEPARTMENT NOW DECIDED TO MAKE THIS BUSINESS PROPOSAL TO YOU AND RELEASE THE MONEY TO YOU AS THE NEXT OF KIN OR RELATION TO THE DECEASED FOR SAFETY AND SUBSEQUENT DISBURSEMENT SINCE NOBODY IS COMING FOR IT AND WE DON’T WANT THIS MONEY TO GO BACK TO BANK TREASURY AS UNCLAIMED BILL.
I AGREE THAT 40% OF THIS MONEY WILL BE FOR YOU AS A FOREIGN PARTNER, IN RESPECT TO THE PROVISION OF A FOREIGN ACCOUNT,AND 50% WOULD BE FOR ME, WHILE 10% WILL BE FOR EXPENSES THAT WILL INCURE DURING THE TRANSACTION. THERE AFTER I WILL VISIT YOUR COUNTRY FOR DISBURSEMENT ACCORDING TO THE PERCENTAGE INDICATED.THEREFORE, TO ENABLE THE IMMEDIATE TRANSFER OF THIS FUND TO YOU AS ARRANGED,
YOU MUST APPLY FIRST TO THE BANK AS RELATION OR NEXT OF KIN OF THE DECEASED INDICATING YOUR BANK NAME, YOUR BANK ACCOUNT NUMBER, YOUR PRIVATE TELEPHONE AND FAX NUMBER FOR EASY AND EFFECTIVE COMMUNICATION AND LOCATION WHERE THE MONEY WILL BE REMITTED.
UPON THE RECEIPT OF YOUR REPLY, I WILL SEND TO YOU BY EMAIL THE TEXT OF THE APPLICATION TO FILL AND SEND TO THE BANK. I WILL NOT FAIL TO BRING TO YOUR NOTICE THAT THIS TRANSACTION IS HITCH-FREE RISK AND THIS TRANSACTION WILL ONLY TAKE US 14 BANKING DAYS BECAUSE AS A BANKER, I KNOW WHAT TO DO AND MOVE THE FUND INTO YOUR ACCOUNT WITHOUT ANY DELAY AND THAT YOU SHOULD NOT ENTERTAIN ANY ATOM OF FEAR AS ALL REQUIRED ARRANGEMENT HAS BEEN MADE FOR THE TRANSFER.
YOU SHOULD CONTACT ME ON MY NUMBER 00226-7650 9277 AS SOON AS YOU RECEIVE THIS LETTER SO THAT I WILL SEND YOU THE TEXT OF THE APPLICATION TO APPLY TO THE BANK AND THE DATA INFORMATION OF THE DECEASED .
YOUR’S FAITHFULLY,
ALI RAMATH .
(ADB) OUAGADOUGOU BURKINA-FASO.
Is this legit? I think I might do it?
Christ, just cut me the check for God’s sakes!
Yes it is legitimate!
Jump on it
“Facts are meaningless. You could use facts to prove anything that’s even remotely true!”
Homer Simpson
Believe it or not a lot of the same morons who bought houses in 2005 would jump right on this.Isn’t nigeria the best place to meet business partners and companions on the internet?
This is from Burkino-Faso, another country is west Africa. Though clearly they have learned from the Nigerians.
I want in!!!
This sounds like a “Casey Serin” opportunity.
This is a scam.
This type of scam is so old it even made the “date line type shpws a few months back..
Why would any one turn a total stranger half way around the world when I am certain there is a sub prime mortgage broker near their home, to be scammed. It is amazing.
‘Prices kept going up for years,’ said real-estate agent Karen Tomaskzewski, ‘and now we’re making the necessary adjustments.’ Yeah now that Provdence R.I has dropped 26% it is obvious to you.
Sounds like things aremoving along.
“This is a scam.”
This is a Nigerian scam. Turn on your e-mail filter to screen any e-mail written in all caps, and you will probably never see another version again.
http://www.snopes.com/crime/fraud/nigeria.asp
Lots of info on this on the ‘Classic Financial and Corporate Scandals’ page:
http://www.exeter.ac.uk/~RDavies/arian/scandals/classic2.html
Is this the company DL went to?
That sounds like a better deal than a Florida condo, at least.
Ohhh now you’ve gone and done it you’ve f—ed it all up! You were supposed to keep it confidential. You dweeb now you’ll never get your $2 M (MILLION).
You are all very funny - I love this blog!
“I sent all my money to Nigeria and all I got was this lousy t-shirt”.
I wear that shirt a lot. Maybe Ben should start peddling t-shirts saying, “I sent all my money to my mortgage lender and all I’ve got is this lousy foreclosure notice.”
Two similar in my inbox just today. Reported them as spam, but does anyone know if it really does any good?
It does not. You need to change to an ISP that has proper filtering.
From: http://www.easthamptonstar.com/DNN/Default.aspx?tabid=2022
Is it really true that RE outperforms anything? If not, shouldn’t this person lose her license?
Despite the rise and fall in prices and activity, real estate on the East End remains a positive investment for most people. “If you are in it for the long term,” said Ms. Desiderio. “Real estate outperforms anything.” “Regardless of whether the market has hesitated, it comes back with a vengeance,” said Mr. Keeshan.
The article says the guy is 35 years old. He needs to cut back on the alcohol and drugs
“Regardless of whether the market has hesitated, it comes back with a vengeance,”
Well, that part is true, anyway. Just not in the way he meant.
Look folks, his page is Default.aspx. He is a real estate agent who has some explaining here because we know what default is but we have no idea what aspx means.
A more appropriate Alexis de Tocqueville quote…
“The American Republic will endure until the day Congress discovers that it can bribe the public with the public’s money.”
Could any of you nice people in Virginia give me an idea about the New Castle, VA area? One of my best friends, a truly decent and nice person, is putting her custom house on 6 acres on the market there. She’s lived in it for 10 years. How bad is the market there? My understanding is that New Castle is about an hour from Roanoke. I want her to get as much as she can but not to over price so she can’t sell it.
The New Castle area is very nice, very scenic.
Her custom built house is beautiful and since she is nice, she will be able to get 400K for it. I recommend listing it FSBO at 420K.
Here is what I’ve been posting to lists and groups I belong to.
U.S. Taxpayer to bail out the mortgage industry which faces $1 trillion or more in losses.
http://www.house.gov/apps/list/press/financialsvcs_dem/press050307.shtml
We all know real estate prices skyrocketed from 2002-2005.
How did house price double in those years? It was a giant ponzi scheme funded by idiot lending that used $0 down to allow people to gamble with other people’s money.
Well, with the lenders taking billions in losses each quarter on these $0 down loans, the are now refusing to give $0 down. Without that flow of idiot money, the market is going to crash HARD!
Lenders have been trying to “rescue” borrowers. Yeah, right. The bank is doing you a favor…. NOT. They are trying to lock you into an overpriced house for as long as possible. But it didn’t work, because within 3 months, 40% of those “rescued” houses were back in default.
So, a week ago they went to Senator Dodd and asked him for a taxpayer bailout. He floated a trail baloon, and that got nuked hard.
So, all the lenders got together and worked on a set of workable principles. These involved everyone in the industry “helping each other out”. Wells Fargo and Countrywide, the most responsible of the many completely irresponsible lenders said HECK NO, when asked to “take one for the team”.
So today, congress is again trying the federal bailout, but they are trying to sneak it in.
They are doing it through FHA, the federally backed lending insurance.
http://www.house.gov/apps/list/press/financialsvcs_dem/press050307.shtml
* Increasing loan limits
* Authorizing zero down and lower down payment FHA loans
* Directing FHA to underwrite to borrowers with higher credit risk than FHA currently serves
* Permanently eliminating the current statutory volume cap on FHA reverse mortgage loans
*An amendment by Reps. Frank, Gary Miller, Scott, and Neugebauer to permit mortgage brokers to participate in FHA by posting a $75,000 surety bond, in lieu of the current audit and net worth requirements,
* An amendment by Rep. Capito to require a government ID of some sort to qualify for an FHA loan. (as opposed to before when they had to prove citizenship)
So, let’s let EVERY lender, write as many loans as they want, for as much as they want, to anyone they want, including illegals. And when the loans go bad…. The lender is paid back out of the U.S. Treasury.
This is NOT about keeping you in a house or getting you into a house. IF a lender thought there was a remote chance you’d stay in that house, they’d give you a loan RIGHT NOW. Thier books are BACKED with houses they’ve taken back in foreclosures.
This is about bailing out the banks who have made trillions of dollars worth of stupid loans agaist houses with prices WAY above the fundamental support level.
If the government cared about the home buyer, they would have stepped in back when flippers and con-men were using “coerced” appraisals to make huge proffits by driving home prices WAY above the fundamental support levels.
Housing is crashing, and the bankers don’t want to get trapped under it. Well, as a HUGE tax payer I don’t want to take their place.
WRITE YOUR CONGRESSMEN TODAY. SPREAD THE NEWS!!!!
NO TAXPAYER BAILOUT!!!
“I remember vividly the pride I felt on the first night in my new place. Now the experience conjures up anxiety, restlessness, and regret.”
I remember vividly visiting open houses in 2004, after coming back from several years of living in the UK, and the experience conjured up disgust for the overpriced houses and contempt for those herd creatures who blindly shelled out the asking price, taking on irresponsible levels of debt to do so. I rented instead, to wait for reality to impose itself.
Now, reading about this FB’s “anxiety, restlessness, and regret” conjures up snickers, smugness, and schadenfreude.
Its HER custom house, NOT MINE,
That is the problem i see, if i don’t like her decorating or floor layout ideas it will cost me a lot to tear it apart and redo it…
For example I like BIG old fashioned wide bowled toilets, or maybe a backyard thats on ground level, for my cats…. not like my friend who has a big porch over a 50 foot drop in the back “yard”
Maybe i don’t like Tiny bedrooms, (i love king sized beds)……and don’t need 20 foot cathedral ceilings in the huge energy guzzling living room…..
oops this is for TXchic ……. HI
Pains me to see that prices on the Cape are now cheaper than Seattle. I know Seattle will come down too but sheesh…..Cape Cod’s a nice place.
As for the Capital Region of NY, that is an accident waiting to happen. It’s such a nice area in so many ways and the people are great but it simply can’t support the RE prices. There aren’t enough equity locusts in the world to do it. But people “from away” who bought there in the past few years cannot get it through their heads that they bought into a bubble. Which is probably a good thing. It’ll give the locals who want to sell (and KNOW it’s a bubble!) a chance to get out from under. Let the silly equity locusts chase the market down.
TD Waterhouse weighs in on subprime mess:
http://www.tdameritrade.com/individual_investor/may2007.html#borrowed
Would you really believe anything from a company that uses a fake district attorney as it’s spokesperson?
“‘Money was cheap and a lot of banks gave loans to borrowers who probably shouldn’t have been buying a house,’ said Steve Messerschmidt. Messerschmidt has been a realtor in Sioux Falls for more than 20 years.”
Everytime I see this statement “probably shouldn’t have bought”, I just want to bitchslap the realtor who’s talking. Who the heck put these deals together, Steve-O? You guys! You get to see the same loan docs, and you got a pretty good bead on whether your client can afford what you’re trying to make a commission on. Quit with the hindsight empathy…you already cashed the check and you weren’t concerned with whether the poor sap could afford what you were peddling.
I hope this massive fraud will eliminate the “COMMISSION ONLY MIDDLE MAN”
And that selling a home will be quite inexpensive from now on. You really don’t NEED a realtor, but you DO need someone who can effectively market your home. FSBO is OK..but remember most people can’t even take a decent picture of their home..
So it will be a pay as you go system, the seller pays for marketing services which if done right could wind up maybe at 1 or 2% of the home value…i mean $4-6000 to sell a $400K home seems reasonable
So either you show the house yourself or pay a “professional” $20+/hour……..Hey they have apartment showers here in NYC, start at $10-12 hour then they take them to the broker who sits in the office all day, to sign the contract, and get a piece of the commission. or fee.
“Real estate prices on Cape Cod dropped again in April, said Barnstable County Register of Deeds John Meade yesterday. The median sales price in April was $340,000, 8 percent lower than at this time last year, marking the sixth consecutive month of declining prices.”
I really like how people talk about an 8% decline, as though it is no big deal. If I bought a place for, oh say, $400K and lost $32K, not including acquisition costs, closing costs, carrying costs, etc., I’d be a bit upset. Yes, I realize it isn’t an investment, but lost equity is lost equity, any way you slice it.
I see lost equity as lost wealth. Again, yes, the home shouldn’t viewed as an investment, but up is still a much better financial direction than down.
“‘People are responsible for what they do, including reading and understanding a contract before signing it,’ Rick M. says. Echoes Tmoonz: ‘People, just because someone tells you that you are qualified for a $250,000 home loan does not mean you can afford it!’”
Although,I agree with Rick’s first statement. I disagree with the 2nd.
The banker is responsible. That is why he gets to ask all those questions, and demand all that disclosure information. After all supposedly it’s his money? If the banker can have people bear their sole, and expose their private identity on virturally every account that bears their name, to get a mortgage, then when he says you qualify…(after giving him / her) all that disclosure they require.
Then the borrower better dam well be able to afford the mortgage.
Otherwise mortgage brokers & other lenders have a business license to steal, peoples homes & money{deposits & closing costs}. People are entitled to trust the system.
I expect the government to protect me from theives & sharks like you Rick, by throwing the bankers in jail for 5-10 years…..see yah Ricky M.
Maybe that was the plan all along?, on these sub primes…bankers thought house go up {always?} if only we can lend to unqualifed borrowers let them go broke trying to make the payments, then we swoop in and sell the property in 6- 12 months for a cool 10 to 25% profit? right! something like this Rick?
>> The banker is responsible.
I don’t agree with this at all.
Why should I expect a banker to be responsible for my decisions, or anyone else’s? What right would I have to demand this of anyone?
>> People are entitled to trust the system.
No! People are entitled to make their own decisions and be responsible for those decisions.
He is responsible to the degree that he is running the risk that the FB will be unable to pay him back and get bankrupcy protection. There will always be people willing to borrow their way to the poor house. Bankrupcy it the way we try to minimize the number of “debt pushers,” encouraging people to take on more debt than they can handle. Bankrupcy protection IS the helping hand that we should extend to FBs. It is both their punishment and their salvation. And it punishes those who would attempt to put them into a sort of “debt peonage.”
I’m just working the stages of grief here….
1) Denial.
Belief: With enough information, and enough people up in arms we can stop the government bailout of the banks and make the people that worked the system, pay it back.
Then I remembered why the rich pay all the taxes… because they are the only ones that can. This woke me from my denial.
Reailty: The government HAS to bailout the banks or our economy ceases to exist. There were far too many criminals to make them all pay.
The idiots that caused the problem will get away with it, because they have to.
2) Anger:
For days I’ve been SO PISSED OFFF…..
3) Bargaining:
Waking up and realizing that there is nothing we can do about the bailout that HAS to happen…
I slipped into bargaining. What’s to stop us from taking all the money out of the HELOC… we have one in place, but no balance. Take the cash, pay off student loans, buy stuff, etc.
Oh, wait, the banks can file suit against us. Foreclosure doen’t remove your need to pay… if you can.
But wait, we can refi to FHA, then the bank gets paid from the government, so won’t come after me.
Oh wait, the federal government can come after me to recover their FHA loss…. since I have money, I pay.
Crap… nope, no way to work the system without actually being poor. The poor don’t have to pay, because they can’t. If you can, you have to.
So, then depression…..
I’ll let ya’ll now if/when I reach acceptance. I’m going to bed…. Yeah, it is only 6:44. I’m tired, and very depressed.
Got Zanex?
Darrell –
At least you are working through the stages of grief very quickly. Imagine the reality for much of America, which is still that “real estate always goes up, at least in the long run.” In other words, most Americans have not yet passed through the denial phase of the Housing Bubble stages of grief.
Charles Shummer is proposing a bill on Monday before Congress to prevent Paris Hilton from going to jail based on her not understanding what she signed which said she was driving under a suspended license.
Paris Hilton was among a series of witnesses who took the stand during the hearing. She testified she believed her license was initially suspended for 30 days and that she was allowed to drive for work purposes during the next 90 days.
She said that when an officer who stopped her in January made her sign a document stating her license was suspended, she thought he was mistaken and did not actually look at the document.
I think the taxpayers should chip in a buy Ms Hilton a new limosine and hire a driver and bodyguard for her.
From iamfacingforeclosure.com (Casey Serin):
“I went back and forth on writing this foreclosure book. At this point I’m going full speed ahead. I don’t need some kind of a miraculous “turn around story” to share my foreclosure experience in detail. ”
That’s a good thing, because the only ‘turn around’ he is going to do is the ‘turn around and bend over’ if they toss him in the pokey.
Harry Bliss (New Yorker cartoonist) has a fantastic cartoon in today’s SD Union Tribune comic strip page, but unfortunately I cannot find an online link.
It shows a bum with 3-day beard growth holding a cup in one hand and a large sign in the other which says “HOMEOWNER — PLEASE HELP.”
If anyone has an electronic link, please post!
Median home prices dropped in April by 45%
Bathje said, “The median price is down, but that’s OK.”
5000 homes were foreclosed on in Montgomery County
Bathje said, “We are having some foreclosures, but that’s OK.”
The sub-prime market is collapsing, and people can’t get suicide loans anymore.
Bathje said, “People won’t be able to pay 10 times their salary to get a home, but that’s OK.”
I guess saying that it’s OK really makes it OK. I feel much better now.
“The town-by-town breakdown of sales by real-estate agents showed that on Providence’s East Side, the median house price during the first quarter plunged 26.5 percent, or $152,000, to $422,500 from a year earlier, according to the Association of Realtors.”
Wow — a falling knife effect to the tune of $152,000! That would wipe out two years of income for the median San Diego household. But I suppose that East Side Providence households are richer than poor Californians, right?
“It’s a real estate reality check. In Sioux Falls, South Dakota, the number of foreclosures is holding steady, but the reason people can no longer afford their homes is changing. Some people who took advantage of sub-prime mortgage offers—are now having trouble making their payments.”
What is it that Demo-ratic Congressmen don’t get about the folly of turning the FHA into a government-sponsored subprime lender, complete with zero-downpayment loans? Don’t they realize that they will catch the full brunt of the blame for future generations of FHA buyers who get foreclosed when it comes to light that they cannot possibly afford to pay off their mortgages? Or are these idiots assuming that they will always be able to either rely on the Fed to inflate the currency by enough to erode the debt balance owed, or to ask the taxpayers to pay for yet another S&L crisis-style bailout down the road?
Bad omen. Condo construction crane collapses (I got 4 c’s in there!), crushes truck.
http://www.chron.com/disp/story.mpl/metropolitan/4775953.html
You get points if you can figure out how the crane operator just happened to be the guy who picked up the phone when the reporter called the company’s switchboard and asked about the incident.
“Officials refused to identify the man who was operating the crane. He works for Bell Bottom Foundations, a subcontractor that was drilling holes so that a foundation can be laid. A man who answered the phone at the company’s office said he was the crane operator and refused to comment.”
Uhhuh. And the crane operator spoke English and was a US citizen. Right?
Actually, I’d bet that it’s an expensive enough piece of equipment, with enough potential liability associated with it, that that’s the usual case. Now the guys positioning the bucket on the other hand….
So in the next 90-180 days, 1 in 11 mortgages in this country under ARM’s are going to reset, most likely to a bigger ballon payments. They will not be repaid even in a fraction. These is no money or wealth there and not enough to cover it all.
A miltary war and possible future war in the Gulf/Iran to add fuel to the Fire Economy….100 dollar oil and 5 dollar gasoline.
How is the system going to handle 5-8 million foreclosures starting in the next 90-180 days and the months beyond? It will be incapable of it. People will squat and the system will freeze up.
There will not be enough process servers, cops, and muscle to to the job….I see a lot more than people being thrown out on the streets…I see bitter battles and gunplay all with the background of state-by-state foreclosure moratoriums as things get “hotter”.
Collapse is here….whether we can “engineer” it as a slow collapse of paper value or somewhat orderly or a “quickie” is beyond me.
Events will move too fast for even Washingtoon, The Fed, Wall Street or the banks to do much. Events will run out of control.
We are witnessing the seminal event of our lives, the economic and political collapse of the United States of America. It will be quick when it happens.
What to do??….Start planning to live more humbly…buy the tools and things you will need to survive a 2-5 year panic and depression. Cash may be king for awhile unless The Fed does the “German 1923″ thing…could go either way.
test
So in the next 90-180 days, 1 in 11 mortgages will reset under ARM? Into ballon payments or double payments. Can we say several million foreclosures on the average of 300K apiece. There is not enough money or the printing presses can not print it that fast.
We are witnessing the seminal event of our lives, the slow or fast economic and political collapse of the United States of America.
I may be going into this further but an sick to see what the depression, panic, several year of just 90% drop to the bottom this is going to entail. 500-700K homes going for 10-15K, if you have any money and it will be strictly cash.
If The Fed inflates German 1923 style, it will be all the worse but think events will move too fast and too titanic to even with their mighty powers to hold back. It will be like holding back the ocean.
Sorry for double post by my browser has been acting strange this morning (Konqueror)