A Significant Deterioration Continues
Some housing bubble news from Wall Street and Washington. “More evidence of a continued housing market slump arrived Thursday morning, when Bensalem-based Orleans Homebuilders Inc. reported a loss of $51.9 million for the quarter ending March 31. Revenue fell 38 percent from last year’s third quarter.”
“‘Although we did experience some strengthening in new orders through February, March did fall short of our expectations and the trend has continued into April, where our new orders were also disappointing,’ CEO Jeffrey P. Orleans said.”
“The loss was blamed on abandoned project write-offs and other conditions. Chief accounting officer Jim Thompson added profit margins narrowed because Orleans used sales incentives to drive new home orders.”
“‘We took $47.3 million in charges against inventory, which was substantially against land,’ added Michael T. Vesey, Orleans’ chief operating officer. ‘We also took a pre-tax charge of $10.7 million for abandoned projects, representing the write-off of about 1,300 lots.’”
“Avatar Holdings Inc. today reported…the dollar volume of housing contracts signed during the first quarter of 2007 declined by 76% compared to the first quarter of 2006. The number of contracts signed declined by 67%, compared to the first quarter of 2006.”
“The decline in contracts signed for the first quarter of 2007 compared to the first quarter of 2006 reflects the accelerated weakening of the market for new residences in the geographic areas where our developments are located. Avatar Holdings Inc. is primarily engaged in real estate operations in Florida and Arizona.”
“A significant deterioration in our markets continues. The number of investor-owned units for sale, the current tightening of mortgage underwriting standards, the availability of significant discounts and incentives, the difficulty of potential purchasers in selling their existing homes and the significant amount of standing inventory continue to adversely affect both the number of homes we have been able to sell and the prices at which we are able to sell them.”
The Dallas News. “One of North Texas’ top 20 homebuilders has sold out to a fast-growing competitor. Newmark Homes, which started more than 600 houses with its affiliates in the Dallas-Fort Worth area last year, is selling most of its D-FW assets to Arlington-based Wall Homes.”
“The acquisition was made at a substantial discount, company founder Steve Wall said. Newmark’s parent company said the sale of the D-FW assets is expected to generate a pre-tax loss of $11.7 million.”
“The purchase could signal the start of a contraction in the homebuilding business at a time when sales are slumping. ‘We are at the beginning of a lot of changes in this building market right now,’ said Dallas housing analyst Ted Wilson. ‘There will probably be more consolidations.’”
The Journal Now. “Home builder Centex Corp. said yesterday that it is cutting jobs in the Triad as it restructures its work force in the area. Centex does not plan to make additional investments in the market at this time, said Eric Bruner, a spokesman for the company.”
The Associated Press. “Pope & Talbot Inc., a maker of lumber products, said Thursday its first-quarter loss more than doubled as lumber prices fell sharply in response to the U.S. housing slump.”
From Reuters. “Impac Mortgage Holdings Inc., a specialist in mortgages whose risk levels rank between prime and subprime loans, reported a first-quarter loss, hurt by a mark-to-market loss in the fair value of derivatives. The Irvine, California-based company posted a net loss of $121.7 million.”
“NovaStar Financial Inc. said Thursday its first-quarter earnings doubled, but the residential mortgage lender posted a loss excluding an accounting gain related to a change in its corporate structure.”
“Stripping out the one-time gain, the company lost $39.8 million. The company made the move anticipating accounting issues related to a sharp increase in mortgage defaults and foreclosures among customers with poor credit that will reduce taxable income in the next five years.”
The Financial Times. “American International Group on Thursday said it expected to face costs of $128m linked to subprime mortgages in the first indication of the price US federal banking regulators could extract from the industry for past aggressive lending practices.”
“AIG has not been one of the biggest subprime lenders and has steered clear of the most aggressive mortgages, which suggests the hit for the industry leaders could be much larger.”
“Banks are taking more risks with their property lending so buyers of European and U.S. commercial mortgage-backed securities should beware, even though property markets are healthy, Moody’s Investor Service said.”
“In the U.S. market’s five worst-performing years, 31 percent of CMBS issues with 70-80 percent loan-to-value ratios experienced credit events such as defaults or restructurings, Tad Philipp, a managing director of Moody’s in the United States, said.”
“It was fanciful to expect the continuation of sub-1 percent delinquency rates and annual real estate capital growth of 10 percent, he said. ‘We’re not going back to reckless construction but we do have to be careful about how we look at the last 10 years,’ he said, explaining Moody’s preemptive decision this month to tighten up its ratings criteria to give bond holders extra protection.”
“Philipp said it was ‘better to get a flu jab when the body was healthy’ but cited growing signs of lax lending in the United States. Among these was a rise in loan-to-value ratios to more than 110 percent from just over 90 percent in 2003 and a growing share of interest-only lending.”
“‘There is a growing difference between underwriters’ and Moody’s measure of value,’ Philipp said.”
From Bloomberg. “Former Federal Reserve chairman Alan Greenspan said he sees a 2-to-1 chance that the U.S. will avoid a recession even as the economy slows. ‘At the moment, I still say as I said before, by algebraic implications, the odds are 2 to 1 we won’t have a recession,’ Greenspan said today, according to a recording of his comments.”
“‘There is no doubt there is a slowdown going on in the U.S.,’ Greenspan said. ‘We are clearly having troubles in the capital investment area, as well as potentially in the consumption area and obviously housing being a significant drag.’”
The Chicago Tribune. “Consumers are spent. Retail sales tumbled a record 2.4 percent in April from a year earlier, according to the International Council of Shopping Centers’ preliminary tally of 53 retail chain stores; the worst performance since the trade group began tracking sales in 1970.”
“‘We expected a slowdown in 2007 but not to the degree we’re seeing,’ said Michael Niemira, the group’s chief economist in New York. ‘Anything that is home-related is really hurting.’”
“‘With the direction it’s going, I’m not sure there’s any immediate light at the end of the tunnel,’ said Arnold Aronson, managing director of retail strategies at Kurt Salmon Associates in Atlanta. ‘It’s going to be rough sledding for a few months until the whole psychology about housing prices and housing sales and mortgages starts to stabilize.’”
“The crisis that has swept the U.S. subprime mortgage industry may come down to a simple, three-digit number, multiplied by millions. Lenders in the midst of an unprecedented U.S. housing boom pared borrowing requirements to a minimum, a single number, known as a ‘FICO score,’ that was supposed to reflect the borrower’s ability to repay a mortgage.”
“A credit score and a written, unchecked statement of income have often been enough to get a loan. ‘The combination killed the goose,’ said Bill Dallas, CEO of Ownit Mortgage Solutions, a failed subprime lender.”
“Boosting scores has become a booming industry. Deborah Vasile, a Cape Coral, Florida, mortgage processor who went through a recent business bankruptcy, said her credit score rose more than 100 points after she paid about $500 to Credit Repair Today of Tampa, Florida.”
“Elizabeth Warren, a professor at Harvard Law School, said she questions how an entire industry can be based on claims of quick fixes for a person’s creditworthiness. ‘If credit repair can help someone alter a FICO score for people that can pay a fee, doesn’t that say that a FICO score is not a very reliable indication of a person’s financial status?’ she said.”
“Lenders today might take a lesson from failed underwriters that may have ignored the details at their own peril. Executives from mortgage lender New Century Financial Corp. cited FICO scores to demonstrate the quality of their mortgage loan portfolio.”
“On May 4, 2006, for example, New Century told investors and analysts its average FICO score was 633 at the end of the first quarter of 2006, up from 600 in 2003. ‘Credit performance is better than historical experience and has exceeded our expectations,’ the company’s slide presentation said.”
“Eleven months later, New Century filed for bankruptcy protection.”
“Elizabeth Warren, a professor at Harvard Law School, said she questions how an entire industry can be based on claims of quick fixes for a person’s creditworthiness. ‘If credit repair can help someone alter a FICO score for people that can pay a fee, doesn’t that say that a FICO score is not a very reliable indication of a person’s financial status?’ she said.”
Don’t need to be a Harvard grad to answer that one.
What I say to her is “DUH!”
Isn’t the dividing line between sub-prime and alt-A the 3 little digits of your FICO score? Buh-bye Alt-A.
There MUST be a new paradigm here somewhere! c’mon guys, we need to save housing!
There have been so many new paradigms that came and went over the last 5 years that helped to justify the bubble (boomers retiring, low interest rates, housing only goes up, FICO scores only are enough, improved risk management by lenders) … why not just create a new one?
.
Mortimer Duke: F**k him! Now, you listen to me! I want trading reopened right now. Get those brokers back in here! Turn those machines back on!
[shouts]
Mortimer Duke: Turn those machines back on!
The usual wager, Winthorp?
Harvard is a big proponent of feel good
international debt relief etc
give me someone from Wharton or Chicago B school
The FICO score is a good score if you consider the context of the score. How well is a person paying off obligations based on their past history?
But since the scores are essentially based on past data, there is a lag. If the future resembles the past, then that’s ok. But if someone whose biggest credit obligation was a car loan of $17K is suddenly saddled with a $600K ARM, the future is now totally disconnected with the past.
It would be like a recruiter getting good reviews of me as a writer and then putting me in charge of Goldman Sachs’ derivatives division. Odds are my chances of success will be pretty low.
Fair Isaac loved the FICO madness in the bubble days, but I suspect they’ll really regret it after its name has been strongly associated with financial unreliability and stupidity because of the housing bubble. Again, reasonably good score for its original use, but its distortion for home lending will be a black mark.
This is why credit scoring models which deduct 3 points for inquiries should look at the type of debt and likleyhood a person can repay based on historic data. In otherwords, if a person only has say 25K in credit cards available of which they have been paying off each month approximately $500 and a few paid off cheapo cars, but then applies for a $600K house, their score for that transaction should be in the toilet and only makes any sense at all if taken in context of their REAL income and assets, down payment etc. Thus, say my score is around 800 - a very good rating, but my history included NO major purchases, for that transaction it should be very low, given there is no historic data on me for paying off $600K loans etc, even though I may have paid off several cars and credit cards over time. Also, say a person had a previous mortgage, but in the $150K range, what life changes occurred to now allow them to repay one 4 times greater? Thus, ALT-A = Subprime to all intents and purposes and these loans will fail catastrophically once they reset. This will take a good bit longer given the longer teaser rates typically afforded those with superior credit.
What are you guys talking about? She’s criticizing the over-simplified easy-money system that resulted in tons of bad loans being made. That’s not “feel good” at all, it’s more or less what most of us have been saying around here.
“What are you guys talking about? She’s criticizing”
We’re talking about how a lot of this knew this two years ago, where was she? Hence the “duh”.
Where she was was, criticizing the 2005 bankruptcy bill. She WAS saying that subprime loan originators were taking advantage of people. She IS a bit of a typical Cambridge bleeding heart, rarely seeing borrowers as blameworthy.
We’ve all said it at least once before. Credit score without income is a worthless measure.
I’ve learned a lot about “fixing” FICO scores. It is not that difficult. In fact, you can sue you way to “good” credit.
http://www.debtorboards.com
Heh. You know when the pages start with “Lorem ipsum…”, you’re working with a winner.
http://www.debtorboards.com/wallofshame.html
oh that was so gooood! Got a really good laugh out of it , thanks. But hey what is going on that is just too grude and sloppy to be for real…
When you click on “Contact us” it comes up “Page not found.” A very reputable site indeed!
Yes, and “Latest Success Story” dated….12/2/2005! Wow, 18 months ago, they helped someone….
That looks like what happens when you don’t pay your webmaster - they deliver the site in the state it was in when the last check cleared.
“Former Federal Reserve chairman Alan Greenspan said he sees a 2-to-1 chance that the U.S. will avoid a recession even as the economy slows. ‘At the moment, I still say as I said before, by algebraic implications, the odds are 2 to 1 we won’t have a recession,’ Greenspan said today, according to a recording of his comments.”
I suppose thats one way to say 50% chance of recession. What were the chances when he spoke in Japan a month or so ago, 1 in 3 in favor of a recession?
33% rather than 50%, but that’s still a remarkable statement from AG.
Greenspan is like one of those “golden parachute” CEO’s that leave a company right before it goes down the tubes. At least with those guys you never see them again because they take all their money and retire.
Greenspan is different he’s taking salt and rubbing in the wounds of all the poor economic choices he made. I wish this old kook would either go away or fess up to the credit bubble he designed after the dot com collapse. Nobody wants to hear his nonsense now.
Good point. Forbes carried an article about two years ago called “The Bernanke Bust” — by which they meant the HOUSING bust — and made exactly this point, that poor BenB was taking over an aircraft doomed by Greenspan.
Anyone who was stupid enough to listen to Greenspan deserves what they’re getting.
‘Do your own due diligence.’ ‘Research it yourself.’ ‘Do your homework.’
Or, my personal favorite, ‘Get the Big Mac out of your mouth, turn off the television, get off your fat lazy a$$ and look it up.’
thank you for correcting my lack chance/odds/bookmaking understanding…..now I know why Ive never been to Vegas, or bet a horse, or anything else that has to do with odds…. odds are I would be throwing money in the toilet.
“Horse sense is the thing a horse has which keeps it from betting on people.”
W.C. Fields
Took my son to a movie in Elk Grove CA last night, and we were the only ones in the theatre! As you may recall, Elk Grove is/was one of the fastest growing cities in CA. This theatre has 12 screens, but it was a virtual ghost town. Me thinks there’s no HELOC money left in Elk Grove. Oh well, this renter enjoys private screenings. No recession indeed!
Pretty soon you’ll have to verify you’re a renter for credit cards or checks to be accepted. Signs in shop windows will soon state “We reserve the right to refuse service to homeowners”, followed by “Renters Welcome”.
“We reserve the right to refuse service to homeowners”
Why not? Until recently, it took more finances to rent a home than it did to buy a home.
Renting required good credit, verified income, and an actual deposit of money.
Buying required only a pulse and heartbeat, you could “state” (ie “make up”) your income, and you didn’t even need any of your own money to close. (Actually, you could even get “cash back on closing”).
Who would want to take a risk extending credit to a recent homebuyer?
“Renting required good credit, verified income, and an actual deposit of money.”
how true. i just rented a new place and had to show all the documentation of income,fico,and when the epole saw my financials they were like you sould buy a home!
i was like no il rent it for half the price
thanks but no thanks
laughing all the way to the bank
You bet. I have had that conversation several times. “If you have that kind of money, why don’t you buy?” To which I reply with some socially acceptable version of “Because I’m not mentally retarded.”
When I got my place the woman in the rental office said she had never seen that high a credit score. And I don’t think my score is all that astronomical, mostly because I don’t have any debt to be making payments on to boost it up. I never thought that is was because everyone in this area who could possibly buy did buy and only people with bad credit (and few others) were trying to rent.
By the way, I think there was a $100 fee, but no deposit of any kind was required. Nada. Nothing. Zippo.
I concur. Many LLs will NOT rent to persons with poor or below-average credit history unlike the mortgage lending industry who will GIVE these persons 100s of thousands of $$$. Realtors, normally very hard on renters regarding credit scores (”Rental Application” in addition to the “Lease Agreement”) etc, have had no problem promoting house buying to the opposite.
~Misstrial
Hah hah …. it’s harder to get a rental than a loan with bad credit because the person renting actually cares about whether they will get repaid.
What irony — all the power of the mortgage industry, with an army of brokers, processors, underwriters, administrative staff, marketing, and computer-modeling is no match for an individual owner and/or property manager who can run a credit check, and call your old landlord.
I’m sure a lot of you already realized this — but it really just struck me right now, and I find it hilarious.
I moved into a large house last October owned by a stuck flipper. My FICO is 785. My income is 23 times the rent. He wanted me to buy the place. He paid 760,000 for it in April, but could not sell it. I pay $2,000/mon rent. He adds $3500/mon to the rent and sends it on to the lender. When he was finally convinced I did not want to buy the place, he admitted it was a smart move and I would not regret it. The latest sale for the exact same model: $515,000.
When the prices get to $430,000, it will make sense on an after tax basis to buy one. Might happen going into winter 2007, and definitely will happen in 2008. Four houses are bank owned, 4 more were posted NOT’s this weekend, and 10 more in NOD within the last month.
Sacramento is going to be a washout.
Isn’t Elk Grove where all the homes are filled with hydroponic marijuana?
I think thats actually called Lotsa Towns, USA
It’s hard to pony up a Sawbuck for the movies, no?
I haven’t been to a movie since 2003. And I’m not hearing about any must-see movies this year.
As you may recall, Elk Grove is/was one of the fastest growing cities in CA.
Not any more!!
When I was in college putting a box around the final answer was not good enough for full credit, you had to SHOW how you reached your final answer.
I understand the good professor is using qualitative analysis over quantitative, but to say “by algebraic implications” is not descriptive enough for me. He has drawn his box around the final asnwer, with no explanation as to how he got there.
I think he simply hired some illegal alien to throw darts at a chart on a wall. Either that, or he is talking out of his a$$. (As usual.)
Got 10% down?
Can’t wait for Greenspan to steal a page from the NAR play book and explain that “all recessions are local”.
Actually, Greenspan will use the quote from Ed Koch, former NY mayor: “I got mine”.
2-to-1 we WON’T have a recession means 1-to-2 we WILL have a recession.
Greenspan obviously doesn’t gamble much, because he just effectively said that there’s a 66% chance of a recession.
Actually two to one means a 33% chance of recession. I can’t believe I’m defending AG but I don’t think he changed his odds just murked them up with confounding language. Two time no recession to one time recession is one out of thrre possible outcomes or 33%.
Retirees have to get their jollys somehow. Watching reporter’s eyes glaze over trying to convert the ratio of 1 to 2 into a fraction is about all the excitement I’ll likely be able to stand at his age
“The crisis that has swept the U.S. subprime mortgage industry may come down to a simple, three-digit number, multiplied by millions. Lenders in the midst of an unprecedented U.S. housing boom pared borrowing requirements to a minimum, a single number, known as a ‘FICO score,’ that was supposed to reflect the borrower’s ability to repay a mortgage.”
All MBS investers focus your eyes on those FICO scores, and ignore how the size of the loans in the pool compare to the buyers’ incomes and other available means to repay the loans.
No, they keep their eyes on the credit ratings, and the credit rating agencies “ignore how the size of the loans in the pool compare to the buyers’ incomes and other available means to repay the loans”.
It’s like there six degrees of separation between those that actually meet with the borrower, and those that end up taking the risk. Like a game of “telephone”, the message of risk gets murkier and murkier with each re-telling, until it looks like all risk has disappeared at the back end. Trouble in paradise.
Seriously, only fools would believe that you can take a bunch of MBS, pull out the good stuff and label it AAA grade… then take what’s left over (clearly not AAA) and basically mix it up, and now have a new tranch of stuff that rates as AAA. Then take what’s left (even worse stuff) and mix it up and get again… you guessed it… AAA rated bonds. Rediculous.
I wish my life were like financial “innovation”.
Because then after I’m done eating, I could take a crap. I could then take that crap, and mix it around, and come up with Filet Mignon. the stuff left over after the Filet Mignon (even worse crap) could be mixed up again, and I could create Dom Perignon from it. Then with the crap left after that, I could mix it all up in yet a different way and create Creme Brulee.
I don’t see how this could fail!
it’s like financial alchemy: turning crap into gold.
“it’s like financial alchemy: turning crap into gold.”
Alchemists are always in great demand and are always paid handsomely…until the misdirections and head fakes that they use are revealed. Then they slink away into the shadows, and all everyone is left with is a pile of gold-colored cr@p.
F-n knarly!!
They’ve simply got the Midas Touch…
In reverse.
Crap Brulee for all MBS investors! LMAO!
I’m visualizing someone using one of those little torches to carmelize the surface of a creamed turd poared into a ramekin. Mmmmmm-mmmmm!!
If you add a turd to the punchbowl, the effect is not dependent on how small the turd is, or how big the punchbowl.
That’s not exactly right. The bonds are AAA because the money that does come in goes first to those bonds. So you can have huge defaults, but AAA still gets paid while the lower-grade bondholders get screwed. The effect is to provide a much greater contrast of risk than exists in the range of mortgages that pay the bondholders. What is made more secure on the top is made even less as you go down.
So the real danger is for people holding sub-AAA paper. They are going to lose a lot of money. They are incurring a lot more risk than they are being paid in yield… all the while they thought “Hey, more yield! It’s still investment grade, after all… What could go wrong?”
You have to be careful when talking about tranches. There are a variety of schemes, but the usual is the waterfall approach, where (say) tranches A, B, C, D are set up. Interest payments (from the servicer) are divvied up among the tranches, proportional to the principal in each tranche. As loans are paid off, the payments first go to tranche A (which then has lower capitalization, but the holders have cash in their pockets). Whether a tranche is AAA etc is purely a function of the rating agencies such as S&P or Moodys- it could be that none of the tranches are rated AAA, or (conceivably) all of the tranches could be rated AAA.
It is also not necessarily true that the first-paid tranche is the most valuable. All CDOs come with payment guarantees of some kind or another. For non-agency CDOs, the guarantees are only good as the guarantor (the lender, securitizer, or a 3rd party)- if the guarantor looks weak, S&P will downgrade the tranches, especially the lowest tranche, because it might lose money in case of defaults. However, CDOs based on FHA or VA have government guarantees behind the mortgages, so mortgage defaults will not hurt any of the tranches. In the latter case, the main ‘risk’ to CDO holders is what is called ‘prepayment’ risk. That is, if you are holding mortgages paying 6% and interest rates rise, you will hope the holders prepay their mortgage so you can lend the money out for more. If interest rates fall, you hope that prepayments DROP, so that the money keeps paying higher interest. In this case, prepayments go first to the highest tranche, so in the case where interest rates are falling, the ‘lower’ tranches could become more valuable than the higher tranches.
Again, it is the case that ALL of the tranches could be rated as junk, in the case where the mortgages are defaulting AND the guarantor is insolvent. I am not sure of Fremont MBSs (for instance), but if they didn’t have a 3rd party guarantor (credit swap, mortgage insurance, Fannie Mae, etc.) they would be a candidate for a lousy rating for all tranches.
What’s funny is I consider all of this financial innovation essentially rule based investing.
Rating of x=Spread of y
FICO of z=Loan Terms q
We’ll buy AAA rated paper (regardless of what the fundamental holdings are…). We’ll lend to a 700 FICO, (regardless of whether the investor proves their income).
In my opinion, this is not any different than “buy every stock with P/E of lower than 20 or sell any with P/E greater than 30″. It’s a CYA society, no one wants to take responsibility for their homework or their decisions, so they base their decisions on someone else’s homework, someone who is pedigreed (Moody, Fitch, etc.).
It’s the “no one gets fired for buying IBM” philosophy.
…a ‘FICO score,’ that was supposed to reflect the borrower’s ability to repay a mortgage.”
“Supposed to” being the operative words here. I have an excellent FICO score. However, if I had allowed myself to get caught up in the madness of the past few years using adjustable rate loans, I guarantee I’d be defaulting.
““Supposed to” being the operative words here. I have an excellent FICO score. However, if I had allowed myself to get caught up in the madness of the past few years using adjustable rate loans, I guarantee I’d be defaulting.”
Well said. I was perilously close to making such a mistake in late 2004 (buying before selling first). Surfed for some common sense interpretation and found Ben’s blog. Sold, rented, saved.
Yup same here. Guess that is why we have good scores - if good score = good judgment.
“Supposed to” ….and the supposition is based on a history of performance….which is based on a set of “rules” or lending parameters based on years of data accumulated which (over the last five years) became utterly meaningless.
If the rules hadn’t changed, the initial supposition would still, likely, be valid (baring some other economic catastrophe). But the rules, the limits on mal-behavior, did change and what once was reasonably predictible behavior became totally unreliable borrower behavior.
Maybe the investors and the brokers didn’t understand what was going on “beneath” them with respect to the lending games that were going on, maybe they did and didn’t analyze it properly. Whatever the case may have been they are screwed because they played a game where they didn’t understand the fundamental rules could be changed without their, direct, participation.
When you think about it; what a wonderful situation the executives of these subprime lenders must have seen laid out before them:
Originate anything and get paid enormously for it…..whenever the music stopped and the quality of their loans was of no absolutely no matter. On top of that, get options on your stock, ride it for all it was worth and (since you’d be the first to know when the jig was up) get out at the absolute top. Talk about a two-fer!
I wonder if how much of this was an accident that simply evolved “naturally” and how many, sharp, mortgage executives knew PRECISELY how it would play out from the begining?
I guess all the sophisticated risk managment software really looked like this:
bool IsGoodApplicant(int FicoScore)
{
return FicoScore > 600;
}
More like:
If (collateral == house)
{
approve_loan();
}
Nothing like some good coding humor to liven up the afternoon…
try {
if (payday) write_payroll_checks();
}
catch (…)
{
// NULL
// AAA baby! - We don’t need any stinking exceptions!
}
if (HasPulse(Applicant) && Collateral == House)
{
float LoanValue = AppraisalPrice(House) * 1.2;
ApproveLoan(LoanValue, Applicant);
}
then shortly after -
try
{
while(teaserRate == true)
{
MakeLoanPayments(minPayment);
Principle = OriginalPrincipal + UnpaidInterest;
}
throw new CannotPayException(”Payments exceed ability to pay”);
}
catch(CannotPayException ex)
{
If (EnoughMoneyInTheUniverse == true)
BailOutVictimBorrower();
esle
Fail();
throw ex;
}
Nice! I like your re-throwing idea.
Now we’re talking, GH. Problem is, the ISR that updates teaserRate in real time hasn’t been written yet, so it’s just stubbed as true in the header file right now, and none of the code after the while loop has even been fully tested yet. Definite chance of the whole thing blowing up before the last exception can handle things as originally envisioned. I think the first attempts to write BailOutVictimBorrower() ran the system out of memory during unit test. Virtual memory also ran out and the whole thing had to be power cycled. Nobody has tracked that one down yet because the analyzer was running on the same machine and the trace couldn’t be captured.
LOL
You are right, the program is not supposed to be tested before running as we are in uncharted waters, and it is missing a critical line in the while loop
if (Principal > OriginalPrincipal * 1.1 || DateTime.Now() > DateX)
MinPayment = CalcFullPITI(Principal); // Program generally fails at this point.
with regards to rethrowing the exception since the entire machine has likley overheated and shutdown, or has been stripped for parts it seemed like more of a nice touch.
I think it’s more like
bool IsGoodApplicant(int FicoScore)
{
// return FicoScore > 780;
// return FicoScore > 720;
// return FicoScore > 650;
return FicoScore > 600;
}
ROFL
“Consumers are spent. Retail sales tumbled a record 2.4 percent in April from a year earlier, … the worst performance since the trade group began tracking sales in 1970.”
…said Arnold Aronson, managing director of retail strategies at Kurt Salmon Associates in Atlanta. ‘It’s going to be rough sledding for a few months until the whole psychology about housing prices and housing sales and mortgages starts to stabilize.’”
—————–
I hope they are not basing their future plans on this “stabilizing” within a “few months”.
losing 10-20% on your home value is a psychological event
cool
“losing 10-20% on your home value is a psychological event”
Tomorrow it will be labeled a medical symptom, become a medical disease covered by medical and disability insurance. The path leads back to financial extraction from the working class who save to bail these idiots out.
don’t laugh being fat, drunk or bummed out
are already deases’s
and fools wonder why med insurance is expensive
Over-Leverage-Itis or OLI Syndrome.
10% down payment, 90% loan, instant flip, 7% selling costs:
10% gain on asset market value => 23% gain on down payment “investment”
10% L o s s of asset market value => 163% loss on the down payment “investment”
And his position is that the market “psychology” has to stabilize.
Huh? Retail is slumping because people are tapped out and overextended. Does this mean that prices across the board will come down now?
n’ah. They’ve taken a lesson from David Lereah, and so they’re crossing their fingers and toes too. Also burying St. Joseph statues upside down. Not to mention probably giving campaign donations to those that can help grease the “bailout” wheel…
Hey, at least Arnold is acknowledging that there is problem. The rest of them are just chalking it up to the bad April weather.
Just came from the local out patio furniture store. A mom and pop operation( in Sarasota). They claimed traffic was down “at least” 50%.
Sure, just a few months! like, 60 or 72 months.
yeah, North GA Dave
I too was wondering how they could start out the article saying “consumers are spent.” but then end with this: ‘It’s going to be rough sledding for a few months until the whole psychology about….”
What’s psychological about about being spent (you either have cash or you don’t)….
what is going to make that “feeling” go away in just in a few short months (are we all receiving a refund from banks/Wall Streeters?–oh sorry we rigged the game and withheld too much from you—-carry on with that “support the economy” thing now, ok?)
Maybe the president will give everyone another “tax rebate”. I know that an extra $300 in my pocket will make all the difference to my psychology as I consider squandering $80K of savings on a depreciating asset…
“‘It’s going to be rough sledding for a few months until the whole psychology about housing prices and housing sales and mortgages starts to stabilize.’”
Force the entire nation at gunpoint to read/watch ‘The Secret’ until we all have happy thoughts and the bubble inflates again. Or, if that doesn’t work, lobotomies for all FB…
“‘It’s going to be rough sledding for a few months until the whole psychology about housing prices and housing sales and mortgages starts to stabilize.’”
Force the entire nation at gunpoint to read/watch ‘The Secret’ until we all have happy thoughts and the bubble inflates again. Or, if that doesn’t work, lobotomies for all…
Ooops. Sorry about the the doublepost…
Thanks for making me laugh. Perhaps they could get Ramtha to impart words of wisdom.
Hmmm, on a similar vein I guess the Rajneeshpuram “investors” were just a mite early with their investment… They should have waited 20 years to invest their entire net worth with a scammer AND GOTTEN BAILED OUT
Today’s Master Of The Obvious (MOTO)
“‘There is no doubt there is a slowdown going on in the U.S.,’ Greenspan said. ‘We are clearly having troubles in the capital investment area, as well as potentially in the consumption area and obviously housing being a significant drag.’”
lil Weird Al Greenspankovic
dude, can I get a drag off your house bubble?
According to the Credit Suisse “Adjustable Rate Mortgage Reset Schedule” we all know and love, May or June marks the start of the next peak in ARM resets. The actual peak is in November or December. Pull up a chair and grab some popcorn, this could get interesting.
(I still say, recession talk gains some real ground Christmas ‘07).
http://www.njrereport.com/images/armresets.gif
I can’t see enough of that chart.
Too bad there isn’t a t-shirt with that chart printed on it. Would be great to wear to RE open houses…
cafepress.com
Great idea. I just went on to cafepress.com and made up a T-Shirt. Had to expand the image to 150%, but it looks great.
Only graph I saw was of the deficit. A little more specific please?
“Only graph I saw was of the deficit. A little more specific please?”
ARM resets:
http://www.njrereport.com/images/armresets.gif
That chart should scare the heebie jeebies out of any FB. However, most will not survive to the reset (BTW don’t Option ARMs reset early if the borrower elects to pay the minimum payment? Or is that assumed in the chart?)
Notice how the option ARM kicks in later.
Or not as late, as many of those Option ARMs will have resets triggered by the loan balance hitting 110% of original principal balance (many within 2 years…).
I suspect the pain will be much more smoothed out than the chart implies.
“NovaStar Financial Inc said … a sharp increase in mortgage defaults and foreclosures … will reduce taxable income in the next five years.” What do you know, NovaStar read the Credit Suisse chart after all.
“mortgage defaults and foreclosures … will reduce taxable income in the next five years.”
But, but the RE agent said that I reduce my taxes by deducting my mortgage interest and taxes, and if I don’t have a mortgage won’t I be paying more taxes? Hee, hee.
It actually is kind of funny, when you take these little tidbits into account as well:
1. The standard deduction. If your mortgage expense is less than the standard deduction, it’s wasted (ie you would have gotten to write off that amount anyways). I think that the current standard deduction is around $10K. If your interest payment is greater than that, you are only effectively writing off the amount greater than the standard deduction. So if you spent $20K on mortgage interest, you are only writing off $10K more than someone using the standard deduction.
2. The AMT (Alternative Minimum Tax) is starting to reach lower and lower into the middle class. The AMT can reduce or eliminate your mortgage interest deduction.
3. There is a phase out for the deduction on the high end. So if you are making a great salary ($200K - $300K or so), the deduction starts phasing out until it is zero.
Realtors don’t usually tell you these things, just like they don’t tell you that you may be able to find a rental house for 1/2 the cost of buying and owning. Shouldn’t they be telling you that you should rent for a while, because “you don’t want to throw your money away on mortgage interest”?
“Shouldn’t they be telling you”….
That assumes they are “Real Estate Professionals” and not house salepersons. A professional in a given field would counsel you as to the best decision GIVEN YOUR CIRCUMSTANCES within a TOTAL perspective.
Like all too many things today, people equate a nominal designation of “professional” with someone who has their best interest at heart. Caveat emptor applies regardless of the service or product being acquired.
anyone have details on these land deals
2005 price vs the 07 dump off price
$47.3 million in charges against inventory, which was substantially against land,’
“Banks are taking more risks with their property lending so buyers of European and U.S. commercial mortgage-backed securities should beware, even though property markets are healthy, Moody’s Investor Service said.”
For which planet are they reporting?
http://en.wikipedia.org/wiki/Bizarro_World
Shut up greenspan you mad money printer.
Shut up greenspan you mad money printer.
How does one lose $121.7 Million in one stinkin’ quarter, w/o some sort of impact, Impac?
“Impac Mortgage Holdings Inc., a specialist in mortgages whose risk levels rank between prime and subprime loans, reported a first-quarter loss, hurt by a mark-to-market loss in the fair value of derivatives. The Irvine, California-based company posted a net loss of $121.7 million.”
Such a loss can have no real impact if the earlier reported gain was imaginary to big with.
“‘We took $47.3 million in charges against inventory, which was substantially against land,’ added Michael T. Vesey, Orleans’ chief operating officer. ‘We also took a pre-tax charge of $10.7 million for abandoned projects, representing the write-off of about 1,300 lots.’”
Hahahaha….sounds like the tables are turning on the housing market now. It’s even worse than I thought. I’m sure they’ll be hitting up Uncle Fed for some bailout money; only if the feds want to ruin the dollar and have the dumb flippers riot would they drop helicopter money. I think I speak for the housing bubble watchers when I say this: anyone who wants bailout money can kiss this bitchs’ behind.
Got Lube?
There once was a score named FICO
Turns out it was closer to RICO…
Maybe we are unduly pessimistic?
———————————————————————————-
FORECASTER OF THE MONTH
Gallagher wins contest by rejecting gloom
By Rex Nutting, MarketWatch
Last Update: 12:12 PM ET May 11, 2007
WASHINGTON (MarketWatch) — The doom and gloom predictions about the economy have gone too far, says Stephen Gallagher, an economist for Societe Generale and winner of the MarketWatch Forecaster of the Month award for April.
“The economy is very resilient,” he said.
Gallagher beat 42 of his peers to win his second monthly contest based on his forecasts for 10 key economic indicators. Gallagher won the contest by nailing the estimates for the trade gap, durable-goods orders, retail sales, the consumer price index and industrial production.
Gallagher has become more optimistic about the economy despite some recent soft numbers for growth and employment.
“The risk of a downturn is fading,” Gallagher said in an interview. “The basic support is actually improving.”
“It impressed me how quickly we’ve recovered from the gloom and doom of the subprime mess,” he said.
Gallagher used to be in the camp that expected the Federal Reserve to cut interest rates a couple times this year. But now he’s predicting no changes in the federal funds target rate.
“The Fed has done a good job,” he said. “The Fed has been smarter.”
Stephen Gallagher
Economist, Societé Générale
Forecast Actual*
ISM 52% 50.9%
Nonfarm payrolls 150,000 180,000
Trade gap $59 bln $59 bln
Retail sales 0.6% 0.7%
Industrial production -0.1% -0.2%
Housing starts 1.55 mln 1.52 mln
CPI 0.7% 0.6%
Durable orders 3.5% 3.4%
New homes 970,000 858,000 (OOPS! He was only off by +13%…)
Incomes 0.4% 0.7%
*Subject to revision
http://www.marketwatch.com/news/story/gallagher-wins-contest-rejecting-gloom/story.aspx?guid=%7B6A8C9E71%2D023A%2D482B%2DA5BD%2DD2B33B3D4DB4%7D
Delusions do run deep…
Hey, he’s the Forecaster of the Month! It says right there that he’s been right twice. That’s good enough for me. I’m going to believe everything he says from now on.
How can this bozo have the gall to crow when his forecast for new homes was off by +13%? Was it necessary to say “subprime is contained” in order to win the forecasting prize?
“Gallagher used to be in the camp that expected the Federal Reserve to cut interest rates a couple times this year.”
Sooooooo, he was wrong on this forecast? How far into the future is he forecasting? A quarter? A month?
That’s the thing I hate about this short-term forecasting business. It is all about the nearby trees in immediate view, never mind that approaching wild fire over the nearby ridge.
http://photos.signonsandiego.com/gallery1.5/070511catalinafire/smoke7
Classic survivor bias. Even though they’re all guessing, some random guy has to win, and when he does, he makes up a story about why he knew better than everybody else.
If everyone in the USA bet their life savings on the Super Bowl by flipping a coin each year, after 5 years there would be roughly 10 million people in this country who had multiplied their savings by 32, meaning millions of new multimillionaires. These winners would have plenty of opportunities to publicly take credit for their betting prowess, and yet we’d read almost nothing about the 290 million people who went broke.
“…he makes up a story about why he knew better than everybody else.”
Why did the name Elaine Garzarelli just spring into my mind?
http://www.smartmoney.com/pundits/index.cfm?story=garzarelli
This reminds me of a scheme that some con artists actually pulled off. They sent letters to a large number of investors, half of which said that a certain index would increase over the month, half of which said it would decrease. Of course, half of the time they were right, so the next month they sent a follow-up to the ‘lucky’ half of the group, and made similar predictions. After about four cycles of this, 1/16 of the original group of investors were getting pretty impressed (all four predictions were correct!), and these were hit up for money to get future predictions. The con artists walked away with their money, chuckling all the while…
We have heard that enough chimp typing long enough will produce the works of Shakespear eventually- so eventually SOME of the economists/forecasters have to look good, simply by chance. As J. K. Galbraith said:
“The only function of economic forecasting is to make astrology look respectable.”
Wait a second…
This isn’t “that” Gallagher, is it?
Hide your watermellon~
What???? “Of the month”???? Does the guy get his own parking space for a month or something?
Show me the yearly grand prize winner…that’s what I”m talkin’ about!
Kinda like a broken clock is right twice a day…Much like the builders who said we had a soft landing,and the slump is over..meanwhile they were offering 100k off prices with all the upgrades thrown in. It looked great for the next month. Now look at the headlines on this thread..The ‘Real’ #’s are leaking in, and we can’t take on anymore water…Keep bailing !!
You look at the property first when underwriting to determine if the value is there and what it’s resale ability is if it goes into foreclosure . That would mean hitting the mark on sale prices would be stupid .Lenders should of know that 40% increases in one year were speculator/sub-prime market driven and would crash .
Second , you would be looking for how much money the borrowers are putting down to downgrade the risk of the loan because they have skin in the game . The lower the loan the to value the higher the risk .Borrowers that have skin in the game do not walk as easy but more important in downturns the borrower takes the first hit on the loss.
Third you would be looking at the real ability of the borrower to pay the loan back including potential increases . That analysis would required looking at the type of job the borrower has , how stable is that employment , etc. etc.
Lastly, you would look at credit scores as the last factor in weighing risk . It doesn’t matter if a person has a high score if they lose their job or have a medical emergency ,so it goes back to the property value being solid and resaleable as the first consideration of risk. Also if your really doing your job as a underwriter you look at spending patterns of the borrower. Sure ,high credit scores show that the person has paid their debt in the past but how well can they perform with the higher amount of debt of a home mortgage .
This is why lenders use to sell off loans after they became a “seasoned loan” ,(meaning the borrower proved they were a good pay for 2 or more years ). In the past , Lenders would not give additional money to a new buyers from their equity until they had proven long term that they were a stable good pay and could handle the increased debt . In this market borrowers were pulling money out within a short time of the original purchase money loan without even showing long term ability to pay the original loan .
Also underwriting is required on loans by lenders to prevent fraud . Liar loans and a high % of speculators liar loans are fraud that inflates property values . Solid property values are the first consideration of lender underwriting remember .
Banks and investors got so worked up in the frenzy, that they decided to just chuck #1, #2, and #3. After all, loan volume equaled $$$, and foreclosures were at historic lows! Added to the fact that they made money originating and serviceing the loans, and not necessarily on holding the loans. Like House Inspector Clouseau said, sweep up the crud that you don’t want to keep, grind it up with some “fresh” meat, and sell it as gourmet sausage (ala Upton Sinclair). What could possibly go wrong?
Wizard, what an excellent summary of the relative importance of factors to be considered by Real Lenders (by which I don’t mean, Loan Originators). Property resale value, down payment, ability to repay. Scrooo FICO scores. I don’t even know how to get someone (else)’s FICO score. If I mess up on (1) and (2), it doesn’t even matter whether I am right about (3). The borrower has too much power when the deal is underwater.
The Good News = Real Estate Prices are Local.
The Bad News = So is your Bankruptcy and Foreclosure.
Got water wings Fbs?
All real estate is local, sub prime lending was ubiquitous.
‘It’s going to be rough sledding for a few months until the whole psychology about housing prices and housing sales and mortgages starts to stabilize.’
That’s the first time I’ve seen the word few to describe a number like 60.
“a few months”
I do not think those words mean what he think they mean…
“‘Although we did experience some strengthening in new orders through February, March did fall short of our expectations and the trend has continued into April, where our new orders were also disappointing,’ CEO Jeffrey P. Orleans said.”
Get use to these conditions. Without subprime, it’s the new market reality. It’s gonna suck.
When I left CA and came to ABQ in 2006, we bought a house here. I was burned from my job in CA and so now on a disability. I was having a hard time getting them to consider my disability income because it isn’t ‘permanent’. I have a good credit score also (as I wanted the fixed low rate loan). A manager at a bank had the gall to tell me I was a bad credit risk (even though at same job 16 yrs, all bills paid, and could pay house with cash if I needed too). He told me he had to protect shareholders of the company. I then asked about loans to undocumented workers, and how they verify their income. He shut up. I slammed any point, but got a loan through another entity. My point, these asshats have no clue how to judge someone’s credit worthiness. They don’t have a clue what people are going to do in a completely unknown scenario.
Anyone in the Bay area now - what would you think of someone who now just spent $1.4M on some 2900 sq ft home in San Jose. Friends of mine that I hadn’t talked to for a year. I thought I had educated him on the bubble a year ago, and he would just stay in the house he could comfortably afford (wife and him are both IT engineers and do earn a good living). My jaw dropped when my wife told me they had bought such a house. All I could think of was “good luck”. I think it was a dumb move.
Odds are your friends paid with an IO loan. Assuming they somehow had $400K equity from a previous sale (do they?), an IO mortgage at 6.5% for $1million is exactly 65K a year. Add to that about 1.8 percent in taxes+insurance — another 25K and you’re looking at $90K year in carrying costs.
That works out to be $7.5K/month.
Even at a combined $250K/year in salary, $7500 is a tough nut. What about emergency funds, college savings for kids, the BMW payments, vacations to Maui, etc.etc.
OUCH.
Whenever I think of buying a house, I think of my hard-earned, after-tax, cash, down payment, NOT the monthly cost (although important). Ultimately if I for some reason can’t make payments (illness, job loss, etc.), I’d like to be sure that I could sell, get that equity back out, and use that to live on (rent) for a while.
As of right now, no down payment is safe…
I’ve bemoaned this a few times already:
my best friend just bought 714 sq ft condo in SF proper for $800,000.
at least your friends got a house you can actually live in! and at least their home is under $1000/sq ft. (heck, it’s even under $500/sq ft)!
“‘With the direction it’s going, I’m not sure there’s any immediate light at the end of the tunnel,’ said Arnold Aronson, managing director of retail strategies at Kurt Salmon Associates in Atlanta. ‘It’s going to be rough sledding for a few months until the whole psychology about housing prices and housing sales and mortgages starts to stabilize.’”
Psychology HELL!…I BELIEVE that your jolly Housing SCAM SLEIGH RIDE just missed the bend and took OFF OVER the Frigging CLIFF
I periodically drop by a local watering hole in the evenings to talk about sports and all with the locals. This is in Orlando and it is a cheap neighborhhod type haunt. No fru fru types but a lot of business types drop by as well.
Last night the bartender who probably poured a drink for Moses was really glum and I asked what was up. He said, “dude it is happening again.” I asked what the hell he was talking about. He said,”the economy is tanking again as business is off about 40%”, and his tip jar was sucking air. I said I thought the bar business got better when things went south. He told me that people go home and drink when it is bad. Is nothing sacred?
sounds like spillover to me , better report it
“‘We expected a slowdown in 2007 but not to the degree we’re seeing,’ said Michael Niemira, the group’s chief economist in New York. ‘Anything that is home-related is really hurting.’”
What does he know? The really smart people in government say it’s contained.
If one and only one regulation came from this bubble disaster, I hope that they SIGNIFICANTLY alter contracts and reported sale price to reflect all incentives to the buyer.
We got out of whack because of huge cash-back deals that weren’t clearly in the contract, that became part fo the comp, that let other cash-back at closing flippers to further inflate the market…
Strong laws against “cash back at closing”. Any incentive that directly compensates buyers expenses comes off the sale price for stats and comps.
http://biz.yahoo.com/bizwk/070510/may2007db20070509123960.html?.v=1
Day late and $200K short you jerks.
Darrell,
If you have read here for any length of time, you realize that Housing Wizard and I have both beaten this horse to the point of exhaustion…
Ok, I need to briefly call attention to something.
There were some recent “investigative reports” on the local Sacramento TV news about some broker accused of scamming some real estate “investors”. Stated loans were involved, possibly inflated appraisals, etc. There are a few lawsuits getting underway.
The interesting part is, the person accused of the wrongdoing is responding to posts on the Sacramento Landing blog, and is commenting there right now as I type. If you have any constructive info to add to the conversation, please feel free…
http://sacramentolanding.blogspot.com/2007/05/as-fraud-turns.html
“The purchase could signal the start of a contraction in the homebuilding business at a time when sales are slumping. ‘We are at the beginning of a lot of changes in this building market right now,’ said Dallas housing analyst Ted Wilson. ‘There will probably be more consolidations.’”
By what percent is home construction down from the peak already? I believe it was around 40% off peak on a national level the last time I checked. So what is this analyst talking about when he says we “might be at the start of a contraction in the homebuilding business?” Congitive disconnect strikes on a daily basis in discussions of the housing situation…
I believe that my friend did put $400K into this home (from sale of their townhouse). I would have stayed in the townhouse if i were them. It was a fine place, walking distance to the park for the child, safe area, close to their work, etc. Everyone’s sense of ‘entitlement’ - even when they have been pretty frugal and make decent money. I am just figuring they bought a falling knife. I have basically the same size house, but paid 1/5 the price for it (and that seems way high enough for me). And a bank told me I was a bad credit risk because they can’t ‘validate’ my income according to their guidelines, and ignored the fact that I have more money saved (most in retirement acct, but still mine) that my mortgage is. They would take a letter of employment (only as good as toilet paper for many from my former company that were axed the next month) as a form of security. I tried to argue my disability income was more secure, since it was subject to extensive medical review and my ability to replicate my income on my own. Unbelievable bunch of asshats where their ‘logic’ makes no sense.
I believe that my friend did put $400K into this home (from sale of their townhouse). I would have stayed in the townhouse if i were them. It was a fine place, walking distance to the park for the child, safe area, close to their work, etc. Everyone’s sense of ‘entitlement’ - even when they have been pretty frugal and make decent money. I am just figuring they bought a falling knife. I have basically the same size house, but paid 1/5 the price for it (and that seems way high enough for me). And a bank told me I was a bad credit risk because they can’t ‘validate’ my income according to their guidelines, and ignored the fact that I have more money saved (most in retirement acct, but still mine) that my mortgage is. They would take a letter of employment (only as good as toilet paper for many from my former company that were axed the next month) as a form of security. I tried to argue my disability income was more secure, since it was subject to extensive medical review and my ability to replicate my income on my own. Unbelievable bunch of asshats where their ‘logic’ makes no sense.
“Banks are taking more risks with their property lending so buyers of European and U.S. commercial mortgage-backed securities should beware, even though property markets are healthy, Moody’s Investor Service said.”
…
“Philipp said it was ‘better to get a flu jab when the body was healthy’ but cited growing signs of lax lending in the United States. Among these was a rise in loan-to-value ratios to more than 110 percent from just over 90 percent in 2003 and a growing share of interest-only lending.”
WTF, is this a rerun from 2005? Thank you for those keen observations, Captain Obvious!
ok, here I go. I became disabled as a result of being a Police Officer{flame on, am to far gone to care} and saw my income drop by a 2/3rd. Thus a $200,000 home is out of the question for LIFE. My competetion was the subprime people, despite the fact me and my wife had excellent credit, income forced us to compete. What I saw amazed me, people out living their means was rampant at house showings. Thus we moved to a small town in PA., and pay $475 for rent and save the rest of the money. The most I would borrow to own a house is $125,000, thus Elmira NY might be our next move(house’s are very cheap there}.
Cen penna,
I drive thru Elmira a couple of times a year to visit family who live in the burbs of Buffalo. It’s a nice little town. For what it’s worth, there are also some prettier places near Rochester, on Lake Ontario, where the prices are coming down a lot–Henrietta, for example, if you like to fish or go boating. Just wait, though, at least til after summer.
And keep an eye on those property taxes–upstate is famous for high rates. Allentown, Pa. is pretty similar to Elmira–and I think PA property taxes are lower. Worth keeping in mind.
My competetion was the subprime people, despite the fact me and my wife had excellent credit, income forced us to compete.
How do you figure you were “forced to compete”? I’ve been renting since 2004 precisely because I REFUSED to compete with every ‘how-much-a-month Harry’ who, unlike me, were eager and willing to take on reckless levels of debt to fund their “dream” and beyond-their-means lifestyle with some else’s money.
The worst part of the FICO manipulation is that some of us have paid bills on time for years and actually have FICO scores in the 800 range.
Now our actual FICO scores have far less meaning than they once did.
Un Fing believable!
WTH regarding the greenspan comment/quote article
What time this afternoon did this change from 1 in 3 recession to 2 in 3 against …
manipulation at its finest i guess.
spin spin spin
I am continuing to feel warm and fuzzy about the economy
sarcasm*