Consumers Not In Panic Buying Situation
The Providence Journal reports from Rhode Island. “The sharp rise in home foreclosures, according to data cited by U.S. Sen. Jack Reed, follows a run-up in house prices at a time when wages have remained largely stagnant. Reed and local housing officials yesterday laid much of the blame for rising foreclosures on mortgage lenders who sold borrowers ‘interest only’ loans with low teaser rates that are now adjusting upwards.”
“The homeowners are people such as Aida Maria Jansen, who got a no-down-payment loan less than a year ago to buy a $250,000 house that she cannot afford.”
“‘I didn’t even have a job,’ she said at the news conference. ‘They told me my payments would be $1,200 a month and to get a roommate.’”
“Aida’s mortgage was actually two loans which totaled about $2,000 a month. Last year, Jansen earned $11,212, according to her tax returns. ‘I have money for two more payments and them I’m totally broke,’ Jansen said after the hearing. ‘In nine months I’ve paid $18,000 on that house…I’m exhausting everything.’”
“Jansen said that she never should have qualified for the loan. ‘They all ripped me off,’ she said. ‘They put double my income to get this mortgage.’”
The Buffalo News from New York. “The buyers are well-heeled, even affluent, and their new homes will be among the most expensive ever built in Buffalo, luxury lakefront condominiums with price tags as high as $659,000.”
“And to help ensure the upscale condos sell, City Hall added an incentive, a 10-year break on property taxes. All at an average savings of about $100,000 for each home buyer.”
“‘I’ve never heard of such a thing,’ said Michael J. Wasylenko, a professor of economics at Syracuse University.”
“‘This is found money,’ said developer Carl Paladino. ‘The city is giving away tax revenue that doesn’t exist today. Besides, don’t we want wealthy people moving into the city?’”
“To hear Paladino talk, tax breaks are the difference between the project making money and losing money. He said the benefits help bridge the gap between the project’s high construction costs and, by national standards, the city’s low real estate values.”
“The tax breaks allow for higher prices, but Paladino said the higher prices are needed for the project to finish in the black. Not everyone buys that. ‘We don’t see any reason why it’s necessary to give tax abatements to prospective luxury homeowners,’ the homeowner association at a complex next door said in a statement.”
The Asbury Park Press from New Jersey. “If you thought the real estate market had hit bottom, think again. Increasing numbers of New Jersey homeowners are faltering on their mortgage payments, state and local records from the first three months of this year show.”
“At the current rate, there would be nearly 36,000 foreclosure filings statewide this year, up from 23,875 in 2006.”
“James W. Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University, New Brunswick, is concerned the state is in the middle of a multiyear housing down cycle, on par with the bust years of 1988 to 1992.”
“‘There’s no computer model that can figure this out,’ said Hughes, who studies regional economics. ‘We don’t know the full scale of the problems. If you bought in 2005 or 2006, you will be the one with the long-term correction. If you were a peak of market buyer, that’s a scary prospect.’”
The South Coast Today from Massachusetts. “With the numbers for the first quarter of 2007 in the books, Realtors are hoping they can finally shake words such as ’slumping’ and ‘cooling’ from the vocabulary describing the local housing market.”
“‘This is a wonderful time to buy a house,’ said Linda Hopps, president of the Greater New Bedford Association of Realtors. ‘The rates are great. The prices are good. There is a lot on the market so you have a lot to pick from.’ But ‘I think buyers are now afraid to make that jump because they keep reading everything in the paper that’s saying this is not the time to buy.’”
“Part of the frustration for Realtors is that the market is often compared to the real estate boom of 2003-05, during which prices were driven rapidly higher by a limited supply of houses, relative to the number of potential buyers.”
“‘The mind-set overall of the consumer has changed,’ said Ralph Grassia, president-elect of the Greater New Bedford Association of Realtors. ‘They’re not in the panic buying situation, which has taken the real estate market and made it more even.’”
“Caught up in the bidding frenzy, many new homeowners found themselves in over their heads with mortgages, taxes and utility expenses bigger than their budgets. Two or three years later, those houses are beginning to turn over.”
“‘There are a lot of them,’ Ms. Hopps said. ‘There really are. A lot of people qualified for mortgages for whatever reason and they didn’t look at the big picture.’”
new victim class for some pols to court
‘They all ripped me off,’ she said.
What disturbs me is that each of them is describing the purchase process as though it was a 2-minute procedure. “Well, I was just a”…; and, “This was on there and I didn’t”…; or “I never said that”;…and, “This is news to me, I couldn’t have”…. blah, blah, blah
Nearly every loan/purchase document requires a signature or an initial. They knew what they were doing.
~Misstrial
I don’t think it is as simple as that. Reading lots of stories about outrageous behavior by brokers. Massive fraud was committed. I think it is a combination. In some cases the borrower clearly didn’t read what they were signing. In other cases the broker lied, committed fraud, forged signatures, and totally ripped off the borrower. These people asked the right questions but got totally bullshit answers.
Lots of blame to go around.
You mean she didn’t know she was jobless when she was buying the house?
Exactly. Nevermind the loan type or payments, what the *&^% was she doing even shopping for a house with her lack of income??
She didn’t realize how much this would drain what little savings she had? My guess is she read somewhere that people were making money hand over fist buying real estate. So, she bought real estate.
In this case I agree it is the borrower’s fault. But you made a general statement and I think you cannot paint everyone with the same brush.
Lots of fraud committed by brokers.
“Jansen, who has visited a food pantry twice in the last two months, said she is in the process of applying with the state to adopt a child so that she can get some extra income to pay her mortgage. “They pay about $102 a week,” she said. ”
OMG, Did ya all get this? This 77 year old sea hag is in the process of trying adopt a child so she can pay her mortgage!!!
Like ex-cons, any FB given a bailout should be stripped of the right to vote. There’s too many of them for prison, and they’re too dangerous to be allowed to participate in a democracy.
Once again, I have to question the entire concept of “panic buying”. I have never heard this term used except when associated with a horrific bubble that always ends very, very badly.
Buying something is spending money people. If your in “panic” mode to spend money, I will just give you my address; you can mail whatever you need to spend down to me, and your panic will be solved. There is never, in a normal market, a panic to buy anything (except possibly the morning cofee at STBX).
Panic buying is a concept invented to keep blowing the bubbles up; it just does not exist in the real world (you know, where people pay for things with their own money, or at least money they intend to pay back).
I associate “panic buying” not with bubbles but with an unexpected interruption of supply when many people go into the grocery shop and empty the food shelves, with little regard to price. Buying while blinded by greed is something entirely different.
Agreed, and a much better description.
Panic buying? Like there is a national shortage of lumber or something! I forgot, we are running out of land. All those empty lots are an illusion!
I am tried of hearing “I did not know what my payment will be” or “I did have a job when I bought the house”
Grow-up people, you knew exactly what you were doing and now you have to live with your choices.
SCREW the FB, Brokers, and AGENT!!!!!
My wife and I want to buy a house, but we know what loan we want and what loans to avoid. I can read a contract and if something does not look right on the contract I won’t sign it.
I lost my house in the 90’s for a stupid reason. I was lucky I had family to help my wife and I out.
We are not making that mistake again. I rent till I die if we can’t find a deal we can afford.
Sorry for the venting.
I lost my house in the 90’s for a stupid reason. I was lucky I had family to help my wife and I out.
The problem is that people are, generally, ignorant about their finances and make stupid decisions. Sean from NEV learned from his mistake; many continue in igorance, relying on a family safety net to bail them out time and again.
I am currently bailing out a family member for a stupid financial decision. This is one of many bail-outs that my brother has solicited from family members because of his stupidity, greed, and unfounded optimism in his ability to make decisions. As the bailer-outer this time, I’m feeling pretty stupid myself…
Hey, he’s blood, you have to help him out at least once.
But don’t make it habitual. You’re not the Bank of Mikey(2).
Final score for my 2 sisters:
5 houses between them.
“he’s blood”
Yeah, whatever! I choose who I call family, and it has absolutely nothing to do with “blood”.
lol you don’t have to tell me… if I have any assets at the time of my croaking out, only one blood relation is going to be in my will. Unless I have kids. And they act right.
I guess there’s blood, and then there’s…family!
May I ask what you did to help him out? Shelter, help for the kids, helping to refinance a stupid loan?
“ability to make decisions”:
Do you mean the ability to make right decisions or the ability to make decisions at all and not to drag them out?
PeterT: I loaned him $25K to help him pay the purchase price for a business property lease, because the lease owner was going to sue him for nonpayment. He had received $100K last year as an heir to a relative’s estate, but decided to blow that on granite, stainless steel and marble tile. Has been in debt (credit cards, car loans, etc.) forever, and is now planning to open a business using the family homestead as collaterall and unsecured loans from family members.
“ability to make decisions”: Should have said, “smart business decisions.”
Helping relatives isn’t so easy. Maybe denying a loan can be helping, too, sometimes. I wish you a good judgement for how to help your brother.
Been there, done that. $7k.
I closed my bank down for good ten years ago.
Got 10% down?
inventory still going up in N VA may hit 100 this week in 22151.
Rent , who knows socialism may be defeated, even France is turning around.
IMO defense spending will get hacked in 09 and N VA could take a hit
OT:
One to Lie Awake at Night About
“At the end of 2006, there was $12,588,200,000,000 outstanding in household debt — defined as consumer debt and mortgage debt combined. But there was only $11,065,500,000,000 in personal income for 2006. (Those are trillions of dollars.) If the United States spent none of its personal income for one year on “trivial” things like food, shelter, taxes, and medical care, it would still be inadequate to pay off our car loans, home mortgages, credit cards, and other personal indebtedness. This was not true as recently as 2003.
“Source: U.S. Federal Reserve and the U.S. Bureau of Economic Analysis.”
but look at household wealth creation
l kudlow
OMG, this should send foreign holders of US currency RUNNING AND SCREAMING FOR THE EXITS!!!!! Hyperinflation on the way. I know that when homes are foreclosed on, the bank will take a loss on each property it can unload, but I wonder if they can collectively get down $1.5Trillion?
get ready for the banking machine to increase quality profit producing products such as, higher fees.
more surcharges and fees are banking bread and butter starving those living on bread and butter.
get ready for the banking machine to increase quality profit producing products such as, higher fees.
WTF…BofA is already there.
POS MF’s…
i have a question that hopefully someone smarter than me can answer.
if i borrow 500k to buy a home, money is *poof* created. if i walk away from that lone doesn’t the opposite happen? wouldn’t that cause deflation? a disappearing of money?
*loan*
Paying the money back causes it to disappear.
Not exactly.
If you borrow from a mortgage broker, they have money in their account they give to the seller. They sell the loan to a banker that packages it with others. The banker than sells that package of bonds to the bond market.
So the money isn’t created out of nothing.
Until the bank needs money and can’t get any from the bond market. Then they go to the fed to borrow the money. THAT is when the money comes, POOF, into existance out of no where.
The fed has rules, like you have to have x-amount of money on deposit for every 5x amount of money you borrow from the fed.
So, I deposit $500 at a bank. The bank then borrows $2500 from the fed, and grants someone someone a $3000 loan.
All this talk of fed interest rates is pretty much a joke. The reserve amount is where real “liquidity creation” occurs. Can they borrow $3 for every deposit dollar, or can they borrow $5 for every deposit dollar?
The only problem is that the x-amount on deposit is practically zero now.
“if i borrow 500k to buy a home, money is *poof* created. if i walk away from that lone doesn’t the opposite happen? wouldn’t that cause deflation? a disappearing of money? ”
Technically there are multiple processes involved, but for all practical reasons that’s what would happen.
Actually, there may be a disappearance of much more than 500k. That’s because your loan could be held as a security for much bigger loans.
If this is the case even a short sale which results in a smaller mortgage may cause a significant disappearance of “money”. In some cases foreclosure may be better for the lender since it may allow keeping the larger “security” longer thus colecting interest for longer time. Of course, it depends on what is the required reserve rate. However, loan owners like Fannie and Fredie are exempts from these requirements.
So, yes it will cause disapearance of a lot of money.
Whether it may cause deflation is another question. Remember the amount of dollars is huge and reduction of this amount by just a couple of trillions wan’t make much difference. However it will cause loses to the foreign keepers of dollars and may cause them to dump $$$$$$$$$.
This will cause a huge devaluation of dollars, which in turn will cause hyperinflation in USA, because all imported goods and services will be many times more expensive.
jmunnie, of course the income in personal indebtedness is a matter for concern, but I don’t see anything strange about the fact that TOTAL household indebtedness exceeds a SINGLE year’s personal income. For an individual, this would be like decrying a mortgage whose total principal value exceeds one year’s salary.
I’m not sure including mortgages in total household debt can be included even at the current ridiculous values. A mortgage is simply paying rent. That is, it pays for a place to live which 99,9999% of the population need. Over the years, property has held it’s value when compared to other items people get into debt over. For instance, food, automobiles, clothing, furniture (excluding antiques), vacations, are all diminishing assets from day one.
Of course, this craziness we are seeing in property will take years and years to unwind and a lot of people might end up living in one of their diminishing assets. Their cars. However it would be interesting to know what the figures are when mortgage debt is taken away from the overall household debt. That’s the number to be concerned about because there is nothing of value to back it up. It’s long been my feeling that government has simply switched “value” from gold to property (which is why gold will never be as important a financial asset as it once was) for many, many reasons including keeping the population stable and taxable. I suspect that a few decades ago, some bean counter like Easy Al suddenly woke up in the middle of the night and shouted, “Euraka! Property is the answer to controlling the economy!”
Or living in the box that their HDTV came in.
The picture is not adaquate as it does not take into account where the concentration of income and the concentration of debt falls out i.e. maybe the top 10% has 80% of the income but only 40% of the debt and therefore awash in liquidity while the vast majority of the population is up to their eyeballs in debt .
I agree with Az_lender that on first glance that overall picture lo
10% owns about 70% of US wealth, not 80%. The top 10% does also pays 70% of US income tax, meaning most Americans get a free ride…a little tidbit the left leaves out in the class warfare rhetoric.
Ed, a little “tidbit” you’re leaving out is that middle class Americans pay a much higher total tax burden as a percentage of income since interest income is undertaxed and because the middle class is disproportionately hit with SS taxes, state tax, state fees, etc. So sorry, my heart doesn’t bleed for the ultra wealthy, who can pay people to hide their wealth.
The 10% that owns 70% should pay more in taxes, for they’re a greeding bunch that obviously have way to much. Why should such a small group own the vast majority of goods? Let them pay.
The top 10% has to pay all the taxes, because they are the only ones that can. If we try to tax the lower or lower-middle, the economy comes to a screatching stop since our economy is built on the lower and lower-middle spending every penny that they can earn, borrow, or steal.
a geeding bunch that have too much?
Karl Marx would have been proud of you. 75 years of absolute failure and there are still people who believe in communism…amazing.
Warren Buffett has said that he pays a smaller % of his income in taxes than his secretary. And he thinks that isn’t fair.
Is Buffett a commie too?
And if you don’t believe me,
“There’s class warfare, all right,” Mr. Buffett said, “but it’s my class, the rich class, that’s making war, and we’re winning.”
Interesting statistic.
Ratio is about 1.13 dollars of debt for each dollar of income.
Is anyone aware of a source of historical debt/income data?
Would be most interesting to track this ratio over previous decades.
“Would be most interesting to track this ratio over previous decades”
LMAO
Exactly…who was Jesus angry with?…”Jesus”… like the guy nail gun stapled to the wooden thing…Is it true that all the nail guns @ Home Depot are made in China and the lumber comes from Canada?
–
“Panic Buying” is essential ingredient that drives rising prices into bubbles. If you don’t buy now, at whatever “market” prices, you will have to pay more. This is because had you bought earlier you would definitely have paid less. The bubble dynamics is not hard to understand.
The question is: How the other side of the bubble dynamics is going to play out? We are beginning to get some evidence in that regard.
Jas
$50k will buy you quite the house in Buffalo, to gently dissuade those of you on the fence, about jumping on this offering…
“The buyers are well-heeled, even affluent, and their new homes will be among the most expensive ever built in Buffalo, luxury lakefront condominiums with price tags as high as $659,000.”
I am looking at a summer/winter cottage on the lake shore with a view of the Apostle Islands. 45 ac + 1bdrm cabin 50K. LOL
No condo for you, then?
My husband and I went to Buffalo last weekend, and there’s some really nice houses dirt cheap in good areas. If he can get a decent job there we will move there, however he’s a patent attorney and I’m not holding my breath that anything will come up.
Syracuse is a little more likely.
You can also get a house for 15k if you like going to sleep to the sound of gunshots.
Fe fi fo fum, I smell Lereah’s work being done…
“‘I didn’t even have a job,’ she said at the news conference. ‘They told me my payments would be $1,200 a month and to get a roommate.’”
You would think that even a moron would realize that she needs a job to pay the monthly nut.
That’s why she was making less than $12k a year - she’s a fu#king idiot.
I only hope she’s not breeding.
Unfortunately these people are the ones that have 5 or more kids who all follow in their footsteps.
Why would anyone in the right mind want to room with someone who has no assets, no job, and a mortgage they can’t? So they can eat all your food and never chip in for toilet paper while you wait for the place to be foreclosed on. No thanks.
“Caught up in the bidding frenzy, many new homeowners found themselves in over their heads with mortgages, taxes and utility expenses bigger than their budgets. Two or three years later, those houses are beginning to turn over.”
There are a quite a few examples of this on the South Shore (MA). A few houses that came on the market this year were bought during the period 05/2005 - 08/2006, probably with the hope of flipping. Now, the some houses, with a fresh coat of paint & a new roof, etc., are on sale for about 5% less! Savvy buyers will probably offer another 10% less!!
You must be kidding::LOL. Great resources used on this article.Heroin dealers say it is a great time to buy heroin. VCR agents say now is a great time to buy VCR’s. Anyone who buys now will regret it for years to come.
There realt-whores who are quoted need translation. Allow me. Now is a great time to buy = I really need commission money
10% is a knife catcher and they will bleed for years. Wait, rent and buy for 30% off in Fall 2008
RE: Mazzholeland
I’m still waitin’ for the follow-up Sunday Globe, RE flipper hey-days story on the pair of secretary’s who bought 3 Dorchester multi unit’s (LMFAO-anybody got any idea how hard it is to run a lead paint infested triple decker? ) for a bout a mil, with the following, “I am woman here me roar” quote,
“We expect to turn these properties over in a year and pocket $600k. No problem…
Famous last words.
Kim Blanton of the Globe will write this one soon about how “The Man” is causing single mothers and their poor children to have to go back to renting instead of in the 600K McMansion. We should all help them keep their dignity by bailing out the dumb-arses
Linda Hopps:
Another one we should throw in the “F you, RE cheerleader” pile.
“‘This is a wonderful time to buy a house,’ said Linda Hopps, president of the Greater New Bedford Association of Realtors. ‘The rates are great. The prices are good. There is a lot on the market so you have a lot to pick from.’
I love the English language; how two words that are so close in structure have nearly opposite meanings: “realtor” and “reality.”
“prices are good” for anyone who can collect ‘em
Wait longer, and the prices will be even better.
I meant, prices are good for sellers - they don’t know HOW good - will certainly be lower later, as you BJS suggest.
I’m very careful about the people I have as friends so it will come as no surprise that I do not have a friend who is a realtor. However, it seems pretty obvious that these used car sales people (realtors) are given some kind of NRA handbook which gives them soundbite phrases to use when trying to sucker in potential buyer. The ones they seem to use most (well worn out by now I should think) is, “Now is a great time to buy,” or “Rates are really low,” etc. Sometimes there are slight variations such as that used by realtorwhore Linda Hopps but it’s probably not a coincidence that nearly every realtorwhore across the country use the identical collection of soundbites. If I was in the market to buy, which I’m not and never will be because I think there is a government hidden agenda behind the rush to get people to buy property, I think I would hightail it out the door the minute a realtorwhore smiled sharks teeth and said, “Now is a great time to buy.”
“which I’m not and never will be because I think there is a government hidden agenda behind the rush to get people to buy property,”
Interesting. I just heard on car radio analysis of market data being released. The commentator said, “If you can put yourself into the mind of The Fed, it looks like they want the housing market to slump…” in explanation of why the Fed hasn’t cut interest rates. If I were the interviewer, I think I’d have had a few follow-up questions.
Very possibly it’s a case of acceptable collateral damage by government. Look at it this way:
There are many more property owners now than there were say, 10 years ago (or should I say living in property they think they own until they miss 3 payments). When the dust settles after this mess, which really only covers the majority of those people that bought in the 2004/2006 period, MOST will still be in property they bought in 2000,2001,2002,2003. The big part of collateral damage will come from the 2004/2006 buying period.
My own feeling is that government factored that in. Now the Fed has taken away the low interest rate punch bowl (yeah, I know the Fed is a private bank and nothing to do with government lol) the prices will continue to drop.
Let’s say values drop to 2003 levels or even lower. In all busts and booms values always shoot past the expected top and bottom numbers. Now those that thought they missed the “buy property now boat”, will start to buy, what they are brain washed into thinking, are bargains. Because the Fed has tightened up lending, the new qualifiers will be reasonably stable. End result. Thousands and thousands more property owners (debtors) will have entered the government “stable cash cow” column. The number will FAR exceed the numbers created from collateral damage. Also, immigration will pick up either thru amnesty or some form of amnesty which allows illegals to become US residents (they have to to make Social Security secure for the next 50 years). Of course, there will be plenty (underline PLENTY) of excess inventory available over the next 10 years. The US is probably the most financially manipulated countries in the world and it’s in every aspect of day-to-day life from Wall Street to inflation and employment numbers to the price of gasoline. No move is made by US government UNLESS they have some kind of agenda.
Now those that thought they missed the “buy property now boat”, will start to buy, what they are brain washed into thinking, are bargains. Because the Fed has tightened up lending, the new qualifiers will be reasonably stable. End result. Thousands and thousands more property owners (debtors) will have entered the government “stable cash cow” column. The number will FAR exceed the numbers created from collateral damage
Nope, you’re dead wrong. There is almost nobody left to buy, and most people with the means to buy who didn’t buy, are smart enough to wait until this fiasco bottoms out.
Never mind what the Government and media say. When people personally know someone who has been wiped out in RE, that makes an impact. And very soon, that’s going to be everyone. That’s the reason why RE busts take such a long time to recover.
A house is a bargain when the total monthly outlay for buying is 25% less than renting the same property. Not a dollar more.
Here’s a mass email I got a hold of from NAR about CBS….from their president….
“I am disappointed and dismayed at the biased story that 60 Minutes aired on Sunday evening. I want to let you know that we’ve been working to stay on top of this story.
One of the most difficult challenges we face is educating the news media about today’s real estate industry. There’s no better example than this 60 Minutes show. For more than a year, NAR worked with the producers who put the segment together and offered several spokespersons to be interviewed for the show, including myself. Yet, NAR’s voice was strangely and noticeably absent from the segment though CBS gave time to two critics who disagree with our policies on the display of listings on the Internet.
At times, NAR and REALTORS® have often been the subject of less than accurate news coverage. Your association and its professional staff is making every effort to get the REALTOR® message out to the news media. The result is that only a fraction-less than five percent-of the vast news media we receive is negative.
We encourage all of you to contact CBS to voice your concerns — maybe have some of your satisified customers do the same.
Thank you for your support.”
Pat V. Combs
President
Pat should hang around here sometime –I can assure her that the amount of “negative news media” she will receive here will be MUCH larger than 5%.
I saw the “60 Minutes” episode. Gee, they should be thanking their lucky stars that it was so gentle! The realtors got off easy. I thought they were going to talk about predatory lending, the suprime mess, etc., not just commissions.
I’m very careful NOT to have friends who are real estate agents. Likewise, insurance agents. I do business with them when I have to do. But I don’t make friends with ‘em.
Question to a Realtor….
If now is a good time to buy, when will it not be a good time to buy?
The longer you wait, the more you’ll save. Wait for the half price sale.
“Jansen said that she never should have qualified for the loan. ‘They all ripped me off,’ she said. ‘They put double my income to get this mortgage.’”
Is she claiming the lender misstated the loan payment amount on the closing documents?
It sure looks like it. So she saw the stated income was wrong, and signed the loan docs anyway. Sure, sure, she should get a gov. bailout and a big fat lawsuit settlement, and then she could, ummm…hold the football for all those monkeys?
$659,000 for a condo in Buffalo. That’s a good one. Developers must think it’s the next San Diego.
Naw, they think it’s the next San Jose.
Hey, they’ve got a waterfront. It’s just a little colder and dirtier.
In Buffalo’s defense…
They do make a mean Beef-on-Weck
But they can’t play hockey!
Whats beef on Weck and where do you get it?
Google one up…
Gonna warn you, the internet version isn’t that tasty.
It’s a hard roll with rock salt..with sliced beef and gravy. Any good bar in Buffalo serves it. Same with Buffalo wings.
Add a genesee cream ale and you’re good to go.
Let me get this straight. In Buffalo - the rich get a property tax cut while the poor, the middle class, the disabled and elderly still have to pay. Anyone believe that we have an aristocracy forming in this country?
this is really getting insane. The only saving grace is that those homes are going to be impossible to unload in 10 years.
Wonder if anyone will even buy them now.
It does truly seem insane when the building continues apace into a bust. The situation brings to mind the image of a headless chicken running around the barnyard.
659K condos in Buffalo will be worth 50K out less in 5 years.
Game is over….getting ready for a 10-20 trillion dollar haircut….nationwide and worldwide.
It is no different than for example when a final assembly auto plant sets up shop in your local home town. All of the small businesses who have always payed the full bill for sewers and inventory tax and everything else and will continue to pay the full fare are in fact subsidizing the multi-billion dollar multinational. The businesses who can least afford to pay for local gobmint pay for it, and the ones who can most afford to pay for it get the free ride.
I know a guy who had a small music store for some years. What he hated the most was the inventory tax, to be paid every 6 months. Now he has moved into and lives on the top floor over his store, and he does piano tuning and repairs for a living.
What will they think of next? No local sales tax for the buyers of $60k+ luxury cars?
Got 10% down?
Even worse - here in Austin, we are giving tax breaks for major retailers (Wal-Mart, Barnes and Noble, etc..) to open stores in town. These retailers will compete with locally owned businesses whom have to pay full property taxes (through their rents). Also, it’s pretty clear that retailers will go where the business is so, if Wal-Mart doesn’t open another store in Austin, then Target will. The tax break is a nice addition but not really necessary to bring a retailer in. We are just giving away money for no real return.
They have a name for that, Corporate Welfare.
What we have in this country is socialism for the rich and free enterprise for the poor. — Gore Vidal
“And to help ensure the upscale condos sell, City Hall added an incentive, a 10-year break on property taxes. All at an average savings of about $100,000 for each home buyer.”
“‘I’ve never heard of such a thing,’ said Michael J. Wasylenko, a professor of economics at Syracuse University.”
They don’t cover government corruption in the graduate economics curriculum…
Hey, professor! The same exact deal (10-year tax abatement on new or rehabbed construction) has been in place in Philadelphia for almost 10 years. Looks like Syracuse is not attracting top talent to teach in its economics program.
They have tax abatments in Syracuse as well, but as you said, its for economic redevelopment of poor neighborhoods. I know someone who bought a house in such a district within the city, but it carried the stipulation that my friend had to live there 10 years or else pay back all the tax breaks they received.
I took graduate economic classes at Syracuse University. Not from this professor, but the faculty is quite talented. The tax abatment for luxury housing, not low-income housing, is what is new to most people.
In Philly, the tax abatement is for ALL new construction and rehabs — whether in poor neigborhoods or in rich neigborhoods. There’s nothing new about this concept.
That said, I’m know the Syracuse is a fine university; I was just needling the prof’s statement.
I’m just wondering what’s going to happen 6-7 years from now when current Phila. new condo owners are going to be saddled with a property that has declined in value, and then hit with a tax bill they haven’t had to pay since they first bought the house.
In a small town in Ohio they have 5 year property tax abatement for anyone in any price range building or buying a newly constructed house. Reason is that the town was a city and when they dropped in population below 5000 they lost their city status. Trying to build up the population to get the government perks that come with city status.
“James W. Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University, New Brunswick, is concerned the state is in the middle of a multiyear housing down cycle, on par with the bust years of 1988 to 1992.”
Actually, the last bust did not end in California until 1997. I guess all real estate is local after all…
“‘There’s no computer model that can figure this out,’ said Hughes, who studies regional economics. ‘We don’t know the full scale of the problems. If you bought in 2005 or 2006, you will be the one with the long-term correction. If you were a peak of market buyer, that’s a scary prospect.’”
Repeat after me until numb in the skull:
SUBPRIME IS CONTAINED…
SUBPRIME IS CONTAINED…
SUBPRIME IS CONTAINED…
I think the east-coast version of the early-90’s bust did end sooner than Calif. Mister Hughes’s apparently woeful comment that “there’s no computer model that can figure this out” reminds me of a recent complaint by a U. Delaware oceanographer that grad students now are learning ONLY computer modeling (probably not even the physics - or in this case, the economics - that underlies it). “Subprime” would be a good word for American financial education in general, no?
no computer model needed, just come to this blog
Typo:
SUBSLIME IS CONTAINED…
SUBSLIME IS CONTAINED…
SUBSLIME IS CONTAINED…
Drinking a bit too much Barley Soda, Ms. Hopps?
“‘This is a wonderful time to buy a house,’ said Linda Hopps, president of the Greater New Bedford Association of Realtors. ‘The rates are great. The prices are good. There is a lot on the market so you have a lot to pick from.’ But ‘I think buyers are now afraid to make that jump because they keep reading everything in the paper that’s saying this is not the time to buy.’”
I think buyers are now afraid to make that jump because if not now, then very soon, every single American will either be foreclosed upon, will be related to someone foreclosed upon, or will be close friends with someone foreclosed upon. THAT will be a good time to buy.
Buyers are afraid to make that leap, but maybe she can persuade them to make a series of Hops, if that doesn’t land them right in the middle of the moat.
“The homeowners are people such as Aida Maria Jansen, who got a no-down-payment loan less than a year ago to buy a $250,000 house that she cannot afford.”
“‘I didn’t even have a job,’ she said at the news conference.
-Aida Maria buys the property with her free will - no one made her buy the house.
-She knew that she did not have a job.
-She knew that she could not afford the payments.
Now she feels ‘Wronged?’
David Lereah strikes again….
“Just four months ago, it looked like we were on the road to a very nice recovery. Then the subprime [mortgage] market blew up, and that has substantially inhibited lending. It was a monkey wrench that was thrown in;
no one would have predicted it two years ago, no one.”
-David Lereah, former National Association of Realtors, cheif
Lereah- We Need a Recession?
In a Chicago Tribune article today, David Lereah, chief economist of the National Association of Realtors, [He’s leaving, but not yet gone.] gave an interestingly schizophrenic interview. More bearish than usual, he’s still not giving up his old ways. Here’s a few quotes:
We’re in a real estate recession. I’m projecting the first [nationwide] price drop since the Great Depression,” he said. “We’re going to have negative home prices in 2007.
I feel confident I did a very good job forecasting and reflected what was happening in the marketplace.
If anybody actually took the time to read my book, rather than just comment on the title, I was insistent in it that … a frenetic boom was unsustainable. I predicted a downturn [would occur] shortly after I wrote it, in 2005.
We’re all partly guilty. But the lenders and the speculators, they had the most in it. Making zero down payments with no documentation, that’s just irresponsible.
But the Realtor, the lender, the title attorney, they all got wrapped up in the frenetic pace of the boom.
Just four months ago, it looked like we were on the road to a very nice recovery. Then the subprime [mortgage] market blew up, and that has substantially inhibited lending. It was a monkey wrench that was thrown in; no one would have predicted it two years ago, no one.
I am the cheerleader for real estate. I will always be the cheerleader. I think it’s the best investment anybody can make.
My personal favorite:
I am going to say, look, guys, we all have to face the music. We strayed from [economic] fundamentals, and we’re paying for it. It’s not an all-out bust, not a crash in real estate, but it is a recession. This is going to cleanse the markets and in the long term this is what we have needed.
Only Lereah would find a recession to be a good thing.
I also find myself intrigued by his answer to the question of whether he felt pressured by the NAR to skew forecasts in a positive direction:
“You’ll have to talk to me about that in two or three weeks,” Lereah said. “I work for NAR now.”
2, 4, 6, 8
Lereah’s still a cheerleader, first rate.
I must admit, I haven’t read his book “Why the Real Estate Boom Will Not Bust - And How You Can Profit from It: How to Build Wealth in Today’s Expanding Real Estate Market”, but if he “…was insistent in it that … a frenetic boom was unsustainable. I predicted a downturn [would occur] shortly after I wrote it, in 2005″, then I can think of a couple of better titles for it…..
Here is my favorite understated quote of the day:
“They’re not in the panic buying situation, which has taken the real estate market and made it more even.”
Hey Ralph, I think you need to be looking for the “panic selling” mode. We are starting to see the change as the resets take effect. Two years ago, you could overhear people in public talking about how they had to buy and how much money they were making. Now you hear desperation of sellers discussing how they can not hang on much longer and how much they are losing every month.
Listening to Wall Street Journal radio this morning and the hardware/construction materials business is off as much as 30% for March/April at Home Depot.
Anyone getting reports from Lowe’s and other places. Was in Lowe’s last week and it was a tomb.
I first noticed the Lowes-as-tomb concept last October. Lovely Saturday morning in Tucson. Perfect for yardwork and other outdoor projects.
But during my visit to Lowes on Oracle Road, I felt like I’d wandered into my own private big box. Only once checkout stand open in the main store.
ansen, who has visited a food pantry twice in the last two months, said she is in the process of applying with the state to adopt a child so that she can get some extra income to pay her mortgage. “They pay about $102 a week,” she said.
My God, where do they FIND people like this?????
No foresight, of course. That $102 per week will barely pay for the food to feed the child, even in the midwest. So, she’ll have a starving child, but will make her mortgage?? Effing b*tch.
Is this kind of thing still legal? I remember when welfare recipients would have lots of children, or borrow their neighbors’ children, to get more money, but I can’t imagine anyone adopting a child for a check, though I guess it’s no different than fostering kids for money. Obviously, this woman is deranged as well as stupid, and belongs in a padded cell, even at taxpayers’ expense.
This woman is the poster girl for the greedy borrowers…let her testify before congress so the whole country can see what kind of people they would be bailing out. Then hand her a cardboard box and a kick in the rear.
Pity the poor kid. BTW she must mean fostering a child, not adopting. Adoptive parents don’t get paid by the state. Do they?!
I fear for Carmela…
“If you thought the real estate market had hit bottom, think again. Increasing numbers of New Jersey homeowners are faltering on their mortgage payments, state and local records from the first three months of this year show.”
In a Chicago Tribune article today, David Lereah, chief economist of the National Association of Realtors, [He’s leaving, but not yet gone.] gave an interestingly schizophrenic interview. More bearish than usual, he’s still not giving up his old ways. Here’s a few quotes:
We’re in a real estate recession. I’m projecting the first [nationwide] price drop since the Great Depression,” he said. “We’re going to have negative home prices in 2007.
I feel confident I did a very good job forecasting and reflected what was happening in the marketplace.
If anybody actually took the time to read my book, rather than just comment on the title, I was insistent in it that … a frenetic boom was unsustainable. I predicted a downturn [would occur] shortly after I wrote it, in 2005.
We’re all partly guilty. But the lenders and the speculators, they had the most in it. Making zero down payments with no documentation, that’s just irresponsible.
But the Realtor, the lender, the title attorney, they all got wrapped up in the frenetic pace of the boom.
Just four months ago, it looked like we were on the road to a very nice recovery. Then the subprime [mortgage] market blew up, and that has substantially inhibited lending. It was a monkey wrench that was thrown in; no one would have predicted it two years ago, no one.
I am the cheerleader for real estate. I will always be the cheerleader. I think it’s the best investment anybody can make.
My personal favorite:
I am going to say, look, guys, we all have to face the music. We strayed from [economic] fundamentals, and we’re paying for it. It’s not an all-out bust, not a crash in real estate, but it is a recession. This is going to cleanse the markets and in the long term this is what we have needed.
Only Lereah would find a recession to be a good thing.
I also find myself intrigued by his answer to the question of whether he felt pressured by the NAR to skew forecasts in a positive direction:
“You’ll have to talk to me about that in two or three weeks,” Lereah said. “I work for NAR now.”
“We’re going to have negative home prices in 2007.” - Lereah
Quite comical. Of course he means “home price changes” but he is really saying you would have to pay someone to take a house off your hands. Kind of like yesterday’s sale of Chrysler, in which it appears that Daimler is really PAYING some private-equity outfit to take Chrysler and its pension costs and health-care obligations off of Daimler’s hands.
It’s called wealth destruction.
“Just four months ago, it looked like we were on the road to a very nice recovery. Then the subprime [mortgage] market blew up, and that has substantially inhibited lending.”
Okay, if he is acknowledging this is what’s kept the market propped up, put a fork in it already. Those loans are never coming back anytime soon. Lenders will have no choice but to tighten across the board as foreclosures continue to rise.
More traditional lending standards = more traditional housing prices, may take a while to play out, but I have to believe that’s where we’re headed.
Give me a L
Give me a E
Give me a R
Give me a E
Give me a A
Give me an H
What’s it spell?
LIAR
“no one would have predicted it two years ago, no one.”
yeah, just like no one, i mean no one could’ve predicted the levees breaking… what a dumb ass i tell ya.
got cash?
Just four months ago, it looked like we were on the road to a very nice recovery. Then the subprime [mortgage] market blew up, and that has substantially inhibited lending. It was a monkey wrench that was thrown in; no one would have predicted it two years ago, no one.
Must be the same road Dorothy and Toto were on after the tornado. Is it by chance yellow brick.
Yep, always thought that the massive rise in housing prices in San Diego was due to the $150K medium income in the area. Who knew that the subprime market would blow up? Damn it, that screwed up the housing market right when it was finding a bottom! Don’t forget the Media too. Those commie bastards!
Now repeat after me. Foreign buyers will save our housing market.
San Diego county is running out of land. Everyone loves our balmy weather. Prices always go up. Many new condo developments are almost all sold out. It’s true, I saw the signs “Closing out final units” of course it had on the bottom of that sign”Bring all and any offers” Not, “High 300’s” or “Mid 300’s” or “low 300’s” or “high 200’s” or “low 200’s” NOW it’s “Bring all and any offers”
Haha, geez
Used to live in San Diego. Whenever we go back to visit I find the place to be depressing. Sure La Jolla is nice, but a drive down El Cajon Blvd makes one wonder: “people pay how much to live here?”.
Turns out the Grassia was greener on the other side of 2005…
“‘The mind-set overall of the consumer has changed,’ said Ralph Grassia, president-elect of the Greater New Bedford Association of Realtors. ‘They’re not in the panic buying situation, which has taken the real estate market and made it more even.’”
Are we looking at 10 days that shook the world, in realtime, Jack?
“The sharp rise in home foreclosures, according to data cited by U.S. Sen. Jack Reed, follows a run-up in house prices at a time when wages have remained largely stagnant. Reed and local housing officials yesterday laid much of the blame for rising foreclosures on mortgage lenders who sold borrowers ‘interest only’ loans with low teaser rates that are now adjusting upwards.”
http://en.wikipedia.org/wiki/John_Reed_(journalist)
“housing officials yesterday laid much of the blame for rising foreclosures on mortgage lenders who sold borrowers ‘interest only’ loans with low teaser rates that are now adjusting upwards.”
I’m getting tired of let’s just blame the lenders. Let’s put a lot of blame on the greedy irresponsible borrower! I know people in this town who only make $40K that have been telling me over the last two years what a genius they are because they own three houses. One ended up embezzling over $100K to keep to keep his lifestyle going, lost his job, and doesn’t think that he should get prison time. Part of his justification: ‘Passed over for a promotion so he was entitled to suppliment his salary because he wasn’t appreciated’! Great scripts for some HW movies are being written every day.
I used to have a friend who admitted stealing from his employer for ten years because he felt he wasn’t paid enough. When he told me this, it pretty much ended our friendship. Apparently, it never occurred to him to find a different job. When bad things started happening in his life, he blamed them all on astrological configurations (seriously). When I told him I didn’t believe in astrology, he stopped speaking to me completely. Ho hum.
No big loss.
“I used to have a friend who admitted stealing from his employer for ten years”
When I “discovered” that the “office manager” was embezzling apprx $15,000 over 6 years…I informed the owner of the small company we worked for…the first thing he asked me was: “so do you think she stole more than $100,000?” …in a tone that said: If not, I really don’t give a f*ck…
Turns out…you guessed it…lip gloss was applied to the squeaking wheel.
Should read: $15,000 per year… for over 6 years.
So did you go to the boss? I have never taken so much as a paper clip from an employer, so I’m not too lenient when it comes to this kind of stuff. Do these people think they can steal and cheat their way through life with no consequences? Seems so. Funny, the ones I’ve known have all claimed to be evolved, progressive, liberal, spiritual, attuned, esoteric, metaphysical, New Age, religious, and/or psychic. Now as soon as someone tells me something alone these lines, I run in the opposite direction.
The investors are more to blame than the lenders.
OT:
Big Lender Enters Mortgage Niche
Lingling Wei. Wall Street Journal. (Eastern edition). New York, N.Y.: May 15, 2007. pg. D.3
“Countrywide Financial Corp. has launched a reverse mortgage aimed at allowing seniors with pricier houses to convert their homes’ equity to greater income, marking the largest U.S. home lender’s entry into one of the fastest-growing markets targeting baby boomers.
“The nation’s aging population, along with the rapid housing-price appreciation from 2000 to 2005, has led to record growth in reverse mortgages, which allow homeowners 62 years old and older to turn home equity into income they don’t have to repay until they move out….
“Countrywide’s proprietary SimpleEquity reverse-mortgage program offers lower upfront costs for those who opt for higher initial loan- draw amounts. A typical borrower of the loan has a home valued at $500,000. Specifically, the Calabasas, Calif., lender will waive both the origination fee and closing costs for borrowers who choose to withdraw the entire loan at the closing.
“For those who decide to draw 75% of the loan amount initially and access the rest over time, Countrywide will waive the origination fee. Industrywide, lenders typically charge an origination fee of 2% or less of a house’s value.
“Also, Countrywide doesn’t charge SimpleEquity borrowers any mortgage-insurance premium, which is a common charge on reverse mortgages, as lenders want to assure that borrowers never will owe more than the appraised home value. The insurance premium often accounts for another 2% of a home’s value. With the SimpleEquity program, Countrywide charges each borrower a $20 monthly fee for its efforts to service the loan, lower than the current prevailing range of $30 to $35 a month.”
I predict many more mortgage companies offering reverse mortgages. Why not profit from all the seniors who can’t sell, and can’t afford not to sell?
So let me guess this straight. A 77 year old woman “buys” a $250,000 house when she made only about $11K last year. They TELL her that her mortgage would be $1,200 a month, with even my limited math skills means she knew going into the deal that it she would pay MORE in mortgage than her salary. Now this 77 year old wench wants to adopt a child to pay her mortgage?
So if she adopts 3 more kids she can get another 1200 + to cover the mortgage…
The SF Chronicle ran an article this morning that several consumer groups are “urging” the big lenders to “suspend foreclosures for the next 6 months and find ways to keep borrowers at risk of default from losing their homes.”
I think, though, since the banks don’t “own” most of the loans anymore, it’s not their call on what to do when the loan goes belly up. Who knows which particular hedge fund is sitting on any particular mortgage?
The article ended with “This is a crisis not of the borrowers’ making.” Here we go again. The FB’s aren’t to blame for their own meltdown, even though they bought houses they had no business buying (and drove prices up for everyone else in the process).
OT remember the realwhore ad 06- Be a man but the house “suzanne researched this”
hehehe so if the guy beats his wife in 07 should the jury walk him ?
With six sales in the first four days of May in the Mattapoisett office of Jack Conway & Co., the spring looks promising… “We’re turning the corner,” Mr. Grassia said.
So six transactions in the peak selling period of the year in a community (Mattapoisett) with arguably the best rated public schools in the area and we can declare the real estate market on the Southcoast has turned!?
Prices are still too expensive. Median family income for the town is approx $70K and median house value is approx. $360K, over 5X income. Average tax bill will run approx. $4K, add insurance and you’re looking at $400+/mo just for T/I. Renting is still cheaper…
This is one of the communities where I would buy, and pay a premium for the schools, but not yet. I’d like to see at least another 20% drop over the next few years…
BTW, one of the houses I’m looking at last in Mattapoisett (3/2 Gambrel, 1600sqft) sold in 2000 for $200K, sold again in 2005 for $400K, is now on the market for $419K. It is overpriced by at least $100K… here’s to waiting for the next leg down.
“The homeowners are people such as Aida Maria Jansen, who got a no-down-payment loan less than a year ago to buy a $250,000 house that she cannot afford.”
“‘I didn’t even have a job,’ she said at the news conference. ‘They told me my payments would be $1,200 a month and to get a roommate.’”
“Aida’s mortgage was actually two loans which totaled about $2,000 a month. Last year, Jansen earned $11,212, according to her tax returns.
Unbelieveable. We considered a place pretty seriously in March. The price was 229K and I thought it was very fairly priced (way under tax appraisal). Our income is higher than that. We go to mortgage company and get jerked around every way but Sunday asking for all kinds of documentation of income, assets, etc. They can’t believe we’re not hiding something since we don’t use credit (or didn’t up to that time) and worked for ourselves. WE COULD WRITE A CHECK FOR THE PLACE! This loser “made” $11K and got a 250K mortgage. Mindboggling.
Aida’s mortgage broker was a criminal. Yours was an idiot.
If things do improve on the lending front (i’m hopeful but not convinced) it probably will take a few years again for the brokers/mortgage companies to figure out the good risks.
txchick,
“We considered a place pretty seriously in March” …If I ever get to tx…I’m gonna slap you with a 20lb catfish. You would have been in camp with NAR…2007… “Never a better time to buy a house!”
I have a t-shirt I’ll sent you…
On the front it says: “Happy Camper”
On the back it says: ” Hey..snap out of it!”
SNICKERING at these FBs in my inexpensive leased townhouse and QUIETLY Plotting my REVENGE with an 822 FICO and a load of available CASH
yahoo marquee
kinda desparate
Stocks Surge on Inflation Figures
try deflation figures
Stocks up 120 points…..lies being spread there is no inflation…..except in gasoline, food, housing, insurances, etc. but we can get a dandy China made toaster for $9.95…..yeppers inflation has been controlled…
/the bullcookies are getting too deep for me.
I am so sick and tired of these sob stories. I got an interest only loan and my payment is doubling now and I’m f**ked and help me government!! And oh yeah it’s not my fault since I am a complete idiot and can’t read a contract that states about 20 different times that my payment will go up in 2 years.
I say screw you lady. When I bought my home I was told I could qualify for a $500K home if I wanted to. My mortgage broker tried every which way to get me to sign on for as high as I could qualify for. I chose to be prudent and bought a $300K home instead knowing that a $500K home was not really a smart move on my part, even though in theory I could have probably afforded it.
I have absolutely zero sympathy for these retards who went for the $500K or $600K or $800K home on a $40K salary and I’ll be damned if my tax money is used to help them out.
Ditto my fiancee. She bought back in 2003 just before the bubble, for $130K on $40K income. They were SOOOO trying to talk her into buying something brand new for $250K. She was smart enough to know better.
“‘This is a wonderful time to buy a house,’ said Linda Hopps, president of the Greater New Bedford Association of Realtors
Yeah-buy New Bedford…Ilegal employee sweatshops and drug gangs.
A great place to hang your hat.
Median home price at 2 year low
http://www.bloomberg.com/apps/news?pid=20601087&sid=acTRbno5hjVA&refer=home
“Foreclosures are being “fueled by a combustible mix of risky loans taken out in the last few years — many in the subprime market — and slowing home price appreciation,” said James Saccacio, chief executive officer of RealtyTrac, in a statement. ”
“Slowing appreciation”? I see, now in MSM newspeak, a 10% drop is really a 10% gain that’s slowed down.
I’m getting tired of hearing about all these idiots who bought houses they could not afford in the hope of greedily making a profit and then blaming someone else when it doesn’t work. Having bought a house before, I don’t feel sorry for any of them, the fact is every detail of these loans is spelled out in documents for you to sign. If they don’t understand what they’re signing they shouldn’t have signed it. And what the hell happened to common sense? Do these people think there is some miracle loan that allows you to borrow any amount you want and pay a pittance?
“Do these people think there is some miracle loan that allows you to borrow any amount you want and pay a pittance?”
I think people made a huge mistake in assuming that if the bank gave them the loan, it must mean they could “afford” it. How many of the FB’s understood (or cared, for that matter) that the banks were just a clearing house for Wall Street? The banks couldn’t have cared less.
But the banks are starting to care as the debt bomb comes back to haunt them.
I see the same thing with all these leased cars…how many people can really afford to drive a new car every few years?
They can’t, so they rent (lease) one. Payments lower than buying. However they never stop to think that at the end of the lease they have nothing.
Here is a very simple math question. You borrow $600,000 at 0% over 30 years. What is the amount you have to pay back?
Got Gray-matter?
Ben,
This will be the thread of 2007…
“‘There are a lot of them,’ Ms. Hopps said. ‘There really are. A lot of people qualified for mortgages for whatever reason and they didn’t look at the big picture.’
Bugs: “eh, got carrots?”
Last night was “A Fourth Day”
Downside Johnny & The Asbury Dukes…
The Asbury Park Press from New Jersey. “If you thought the real estate market had hit bottom, think again. Increasing numbers of New Jersey homeowners are faltering on their mortgage payments, state and local records from the first three months of this year show.”
Ben,
I’m nominating you for: The “Bernie Mac’s America” award for telling it like it was!
Listen America…Ben’s blog is the cure…please send a PayPal donation today…and you will be listed on the charity flyer for the “Picnic in the Hampton’s” …BYOB
“Part of the frustration for Realtors is that the market is often compared to the real estate boom of 2003-05, during which prices were driven rapidly higher by a limited supply of houses, relative to the number of potential buyers.”
If a limited supply of houses relative to potential buyers rapidly drives prices higher, then a huge supply of houses relative to potential buyers will rapidly drive prices lower, right?
Right? Hello?
I can only hope this bit%h starves to death:
“Jansen, who has visited a food pantry twice in the last two months, said she is in the process of applying with the state to adopt a child so that she can get some extra income to pay her mortgage. “They pay about $102 a week,” she said.”
This should be reported to the child adoption services in her state.
This is reprehensible.
I have been reading this Blog since early 2004. The people here are an “extremely” intelligent group! I have learned so-o-o much.
I have a question I hope someone can explain.
A lender authorizes a mortgage knowing the buyer can not afford to repay the money.
Then the lender sells the mortgage to a MBS fund.
The lender no longer holds the paper.
When the house goes into foreclousure who gets the house back and handles the sale?
The Peoples Republic of China and Wal-mart naturally…they OWN everything IN America…don’t they ?
Prime = sell the house, the banker gets first shot at proceeds. If any left, bond holder gets the cash.
Sub-prime or Alt-A = sell the house. The bond holder gets first shot at any money. IF there is enough to cover the loan debt, then the banks get what is left to cover their costs.
Maybe I misunderstood the question.
Broker = originates the loan and passes it to a “processor”, usually a big bank.
Processor = buys loans from originators, backages them into bundels, and sells the debt to the bond market, agreeing to process payments (for a cut) and deal with the debt should the loan go bad.
Bond holder = gets a monthly check from the originator for the amount of mortgage paid, minus fees.
When the loan goes bad, the processor has to pay to do the foreclosure, and has to pay carrying costs, and back taxes and HOA fees and such to clear the title. Then sells.
If it is a prime loan, then the processor skims its foreclosure costs off the sell price and gives what is left to the bold holders.
For non-prime, the processor has to first pay off the bonds. If there is anything left, they can use it to cover their foreclosure costs.
If there is not enough to cover the bond, then the processor is out its fees and the bond holder takes a loss on the difference between sell price and debt amount.
I have been reading this Blog since early 2004.
Cute trick, since it didn’t exist then. Are you psychic? Can you tell us what next year’s posts will be?
With the Banks/Lenders selling the paper on home loans to God only knows Who and Where and Forclosures being a financial/legal as well as a political “Hot Potato”, I imagine that Title Companies will have a busy time Producing “Free and Clear” Titles with all the impending Court Cases over alleged Frauds.
Let the Fun and Games…BEGIN !
Here COMES Da Judge Countywide…Wanna TRY to blow some Lender’s shoptalk SMOKE up his ASS ? haha
Just sent this to the senator:
Senator Reed,
I take exception to your comments regarding the blame for the growth of property foreclosures.
While the lenders have certainly played a large part in the process (not to mention appraisers, RE agents, Wall Street and the Senate Banking Committee), one should not ignore the fact that the borrowers have *personal responsibility* for their actions. No one held a gun to their head and said “sign”. No one denied them the right to review the terms and conditions of the note they were signing.
Contract law clearly states that (excepting provable fraud) as adults, they are 100% responsible for fulfilling the terms of any legally binding contract that they sign, regardless of any verbal representations which might have been made to the contrary.
Let them live up to their obligations. I have.
Thank you for the information on who gets the houses back in foreclosure.
The reason I am asking is I am also renting and waiting for prices to come back to earth.
In late 2003 the MSM starting doing pieces on the Housing Bubble. I had not heard of it, so I did some research. In the search I found this site. BTW This is the best site of all the ones that I found!!
What I read made me realize the Housing Bubble was built over a sink hole
I didn’t realized people were getting mortages with no money down; or just stating their income with no verifications. I had never refinanced and was surprised to read that they were taking equity from their homes to buy everything under the sun. I was raised that you don’t own anything until it is paid for and that includes the house.
I had planned to sell my condo in 2007 and move near my family. I pushed up the plans and sold (FSBO) the end of 2004 and rented an apartment. I moved near the family, but I am still renting.The money is in CD’s .
I may consider a foreclosure if I can educate my self on how this process works. I probably have a year or two to educate myself before I buy again.
Thanks again!!
BJ
“If the liberties of the American people are ever destroyed, they will fall by the hands of the clergy.”
Marquis de Lafayette
“The South Coast Today from Massachusetts. “With the numbers for the first quarter of 2007 in the books, Realtors are hoping they can finally shake words such as ’slumping’ and ‘cooling’ from the vocabulary describing the local housing market.””
And can now change them to “crashing” and “burning”.
realtor “TM”