Bits Bucket And Craigslist Finds For June 5, 2007
Please post off-topic ideas, links and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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This could throw a monkey wrench into the foreclosure picture:
http://tinyurl.com/yrsvgr
Interesting.
Given that Deutsche Bank did in fact buy that loan, albeit incorrectly, for that pool, does this mean that NO-ONE now has the right to foreclose on that property?
Talk about a free ride for the homeloaner!!
At some point the authority to foreclose will be established, as the putative owner of the loan can go to court for a ruling that they have an equitable right to foreclose.
Meanwhile, the ‘home-owner’ can not get a discharge, or sell the home except to an investor willing to rent the house out and then defend themselves against the inevitable lawsuit. Mortgages have long statutes of limitations: here in MA they are good for 50 years!
I have a friend with a situation like that. He holds a second mortgage on an empty, abandoned condo is West Springfield, MA, and the corporation holding the first mortgage dissolved without assigning the mortgage to anyone else (probably because they lost the paperwork). He is negotiating with the receiver for pennies on the dollar, will foreclose the second, take possession, pay off a few years’ taxes and condo fees, and will sell for 3X for what he has to pay out — if he can find anyone willing and able to buy a condo in West Springfield!!
But in this situation, why would the homeowner even attempt to sell? Continue not to make payments (they’ve already faced foreclosure proceedings, and got off on a technicality), squirrel away their money, then leave like good citizens once the court establishes a valid mortgageholder.
Hell, why would they ever attempt to pay!
I think you guys miss the main point!
‘ “I buy time, then get lenders to cut interest rates and fees,” says Charney, who claims she’s stopped dozens of foreclosures over ownership issues.’
Bank A resold the loan to bank B AFTER it was in default. So, bank A is worried that bank B will sue. This means bank A is very worried about getting sued by Bank B should they have to foreclose, meaning they are under preasure to refi the customer into a better loan to keep them from foreclosure.
This isn’t going to stop foreclosures for people that truely can’t come close to affording the house they “own”, or let people live rent-free forever, or convince people to stay in a house that they owe twice as much for as the house next-door just sold for. It is just a way to preasure banks to refi.
At least, that is my take.
Maybe the lenders and MBS investors will now further tighten up their scrutiny of the loans they buy. If it takes 2 years to perfect a foreclosure, think about all the missed payments, back taxes and insurance costs that are racking up each month. More losses. In a couple of years, you will not be able to get a loan without 20% down, 6 months reserves and full impounds. It is already starting, but it is going to get much much tighter.
In the 80 my parents owned a hoem in the DFW area. The mortgage was held by a S&L. When they started going belly up my parents didn’t know who to pay. And no one they contacted had any idea hwo to find out.
(my parents got diveroced) and the home stayed in my fathers name for about 2 years before he walked away… never got any notices till abotu anothe ryear later when the IRS hit him up. (some bank had finally got it and short saled it) all without ever trying to contact him.
all together was almost 4 years from first S&L going bellow up till IRS sent notice. So 4 years rent free… then an IRS bill… somethign to ponder
This cuts several different ways. In the rust belt lenders deliberately confuse the record so the city can’t force them to clean up or demolish nuisance properties.
FICO…. No surprise here!
http://www.startribune.com/535/story/1225414.html
A good move on their part.
One thing it doesn’t mention is if the scores will be changed retroactively - i.e. will they remove even past occurrences of piggy-backing. I would imagine they will.
I’m curious about the other planned changes too.
I never knew Fair Isaacs was Minneapolis company.
wow… I’m SOOOO proud.
It’s surprising the numbers of times I see how intertwined Mpls is with all this mess. (several of the big subprimers are/were based here, many big banks, etc)
disgusting. Here I thought I could blame it all on the SoCalians.
Inspector, I posted something yesterday that I’ve stated a couple of times. I got my first lesson on the stupidity of subprime lending in a bowling alley in Inver Grove Heights. Minnesota is subprime.
“Minnesota is subprime”
ROFL.
Well, at least we export most of these subprime products. Although unfortunately we have more of them than I’d like.
House across from me still hasn’t sold. There are many looky-loos (several per day each weekend) but the owner has it overpriced by $40,000 at least, and the layout is weird.
The last couple that came to look at it could clearly not afford it unless subprime picks up again.
Giving the benefit of the doubt, don’t judge a book by its cover.
This is a good move on their part. It’s too bad that it took some national publicity to react, but at least they reacted swiftly.
Houseguests for week of June 17th just cancelled. East Coast hbber’s welcome. No charge, just buy your own food. Fabulous harbor view. Drive from Boston 5 to 6 hrs. Email by appending “hbb” to my blog handle; at yahoo. No trolls please.
Maine? Wow, I’ll go!
Tempting…
Seeing as your here, az_lender.
[yellow smily face]
go to http://codex.wordpress.org/Using_Smilies and all will be revealed.
-your
+you’re
We live in fear of the grammar Nazis.
Per WSJ, non-performing second liens are written off within six months, while first liens aren’t written down until the foreclosure sale and usually get something back.
Also, regulators are worried about a liquidity problem like Russia in 1998
http://www.bloomberg.com/apps/news?pid=20601039&sid=a8Xy_AEnUGE8&refer=home
God help them if they’re relying on parents who got sucked into this bubble mess or who are in debt up to their eyeballs to teach them sound financial lessons.
http://www.msnbc.msn.com/id/18968245/
I have three children, 15, 13 and 10. I am concerned because they are not going to be introduced to managing finances in school until 11th or 12th grade. Way too late. Are there organizations available to educate them on this subject outside of school?
Unfortunately, personal finance is not part of the mainstream curriculum at most schools. Despite the increasingly complex financial products and services available to Americans, only a handful of states have moved to reverse the gaping hole in public education and financial literacy for young people.
…nearly half of American kids leave high school without understanding how to save and invest for retirement, handle credit cards, or understand the difference between inflation and recession…
In the meantime, you can be a very important teacher and role model for your kids. If they’re not on an allowance, get them started. How soon? If they’re old enough to understand the impulse to buy candy at the checkout line, they’re old enough to understand an allowance. Make them responsible for as much as you feel comfortable. Have them set aside money for savings and regular donations to a charity or service group of their choice.
The more spending they’re responsible for, the sooner they’ll learn how to stick to a budget. It’s not unreasonable for a 15-year-old to handle most expenses, based on a monthly number you work out, beyond basics like food, clothing, shelter and medical costs. As an added bonus, you may find you have an easier time with your own budget. (No more “Mom, can you buy me these $100 jeans?”)
Expect them to make a mistake now and then; that’s how they learn. Avoid the urge to bail them out. If they must have something that’s beyond their budget, work out a loan — with a strict repayment schedule — to teach what it feels like to be in debt. Better in debt for a few hundred dollars — to you — that to hit adulthood and go on an “easy credit” borrowing spree that lands them in debt beyond repair. Based on the mail we get every week, the problem is widespread. (ya’ think?!)
As they get older, show your kids how you pay the bills. Explain what a mortgage is. Help them find part-time work. The sooner they get a job, the sooner they have a personal stake in their budgeting. At the end of the year, walk them through the basics of a tax return.
If they plan to go to college, make it clear that they’ll have a stake in those costs too — either an on-campus job or some level of student loans that will give them a first-hand feel for debt — without burying them in loans when they graduate.
Most of all, teach them early about the predatory lending practices of the financial services industry, which is reaching younger into adolescence for new customers. Many college freshmen now pass a booth on their first day on campus, set up with the school’s blessing, offering credit card accounts — complete with a $50 “starter credit” just to them hooked on the habit of using the card. If your child is approaching adulthood and hasn’t figured out how to manage credit, make sure you get to them before the card companies do.
And when you give them their allowance be sure to withhold half of it for taxes. They need to understand the real world.
My first job was bussing tables at Hornes Restaurant during the summmer. I think I was maybe 14 years old. I learned more about money (and even more about people) during those three months.
I was taught money matters very easily… After taking my first job (apple bagger in an Apple barn) at the age of 12 I thought I had it made– 2 bucks an hour for a 10 hour day! After my first two days of work I went and bought a video game with “my own money”. My dad didn’t say a word.
After I had played it, my dad asked me if it was worth two days of (relatively) hard labor to play that game (one that I was fairly disappointed with).
I guess that’s how us rural folk are brought up. Whether it was a pair of shoes, pants, or dinner. How many hours did I work to pay for that?
While I have moved on to a different world all together– you never leave behind those roots entirely. I can’t wait to do the same thing with my son one day.
I saw a waitress at California Pizza Kitchen carried a $300+ Coach bag. I wonder how many hours and tips she had to work to buy that bag. If a waitress can buy a $300+ bag, then there is no problem in buying a $500K starter home for her, isn’t it?
I had wanted to get my teens an ATM card linked to their own account, with a fixed amount of money automatically moved from my account to theirs each money. They could meet their expenses by withdrawing cash from cash machines. They would have a budget for most of their expenses, which would determine the amount that would be automatically deposited.
Our bank, a large international company, will not give those under 18 an ATM card. They’ll let them open a checking account with checks, since checks can be kited (I didn’t want checks), and they’ll hand out credit cards, since they can overspend and stick the parents with the bill (I don’t want my kids to have credit cards). An ATM card? No way!
BTW, my bank is a generally well run organization that for some reason bought a bunch of subprime lenders in the U.S. and took a hosing. I guess they’ve bought into the idea that they prefer irresponsible customers.
I have three sisters. Since our parents died, they had to learn to live within their means. Unfortunately, they do not know how to save money. they are all older than 50, two of them divorced and one single.
I don’t think it’s the jobs of schools to teach personal finance. It’s the job of parents. If a kid is given everything he asks for, he’s not going to learn wise money management. I lived with my parents until I was 26. I did not ask for much and had $3,000 to my name in those days. I knew that the best things come from within. That is, if I wanted a good car, vacations, a great girlfriend, I’m going to have to make the most of what my thinking and reasoning can do. My sisters never got that idea. It’s all about ambition, perseverence, keeping a sharp eye out for opportunity, and maintaining flexibility to take advantage of that opportunity.
Another thing I want to mention: A kid (or adult) must be left to learn from his own mistakes. When I was 31 and I signed the purchase agreement for a brand new house in 1990 in a one company town after the peak of the last bubble, my dad told me that I’m going to learn a lesson. He did not want me to buy the house. I remember that vividly. He was right. I was stuck for 6 years. But I certainly learned the lesson. My parents did not bail me out. I had to bail myself out and it took 6 years of scrimping and saving beyond the PITI payments to get to where I could bring money to the table and sell for a loss. I now consider myself an expert on personal finance from that hard lesson. My net worth increased about 19-fold since 1995.
Never put your kid on economic outpatient care (the terminology from “The Millionaire Next Door.”).
Bill,
Did you ever live in Ridgecrest, CA? That sounds about the right time for that town to go belly-up.
yeah and I don’t want to talk about it much, although I have some friends there still.
Ah, the Crest, home of Buttermilk Acres.
A good friend of mine just milked the last of his “equity” in his high desert 3/2 SFH.
I told him to sell, but he’s gonna retire there. Borrowing against a retirement investment……..poor money management in a poor desert town.
It’s sad to retire there unless you have a big network of loved ones and friends nearby. Otherwise it is crazy to retire there, or the solitude could drive you bonkers. I had to get out by my mid-30s. I saw older men who lived there long. They had no girlfriend / wife. They lived alone. They were strange. I did not want to be like them and left ASAP.
Three years was enough for me. I did my Master’s there and that was it. Time to go. I have a bunch of friends still there and a bunch who have left. When I lived there, surprisingly, I knew quite a few single women in the early 40’s (with kids). You know something in common with a guy in his mid-20’s.
What I find even more amusing is that when I come across others who have lived there (and left). We seem to immediately “click.” Like we know what miserable experience it was (”hell” comes to mind) and we made it out.
Carlsbad, as a coincidence, I got my MS degree (MSCS) there in R/C too. That’s what kept me there 5 years. Then I did the stupid thing the year I got my degree, which was buy the house, and I was trapped another 6 years. Self-imposed slavery to a mortgage payment.
I can sympathize. I’ve got a couple of close friends I rew up with whose mother carries them through life. These people are in the late 40’s, college educated, with kids! Yet if it were not for their mom, they’d be in financial ruin. As it is, they live just above the poverty line.
Part of it I blame on the “What Color is Your Parachute” syndrome, where they’ve got the notion that they should do what they love, and money will follow. Nice platitude, but it doesn’t seem to work a lot of the time. And when it doesn’t, there’s no alternative but to just get your azz for a while into a job that pays, whether you like the work or not.
So they’ve had nothing but crap-paying jobs they love, but also which they leave when they get bored with ‘em, and spend lots of time between those jobs. They’d be living in dire poverty were it not for constant handouts from above. We’re talking about being saved from car repos, foreclosures, etc. If their mom ever runs out of cash (quite a possibility) they’re screwed.
The thing is, these kids were pointed to a college path paid for by the parents and never encouraged to hold even part time jobs during that time. When they got out of school, they were encouraged to find jobs they liked, and mom would support them in the meantime. 20+ years later, mom is *still* supporting them!!
And so they still haven’t learned how to work, earn, save, and spend properly.
It’s all about ambition, perseverence, keeping a sharp eye out for opportunity, and maintaining flexibility to take advantage of that opportunity.
There ya go! And also working real hard to make something out of that opportunity.
Another thing I want to mention: A kid (or adult) must be left to learn from his own mistakes.
Agreed! Hopefully, my kids can one day learn the same lesson, perhaps a bit less expensively I hope, but… sometimes it just takes an expensive and painful lesson to make it stick.
The single best thing my parents did was get me in the stock market 26 years ago at the age of 14. They made me save 20% of the money i made mowing lawns and the same when i took a job at 16. Best education i have ever had. I have been thru some great times and some pretty horrible times but overall i am way ahead of the game.
IMHO to many people do not teach kids to save…
Chris
i think the old adage applies: “you can’t have it, and spend it.”
i teach my kids to stop tripping on the “gimme, buy me, show me, take me” game. i don’t think we need more ATM cards. i think we need to get to the root and change the thinking that says if i’m not spending, i’m not happy.
Was talking to a 61 year old boomer friend last week, and he told me of his 14 year old grand daughter’s $352.00 cell/text bill, for one month. She was read the riot act and only went up to $382.00 the next month. Her parents laid down the law and the 3rd month she got it down to $303.00.
The youth of our country have to be in constant contact with one another, but the idea of hanging out and doing things and talking face to face, doesn’t seem to enter into the equation.
How did it come to this?
My parents recently got a cell phone because their Verizon landline was down for something like a week. Mind you, my folks are both in their eighties, so I doubt that the cell phone will be used as a hanging out device. It’s more like an emergency backup phone.
Octogenarians madly texting each other…
Slim, I hope your parents didn’t get that Jitterbug thing that’s advertised a lot on TV and clearly targets seniors. What a rip off! I’ve got great eyes and can barely read the fine print; no way my grandmother could do it!
Anyway, if anyone want a true emergency-only phone, don’t buy a phone service plan. Get a used GSM phone off eBay, or buy the $20 pre-paid special at Target/Wal-Mart. All GSM phones will make emergency (911) calls regardless of whether they are activated/paid for/have a SIM card. If the battery has juice and the phone has a signal, it will make the call. The phone network will even kick a paying user off to make your call. I worked in the infrastructure business for years, and emergency calls were the first thing we tested when building up a new system (it also happens to be the easiest call for a cellular system to make).
My parents never had a budget when I was growing up. Thus, there were often problems when an emergency came up, and there was no money. Especially with car maintenance and repairs. Many cars were literally driven into the ground before their time because there was never any money set aside to take care of them.
On the other hand, they never used credit, for anything. Their only constant debt was their mortgage, and that was less than $370 a month. And their checkbooks were always balanced.
I didn’t have a perfect financial education, but at least I was raised to think that debt was a very bad thing.
First year of college, I would occasionally bail out my daughter. By the time she graduated, she got $X for tuition, room and board, and books. I also “loaned” her my ten year old car and paid insurance. Anything else was up to her. She had numerous part time jobs and has done rather well since then.
There is a lot out there, quite a bit paid for by tax dollars. The Fed has been concerned about low savings rates and financial literacy for some time.
America Saves: http://www.americasaves.org
Operation Hope: http://www.operationhope.org
Fed Ed: http://www.federalreserveeducation.org
Dallas Fed Ed: http://dallasfed.org/educate/
Jump$tart Coalition: http://www.jumpstart.org
US Treasury Office of Financial Education: http://www.treas.gov/offices/domestic-finance/financial-institution/fin-education/resources/alpha-name.html
Choose to Save: http://www.choosetosave.org
If they were that concerned, maybe they could do something about the near-negative real interest rates…..
Why not post one quick 10 second commercial that says
‘Hey guess what? You can put $15,000 a year, pretax, into a retirement account every year. If you are in a 30% tax bracket, that’s $5,000 dollars the government is giving you’.
But is that in the government’s best interest?
I know way too many people where that $15k is 1/3 to 1/2 of their yearly salary so that’s $5k free for rich people in their eyes.
The Fed is long on talk and short on action these days, whether it comes down to controlling inflation or encouraging Americans to save (which, upon a moment’s reflection, are pretty close to the same objective). Who wants to save money when there is little indication the Fed will follow through on its commitment to keep inflation under control?
It’s your job to educate your children into the world of finance. When I was 12 yrs old I took the lawn mower and started mowing yards for a $1.25/wk. After the first week my dad put me in the car and went to the bank and opened me a savings account. I got to keep 10% of my earnings and the other 90% he put in the bank. When I got a paper route the same rules applied. When I turned 15 1/2 he got me a work permit and told me to go out after school and get a job. I went off to college and paid for everything, earning enough during the summer to pay for my next year of college. While at college I got my meals (three/day) free by hashing at a sorority at lunch and dinner. After HS graduation I was on my own and never looked back. I retired 10 yrs ago at age 57 yrs and make more today in retirement then I did 10 yrs ago.
One thing my parents did was to charge interest on any loans to us kids. They’d show us the amortization tables and explain how much we’d be paying in interest over the life of the loan, etc.
I never did understand why people think parents should have to loan their kids money for nothing.
Though I’m not sure of the legality of it, there’s nothing wrong with making your kids get a job and having them pay some kind of “rent” which can be put away in an interest-bearing account or Treasury acct. Nothing big, but something along the lines of $150 or so per month that can later be used for a down payment on a house or car.
The worst thing a parent can do is pay 100% for a kid’s college education & not expect them to work. Those of us who had to work through college already had very valuable work experience and often had a career upon graduation. Can’t beat that.
I use to pay my kids for good grades A=$20 B=$10 C=$0 D-$20
F= no money. Staight A’s =$100.00 I usually got cliped for the max. It worked for us.
A=$20 B=$10 C=$0 D-$20 F= no money
Well, if I was headed for a “D”, with no hope of bringing it up to a “C”, I think I’d do everything I could to push it to an “F”
I think kckid meant that getting an F in any class negated receiving money regardless of the grades in the other classes.
I learned the rules of entrepreneurship through mowing lawns too, but this was college freshman summer work. I was making $4/hour (not bad, not good for unskilled at that time.) Having my help let my “Entrepreneur” boss stop working at the lawn mowing business and go back to normal daytime work ;). Meanwhile, I was making $4/hour and he was making about 10$/hour. The he stiffed me for about $700 at the end of the summer by moving his trailer home on down the road. (So many life lessons in so little time
)
In answer to the question as to where one gets this education, try the boy scouts, girl scouts, 4H, etc. They all have a component teaching financial responsability.
FL will vote to revise the prop tax system (no concrete plan yet on how to revise, that should be determined before this vote) in Jan of next year:
http://www.sun-sentinel.com/news/florida/sfl-fproptax05jun05,0,3915152.story?coll=sfla-home-headlines
By that time prices will hopefully be down enough that the SOH disparity starts to evaporate.
And, BTW, where are the people suing for reassesments? I just don’t see enough of these stories, and I don’t understand why. Every single day I expect to see the papers start to report on it (or hear about people doing it) and it never happens.
Especially for commercial property; I would think that they would want a reassesement every other day while values are trending downward. Perhaps some other FL posters can shed some light on this?
Rebound. From what? I thought there were not any problems.
http://biz.yahoo.com/ap/070605/bernanke.html?.v=6
Rebound……from what? Since all was well. That was my thought exactly when I read the Bernake story this morning.
From the reported 1.6% GDP growth rate, that was already revised down to .6%, that is surely to be revised down further.
are you implying that we might be in a recession? No, cant be, I didnt get the memo.
Can’t be…. job growth in the service sector is still way too high….. Right. So what if factory orders are down. So what if manufacturing jobs are disappearing. So what if ages are down and credit card usage is soaring. So what if comissioned sales people are seeing massive cuts in income, losing their jobs, and can’t qualify for unemployment.
All the people that were displaced from those other jobs are rushing into the service secotr and taking jos form the illegals…. so our economy can’t be in recession.
The revision was down to .15%, but they then multiply by 4 to get .6%. Near flat-line for the first quarter.
Nice plots of Case Shiller for several cities:
http://biz.yahoo.com/seekingalpha/070604/37282_id.html
The plots speak for themselves. I don’t think this is the first inning anymore.
Shame those plots don’t all have the same scale.
So is Shiller making the case that Chicago is just about back to baseline?
Not a lot of explanation about what the graph is actually plotting…
It is showing the % change, year over year. For example, Phoenix was running pretty flat with inflation for decades, then in 2003 jumped 20%, 2004 jumped 40%, then 2005 jumped 20%. 2006 was down just a few %. Back to 0 means that prices have stopped going up.
This doesn’t show that the result of that short but steep bubble was that house prices doubled in 3 years and are now twice as expensive as the fundamentals indicate they are “worth”.
I’d say e’ve entered the second inning - the shills are down 15-0 already.
http://money.cnn.com/2007/05/29/real_estate/could_have_had_a_prime/index.htm?postversion=2007053011
“Doug Duncan, chief economist for the Mortgage Bankers Association, said a 1999 MBA survey revealed that 31 percent of all home buyers never spoke to anyone except their real estate agent when they bought a home.”
No, realtors have NO culpability in this at all.
Was talking to a RE agent recently who tried to convince me that the 30 year fixed rate mortgage I would only consider taking out would be “smarter” if it had “an interest-only component,” as she put it. I pointed out that 30-year IO fixed loans have 1) higher interest rates than regular old 30-year fully amortized loans and 2) have a huge jump up in payment after the IO term is over (the IO part only lasts a few years, a la an ARM — the part of the loan that’s “fixed” for 30 years is the interest rate, not the payment). She seemed both truly stunned and deeply annoyed — like, who was I to question her infinite wisdom? Or to have any kind of clue at all about mortgages? The nerve!
she was just trying to get herself more $$$$$.
No what she was trying to do just looking at the statement is convince you to go with an Option Arm using a rainy day close. Option Arm’s are good for some folks in certain situations but if you get a W-2 at the end of the year it’s not for you.
I call bullsh*t on that assumption. Prime borrowers know they are prime and subprime borrowers know they are subprime. What these asshats fail to mention is that even though a guy has a 700 FICO he may need a subprime loan because his ratio’s are off or for any number of reasons.
And then to blame the Realtors that’s nice point the finger to someone. I have saved a many buyer at the table from an a$$hat lender.
Not saying there’s no fraud or illegal stuff going on but that story is horsesh*t.
Anybody watching the Shangahi market? What a ride…down 7% in the morning only to close up 2%. It’s like watching a spinning top slow down, it just gets wobblier and wobblier.
Weebles wobble but they don’t fall down….
watch the China sell-off continue after the UE tightens this week…its not gonna be a laugh riot.
http://www.businessweek.com/ap/financialnews/D8PIJG802.htm
“Based upon what we have experienced and has been reported by others, the overall retailing environment, especially sales of merchandise related to the home, has been challenging,” Chief Executive Steven Temares said in a statement.
The Elephant in the room is that this is another secondary effect of the bursting RE bubble. The ripple affect will continue
During the bubble, the most a house ever sold for in my neighborhood was $450K at the end of 2005- a nice 5br stone tudor in great shape on a nice lot. In summer 2006, someone listed a 5br at $635K, not stone, but in comparable condition and size. It sold in 3 days for asking. Today, a comparably-sized house was listed at $630K, lacking things that the other houses had, e..g., central air, finished basement. I told the realtor that I would consider it in the low/mid $500Ks and he told me that he/seller would not even consider that amount; that it would have to be on the market for a year or so before that amount would even be considered given the 2006 sale at $635K. Cocky bastard. I wished him good luck. Funny, though, I hope they get it as I am hoping to sell and buy an old fix-up (to live in, not flip) on a lowball. It’s tricky right now….
Wait until winter and submit the same or lower offer in writing (i.e., a real offer) that has to be submitted to the owner.
Just heard that another apartment complex, which was under construction here in San Diego, burned up last night.
Wow. Think this makes at least three in the past six months or so, doesn’t it.
NO ….SERIOUSLY……this is cool………come on take a chance….
http://www.revbilly.com/index.php
LOL… geez
Ben, you need to check this out. Accredited Home Lending buy out at $15/share. The most interesting this is what Eckert has to say on the reasons why. Basically that AltA lending stopped being predicated on the borrowers ability to repay and the standards deteriorated to relying on the underlying asset to repay the loan…Ie refinance based on appreciation…I’m paraphrasing but I thinkg you get the point.
http://blogs.ocregister.com/mortgage/archives/2007/06/subprime_lender_accredited_sel.html
“the standards deteriorated to relying on the underlying asset to repay the loan…”
That works just great until appreciation goes negative (-6% for San Diego from 2006Q1-2007Q1 according to the S&P/Case-Shiller housing price index).
“Join us. Sing, laugh, clap, give.”
Stop shopping so that you can donate more cash to the church?
http://www.mortgagenewsdaily.com/652007_Flip_That_House.asp
“Flips are beginning to crowd the market as home sales slow. Investors who mistimed the market are finding that it is taking much longer than they planned to resell their property. Some who bought with the idea of renting for a few years to allow some natural appreciation are seeing their adjustable rate mortgages resetting to levels incompatible with the local rental market. Many investors who read too many books, watched too many infomercials about getting rich in real estate or watch the numerous house flipping TV shows went into the process with insufficient capital and are now trying to get out with their shirts still on their back.”
I thought the investers had already left the market?
Full-court press…
HUD boss wants changes to half subprime mess
MSNBC - 17 hours ago
HUD chief urges action on loan proposal
MLive.com, MI - 18 hours ago
Hud Chief Urges Action On Loan Proposal
Guardian Unlimited, UK - 18 hours ago
http://tinyurl.com/yqtw9h
I feel compelled to mention that I think it is moronic to encourage homeownership without addressing affordability concerns.
But ignoring affordability is the POINT of addressing home ownership concerns.
If prices quickly(like year) crash by 50% (or more in some areas) back to affordability levels, then the banking industry is finished. We’re probably in Greator Depression.
The point of reforms is to keep people buying houses that they can’t afford, for as long as possible, to let the prices slowly come back down…. or at a minimum, transfer the losses from the banks to the U.S. Treasury.
Link to you tube madtv clip where sesame street is sold to Donald Trump, you get to hear/see the Donalds hair sing a song.
http://www.youtube.com/watch?v=5l3FWu2dWBM
Does Uncle Sam have a stake in Citadel? I just have a hard time imagining a private firm thinking that now is the time to buy subprime bonds. I also find curious all the propagandic-sounding remarks about the market “coming back” when all the evidence on the ground suggests something more like the dot com crash or worse.
Citadel Bet Signals Return of Subprime Bond Market (Update3)
By Steven Church and Jody Shenn
June 4 (Bloomberg) — Citadel Investment Group’s purchase of Resmae Mortgage Corp. is the latest evidence that investors’ appetite for new bonds backed by subprime mortgages is returning five months after the industry crashed.
The $180 million acquisition by Citadel, a $14 billion hedge fund, shows that the market for loans to people with weak, or subprime, credit isn’t dead, said Sharon Greenberg, vice president of asset-backed securities research for Credit Suisse Group in New York.
“The fact is that somebody came in and saw value,” Greenberg said. “It is definitely a good sign.”
http://www.bloomberg.com/apps/news?pid=20601087&sid=apagcfXpuWqU&refer=home