Bits Bucket And Craigslist Finds For June 17, 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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Squall.
http://www.ft.com/cms/s/a01aee1c-1ba5-11dc-bc55-000b5df10621.html
This squall is disturbing the placid surface of the conundrum.
Buttonwood
Signs of the beast
Jun 14th 2007
From The Economist print edition
Three things investors should be fretting about
INVESTORS have had a pretty good time of it over the past four years. Almost every asset has increased in price, including art, emerging-market shares, junk bonds and property. Indeed, things have almost been too good to be true.
Some commentators, such as Tim Lee of pi Economics, a research firm, have consistently warned that investors have become complacent. At each setback, the Jeremiahs have been tempted to echo W.B. Yeats and ask “what rough beast, its hour come round at last, slouches towards Bethlehem to be born?”
http://economist.com/finance/displaystory.cfm?story_id=9340715
This looks like a preview for a whole wave of McMansion owners. Personally, this brings me no sorrow. The concept of this organization just stinks.
http://tinyurl.com/25a3ka
They’d be amazed to know how many people in houses costing many multiples of theirs have the same shoddy construction.
What about the “concept” of Habitat for Humanity stinks? The implementation may not always be perfect, but the concept is that people who are very poor and are willing to put in long hours helping to build homes for other people will eventually get other people to help build a home for them. The sweat equity component is required and the mortgages they hold when they are finished are affordable. The concept is fine - much better than most charities in this country.
I would gladly give to a charity that did projects to benefit the entire community. Maybe they could rebuild a park or clean up an overgrown lot. Once they start singling out individuals for these homes then you know a huge unfairness is going to jump in. How does being a single mother qualify a person to receive more than the single woman without kids that still needs a helping hand? I just can’t stand this entitlement concept. That’s my personal opinion.
Having done some work for Habitat locally - the single mother is preferable because the house would help at least 2 people instead of just 1 one. The fact is that in any charity situation you end up making decisions about how to distrubute limited resources. (Which park do I decide to rebuild? Not everyone can benefit from rebuilding 1 park or lot…)
I for one, would rather send money and/or help a charity that insists that the recipients both pay for and work for their help than just handing over cash. The end result (when it works well which it doesn’t always obviously) is a home base to where people work and live productively. The Heifer project also appeals to me for the same reasoning - money is used to establish a real base from which people can build prosperity and then give to others.
I agree that it is very difficult to determine if the charity deserves the donation or if they will use it wisely. That is why I have decided to make all of my donations directly to local pubs. I know they are working for the money and providing me a nice service in return. Plus I always feel better after making my donations.
“…the single mother is preferable because the house would help at least 2 people instead of just 1 one.”
It might also have the unintended consequence of encouraging those who are currently just 1 to become 2 (and I am not talking about tying the knot).
LOL - this is great blog on rainy Sunday.
It might also have the unintended consequence of encouraging those who are currently just 1 to become 2 (and I am not talking about tying the knot).
True - but what do you do about the child that exists in the now and didn’t ask to be born? There are always unintended consequences…at some point you end throwing your hands up and not doing anything. The pub idea does sound pretty good (that was the LOL comment)
but in the end I’m not sure it’s okay to end up in a place where you never give to others because the results are imperfect.
Hold the current generation accountable and future generations might just take notice.
Overpopulation by humans is the biggest problem for nearly all other species on the planet, and perhaps for humans themselves. Policies that “help children” always encourage additional reproduction. Not a good thing. We (humans) are a parasite killing the earth.
For the record, I’m not a “save the children” charity nut case. I understand the effects of overpopulation and “pro-child” policies and welfare.
What I am saying is that the kids involved are the true innocents because they lack any control over the situation. If the adults wish to feed them junk food, ignore them, abandon them or worse, even in this day and age, they are at their mercy. I very rarely have any sympathy for the adults in the situations that call for help.
NYCityBoy’s comment reminded of this quote by Abraham Lincoln:
“I have always found that mercy bears richer fruits than strict justice. ”
I’m not suggesting that you give to Habitat or any “pro-child” charity if you don’t want to you. What I am suggesting is that it’s not okay to transfer to the sins of the parents to the children. It’s about a little compassion for the humans in the here in a now.
What do about all that is very complex because unfortunately helping children does usually involve helping the parents. I know that it’s not going to be solved on a Sunday morning.
“What I am suggesting is that it’s not okay to transfer to the sins of the parents to the children. It’s about a little compassion for the humans in the here in a now.”
This is the whole rationale that created the welfare mess…generation after generation learns that as soon as you have a kid, at whatever age, the gov’t. just starts writing checks. No need to make any personal effort.
But if we can just save one child….
I think charity for children can be offset by offering incentives to people for NOT having children (permanent sterilization, for the most part).
I think a plan where welfare recipients get a lump sum ($5-10K) to get sterilized would be a good start.
In the discussion about welfare, let’s not forget the most important component — the welfare DAD, who relies on the govt to fund the results of his sex life. Too many people focus on the mother because she’s the only one visible in the child’s life (she’s taking care of the children). In a better world, MEN would be sterilized if they didn’t want to take responsibility for the lives they create. They’re the ones who actually make more babies per person.
Just another perspective…
I’m with you, NYCityBoy. The only good charities are those that do not discriminate against any group. These include charities that are involved in health and medical research, such as American Cancer Society.
Sorry, Bill (though those are my charities)…
Cancer research discriminates against those who don’t have cancer. For every dollar going to cancer research, there is a dollar not going to MS, Alzheimer’s, Parkinson’s, etc.
All charity discriminates unless you are giving an equal amount of money to EVERY single person on the planet (can’t discriminate against those in other countries, can we?).
Of course, I’m being facetious — totally into cancer research, as it benefits more people and cancer is a particularly “evil” disease, IMHO. Just trying to make a point.
Cheers!
I agree, the implementation may not always be as good as hoped, too may amateurs working to fast to a overly ambitious schedule, but at least the cost of the house is not outrageous. On the other hand there are far too many McMansions being built with similar low quality (day laborer) work to too fast a schedule and selling for far far more money.
Even if the Habitat for Humanity house has to be bulldozed at least it only a $50,000 loss. As opposed to all those quickly and poorly built $500,000 McMansion that have been built in the wrong locations and for the wrong reasons.
“…that have been built in the wrong locations and for the wrong reasons.”
I was looking for housing in all the wrong places.
Looking for housing near wide open spaces.
Sifting through lies, looking for traces
of what I’m dreaming of.
I’ll point out that A: the land was donated (ok, “sold for $1″), and B: pouring the foundation was contracted to professionals (as happens at almost all Habitat sites). Habitat does have an obligation to try to make good, but the flaws Habitat is (or should be) fixing are ones they inherited, not flaws in Habitat volunteer workmanship.
Habitat homes are usually pretty solidly constructed. Ones along the Gulf Coast usually survive hurricanes in better shape than their neighbors. Habitat had a couple they were finishing up in Biloxi before Katrina, and post-Katrina, they were discovered to have survived the 30′ storm surge (needed new insulation/sheetrock, obviously, they were almost completely submerged), and were the first in the area to be made inhabitable again. (By Habitat, at no cost to the owner, I might add…)
Habitat usually ends up helping single mothers because single mothers have lower per-capita household income (1/2, 1/3, …) than their child-free counterparts, and Habitat tries to help the poorest people first.
Disclaimer: I have volunteered with Habitat in the past (though not the chapter mentioned in the cited news article.)
Ya get what you pay for in this life.
The land was acquired for a buck $1
Anybody connected with this project doin’ one iota of due diligence would have come up with the fact the site was a former landfill w/ a load base unqualified for any form of construction.
A Jimmy Carter photo/propoganda op was obviously more important than attention to any construction quality or building longevity.
Nothin’ more than the typical contemporary US mantra of sound over substance.
I worked on a renovation HfH project once with folks from my church. It was a pleasure to help a needy family in the comunity have a more decent place to live. We all felt better doing this together.
Then the family stole all our tools.
http://tinyurl.com/2jfspp
It is funny how complex property tax structures are. Even the people that develop the system don’t really understand it. That’s what happens when you cobble together Frankenstein and the only thought in your mind is, “how can I get more votes out of these suckers?”
My favorite lines are, “houses are not assessed in the same way as condos or co-op apartments. To assess a house’s value, the city uses data on recent sales of comparable houses. But for condominiums and co-ops, the city tries to determine what they would be worth if they were rental units.” In other words, you “owners” are paying way too much to be “owners”. When prices stop going up these new buyers will realize just how much they have paid. I bet the new buyers are getting bled to death on their tax bills. And we renters just keep plugging along.
test
test failed
http://www.nj.com/news/ledger/index.ssf?/base/news-11/1182054366124720.xml&coll=1
Mortgage fraud skyrocketing in Jersey, U.S.
State tops nation in the growth of the highly lucrative schemes
The house in Manalapan went for more than $1 million.
And that was only the first time it was sold.
Within days after the first deal, the same buyer and seller closed on at least two additional mortgages on the house — each time using different attorneys, title agents and banks who had no clue the property was already mortgaged to the hilt — illegally obtaining millions more in financing.
The money was being wired out of the country when the scheme came to light two weeks ago. The FBI is now investigating the transactions.
Mortgage fraud in New Jersey is increasing at a faster rate than anywhere else in the country. While some states still see more crooked dealings overall, the number of complaints from financial institutions in New Jersey grew more than 208 percent last year, according to a report commissioned by the Mortgage Bankers Association.
Nationwide, the number of mortgage fraud reports filed by federally insured financial institutions has increased sixfold over the past five years, to more than 28,300 last year. And those numbers do not include complaints from independent mortgage banking companies.
Not In My Front Yard (actually, NYCityBoy doesn’t have a yard but we do smell grass in the neighborhood once in a while)
http://tinyurl.com/2xuqss
“Having taken out huge mortgages for the project, Mr. Rath, said: “It has to work. Everything we have is riding on it.”” It’s not fair if it doesn’t work out for them. Nobody told them they could possibly lose money.
Even better is, “The building is an example of what can happen in a real estate market where the potential payout is so high that almost no effort to get something built seems too extravagant.” I think that would be the definition of “mania”.
This just shows how shallow people are. They can’t think for themselves. They are addicted to yapping on cell phones and making love to their Blackberries. They need to be handed their lifestyle because they can’t build it on their own. All of this luxury junk is focused on creating your lifestyle. Give me a place to live. Let me worry about my lifestyle.
“Even if the Raths succeed in making millions of dollars, they will have paid another price for transforming their block. “Neighbors will cross the street instead of walking up and talking to us,” Mr. Rath said.” But a buck is a buck, so Mr. Rath doesn’t really give a Rath’s a$$ what the neighbors think.
This tells you all you need to know about these people. The pretentious kiddy names. They’re way too “special” to name the kids Mary or Steve or something normal.
As he spoke, the couple’s daughter Breana, 6, watched “Blue’s Clues” on a large-screen television, while their twin girls, Nerina and Meriel, 22 months, crawled around the sofa, playing with the contents of their father’s wallet.
I agree completely. The names people give to their kids always says a lot about the person. These are definitely two wannabes. When Gwynneth Paltrow named her kid “Apple” that was all you need to know about Gwynneth.
http://www.misanthropic-bitch.com/briandrye.html
That was funny as heck. I knew a guy that named his daugher Riley. There is nothing worse than white trash trying to look sophisticated. Unless it’s all the ethnic names that try to sound French in origin. And the gene pool gets cloudier by the day.
I second the funny as heck - thanks for the post and the laugh.
That site has been a source of endless amusement to me for years when I’m in a particularly antisocial mood.
We’ll know you’ve flipped if you change your handle to “techs tschyq”
lmao.
Recently found out my ex wife named one of her kids Oberon. Oberon was the king of fairies in Midsummer Night’s Dream. That should work out well for him when he gets to about 8th grade. Probably should have gone with Sue.
Not to fear — no eighth grader in America is familiar with A Midsummer Night’s Dream.
Oberon was also in the cartoon Gargoyles
Oberon is also good beer from Kalamazoo, MI. Cheers.
Jeesh - a “Breana”, Nerina, and Meriel in one family. My friends and family are at the age where they are reproducing. Thankfullly, most of them have managed to stay way from pretentious names. My kids: Lewis and Vivian - I actually got a compliment once on the “normalcy” of their names. My sister has my “normal” names beat - her son’s name is John.
Yes this is why we have rent control /stabilization in NYC, so that Greedy arrogant landlords will have to pay the tenants LOTS OF $$$$ to give up their cheap apartment.
Which is only FAIR since if there was No bubble there would be no incentive to even think of tearing down the building and getting rid of your long term tenants in that hood
The Raths estimate that, after they bought the building for $1.6 million, they spent $1 million — on legal fees and settlements — to remove long-time tenants.
In 2002, the building next door came on the market. After a year of negotiation, Mr. Rath said, they were able to buy it for $1.6 million. The price would have been higher, he said, except that there were a dozen people living there. Several had been residents for decades. “It took two years to get rid of all the tenants,” Mr. Rath said.
Sophie Rogers-Gessert, 26, moved into the building in July 2005 and worked hard, she said, to make her small apartment a real home. But seven months into her two-year lease, she said, she was shocked to discover that the Raths, whom she knew as both her neighbors and her landlords, had plans to demolish the building. “I was upset for myself, but I was even more upset for the people who had been living there for 20 years or more,” she said.
Comment: I really can’t stand these people and their sense of entitlement. They are first class jerks, kicking out renters who’ve been living there for over 20 years. They are the most selfish people I’ve heard about in a long time. I hope this project fails. Please keep us updated as to whether they are approved or not.
“I began to worry about my health,” she said. She went to see a lawyer, hoping there was some way to preserve the building and was advised to withhold the rent. The Raths sued to evict her. Eventually, she accepted a settlement from the Raths but would not disclose the amount on the advice of her lawyer.
The Raths said that tenants received payments of $10,000 to $240,000. “They’re all living in the area very well, or they have a nice nest egg,” Mr. Rath said.
Renting is renting. Owning is owning. A two year lease is what, two years long? The sense of entitlement to have low rent for generations is what is staggering to me. Is this is a regional thing, or do many large US cities have this kind of thing? The renters version of property tax redistribution schemes, where vastly different rents can be charged on different floors or apartments based on longevity?
Everywhere I’ve lived, the building is sold and the new owner raises the rents as much as the market will bear to pay the loan. Or the rent goes up a bit each lease, again, according to market forces.
the building is sold and the new owner raises the rents
That is ILLEGAL in all 50 states, unless you are on a month to month rental, then you usually get a 30 day notice, A lease goes with the sale and must be honored.
===================
The sense of entitlement to have low rent for generations is what is staggering to me. Is this is a regional thing, or do many large US cities have this kind of thing?
———————————-
What you DON’T UNDERSTAND the price of the building sells for is directly related to how much rent you can collect.
So if rents are Stabilized and LOW, guess what happens to the price of the building? Most landlords in NYC would never have been able to buy their building had rents been at market value.
You people always talk about buying a home if its 100-120X month rent….same principle applies to Rent controlled buildings too.
You pay a lot less to buy because you are limited in raising the rent. So you have 2 options harass and threaten the tenants into moving, or as the Raths did, BUY their lease out…
A Rent stabilized lease guarantees you a renewal that is why people live in the same apartment for 30-40 years, limited increases each year based on your original rental.
But only when there is a Bubble are rents so out of wack, that its pays to pay a long term tenant $240,000 to vacate. If the tenant is paying $400 a month for a 2 bedroom and you can luxury renovate and get $4000-5000 a mo, it makes financial sense. Rather then risk years of lawsuits and possibly criminal harassment charges.
(Sorry for the red herring: I agree that the rent is for the lease period. I was a 9 year renter in my first building in Seattle so I saw several such cycles. The misinterpretation didn’t occur to me, sorry.)
“Rent Controlled” apartments is something I know of only by sit coms jokes. How it came about, and the good and bad points in the modern age are obviously very complex. I appreciate the primer, thanks. (insert sincerity emoticon - why isn’t there one?)
Looks like all the zoning and other legal complaints can go on for years with all the myriad factors involved. A one time developer like this seemingly can seek out all this publicity to try and get the sales prices they need to be profitable. Seems like bigger operations would be concerned about it generating more effective opposition to other projects.
LOL there is no scenario where I would pay a tenant $240k. There are much cheaper ways of getting rid of tenants. These people are idiots all the way around.
YO MISTAH INKOM STEEM…….I WOULD HAV U ARRESTED 4 HARSSIN ME….
A LEASE WORKS BOTH WAYS
You want me to break my lease you pay me to move.
LOL yea I have made getting rid of low rent paying moochers an art form. I have only seen one lease in my career that was rock solid. It was from the 60’s and unfortunately every thing I have tried has been unsuccessful. I hate it but yet have to admire the tenants for their foresight. They pay a quarter of what the current market is and it disturbs me greatly.
NY rent control leases being broken without paying the tenant are the exception. I know of one tenant that was paid close to a million dollars 20 years ago to move. The new owner wanted her unit. If it goes to court, the courts have sided with the tenants and then it is nearly impossible to remove a paying tenant. Should necessary repairs not be performed to try to force the tenants to move - the housing authority may step in, the tenant can then sue for additional damages and in one cast the NY courts turned the building over to the tenants - stripping the owner of all interest in the property.
NYC differs from the rest of the country in that the majority lives as renters. Rent stabilization(affects about 30-40% of apts. in city, I think) confers tax benefits to the owners in return the city board sets rent increases. Idea is to “stabilize” the population of the city, instead of having the majority of the city moving at the end of 2 year leases. After rents reach 2k, basically, the apt. reverts to market rents, and the landlords loses certain tax advantages for the building.
YES but here is a NEW TWIST:
just because you can decontrol an apartment, and raise it to market rates, so does your real estate taxes too….and if we get a recession and you lose tenants and have to lower rents, or they don’t pay and you have to spend Tens of Thousands $$ on Lawyers, your real estate taxes are still pegged at full market rate.
Something a lot of greedy landlords will be kicking themselves in the a$$ for over the next few years.
Maybe the top will fall off the building with all the Raths in it.
Where is the city’s Landmark Commission? I live in a landmarked building, and you cannot put an airconditioner in the window without receiving written permission.I find it impossible to believe that they knocked down a townhouse without greasing a few palms.
That’s why the city has zoning laws…to prevent tasteless jerks from defacing and destroying the texture of the city.
Valhalla indeed…I hope the Furies find these mopes.
No mortgage bailout this year, experts say
By Alan Zibel
ASSOCIATED PRESS
June 17, 2007
WASHINGTON – Homeowners unable to pay monthly mortgage bills and facing foreclosure shouldn’t count on help from Washington this year.
Regulators and lawmakers seem to be taking a wait-and-see approach as they confront the fallout from several years of lenders making too many home loans to people with inadequate credit.
It would be a mistake to overreact to a market that is already showing signs of self-correcting at a time when little evidence has emerged that the broader economy is at risk, according to regulators and some lawmakers. They also note that consumer spending remains solid, the nation’s jobless rate is still low, and stock indexes have hit record highs in reaction to strong corporate profits.
“We have an obligation to prevent fraud and abusive lending,” Federal Reserve Chairman Ben Bernanke said in a speech earlier this month . “At the same time, we must tread carefully so as not to suppress responsible lending or eliminate refinancing opportunities for subprime borrowers.”
…
In March, five federal agencies that regulate banks, thrifts and credit unions proposed guidelines requiring stricter evaluations of a borrower’s ability to repay, among other recommendations. The guidelines – which apply only to federally regulated banks – should be completed this month.
http://www.signonsandiego.com/uniontrib/20070617/news_1h17reform.html
Wyo needs affordable housing
[oas:casperstartribune.net/news/caspernext:Middle1]
CHRISTIAN STEARNS
In Wyoming, there has been a broad discussion on the need for all types of affordable housing (homeownership, rentals, transitional housing and emergency shelters).
HUD’s definition of affordable is that you do not spend more than 30 percent of your income on housing. When we speak about “affordable housing,” we are not just talking about “low-income housing” or “work force housing.” We are talking about housing across the spectrum for all Americans.
…
At the national level, one way to protect and preserve homeownership is to modernize HUD’s Federal Housing Administration (FHA). FHA was created during the Depression to stimulate the housing market and give home buyers access to reasonably priced mortgages under fair terms. Over the past 73 years, FHA has helped more than 34 million families become homeowners.
But FHA’s products can’t be updated without legislation. Many first-time home buyers have turned to exotic and subprime loans. We could safely help hundreds of thousands of current and future home buyers if Congress passes FHA reform.
…
Should homeownership and affordable housing continue to be a “dream” for Wyoming citizens, or is it time to make it real?
Christian Stearns is Casper Field Office director of the U.S. Department of Housing and Urban Development. This article includes excerpts from HUD Secretary Alphonso Jackson’s national column, “Keep the dream possible.”
http://www.jacksonholestartrib.com/articles/2007/06/15/news/caspernext/c364d749b0ca2b6d872572fb00809c92.txt
PREPARED REMARKS FOR
ALPHONSO JACKSON
SECRETARY OF HOUSING AND URBAN DEVELOPMENT
AT THE HOMEOWNERSHIP SUMMIT
WASHINGTON, D.C.
MONDAY, MAY 14, 2007
‘A new FHA could be an antidote for sub-prime difficulties. FHA reform could be one important answer to our sub-prime problems. Right now, without reform, FHA refinancing could help tens of thousands of families who currently have sub-prime loans. So the anti-reformers will say we really don’t need to do anything…the sub-prime borrowers will come to FHA now anyway. But, we could help more families - tens of thousands of families — if Congress expands our authority. With expanded authority to set insurance premiums commensurate with risk, FHA could potentially assist tens of thousands more borrowers who need an exit strategy from their sub-prime mortgages. Unfortunately, under today’s restricted premium limits and maximum loan amounts, FHA simply cannot reach all the borrowers who need the “safety-net” that FHA can provide.
I would like you to reflect on one more part of the FHA reform process. If we had FHA reform last year, much of the sub-prime problem could have been avoided. We have to find the ways and means to convince Congress and others to get ahead of the curve on the housing market. We need to lead through incentives, not simply try to play catch-up after the fact. We could have saved many homeowners the heartache and tragedy of foreclosure.’
http://www.hud.gov/news/speeches/2007-05-14.cfm
“We could have saved many homeowners the heartache and tragedy of foreclosure.”
From the Greeks, tragedy involves a death due to character flaw.
Foreclosure is the end result of greed, mininformation, and wishful thinking. By no means, is it a “tragedy”.
Just shut up, Alphonso.
HUD Chief Urges Action on Loan Proposal
Monday June 4, 2007 10:16 PM
AP Photo WX109
By MARCY GORDON
AP Business Writer
WASHINGTON (AP) - President Bush’s housing chief urged Congress on Monday to quickly enact legislation that he said could help stave off future distress for homeowners with high-risk mortgages without spending government money. This idea smells like financial alchemy!
Mortgage delinquencies and foreclosures have been surging, especially for people with tarnished credit or low incomes who took out high-priced home loans, known as subprime mortgages, during the housing boom that has turned into a slump.
Nearly 2 million adjustable-rate mortgages are resetting to higher rates this year and next, setting up a potential wave of foreclosures that has put policymakers on edge.
Alphonso Jackson, the secretary of housing and urban development, said, referring to the recent crisis in the high-risk mortgage market: “We knew that this was coming. We just didn’t know it would come as quickly as it came.”
Jackson said in a speech that “we can address upcoming subprime problems if we have the wisdom to get ahead of the curve. And we had better get ahead of the curve - or we’re going to have serious problems.” Ahem… http://ml-implode.com/
One way to do that, he said, is by Congress enacting the long-standing proposal to overhaul HUD’s Federal Housing Administration. It was not specifically written to respond to the recent crisis in the subprime mortgage market, but Jackson said the proposal could help tens of thousands of families with subprime home loans who are looking to refinance them.
The proposal would allow FHA to raise the maximum mortgage amount it can insure in higher-cost areas such as the Northeast, California and the mid-Atlantic. It is backed by the White House and has garnered support from Democrats in the House, including Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee.
“FHA could help those thousands of borrowers who need an exit strategy from their suicide mortgages,” Jackson said in his address to the National Press Club.
With many homeowners in trouble frightened to call their lenders to ask for help, HUD also has asked Congress for an increase in funds for housing counseling so that people can turn to local nonprofit agencies, Jackson noted.
“This is not a bailout program,” Jackson said. HUD should not be a “bailout agency” and government money shouldn’t be committed to such plans, he said.
http://www.guardian.co.uk/uslatest/story/0,,-6683395,00.html
They have an exit stategy already…Walk out the door with their suitcase.
Re the unable to pay bills , I think this may be appropiate.
Yesterday, I was watching the Az D’backs on the TV. Twice there was a commerical for Safe Auto(minimum insurance) where the mom has the kid pile into the van. Then she says : sometimes money is tight. Safe Auto allowed be to begin my coverage with a “Post Dated Check.” Absolutely incredible.
desertfox
Incredible and illegal.
Actually, not illegal.but not criminal action if it bounces. It is a promissory note if I remember correctly. Makes you wonder how many still bounce.
desertfox
Hmmm.
“Regulators and lawmakers … confront the fallout from several years of lenders making too many home loans to people with inadequate credit.”
It is still “with inadequate credit” rather than “too many home loans to people at too high prices”. Alt-A ahoy?
And the “inadequate credit” point also lets them hang most of the news space on “fradulent lending”. As defaults move up the credit chain, that would seem to get more and more unsympathetic.
I’ll say it again…write your representatives & senators, now. IMHO, it’s because of bubble bloggers (and all the calls, e-mails & letters they sent) that Sen. Dodd backed away from the “bailout” talk.
Write now, or at least call, please!!!
NATION’S HOUSING KENNETH HARNEY
Renting good credit may become history
June 17, 2007
WASHINGTON – The days may be numbered for dozens of Internet-based companies that promise to quickly boost FICO credit scores by 200 to 300 points.
Fair Isaac Corp., the developer of the widely used FICO score, soon plans to introduce key changes designed to derail schemes that transplant high-quality credit card histories into the files of people with low FICO scores.
The credit-boost companies, easily found on the Web by searching for “rent a credit tradeline” or “rent a credit card,” claim they violate no federal laws and are not seeking to defraud mortgage lenders. But mortgage industry groups, federal and state regulators and credit industry leaders say the programs represent significant threats to the home lending system – opening the door to fraudulent home loan applications.
http://www.signonsandiego.com/uniontrib/20070617/news_1h17harney.html
Ken Harney has been getting more “meat-n-potatoes” into his real estate articles this past year. I guess the MSM editors finally gave him the green light. OTOH, Perkins is still serving the real estate koolaid.
Yesterday need 2 leave ca posted Gary Watt’s response to his email. Mr. Watts has granted an invitation to compare notes in another year; that email exchange would would be very interesting.
This is how I see the timetable for the unwinding of RE:
2007: Denial - RE shills will still get quoted regarding how RE is not all that bad; GFs will still be believing the shills and buying some houses, and some RE industry insiders will still be buying thinking that their $480k auction purchases (complete with a 10% commission) is worth $550k.
2008: Capitulation - we will see the start of some (but not all) of the RE shills throwing in the towel, explaining that what they where saying and writing about RE was a bit misleading but that is understandable because this was expected of them by their former employers. They will all be pointing at the new down payment requirements that will become so pervasive that not even the RE heavy hitters (Realtors (TM) who also do mortgage brokering) will be able to get around them. Also, the crazy advertisements on the History Channel for a $450/mo payment on a $150k mortgage will be gone for good.
2009: Decapitation - the practice of allowing RE shills to strut their stuff on the MSM without rigorous cross-examination will largely come to an end. By that time, this new practice of running these RE shills through the wringer will be viewed as a matter of “competence” and “integrity” on the part of the MSM.
Got 10% down?
link please?
Here is the Gary Watts response, about 3/4 down the page:
http://thehousingbubbleblog.com/?p=2958
And reposting of the Gary Watts response, with a livelier thread, about 1/3 down the page:
http://thehousingbubbleblog.com/?p=2962#comments
I will try and find the link to the original letter to Gary Watts (This is sproving to be very difficult, sorry for the delay.)
Oh you mean to tell me that interest rates did not drop again? They are not at record lows?
These adds make me sick - they should not be allowed as they are not even truthful!
http://tinyurl.com/237vcr
Local realtors ask God for help to restore area housing market
I can’t make stuff like that up
Yes, God is like Santa Claus, and grant’s wishes if concentrate hard enough…
If god had his way all these crooked realtors would be burning in hell for their shady ways.
The governor of Georgia has been praying and expecting others to do the same…
http://www.ajc.com/metro/content/metro/stories/2007/06/07/0607metsonny.html
In some Christian traditions, prayer is conceptualized as consisting of five categories: praise, confession, petition, intercession, and thanksgiving. These RE guys are all about petition when they should be focusing on confession ! And thanksgiving for all the “fat” years they have just enjoyed.
Raucous laughter from this atheist!
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It looks like the new Catharine Zeta Jones movie is finally coming out. I saw the commerical last night. If you see that movie you can easily take a trip to see where they shot the restaurant scenes. It was an abandoned storefront on the corner of Bleecker Street and Charles Street (22 Bleecker in the movie). The movie was shot back in 2005 in the old neighborhood.
It is no longer an empty store front. That spot is now occupied by a “Juicy Couture” store. It is yet another step in the overwhelmingly awful yuppyfication of the West Village. Everybody thinks these streets are paved with platinum. It’s the roaring ’20s in the West Village.
What do foreigners know about GSE debt that I don’t?
Foreigners purchase U.S. stocks, less bonds
DOW JONES / ASSOCIATED PRESS
June 17, 2007
WASHINGTON – Foreigners snapped up U.S. mortgage debt and stocks in April while purchases of Treasury bonds sagged, according to a U.S. Treasury Department report released Friday.
Net foreign acquisition of long-maturity U.S. securities was $76.5 billion in April, up from $39.9 billion in March. But a sell-off of Treasury bonds was attributable to private foreign investors, who sold a net $9 billion, while foreign official institutions such as central banks bought a net $9.4 billion.
Brian Bethune, an economist with Global Insight, cautioned that it might be premature to read too much into the declining notes and bonds purchases, considering the Treasury Department has cut back on raising money as the government deficit has decreased.
“Given that the auction sizes have been cut back so drastically, it would be hard to infer from this data necessarily that (foreign buyers) are pulling from U.S. Treasurys,” Bethune said.
Bethune said the sharp pickup in buying of debt issued by U.S. government-sponsored agencies such as Fannie Mae and Freddie Mac may augur well for the mortgage markets.
http://www.signonsandiego.com/uniontrib/20070617/news_1b17filler.html
From what I have read, for example, on Calculated Risk, the CDO and mortgage securities markets have taken hits in the last few days. They care going back down from the recovery in April.
I have recently read comments in the MSM by politicians and top economic policymakers asserting the beneficial role of subprime lending in the U.S. housing market. Confessing my personal ignorance on this subject, I wrote a post to yesterday’s bits bucket soliciting an explanation from anyone who can verbally attest to the benefits of subprime lending, but I received little response (maybe I posted this too late in the day?). So in the spirit of optimism, I reiterate my request today:
I cannot begin to fathom the financially- and politically-suicidal insanity of funneling money from the pockets of extremely wealthy people into the hands of low-income borrowers with spotty credit to qualify them to buy homes they cannot afford — aka subprime lending (or if you prefer, newfangled usury). How could this ill-conceived scheme have possibly failed to blow up?! And how could legions of clever politicos and financial wizards have failed to foresee a disaster in the making? Please explain this if you can.
Easy. Even though it sounds zany, all risk can be modeled and dealt with through slicing/dicing and custom derivatives. Live for today, ya know?
Guess we’ll see shortly if that’s true or not.
TxChick — Thanks for the input, and I agree — all risk can be sliced, diced and insured, at least in the short run
I think there is a lot of disconnect between the lenders and the people the sell the loans to.If the lender was going to be responsible for the loan if it went bad then they would probably be stricter about loaning the money. Most lenders just want a commission and don’t care if the loan fails as they have sold to some other smuck.I’m am not sure what recourse these buyers of packaged loans have. I think this is where the system ran amuck.I think they slice and dice the loans so much that it is very hard to hold anyone entity responsible.
Only if the other parties aren’t as smart (or turn out to be smarter or meaner) than you are in gaming the systems. Witness the tug of war brewing between those betting on mortgages to default and those twiddling the accounting to stay above water so some hedge funds don’t get the defaults they wanted to make THEIR profit.
(In other words, shark vs shark)
Somebody is bound to get eaten alive when the subprime pie is shrinking as rapidly as it has so far this year…
Txchick, what I find amazing is that there is such widespread acceptance of the idea that slicing/dicing reduces risk. The reality is that there is a Law of Conservation of Risk–just like conservation of mass/energy. Exchanging it from one party to another, chopping it up into tinier bite-sized pieces, etc does nothing to reduce it.
“dealt with through slicing/dicing”
GS, since…2001…you’ve witnessed the creation of a historical economic Frankenstein:
The mortgage: “veg-o-sledga-matic”…it combines all the necessary elements that have not ever been applied on a “Global” scale.
Desperate buyers + a benevolent FED + charitable Bankers + Wall Street “Debt” philanthropy = Home ownership to all those who can say: “where do I sign?” …in any language!
http://en.wikipedia.org/wiki/Leo_Gallagher
&
http://en.wikipedia.org/wiki/Ron_Popeil
On the political front, people on all sides of the political spectrum are good at mental compartmentalizing.
My neo-crotchety-con version:
On Wednesday they are all for massive in-migration to help the common masses yearning to be free. On Sunday, they attend huge “Save the Earth” rallys and promise to take shorter showers to ameliorate the ongoing water crisis.
I’ll let someone else come up with the liberal version. (Shining the light of reason on the inconsistency of one’s philosophical underpinings is best left to the “enemy”
)
“Increasing home ownership” is apple-pie good. Most (all?) articles in the MSM still treat that as a basic tenet of cultural faith. Even if they mention the downsides, they don’t attempt tie them together and potentially tarnish the dream.
Apple pie is good for politicians, no matter if it leads directly to debt-slavery or sparks soaring home prices that crater home ownership percentages in the next guy’s term. Or if I’m a 40 year senator, I can just start working to fix the problem and make my political hay again then also. (I wonder if causing problems via bread and circuses and then pretending to fix them afterwards is a racket that the term-limits-by-assassination minded Romans failed to invent.)
This tenet still runs all through the FHA and HUD and … debates springing up. Once you reach the capitalized status of “THE American Dream”, how long does it take to turn a critical eye on a national mania? (A three hundred+ year old tenet.) In the old days, the huddled masses swarmed in with the idea of taking “free” land by the scruff of the neck and over a generation of back breaking labor, wringing a living out of it. Now we have more-than-100% loans (or three of them on the same property as farther above).
I’m not good at compartmentalizing. Hence I have no future in politics nor in religion.
“I wonder if causing problems via bread and circuses and then pretending to fix them afterwards is a racket that the term-limits-by-assassination-minded Romans failed to invent.”
The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary.
H. L. Mencken
Hobgoblin du jour: Subprime lending crisis.
Listening to Suzie Orman Show last night, one caller’s situation:
bought a house in Fl, took a home equity loan & used that money to purchase two homes (in CT and Boston) for two “friends” in her name who were supposed to “buy” it from her after six months. The “friends” have not paid the mortgage as agreed and bank is not permitting short sale w/o recourse.
The response from the host after a few pertinent questions basically “you’re screwed,” see you at the foreclosure sale. the Host also made some editorial comments to the effect of “less is more.”
I know a lot of people do not like Suze Orman. I think her stock mutual fund advice is right on, as well as her general savings advice.
The “less is more” idea is a cool concept. One of my sisters and I talk about that a lot and we are proud to have few material possessions. Our dad warned us long ago to not become slaves to our possessions. He was right (of course he was from the Bob Hope generation). Less is more means that when you have less, you have more freedom. You do not have to clean as much house, maintain as many cars, and so forth. I prefer having time for vacationing.
Less is more is a great concept. Too bad she spends half of her time talking about how much “more” she has.
OT, but the Wash Post signals confusion as the blogosphere ignores the directions of the MSM and embraces Ron Paul…
“On Technorati , which offers a real-time glimpse of the blogosphere, the most frequently searched term this week was ” YouTube .”
Then comes ” Ron Paul .”
The presence of the obscure Republican congressman from Texas on a list that includes terms such as “Sopranos,” ” Paris Hilton ” and ” iPhone ” is a sign of the online buzz building around the long-shot Republican presidential hopeful — even as mainstream political pundits have written him off.
http://www.washingtonpost.com/wp-dyn/content/article/2007/06/15/AR2007061502428.html
Excellent! Thanks for the link!
The established party hacks and lobbyists do not want Ron Paul to come close to nomination. He is close to the American people and too far from the beltway lifetsyle. I am a registerd Libertarian and won’t change my registration to vote for him in the primary. But I will vote for him if he wins it.
Few days old now, but here’s an excellent thread on another blog. One can almost smell the snark in some of the comments.
http://www.irvinehousingblog.com/2007/06/11/the-reservoir-of-schadenfreude/
Lead off:
Why do we get so much pleasure from failed flips? I can think of no other human endeavour which has engendered so much pleasure in the misfortune of others.
Quite.
Well stated!
“so much pleasure in the misfortune of others” - hey, it worked for the flippers too, for a lil’ while …
Pay back time, skumbag$!!!
Greetings from el lay…
Taking in the Playboy Jazz Festival @ the Hollywood Bowl~
Heff is looking older every year, but the 6 hotties hanging around him never age. I’d estimate the total age of the 1/2 dozen to have been 133 years, in total.
This is my favorite peoplewatching venue, and the music ain’t too shabby, either…
Enjoy! I am one to like smooth jazz myself.