As Fast As The Boom Started, It Was Over
The Press Herald reports from Maine. “Looking back, Maureen Green often wishes she had just gotten up from the table and walked away. In January 2006, Green and her husband, Loni, sat down to buy their first house, a modest two-bedroom home shaded by tall pines in the Lake Arrowhead subdivision. At the time, Green had no down payment, no recorded credit score and a part-time job earning $11 per hour.”
“Her husband, who is diabetic, worked as a mechanic at a salvage yard, earning $9 per hour without benefits.”
“But Green, like thousands of other borrowers with poor credit who obtained mortgages in the past few years, discovered there were lenders willing to loan her money, albeit at a higher-than-standard interest rate. Today, Green has learned that the loans she found easy to obtain are almost impossible to pay back.”
“‘Once I was sitting in that chair with that pen, I just wanted that house,’ she said.”
“During the first year in their new home, Green switched to working full time but the couple still fell behind in their property taxes. In January their lender began foreclosure proceedings. Green is expecting a court action later this week that may order her to leave the tidy one-story home where she has planted flower beds out front.”
“‘It was my first house, and it might be my last,’ she said.”
The Boston Globe from Massachusetts. “Just two years ago, East Boston was the next ‘it’ location. Developers snapped up triple-deckers to remodel and flip, and proposed converting factories into high-end condominiums.”
“‘It was on fire. It was going crazy here,’ said David Barsky, who bought a house in the neighborhood in 2000 and embarked on an eight-unit remodeling project in 2006.”
“Then, as fast as the boom started, it was over. In 2006, the real estate market statewide softened. As extreme as it was during the boom, East Boston’s condo market was way out front during the bust: Sales here fell 30 percent in 2006, compared to a 10 percent decline citywide. And so far this year, condo sales in East Boston are down nearly 18 percent.”
“Once-imminent luxury condos are suddenly on the back burner. Earlier this year, work on the massive East Pier, a 550-unit luxury condominium and apartment complex, stalled just months after it began. The developers now intend to begin building an apartment building this fall, rather than the condos that were initially planned to go first.”
“Meanwhile, another waterfront development, Clippership Wharf, where 400 condos were proposed, is also going to be built as an apartment complex.”
“With the housing market slowdown, and the stalling of major developments that would have dramatically altered the landscape, East Boston is ‘where we were five or six years ago. We’re in a day-by-day market,’ real estate agent James Zarrella said. ‘Not everybody is pounding the neighborhood to get over here and live. There just isn’t that demand to be here.’”
“People who recently converted condos are now offering steep discounts or renting them out; in some cases, lenders took over the properties, he said.”
“Barsky, who estimated he stood to make as much as $1 million restoring a huge Victorian, was unable to complete renovation before the market cooled. He ran out of money, sold it to someone with deeper pockets, and lost $500,000, including his house.”
“Now he is working with another developer to try to get eight newly constructed condo units on Cottage Street sold before winter hits. He’s worried the market could decline even more, and the condos, which were originally going to go on the market for the high $300,000s or low $400,000s, have already been marked down to the low $300,000s.”
“Longtime East Boston realtor Tony Giacalone said the major benefit residents expect from the East Pier project was the waterfront access it would provide. He said he has never heard anyone talking about actually buying a unit in the development.”
“‘A lot of people would be just as happy if that were turned into a park,’ Giacalone said, contending the projected unit prices are too high for the neighborhood.”
The New York Daily News. “The growing wave of foreclosures casting a shadow over the nation’s economy just crashed over 63-year-old Eva Murphy of Queens. The former airport worker says she became a homeowner after a representative of a company called 2000 Homes showed up on her doorstep in December 2005.”
“The sales rep told her she could afford to buy a house even though she had bad credit and lived on an amalgam of government subsidies.”
“The sales rep promised Murphy a house with a mortgage she could afford. She says he suggested a two-family home on Roscoe St. in Jamaica, Queens, for $430,000. After the closing, she discovered the price was actually $538,000.”
“Murphy says she was told monthly payments would be about $2,000. She later learned they would be $3,990. She also learned that even though she has no full-time job, her mortgage application listed her as a $9,000-a-month ‘marketing manager’ for a company owned by her loan officer’s husband.”
“Ten months ago, her house ended up in foreclosure. ‘It’s a mess,’ she said.”
“Eitan Sror, chairman of 2000 Homes, provided a copy of the sales contract, which was dated May 4, 2006, and signed by Murphy, showing the price of the house was $538,000. ‘I can’t see how she would think otherwise,’ he said.”
“Sror said he didn’t know about Murphy’s loan documents, adding, ‘We’re not required to keep any information that has to do with the mortgage.’”
“Murphy says she doesn’t know what she’ll do if she loses the house. ‘I didn’t know there was so many dishonest people that they can just sell you a bunch of garbage,’ she said. ‘And this is what this is - a bunch of garbage.’”
The Philadelphia Inquirer from Pennsylvania. “Portents of economic doom darken the national real estate picture daily. Anywhere but here, it seems. Observers of the local real estate market say the eight-county Philadelphia region has so far managed to dodge the crashing prices that have beset some other major U.S. metropolitan areas.”
“‘While the market has cooled, we have yet to see any significant price declines - yet,’ said Kevin C. Gillen, a Wharton School research fellow.”
“For buyers, it’s the wide selection of houses to choose from. ‘This is a market you can take your time with,’ said Steve Storti, senior VP for marketing with Prudential Fox & Roach Realtors. ‘With so much for sale, there is not an extreme sense of urgency about buying now - because you might miss out on a better house.’”
“No one is willing to predict how long this region can stay above the national fray. ‘It will be a while before we hit the turning point,’ Gillen said. ‘There are still a number of major adjustable-rate mortgage resets coming over the next six to eight months, which will determine how long it takes the lenders to stabilize themselves.’”
“‘With national credit conditions becoming tighter’ even as long-term fixed interest rates decline, he added, ‘this will affect local conditions here, regardless of what we can do about our own market.’”
“The municipal and MLS data reviewed show that in 2006 and thus far in 2007, sales of existing homes dropped to slightly below the level of 2003 - the midpoint in the so-called ‘hot market’ of 2000-05.”
“Sales of new homes - which typically drive median prices higher in a town - also declined, forcing suburban builders to turn to incentives and focus on smaller and less-expensive attached houses.”
“The perception that the national housing malaise has infected this region is having an impact, observers said.”
“‘Chalk it up to the infrequent nature of the real estate business,’ said Storti. ‘Buying a home is either elective [you want to] or based on need [you're relocating]. If your perception of the real estate market is colored by the extremes that the media cover, then you aren’t going to see the differences.’”
“Thus, buyers who don’t need a new house aren’t rushing out to look for one.”
“Broker John Duffy said there was no comparison between that 1990s slump and now. He thinks that a lot of ‘elective’ buyers are waiting for prices to drop, and that it isn’t going to happen.”
“Yet the problem isn’t just with hesitant buyers. ‘There are still a lot of sellers who want us to list their houses for any number they come up with, and we just won’t take the listing,’ said Duffy, who owns Duffy Real Estate in Narberth and Wayne.”
“The sooner sellers and agents allow prices to become more rational, the sooner sales will pick up, Econsult’s Gillen said.”
“Even if we do experience a meaningful price deflation, that isn’t necessarily an overall bad thing, because it increases housing affordability and accessibility for [the region's] population.”
“It’s difficult to predict short-term fluctuations, Gillen said, ‘because the near term is as much dominated by buyer-seller psychology . . . as it is by fundamental forces.’ ‘To paraphrase Dr. McCoy from Star Trek, ‘I’m an economist, Jim, not a mind reader.’”
This New York article was posted in the comments:
‘Unable to work full time because she cares for her emotionally disabled son, Denise DiProspero now has to pay an extra $400 a month to keep her house. With her low income and low credit rating, the only lender willing to take a chance on her charged a high interest rate.’
‘I had to refinance. It was the only loan I could get,’ said DiProspero, of Greece. (NY)’
‘Doug Lustig, a Rochester attorney who specializes in bankruptcy claims, said he has noticed a ‘higher end’ client, people with higher incomes, filing for bankruptcy protection.’
‘One common thread, he said, is a lack of anticipation. People don’t prepare for a layoff, a loss of overtime hours or a major health care expense. ‘Too many people extend themselves, thinking things are going to continue as is,’ Lustig said. ‘They’re doing fine and then a blip occurs. All of a sudden they’re feeling that crush.’
“Murphy says she was told monthly payments would be about $2,000. She later learned they would be $3,990. She also learned that even though she has no full-time job, her mortgage application listed her as a $9,000-a-month ‘marketing manager’ for a company owned by her loan officer’s husband.”
This kind of bullsh@t is incredible.The whole housing bubble was built on lies on fraud.No wonder the real estate industry has a bad reputation.
But they don’t have a bad reputation with the bulk of our fellow citizens. That is what amazes me. People still trust these parasites and this wretched industry.
Speaking of parasites, this FB “victim”, Murphy, seems to fit the description.
“The sales rep told her she could afford to buy a house even though she had bad credit and lived on an amalgam of government subsidies.”
“Murphy says she doesn’t know what she’ll do if she loses the house. ‘I didn’t know there was so many dishonest people that they can just sell you a bunch of garbage,’ she said. ‘And this is what this is - a bunch of garbage.’”
Here’s a clue you greedy stupid lying bit$h - it’s not your house. You can’t afford it - you never could afford it. But you knew that before you moved in, you welfare parasite. Get the hell out of it and move back into a section 8 slum where you belong.
Yes! You ROCK, Chrisrose! Always refreshing to see straight talk from those fed up with paying the bills for parasites.
Your Humble Servant,
Sammy
Many of these people involved in these scams need to be prosecuted. If there’s no consequences, it’ll just pick up where it left off.
I thought you wrote “executed”. I was in full agreement and then I saw that it just read, “prosecuted”. Now I’m disappointed.
Right there with you, brother. A strong branch and a good rope would be just the ticket for many of these fraudsters. It would be a strong deterrent, and would save the taxpayers a bunch of money.
“This kind of bullsh@t is incredible.The whole housing bubble was built on lies on fraud.No wonder the real estate industry has a bad reputation.”
A lot in America has been built on lies and fraud - WMDs are in Iraq, outsourcing to China is good, BLS statistics are accurate, unhitiching from the gold standard was good…anyone care to continue???
Testify, phxis.
You left out “diversity is our strength” and “immigration benefits our great nation.”
Where else in the world could I meet so many people from so many nations?
Answer: everywhere, which is why I’m wondering why I’m still here when there are so many cosmopolitan centers in the world with less severe (if sometimes rather different) problems.
Still, I have to say, having been “over there”, sometimes I’m rather proud of the way we deal with things here, especially our ethnic, religious, and racial differences.
When it comes to integration and innovation we are way ahead of most countries. Of course when it comes to unequal wealth distribution, teen pregnancy, shooting deaths, and piling up trash, “we’re number one” sounds rather hollow…
That’s because the WMDs were in the UN bldg in NY.
“audited ” financials
“The growing wave of foreclosures casting a shadow over the nation’s economy just crashed over 63-year-old Eva Murphy of Queens. The former airport worker says she became a homeowner after a representative of a company called 2000 Homes showed up on her doorstep in December 2005.”
what made her think she could even pay off the mortgage before she died? shes 63 years old? at 63 she should have been able to pay cash for the house! is she going to say they wouldent let her wear her glasses when she signed the contract?
My husband and I had made a point to have money for retirement, then six months of salary saved up in case of job loss, and NOW we are saving for the down payment. Many of my friends don’t understand why we don’t dip into our current savings or our 401k for the down payment…we would have enough right away and we won’t have to wait another two years to save enough.
Fiscal responsibility is like a foreign language to sooo many otherwise intelligent people.
Intelligence and common sense are neither friends nor acquaintances. They have never even passed each other in the hall.
Is that a Mark Twain quote?
NYCityBoy - September 23, 2007
‘Intelligence and common sense are neither friends nor acquaintances. They have never even passed each other in the hall.’
But they’ve met in the alley behind the school, where common sense slapped intelligence around some, and then took intelligence’s lunch money.
Maybe it’s the other way around?
Just In Time Economy
‘One common thread, he said, is a lack of anticipation. People don’t prepare for a layoff, a loss of overtime hours or a major health care expense. ‘Too many people extend themselves, thinking things are going to continue as is,’ Lustig said. ‘They’re doing fine and then a blip occurs. All of a sudden they’re feeling that crush.’
It is a great point and one I don’t get at all. My Dad was out of work for a while when I was a little kid. I have other family members who have spent time out of work. I am a highly educated professional and I have spent time out of work as have several of my similarly educated/skilled friends. All of us were unemployed for a time because of economic/business cycles. Nobody was a crook or incompetent. It happens. There are cycles. Demand for your skill set increases and decreases.
Why don’t people save for the inevitable?
Is it just because it is hard? I guess I understand that. It isn’t an excuse but saving can be a hard habit to start, though it is easy to maintain once started.
Or do people really truely not understand that business/economic cycles are part of our system and it is possible to be out of work for a while? I wonder if this is a second HUGE problem with the “goldilocks” economy. That people cease to know instinctively that no job or salary is guaranteed forever, that you have to have an emergency fund. Or that you can’t really live on unemployment.
Well you do have 3 basic types of people, people that are spendthrifts, people who save like you……
But really there is a 3rd category which is, if you get laid off and use up savings then by the time you finally get some job interviews new software or new technology is beyond your ability to pay for it……new computer programs require a higher end computer then you have,jobs that used to being offices are now requiring you to have a up to date laptop, and to work from home and at the job site.
Seriously i will try and find the ad here in NYC for an Entry Legal paralegal …must have a wireless laptop and a blackberry/or unlimited text messaging…for Entry level???
=====================
Why don’t people save for the inevitable?
And I feel for those people and you especially, NYCdj, because I know you a bit and I have felt the frustration in your posts. But I bet the people the Rochester bankruptcy attorney is talking about aren’t in your situation.
What sort of entry level paralegal is expected to provide his/her own equipment? That is crazy talk. Doesn’t sound like a real job at all. You are best to stay well away from that. Sounds like someone trying to steal the equipment. Bet you bring the equipment in and then they say it contains private client information and you can’t take it with you. Hard to beat lawyers in small claims court.
“The former airport worker says she became a homeowner after a representative of a company called 2000 Homes showed up on her doorstep in December 2005.”
Selling houses door-to-door. And still the morons around me can’t figure out why I say that the crash is going to be spectacular. It’s, “think happy thoughts and this will all go away”. “A pox upon all of your houses”, is what I think. Stupidity has a price and millions are going to learn that price in the coming years.
‘Selling houses door-to-door.’
Good catch.
Brother could you spare a house?
LMAO, that’ll be the next desperate marketing ploy. Some skinny little kid knocking on your door with a box of chocolate bars and candy, and solicitations to buy in new developments, to raise money for some youth organization.
In the future, this might be as good of an answer as any, to what caused this extraordinary popular delusion…
“‘Once I was sitting in that chair with that pen, I just wanted that house,’ she said.”
“‘Once I was sitting in that chair with that pen, I just wanted that house,’ she said.”
Yes Maureen, and like a rat who took the cheese, you turned and your hole was boarded up. The good thing is you’ve got zero skin in the game, and as a pawn in this whole mess the only thing you’ve sacrificed is a heretofore non-existent fico score and perhaps some tears. Just thank heaven you’re not a bondholder.
That is one of the biggest problems with purchasing a home…99% of the American public views it as a emotional purchase not one of financial sense..people need to be educated on the “financial responsibility” that goes along with homeownership…many think it stops with the mortgage payment..trust me it doesn’t…
But the marketing is emotional, including that of the politicians.
It’s a consequence of all this “American Dream” stuff, which is also the name of the Bush admin, low-income, low-downpayment program established in 2003.
It wrongly connects people to a sense of entitlement, that owning a house comes with living in America, regardless of one’s financial assets.
You know, the scam known as “the ownership society”. Yeah, baby, you own the debt,that’s all yours.
Right on Spike. These FB’s were LED to their demise by whom? OUR LEADERSHIP. If our illustrious leadership honestly had the best interests of those they lead in mind, this scam never would have occurred. Further, if our leadership honestly desired to right this sinking ship, they would collar these scam artists and have them do the perp walk, cameras rolling and all.
Did you notice I referenced HONEST twice?
As a homeowner in the Philly suburbs I can attest to the relative calm we are experiencing compared to places like NY, California and Florida. It never really got unaffordable here, so perhaps that’s the reason. I have no doubt we’ll also experience at least some downturn due to the new and much needed mortgage changes, but I must admit it’s nice not to live in the hurricane.
It never really got unaffordable here,
There is the key in a nutshell. What is happening now as far as bad RE markets and decreasing prices will only be bad in the so called “boom” markets where the fundamentals don’t make sense.
Take for example Manhattan Beach,CA. The median income is about 100K I think, and while this is very high the median house price is like 1.5 million. I believe prices will always revert to historical levels versus incomes. So if typically home prices were 3 times the income you are looking at 300K, OK-I’ll give you 5X income because it is ‘la de dA” California, you are still at only 500K, even if I give you 10x income(I know thats ridiculous) you are at 1 million-even at those levels you still need about a 50% haircut.
There are several markets like this in CALI. these are the ones where the pain is yet to come.
“It never really got unaffordable here”
Frequently I hear this from alot of people. And it’s usually those who are in deep denial.
From what little I’ve heard about Philly, is that some of the high paying jobs there were finance related and exported from New York and New Jersey as the cost of living in those areas became truely unaffordable. Philly may have problems if those good jobs leave - either back to NYC or just disappear completely.
“For buyers, it’s the wide selection of houses to choose from. ‘This is a market you can take your time with,’ said Steve Storti, senior VP for marketing with Prudential Fox & Roach Realtors. ‘With so much for sale, there is not an extreme sense of urgency about buying now - because you might miss out on a better house.’”
Lot’s of houses for sale, not many buyers and the ones looking are taking there time. Recipe for a fall in prices.
Can I have what you’re smoking? Houses that sold for 350 back in 2001 are for sale for 900k today.
I can afford 500k, not 900k. And we make a fair bit of cheddar.
This happened across the board, MoCo, CC, Society Hill, Narberth.
Don’t believe me? Spend some time going through the property records:
http://brtweb.phila.gov/
http://propertyrecords.montcopa.org/Main/home.aspx
I’m wondering when this will turn around. No one has really looked at the number of heloc’s and how many were used to buy real estate. So its not just homes sold in the last few years but a good percentage of all homes that are at risk since they home debtors will be underwater. And as more homes go into foreclosure more people go underwater and walk.
I’m beginning to think it will be 15-20 years before real estate comes back.
The only thing that will keep it from dying is conversion to rental properties. But this will keep pushing down the equivalent rent equation.
And property values in areas with large numbers of rentals.
Throw in peak oil and I think suburbia and the white picket fence is dead.
So in my opinion we have just witnessed the death bubble.
Funniest of all…
The past 6 years, we debated whether Darwin’s principles were correct, or not.
Debate’s over.
Welcome to the Brave New World of…
Survival of the Fittest
Let’s all meet at the Bastille.
I’ll bring my Gila teen
I agree that the timeline will be many years..there has not even yet been an estimate given regarding the number of homeowners who are current in their mortgage but due to refinancing/home equity lines are upside down…how long will it take for those peope to recover???
It could actually be a very long process. I occasionally listen to Gabriel Wisdom on the radio, he has some good investment insights and is a true “value” investor. He was predicting a RE bust 3 -4 years ago and he said historicaly RE has an 18 year cycle from peak to trough-9 up and 9 down-which as I remember is about right from the mid 80’s to early2000’s.
Also anicdotal-I was talking to a realtor in Vegas last week and he was so depressed. He had been a top producer in Vegas for the last 15 years-he said every body made money in the last 5 years and alot of it ,but he did not really save much(typical). He said now it is absolutely dead and he does not feel it will ever get better. Of course it will get better but probably not like it was, at least for many years.
The funniest thing was he did not think the market was over priced, he felt this was all caused because investors had stopped buying mortgages, hysterical!
RE: He had been a top producer in Vegas for the last 15 years-he said every body made money in the last 5 years and alot of it ,but he did not really save much
The paychecks for most of those in the RE industry save for the agency principals are a mirage.
The yearly gross looks great, but then you start factoring in
double SS levies, auto depreciation, no paid vacations or sick time, rent, advertising, equipment leases, supplies, maybe the employment cost of a helper, et., el., the final net end’s up bein’ dog-squat.
However, shed no tears for this crowd.
They brought all of this down on the top of their heads, with their acquiesce to state boards who license every jerk-off who smells easy money.
Scores will be wiped out in this debacle.
“homeowners who are current in their mortgage but due to refinancing/home equity lines are upside down…how long will it take for those peope to recover??? ”
and how long will it take for them to understand their position? One local Syracuse poster recently stated long time owners are still enjoying their appreciating asset. I don’t think he understands that arrow on the appreciation graph has changed direction. And until they get their homes appraised for a sale or go for a refinance and get turned down, they’ll keep deluding themselves.
I think I’m most amazed at the people who owned outright, or have been in their houses 20 or 30 years helocing to the hilt. This is so beyond sub-prime. Practically everyone I know has an equity loan, except for us, my parents, and a few friends that like us, own their homes with no mortgage. This is kind of like mold in the walls….growing and growing and no one has a clue how big it will get.
The first time I heard of a “home equity line of credit” I thought, “who the hell would borrow from their house to spend money on their house”? This particular HELOC was used to decorate the place. Then I found out people were doing this to pay for vacations, college tuition and fake boobies. Madness!
Actually they may have been on to something. Take your debt level right up to maximum then wait for inflation. If they just put that money to work rather than spending it. I wish I could stand the insecurity and my general disdain of debt I’d have everything maxed and put the cash in short term CD’s. In 5-10years I’d be making 10-15% on money I borrowed at 6%.
We just heloc’d on our house… (our only effort, thusly)
To put in a solar energy system array
It penciled out fine, financially.
My in laws were talked into an equity loan on their downsized place. They redecorated to the hilt. That’s their business, I suppose, and they have plenty of cash in other places for if they decided they make a mistake.
But what killed me was how hard they campaigned for us to do the same. I just had to keep repeating “it doesn’t make sense for the the position we’re in…it doesn’t make sense for…” Amazing how parents can have an incredible need to “dress you up and show you off” like you’re toddlers. Ugh!!!
Not to mention spouses and SOs.
Just to add to my last post. You had to be financially savy enough to own a house for 20 or 30 years. You had to have 20-33% down, a good income to qualify, and you’ve made payments for all those years, then why in the h*ll would you risk all that equity. Somewhere along the line people are losing all their common sense.
You mean “savvy”? It is hard for people to be savvy when they don’t even know where to look for it in the dictionary.
No “savy” is right, it’s a fancy form of SAVE-y as in youe have to “Sav-ee” to cover the expenses of hownloanership
“Just to add to my last post. You had to be financially savy enough to own a house for 20 or 30 years. You had to have 20-33% down, a good income to qualify, and you’ve made payments for all those years, then why in the h*ll would you risk all that equity. Somewhere along the line people are losing all their common sense.”
IMHO, it’s more likely the banks enforced responsibility 20 years ago when these people bought.
And then they didn’t.
Good point. It’s not that people are all the sudden more greedy, less responsible, sociopathic… It’s that those who had the ultimate decision in the approval process for credit creation held the rabble to certain standards.
Those standards disappeared the last few years and before we knew it lowlifes, liars, pensioners, ‘illegal’ immigrants, welfare recipients, single mothers, fast food workers, the unemployed, cheats and frauds were able to get a loan based on their ‘word.’
What goes around comes around…
“‘It was my first house, and it might be my last,’ she said.”
Translation: we got killed at the casino, but we might go back.
Why so glum? She was playing with the house’s money.
Earlier in the Maine arcticle it reads:
‘Green, 54, had wanted to buy a home for years, but she
hadn’t gotten far. Managing money, she said, has never been her
thing. ‘
Translation: Living within her means, has never been her thing.
Making responsible decisions has never been her thing.
And, this will sound cold, but anyone making $11/hour should be THANKFUL! Why? Because if you take the annual US budget and divide it by the total population (including children), it comes to about $8000/person.
So if you’re not paying $8000/year in federal income taxes, then your neighbors are supporting you. You should thank them.
But no! Instead of thanking America for supporting her, she expects a free house, too.
““Just two years ago, East Boston was the next ‘it’ location.”
East Boston is within viewing distance of Logan International Airport. I recall years ago sound insulated windows were put on all the residential dwelling because the noise level was so high.
“Proximity to the airport” could have been the selling point.
You need a good Realtor that knows how to market such things. Most of us think, “too f-cking loud” but a Realtor can take that lemon and serve you a nice cold glass of lemonade.
Believe it or not, there are only a few street/areas in East Boston, where the planes are heard.
the pollution and congestion are another topic all together.
Such as just a cheap 5 minute taxi ride to the airport.
Yeah, by water taxi, if the report on global warming I’m reading this AM are accurate. Scientists are predicting a 1 meter rise in sea level. Not all agree on the time line, though. Estimates are 50 to 150 years. Sorta gives new meaning to the term “underwater”.
These cycles of warming and cooling have been taking place for eons over the course of the history of the planet, with or without human exacerbation.
Oh my god, Palmetto, at first I thought you wrote “masturbation”. I have to start reading more slowly. I’m just getting psyched for football to start in a little over an hour.
ROTFLMAO!
“Just two years ago, East Boston was the next ‘it’ location.”
I personally lived for two years in Winthrop, right in the flight path. That part of it isn’t a terrible problem. East Boston has a lousy school system. An acquaintance of mine, who had bought one of those EB waterfront houses rehabbed into 3 lux condos, decided she needed to put her kid into the Cambridge school system. So she kept her house in Eastie and bought another in Cambridge. THIS YEAR. Can you believe she’s an assoc prof at BU? Well, that means she can afford to throw her money away, I guess. Meanwhile, another friend, who works for the Fed (!!), wants to get her kid OUT of the Cambridge school system, and is considering moving to Brookline. But has the brains to realize they will have to sell the Camb house if they want to buy in Bkln.
BROOKLINE?!? Bfffffahahahahaha!!! I went to school in Newton where we used to make fun of those suckers. $1 million townhouses or flats, Brockton quality schools.
The parents want out of Cambridge because there are too many brown people in the public schools. Also too many black people in the school dept. Their friends in lily-white Arlington are giving them pity glances.
I guess when you buy an overpriced Eastern Mass. house with bubble bucks you don’t have anything left over to send junior to private school.
My gosh, I remember attending a yacht club invitational at the East Boston Yacht Club. When out on the patio, you had to stop talking every few minutes until the planes had flown by because you couldn’t hear what people were saying. We just went back in.
Now this is particularly bad coming from me as I have very forgiving ears. I grew under the B52 flight path of an Air Force Base.
“In January their lender began foreclosure proceedings. Green is expecting a court action later this week that may order her to leave the tidy one-story home where she has planted flower beds out front.”
Does anyone else marvel at how incredibly long it is taking the lenders to foreclose? If proceeding started in January it means they likely have not paid in full since August of 06. It looks like it is taking well over a year from last missed payment to foreclosure. There is a tsunami coming and we can’t even come close to measuring it.
Not in GA..they can take your home in as little as 37 days!
Not for Long…………when they get totally swamped in GA with foreclosures, will they ADD lots of people to the payroll to process the paperwork…or just let the IN pile get bigger and bigger and…whoops now it takes 370 days to get them out?
We had several in our rural neighborhood about 4 years ago which is when we started noticing a downslide. Most were 1 year to 18 months before the bank put them up for sale. Our neighbor 5 doors up lived in theirs a whole year payment free before they had to vacate. Then it sat 6 more months before it went up for sale. There’s a lot more red tape with foreclosures than anyone knows.
From a lenders perspective, they would rather have a non-proforming note with a occupant than a vacant house that can be torched, ransacked or turned into a meth lab….
Also, in some states the FB has a right to redeem the property. In Alabama, I believe, they can take your house in as little as 60 days, but the FB then has 18 months to redeem the property. Never happens cause the FB can’t raise enough cash to buy the house back and pay all the court costs, back interest, etc etc. But the house has to sit the 18 months because the bank can’t sell it with a “clouded” title. So they foreclose and delay the eviction.
MODERN MONEY MECHANICS:
[Published by The Federal Reserve Bank of Chicago]
“In the United States neither paper currency nor deposits have value as commodities. Intrinsically, a dollar bill is just a piece of paper, deposits merely book entries.’
“What, then, makes these instruments - checks, paper money, and coins - acceptable at face value in payment of all debts and for other monetary uses? Mainly, it is the confidence people have that they will be able to exchange such money for other financial assets and for real goods and services… .’
“Changes in the quantity of money may originate with actions of the Federal Reserve System (the central bank), depository institutions (principally commercial banks), or the public. The major control, however, rests with the central bank.’
“The actual process of money creation takes place primarily in banks.(1) As noted earlier, checkable liabilities of banks are money. These liabilities are customers’ accounts. They increase when customers deposit currency and checks and when the proceeds of loans made by the banks are credited to borrowers’ accounts.’
“In the absence of legal reserve requirements, banks can build up deposits by increasing loans and investments so long as they keep enough currency on hand to redeem whatever amounts the holders of deposits want to convert into currency. This unique attribute of the banking business was discovered many centuries ago.’
“It started with goldsmiths. As early bankers, they initially provided safekeeping services, making a profit from vault storage fees for gold and coins deposited with them. People would redeem their “deposit receipts” whenever they needed gold or coins to purchase something, and physically take the gold or coins to the seller who, in turn, would deposit them for safekeeping, often with the same banker. Everyone soon found that it was a lot easier simply to use the deposit receipts directly as a means of payment. These receipts, which became known as notes, were acceptable as money since whoever held them could go to the banker and exchange them for metallic money.
“Then, bankers discovered that they could make loans merely by giving their promises to pay, or bank notes, to borrowers. In this way, banks began to create money. More notes could be issued than the gold and coin on hand because only a portion of the notes outstanding would be presented for payment at any one time.’
“Transaction deposits are the modern counterpart of bank notes. It was a small step from printing notes to making book entries crediting deposits of borrowers, which the borrowers in turn could ’spend’ by writing checks, thereby ‘printing’ their own money.”
———–End ————–
PONZI SCHEME:
“[A] ‘Ponzi scheme’ is basically an investment fraud where investors are enticed with the promise of extremely high returns or dividends over a very short period of time.’
“This shorter period between payouts and high rate of return is required to create the impetus for the frenzy that is to follow as word leaks out, and is soon verified, by numerous sources. The truly experienced con will balance these two factors ( payout period and promised rate of return ) against the expected duration of the operation so as to maximize his take while still maintaining some semblance of credibility.’
“In the true sense of borrowing from Peter to pay Paul, ponzi schemes are a simple fraud whereby initial investors are paid exceptional dividends as interest cheques from the deposits of a growing number of new investors.’
“‘Profits’ to investors are not created by the success of the underlying business venture but instead are derived fraudulently from the capital contributions of other investors.’
“A few people invest in the scheme, then as news of the offer spreads, more investors are drawn in. Usually there is no actual investment involved, contrary to your understanding, just money being shipped in from new investors to the earlier ones.’
“Ponzi schemes eventually collapse because the underlying asset upon which the investment was based either never existed, or was grossly overvalued.”
Interestingly enough, the only place in the world that has greeted our glorious leader with great aplomb (and perhaps a little presidential watch pickpocketing?)
Has been Albania…
Their Ponzi/Pyramid scheme went wrong 10 years ago, and here’s what happened
http://www.allbusiness.com/public-administration/national-security-international/511850-1.html
An interesting article. Did the real estate bubble not saturate a substantial percentage of the US GDP?
This was to be sure the ponzi scheme of all schemes.
My Q… forget the FB’s they are patsies and are a zero sum gain. Who are the big winners and who are the big losers, given much of the fluff inbetween never really existed at all.
Goldman Sachs, Merrill Lynch, etc who repackaged and sold the subslime toxic waste as triple-A rated CDOs, MBSs, etc
And of course “Tanzillo” at Countrywide pocketed how much when he sold his over inflated stock options.
And if they were smart and saved some (which I doubt) the mtg brokers who put together a bunch of these liar loans and collected fees.
The FB gets screwed (in some cases deservedly so) and the end holder of the mtg bond gets screwed and all the scum in the middle got rich (realtwhores, mtg brokers, GS, etc)
Societies function due to mutual trust between it’s people and entities. We can do business and interact in all different ways because we must believe the rules of society will be followed or, if not followed, then enforced.
So, I do not find it strange that the society’s currency would be backed up by that same sense of trust… paper, shiny metal, puka shells or computer bytes.. what’s the diff, as long as we agree.
Bring back the tally sticks.
This may end up being a double post. Sorry!
“Then, bankers discovered that they could make loans merely by giving their promises to pay, or bank notes, to borrowers. In this way, banks began to create money. More notes could be issued than the gold and coin on hand because only a portion of the notes outstanding would be presented for payment at any one time.”
The “difference” is found in the lies, theft and deception.
The “bankers” were trusted with peoples’ “money” (ie, gold and silver). People began to exchange their certificates of deposit as money, because everyone knew that the “real money” was safe, in the bank. Then the banksters “discovered” that they could “create” money (ie, fake certificates of deposits called “notes”). Eventually they got all the gold, we got the paper.
“Mainly, it is the confidence people have that they will be able to exchange such money for other financial assets and for real goods and services… .”
“Confidence” being the key here, and governments ability to bolster confidence through social manipulation. As confidence subsides the ponzi scheme unravels.
That’s what I’ve always said, no confidence = no money, when you’re dealing with fiat currency.
You go to the store and buy milk for the kids. You “believe” the milk is safe to drink.. you take it on faith alone.
Does the safety of the milk depend at all on what sort of currency passes across the counter?
The entire social order is faith-based.
“Then, bankers discovered that they could make loans merely by giving their promises to pay, or bank notes, to borrowers. In this way, banks began to create money. More notes could be issued than the gold and coin on hand because only a portion of the notes outstanding would be presented for payment at any one time.’
Hence the term ‘FEDERAL RESERVE NOTE.’ Those aren’t dollar bills in your wallet - they’re Federal Reserve Notes of the privately owned Federal Reserve that, prior to Roosevelt, were redeemable in gold or silver.
When more notes were issued than the gold in the vaults, and the bank runs started in the 1930’s, Roosevelt confiscated the gold of the people and turned it over…to the banks. He then made it illegal for the people to hold gold.
Bank run problem solved.
Thanks be to god for whoring bankers with slut politicians in their back pockets.
I have one correction to the Fed article on money: much of our coinage is now more valuable for its metal content than for its face value.
Morning all,
Ok..Knowing East Boston very well….I think I just identified the most valid way to call a market top…
As soon as one hears that a close to the city proper location, such as East Boston, is the “next IT location, the market top has been reached. I have seen this many times over in East Boston, Chelsea, Mattapan, Lawrence, Lowell, etc. Don’t get me wrong there are some ok neighborhoods in these places, seeing that not everyone has the means to live in locale like Marblehead, Boxford, Weston, SWellsley, etc. Not every street in the aforementioned places are like war zones. BUT…as soon as they start being sold as the “next IT place”..look-out. Yes, while East Boston (Eastie) may have some decent merits, (close to the city, highway access, public transportation, etc.), it is still what it is, a locale separated from the city proper by a deep water channel, has a very busy airport, cargo shipping, etc. Not a terrible place to live, but it is VERY much urban.
Paying hundreds of thousands of dollars for a condo is just plain stupid…..
Yet many are, and many continue to do so. We’ve read much debate here on the possible fates of McMansions and exurbia - but what will come of urban condos? One thing - I would argue that it makes more sense for a McMansion to fetch $800k than for a condo to fetch $400k.
My neighborhood is chock full of condos of every type and price. Yesterday I took a photo walk and noticed that builders and converters are making clear and determined price cuts - much more pronounced than anything seen so far.
“I would argue that it makes more sense for a McMansion to fetch $800k than for a condo to fetch $400k.”
Yep, not to mention the higher end condos at $600k, $700k, and higher…
A thousand dollars per square foot is about as stupid as it gets.
It depends on how high energy prices go. My in laws heat their 2000 sq foot condo for 60-70 bucks a month. My rental costs over 400 when it get’s cold. Then you have to factor in location. They can walk to grocery downtown entertainment you name it, they only have one car. In the burbs if you don’t have a car you’re in prison. When oil is $150brl condo’s might look like a much better deal than a McMansion. That being said, I wish they had just rented an apt.
“Lawrence, Lowell, etc.”
Wasn’t there some article recently about all the South American immigrants, legal and illegal, packing up and leaving those towns because the economy is slowing and business has dried up? Taking their marbles and going home. One of the mayors was in tears about the whole thing, talking about how the immigrants had revitalized his town and now it was dying again.
LOL. So much for “we want to be part of America”. I’ve always said most of them were just here for the beer and when the taps run dry, 23 skidoo.
oh, there’s still plenty of immigrants here in Lowell. nobody’s turned off the section-8 spigot yet.
the only nice thing about Lowell is that it isn’t Lawrence. rents aren’t that cheap, half my otherwise nice apt. building is sec8 deadbeats with litters of feral kids, and it’s noisy as hell in this area. but it’s cheaper than most other places in NE Mass, except Lawrence. you’d have to pay ME to live in that shithole. I shoulda done some more research before moving here but my lease ends in Jan so WTF, I can wait.
In Baltimore, the “it” thing was to pay 400K for a renovated row house, next door to an 80K row house on on side and a burned out row house on the other.
“Heh, this is an up and coming neighborhood. Only a matter a of time before everything is rehabbed”
Yeah, right. No parking, bad schools, the war zone right around the corner. And people bought and now.. well you know the rest of the story.
Why would a young couple pay so much for a piece of crap, knowing that in 5 yrs they would have to move because the schoolls are so bad? OK, private school, buut how do pay for school and an alligator? It’s amazing how few brains “college educated something or others” really DON’T have!
RE: East Boston, Revere, Winthrop, & Lynn…
Grimmest total area in Mazzholeland exclusive of Dorchester, Mattapan, & Roxbury.
Lynn, Lynn, the city of sin, you never go out the way you went in…..
Listening to a call money show this morning,,,
An RE broker called in,,was making $200k per year, way down now, wifey makes $57K…
OK, so if he and wifey had a combined income of $200k - $250k for a few years, you’d think they’d be all set ..right?
nope…
savings wiped out, credit cards maxed at 45 large (yes, that’s $45K, for you aristocrats), 400K mtge, home equity tapped out, two car pmts, FICO dropped from mid 700s to low 600s, and so on…
The show hosts recommended BK. Not that I endorse BK, but I really can’t see any way out for people in this situation
I have sympathy for the people that get hit with an unexpected illness, layoff, catastophic event, etc., but for people in this situation, I just can’t give them any pity.
How the %$#& did we get to a point in our society, when a couple that was making this kind of coin, be in sure a poor financial position?
“call in money show”
“sure” = “such”
“I have sympathy for the people that get hit with an unexpected illness, layoff, catastophic event, etc., but for people in this situation, I just can’t give them any pity.”
I will second that motion. Can we get a vote? A simple “yay” or “nay” will suffice.
Yay
Money is a desperate, clever prisoner.. constantly searching for a way to escape.
Wow. That’s the second awesome line I’ve read in the comments here today.
“How the %$#& did we get to a point in our society, when a couple that was making this kind of coin, be in sure a poor financial position? ”
Just listen to all the commercials on tv , radio and read the ads in the papers and on the internet .
This country thrives on selling people stuff they don’t need and more than likely can’t afford in order to project a more favorable or superior image to their peers .
Basically we are being innundated with ads trying to make us discontented with what we already have and designed to make us buy what they are selling .
No matter how much money one makes there is a way to spend it …wisely or unwisely .
Planned obsolescence , consumerisim , capitalism and just plain stupidity is what drives America .
Make it not so, Number 1
“It’s difficult to predict short-term fluctuations, Gillen said, ‘because the near term is as much dominated by buyer-seller psychology . . . as it is by fundamental forces.’ ‘To paraphrase Dr. McCoy from Star Trek, ‘I’m an economist, Jim, not a mind reader.’”
“Looking back, Maureen Green often wishes she had just gotten up from the table and walked away.”
Reminds me of how I felt during a dinner date one time back in the day.
Eva Murphy case.
Many times I blame the buyer but in this case you have a velnable older woman. If she had been part of my family I would have gotton the scum Eitan Sror to refund her money and buy her a house as payment for what he did. Come on guys in NY. You need to talk with him and make him an offer he can’t refuse. Either refund the money, suthdown the opeation. or it is the meat grinder.
Eva seems like a nice enough woman. I am sure Eitan Sror could be convenced to reform his way.
Authorities are on the take there. You cannot get them to help.
“Broker John Duffy said there was no comparison between that 1990s slump and now. He thinks that a lot of ‘elective’ buyers are waiting for prices to drop, and that it isn’t going to happen.”
this guy is still dreaming, they are going to keep dropping. what do you think he will say when they do?
East Boston condos “have already been marked down to the low $300,000s.”
There’s a scene in the Sean Penn movie “Mystic River” where Tim Robbins’ East Boston character leans over to who Kevin Bacon? and talks about all the yuppies moving into the neighborhood. Man, he wasn’t kidding.
I can’t understand what the problem is here. On an $11/hour salary–she got to live in a house for two years and paid less per month than she would have paid in rent. It’s not like she sunk 100s of thousands of dollars of her own money into it.
Hand the keys back to the bank, and find someplace else to live. What am I missing?
Didn’t know the selling price was $538,000? On a document she signed? I find that impossible to believe.