It Was Amateur Hour All Around
The Rocky Mountain News reports from Colorado. “Denver-area home prices fell by about 5.4 percent in October from a year earlier. Broker Larry McGee isn’t worried that home prices were down in October from a year earlier. ‘That reflects a realistic price given all of the foreclosures,’ McGee said.”
“Jim McCloskey, owner of the American Real Estate College, noted there is about a six-month supply of unsold homes on the market. But that inventory includes more than 700 homes priced between $1 million and $10 million, and ultra-expensive homes take an average of three years to sell, he said.”
“At the bottom of the market, there are many ‘one-bedroom condos and townhomes that you can’t give away,’ he said.”
The Arizona Republic. “Voters looked at their rising mortgage payments, the empty houses on their streets and a shaky economy. Then, in 17 of 22 districts, they shot down proposals to maintain funding for Valley schools, deciding they couldn’t afford it.”
“School officials said they knew gloomy economics and still-high taxable home values would make voters leery of renewing tax rates, but no one predicted so many proposals would fail.”
“Arizona schools chief Tom Horne said that if the districts do not persuade voters to change their minds, they will face ‘catastrophic’ cuts.”
The Arizona Daily Star. “The city severed its agreement on Wednesday with developer Peggy Noonan to build Presidio Terrace, a seven-story condominium project just north of City Hall.”
“The cancellation notice says she failed to comply with a city deadline to find legitimate financing, among other requirements. Rio Nuevo Director Greg Shelko cited two specific faults with Noonan’s response. First, that she changed the plans to include 101 units of rental housing instead of condominiums.”
“‘That use is totally unacceptable,’ Shelko said, given that the city had talked for three years about developing the site with high-class condominiums.”
“In addition, Shelko said Noonan’s new financing plan called for the seven-story building with 300,000 square feet to be built for only $29.7 million, a number said Shelko said is not realistic for a luxury condo development.”
AZ Family from Arizona. “Foreclosures are at a record high here in Arizona. Jenny Celli’s trying to leave behind a foreclosure that she went through last year.”
“‘Well, your life is destroyed, really,’ Celli said. ‘Your life is destroyed and it’s humiliating.’”
“And it’s still humiliating because the foreclosure has virtually destroyed Celli’s credit. ‘Oh, I’m screwed,’ she said. ‘I’m screwed. I think my credit score is something like 569.”
The New York Times on Nevada. “As his wedding day approached last spring, Marshall Whittey found that his money could not keep pace with the grandiosity of his plans. But rather than scale back, he chose instead, like millions of homeowners across the country, to borrow against the soaring value of his home.”
“But now, in an ominous portent for the national economy, Mr. Whittey has grown tight with his money. His home is worth far less than it was a year ago, and his equity has evaporated. And like many other involuntary adopters of a newly economical lifestyle, he can borrow no more.”
“‘It used to be that if I wanted it, I’d just go and buy it and finance it,’ Mr. Whittey said. ‘I’m feeling the crunch, and my spending is down significantly.’”
“‘Everybody was basically using their house as an A.T.M. machine,’ said Dave Simonsen, a senior VP for an industrial real estate firm in Reno. ‘Now they are upside down on their house without that piggy bank to go back to.’”
In Business Las Vegas from Nevada. “Whenever a member of the national or international media wants to know about foreclosures in Las Vegas, they call Michael Krein, the owner of Nevada Real Estate Services, (and) president of the National REO Brokers Association.”
“Q: Why aren’t homes selling at courthouse auctions? A: The trouble right now with most of the houses on the steps is there is more owed on them than they are worth, so the investors are not purchasing them. One of the misnomers is the bank is going to sell it for what’s owed on it. That has nothing to do with it.”
“Once the bank owns the property, there is a new appraisal done. They will price it according to market conditions. Are they a little more aggressive about it? Absolutely. They have to move it and want to move it.”
“Q: Who owns the homes you have been foreclosing upon? A: The last two years, 80 to 85 percent of what we’ve taken has been investor owned…so far I have not seen that many homeowners put out. I had a few and some of those did not understand the type of loans they had. We have seen that a few times. They didn’t understand that — they didn’t read the fine print.”
“Q: Why will that pick up in the spring? A: A tremendous amount of three-year ARMs (adjustable rate mortgages) are going to start resetting. Some of them are coming up now…A lot were planning on flipping it and some thought (prices) would keep going up forever.”
“Q: Investors? A: Investors is the wrong term for what occurred here the last two years. It is amateur hour and these people were speculators. Unfortunately, a lot of the agents who sold them these properties did not have the skill set and shouldn’t have been representing these people.”
“It was amateur hour all around. Dealing with investment properties requires a knowledge of cap rates, rates of return, IRRs, vacancy rates, credit collection factors. You talk with most retail real estate agents, they could not tell you what those terms are, yet they were out there selling properties to investors, telling them what great deals they were.”
The Deseret Morning News from Utah. “Not all that long ago, St. George had been one of the hottest housing areas in the West, but it has definitely cooled, according to figures released by housing market research firm, Metrostudy.”
“‘St. George is going through the same struggles that the rest of the nation is,’ said Eric Allen, director of Metrostudy’s Utah/Idaho region.”
“Allen said the number of new homes sitting unoccupied in St. George and in nearby Mesquite, Nev., remains a concern. In St. George, finished vacant homes comprised 37 percent of the total new construction inventory, while in Mesquite, finished vacant homes comprised 38 percent of the total newly built inventory, the report states.”
“‘A healthy number is between 25-30 percent for those markets,’ Allen said.”
“Allen said developers are sweetening the pot for prospective buyers. ‘Builders are giving away a lot of concessions, using a lot of incentives,’ he said.”
From KUTV in Utah. “Bill Gephardt continues his series of special investigations into the business of questionable real estate deals. This isn’t just about one or two cases. This is about dozens of people pushed to the brink of financial ruin.”
“Dave Ormsbee has never been inside this Draper home, which he now owns. Dave says it was his good credit alone that bought a home in Draper and a house in St. George, both with no money out of his pocket.”
“Now at the age of 27, Dave owes more than a million dollars in mortgage loans. Sounds like he makes a lot of money, but quite the opposite is true. Dave is a college student and waits tables after school.”
“He makes maybe $11,000 a year, yet he bought the Draper house for more than $700,000. ‘You’re a server at a restaurant. How can you afford a $719,000 house? I can’t,’ says Dave.”
“Despite that, Dave was given mortgage loans on not just one but both of the homes. But how could a college student making $11,000 a year convince any lender to give him a million dollars in mortgages? Take a closer look at Dave Ormsbee’s loan application. It shows him as the owner of his own company, Ormsbee Graphic Design.”
“But there is no such physical company, it’s all created on paper, he says. ‘That’s the company that they had me make up,’ says David.”
“And the loan documents show David doesn’t make $11,000 per year, but $18,500 a month. ‘Do you make $18,500 a month? Nope. I don’t make that a year,’ says David.”
“Dave says he didn’t fill-out the documents. He admits he made the mistake of never looking at what he was signing. ‘There just so much signing going on that you just don’t care what you’re signing after a while,’ says Dave.”
Is that Peggy Noonan the same as the GOP speech writer?
No, Clone, our Peggy is not the speechwriting Peggy.
Being a republican speechwriter and a condo developer seem like the same job.
“Voters looked at their rising mortgage payments, the empty houses on their streets and a shaky economy. Then, in 17 of 22 districts, they shot down proposals to maintain funding for Valley schools, deciding they couldn’t afford it.”
“School officials said they knew gloomy economics and still-high taxable home values would make voters leery of renewing tax rates, but no one predicted so many proposals would fail.”
“Arizona schools chief Tom Horne said that if the districts do not persuade voters to change their minds, they will face ‘catastrophic’ cuts.”
Will a dumbed down America even notice, that we yanked funding for schools?
Do you think today’s aging boomers care? Just keep those social security payments coming…btw, though we didn’t bother contributing to your education, do you mind paying for my retirement by buying my house?
Yep…
and as they say, paybacks are a bitch - I think the boomers are in for a rather rude shock.
Everything you said is just plain wrong. Boomers don’t get SS payments, though we’ve been paying our parents’ and grandparents’ checks for ages. We’ve also been paying taxes for education for ages and will continue to do so. A great many Boomers have kids in school, some just entering kindergarten.
Whoa, Palisades, I think that boomers are paying a lot to educate their own kids, not to mention paying taxes to support other kids’ educations and their own parents’ retirements. The very first boomer just applied for social security. We’ll see how it works out for the rest of them over the coming years. As a 50+ boomer who plans to work to at least 60, I’m not counting on much, despite the huge AMT I pay every year.
Well, your AMT doesn’t fund SS, payroll taxes do. If people wonder why SS is insolvent, maybe its because all earners under ~$80k or so pay the full ~7% (whatever it is), while someone making $10M a year only pays the ~7% on the first ~$80k, making their effective payroll tax less than .01% of their gross income. Talk about a regressive tax!! Sheesh
schools are welfare distribution points, not much more
free breakfast lunch w cop cars outside
“schools are welfare distribution points, not much more”
sure.
I would just like to expand on my point. my problem with discussing many topics in general is generalizations that assume the absolute worst. no every person who buys a home right now will be foreclosed upon. not every school is a failure. even in failing schools there are still many kids who are receiving a quality education. there are some schools that are failing, but to say that all schools are failing is assinine.
Yes, but this society has chosen to believe that throwing more money into our public education system is somehow going to cure the problems. Give parents the right to quit funding an inadequate product and choose their own school or school their children themselves without having to pay for a bad system getting worse and worse.
There is somethign I don’t get. They rates are drifting down, but that is on a base that is double what it was 7 years ago….
.07% of $125K or .06% of $250k?
My property taxes are up 30% even with lower rates kicking in simply due to increased property values.
So, where is all the extra money going????
See comment below about ASU having doubled tuition over the last 5 years, and still has the nut contents to ask for another 19% increase for next year.
WHERE IS THE MONEY GOING??????
Ya know guys, we have done this stupid generational warfare thing a few hundred times, and I have a prediction; you won’t solve anything here! Please don’t waste my bandwidth with this stuff.
“we have done this stupid generational warfare thing a few hundred times”
I don’t think it is in anyway stupid.
1) It is DIRECTLY tied to the article about school funding you included in this blog entry. Old people don’t want to have to pay for schools, but OHHHHH do they demand they get their social security payments!
2) My grandparents created a ponzi scheme in which each genreation would have to pay in twice as much as the last. In this way, it is no different fro the housing bubble. Just as surely as the housing bubble had to collapse, the Social Security scheme will have to collapse.
But, I’ll try to respect your request. It will be tough if you continue to include stories that are directly tied to generational warefare!
Got news. Those above 65 who are retired and drawing SS are your grandparents and great-grandparents. They were born at least by 1942 and much earlier.
The “boomers” were not born until 1945 and thereafter and the youngest are only 42-43 years old.
The problem that AZ has is that it marketed itself as (1) a tourist spot and (2) a retirement area. When incomes are fixed, people get very nervous about taking on more expenses.
Oops - sorry Ben!
Me too,
Understand about the bandwidth.
But you asked a few weeks back “how do we prevent another?” You can’t until you fix the underlying reason for the govt. scrapping the $$ to pay for the debts and get to the real force pushing inflation. I personally view the housing bubble as part of the hoped for solution - only problem was wages didn’t inflate fast enough, thus the *pop*.
It’s not really “generational warfare” – its just part of the economic puzzle\problem.
“this stupid generational warfare thing”
An interesting angle on this that relates to home prices is the fact that the “Baby Boomers” will soon start selling in droves (3-4 years from now). This should put even more pressure on home prices despite all the sub-prime problems.
It is not just a generational issue; there is also a demographic dimension. The kids are mostly hispanic & immigrant. The older taxpayers are Anglo. It doesn’t make sense for them to pay taxes to educate “other” kids. Same problem in California & Florida. Problem is, it is those kids whose taxes will pay Social Security & Medicare in future.
IMO, there are no societies, no generations, etc. Only individuals. And the PTB foster these collectivist concepts in order to turn us against each other and distract us from what they are doing to us. And causing a housing bubble blog to degenerate into meaningless, back-and-forth attacks is a perfect example of that.
I completely agree with your comment. Dividing like-minded people helps TPTB, and it’s ridiculous to blame the voting behavior of a group of people that must range from 18 to 100, on one tiny subgroup.
Ben and KayLaw,
You guys amaze me. Many of you are the clearest thinkers I interact with, and yet you seem to think here that the housing bubble happened in some sort of a financial and societal vacuum that doesn’t exist. All these things (Social Security, property taxes - which are tied to public schools, etc.) are interrelated, and none of these problems will get solved or worked out in isolation.
I know what works on a blog like this and what doesn’t, from trial and error. Lots of trial and even more error.
I agree that the generational name calling are distractions on the blog and are terminally boring, which is why I apologized and will resist any such tempation in the future.
However, it seems idealistic to ignore demographics in particular in trying to understand what happened and what is going to happen with this bubble. This isn’t about “artifically” classifying people for the benefit of the powers that be - it’s about understanding what’s fueling two massive bubbles within a decade of each other.
Both the tech and the housing bubble have grown up an environment where a mass of people and insitutions are looking for outsized gains. I think the looming boomer retirement has been a signifcant factor in recent bubbles.
My MIL, a boomer, is participating in this housing bubble - why? Because she is looking for an a substantial amount of money to retire on. Would it have occured to take on all those houses if she wasn’t going to attempt to not work for the next 2-3 decades? I don’t know, but I’m convinced she might have passed them up or at least slowed if she didn’t feel the need to be sitting on a pile of money within the next 10 years.
And what about the money that was snapping up the CDOs for all those years? Why were they looking for gains from “safe investments”. Foriegn investors for sure were a factor. But what about all the underfunded pensions funds who also needed outsized “safe” gains? Haven’t they been major buyers of the toxic waste for a while (or forever)?
We don’t have a control life but I seriously wonder if this bubble would have gotten quite so large if we didn’t have such a large population looking to stop working within the next 2 decades.
It makes sense to me to ignore the topic on a blog because it degrades to flame wars, (and heck, it doesn’t matter what I think, because it’s your blog…) but I think to not understand an aging population and the tensions it creates as one of the many factors fueling bubbles is mistake.
It is likely that the mania of local public works projects will get voted down on a broad scale as people fear for their own financial survival. The rising assessments on bubble real estate made even my poor county think it was rich enough to build not only new schools, but new court house, new county office building, a community recreation center, etc.
Naive extrapolation.
My state is putting in a train from ASU, past the airport, though downtown, through the slums, to no where.
What you’re seeing is one of the first volleys in the revolt against civil servants.
It’s easy to overlook huge payment transfers when times are good.
Look for a flurry of taxpayer revolt initiatives across the land.
Which the MSM will dub “local,” of course.
“you just don’t care what you’re signing…” said the college student.
Here we have a fine example of the future of America - a highly educated person who doesn’t care what he’s signing. Sigh. The dumbing down of our students continues…
But making him deal with the consequences of his actions would damage his self-esteem.
ready to vote at the next Springstein concert= circus n bread
Dave, you’re a college student - you can read and know, based totally on common sense, that you don’t have the money to pay the note on a $719K house. Off to jail you go - FRAUDSTER.
No way. Dave was home schooled!
Seriously though, the people that need to do time all live in NYC and work for Merrill, Goldman, Citi, etc…This bubble was enabled and created by the big money guys and the Fed. Yes, Dave is a doofus and most likely fudged just a smidgen on his stated income, (snark), but if he does jail time, why should the real crooks vaporize billions and go scot free?
I don’t believe for a moment that he didn’t know what (he thought) he was doing. He was convinced that he could buy a house for $719K and flip it for $800k or so in a few short months. The fact that he made $11k didn’t matter to him, after all he was going to walk away with a cool $80k.
The only thing he didn’t plan on is the bubble bursting. Now he is not only not going to get his “sweet” $80k on a flip, but now he cannot even sell the house for the original $719K and walk away just a little battered, and perhaps wiser. Now he is going to deal with BK, bad credit, and the IRS as he (hopefully) graduates from school.
I wonder if he likes Jamba Juice?
Speaking of citi and it being amateur hour all around…
The Cook County (Chicago) Treasurer has slapped CitiMortgage over a stunt they and other servicers are trying to pull in regards to escrowed property taxes. Not wanting to pay a $5.00 (yes, five dollars) fee, they are sending letters to the home owners demanding the home owner send them the original copy of the tax bill or else bad things will happen, like owing late fees on their property taxes (now why would their property taxes get paid late if the servicer is holding it in escrow???).
The Treasurer is reminding people that federal law says that the servicer is responsible for any late fees and that home owners can just throw the letter in the trash - they don’t have to do anything. She has also forwarded the letter on to the state for investigation.
One of the papers has her saying that Citi has ruined the economy and she can’t believe that they would try a scam like this just to avoid paying $5.00. Good fun!
I’ll see if I can find a link.
I was surprised by a letter with the same message from WellsFargo last week. WF claims they cannot obtain this year’s tax bill from the local sheriff. I had planned to stop by the courthouse next week and find out why the locals here in Louisiana had made a change. But, now something bigger seems to be at work …
Go to jail. Go directly to jail. Do not pass go. Do not collect $200.
I agree 100%
The equivalent of arresting everyone in WWII that shot a bullet.
Hardly. He makes $11K a year and signed mortgage docs that say he makes $18K a month.
This isn’t the same as arresting everyone that fired a bullet in WWII. More like arresting everyone that shot someone that had thrown down his weapon and raised his hands waiving a white flag hanging from a stick.
I agree. Even though I like the idea of revamping debtors prisons, I don’t feel like paying the additional taxes that would entail. However, I have an alternative plan that may find some approval here. Mandatory Dunce Caps for all deadbeats! Everyone that goes through foreclosure or BK gets their license marked and a big dunce cap issued for wearing at all times not in bed. Get pulled over or go through a check point without your cap on and you go to jail for a predetermined amount of time. The caps will have random humiliating statements printed on them. Perhaps something like “I failed at simple math” or “I went bankrupt, ask me how”!
Think of the fun at Thanksgiving when ole pompus Bob comes over with his Dunce Cap on!
Hey Bob! I see you went for that last flip! Won’t you tell us about your financial ass-pounding over the pumpkin pie? This could amuse us for years!
I like Auger’s idea. That reminds me of Gallagher’s old comedy routine about how all drivers should be issued sticker guns that would be used to shoot bad drivers’ cars. When a car gets a bunch of stickers on it, the cops arrest him for being an idiot!
I maybe spit balling it here, however, when this economy crashes, we, and I mean all of us will be in the same boat. So I would suggest that we all grab a bucket and start bailing, or this boat will not rise with the tide. Gee, I think R Regan, I former president and his advisers said that If you give the money to the rich, the poor wil benefit. Well, we now have to start bailing, or else…
Dave is just a crook. While many have lamented here how “the government” failed to act in this debacle, how many times have we read stories of this abject fraud?
How many times have we read where people made no attempt to understand their loan? Look at what Michael Krein says above; like 70% of the buyers in trouble are clearly speculators.
I’m not excusing regulators, lenders and investors from their roles in all of this but, remember, each individual chose to do these deals. Individuals, however stupid, greedy or misguided made free choices.
Unless society recognizes this primary fact FIRST, no good will come of this bubble. If individuals know they’ll pay a price, they’ll think harder about taking the risk. Yes, I know lenders offered no doc, no down loans hugely facillitating the process. But what adult signs a contract for half a million dollars utterly thoughtlessly? I’d say one who’s more greedy than “misguided” or one, like “Dave”, who is simply a crook in denial about his crime.
I think it is more like they CLAIM to have not understood their loan. Dude makes $11K a year and took on more than $1 million in loans? He can TRY to claim ignorance, but I don’t buy it for a second. He HAD to know his income was being inflated in order to qualify for that kind of debt!
Dave makes the $14,000 strawberry picker with the 750 K mortgage start to look good.
My first thought upon reading this was our old favorite the strawberry picker. Now we have the student/waiter with $1million in mortgages.
The kicker: Dave’s loans are NOT subprime. So much for containment…
Have to be Alt-A since there was not verification of tax records or business documents.
Alt-A is the new sub-prime.
Y’all need to click through to the article. Dave was just the patsy. Hayock and company were the real villains.
Ultimately it doesn’t matter who was responsible, as long as we remember this is all private contract law and should remain that (i.e. no gov’t intervention in the form of bailouts). If banks wanted to give out 700k loans to a guy who only makes 11k per year, that is their deal. They should be forced to sue mortgage brokers for lack of due diligence that should have been in their contracts, and/or bring charges of fraud against those who have committed fraud. If they did not require due diligence from mgtg. brokers, then the company should fail because they were bad at business, and investors should lose money for investing in a poor business. The only “bailout” that should ever happen is a depositor “bailout” in the form of an FDIC insurance claim.
And if that happens, I want the gov’t prosecuting and seizing personal funds of executives of these banks who drove them to a negative net worth. Likelihood of me getting my way ? zero
I am not so sure that Dave is “highly educated.” He could be one of many thousands of people getting college degrees who can only read at the third grade level.
Could this vast virtual illiteracy in America also partly explain why so many have fallen through the trap door of housing?
“Dave says he didn’t fill-out the documents. He admits he made the mistake of never looking at what he was signing. ‘There just so much signing going on that you just don’t care what you’re signing after a while,’ says Dave.”
I have some Enron stocks I like to sell you. Just sign here and here…
Dave knew EXACTLY what he was signing. Fraud and speculation, pure and simple. No different fundamentally from an executive “borrowing” from a cash account to play the horses. No body is the wiser until he has a bad day at the tracks.
“Voters looked at their rising mortgage payments, the empty houses on their streets and a shaky economy. Then, in 17 of 22 districts, they shot down proposals to maintain funding for Valley schools, deciding they couldn’t afford it.”
Well, that pretty much sums up the nature of the 30K a year millionaires dirtbags that have invaded Arizona for the past 10 years, stinking up the joint with the Axe cologne and the tramp-stamped, tanning bed wives have business cards saying they “organize closets”.
Schools? WTF? Why should they pay for schools? They gotta go to ‘Forever 21′ and get a new outfit to wear to Vegas this weekend where they’ll gamble away the $645 they saved up for their kid’s college!
“stinking up the joint with the Axe cologne and the tramp-stamped, tanning bed wives have business cards saying they “organize closets”.
LOL! They are everywhere you go. We have Urban Lifestyle Scientists here in S.C.
I have to know WTF an Urban Lifestyle Scientist is. Please tell me this is just some shit you made up, and that there are not really people with this on their cards. Please.
Beautiful rant.
Not to disagree with you about the character and attitude of the 30K millis, but the fact that voters rejected yet ANOTHER increase in taxes “for the children”, with very little accountablility or tracking as to where all that money goes, is not such a bad thing for AZ.
The Maricopa ASSessor jacked “values” by 40% over two years (2006-2008), and of course the rates didn’t go down equivalently - hence my 2007 tax bill is 20% higher than 2006. What individual, business, or government entitiy really needs 20% increases in their budget year to year? For some reason the gov’t always does, but no private entity can expect that - did YOU get a 20% raise this year for doing the same thing?
Governments as a whole, and yes, that includes schools, police, fire, etc need to get their spending in line with what the actual economy is doing - when the economy is flat, spending is flat. When the economy shrinks, gee whiz - maybe government spending should shrink too?
Simply look to California for a government and populace that could never say “No” to increased spending on schools, public healthcare, police pensions, etc, etc, etc. Literally bankrupt and desperate to find any source of funding. Votes like the 17/22 rejection of MORE spending will maybe help AZ avoid the same fate.
My tax bill has risen an average of 13% a year in Arizona over the past few years, they’re running people of out their homes at this rate. No wonder it got voted down.
I gotta agree with you, fiscally, anyway. Funding government without accountability is never good.
I just got a problem with the carpetbaggers that came to AZ and really jacked everything out of line. The ethic-less pile of morons that pose as gangsters every Friday night on the 101.
Yeah, this is why I doubled over laughing at Chris Dodd’s feel-good line that “education is the answer to all of society’s problems” (roughly quoted from memory).
Not hardly. Educate a thug, and all you’ve done is create a mortgage broker. As long as a healthy number of people in a society have the character of skunks, you can educate people all you want and you’ll still be guaranteed plenty of problems.
The only difference will be that once you’ve educated a skunk to count higher, your problems will have more zeroes at the end of their price tags.
We had two school spending measures in my town which would increase prop taxes. I’m a Gen Xer, renter, and gov employee and I voted them both down. The schools here are funded just fine thankyouverymuch.
if i were in position to sponsor a Bill, it would be that all revenues from any existing tax, any tax increase or any proposed new tax be 100% allocated to the purpose for which the tax payers were told it is intended, and not a penny could go to any other purpose.
I’m sure similar has been proposed, and I wonder if such a thing could pass or ever has passed anywhere…
Right on Catherine. And to top it off by example of Palisades above, we should keep paying for everything so the poseurs can continue pretend they have succeeded.
Catherine, you have a way with words!
Ack, not the NYT’s Whittey article again. Now I get to spend the next hour pissed off for a second time today.
What did you call this fool, TXChick? An odiferous buffoonish slob? If not, I call dibs on that particular description.
“But now, in an ominous portent for the national economy, Mr. Whittey has grown tight with his money.”
Tight money in the Whittey household is indeed quite an ominous portent for the national economy. Have the striking comedy writers turned their talents over to financial journalism?
Well, he is taking it in the shorts.
That guy is an almost unbelievable clown. From the article:
Mr. Whittey once seemed an unlikely member of that cohort. A sales manager at a flooring and tile company, he exudes the unflappable air of someone raised amid the easy money of the casino world. Until recently, he and his wife regularly embarked on shopping sprees of $1,000 and up.
He bought a 21-foot boat and two flat-screen televisions for their home. He sold his old truck and bought a new one, he said, “just ’cause I didn’t like the color.” Mr. Whittey could live in such fashion because his company was making good money and his house was appreciating.
I hope someone does a followup article on this goon in a year when he’s living in a dumpster behind 7-11 and guzzling Night Train.
RE: I hope someone does a followup article on this goon in a year when he’s living in a dumpster behind 7-11 and guzzling Night Train.
(laughing in my computer seat with tears in my eyes)
This stuff really pisses me off. These people aren’t victims. They’re con artists.
To top it off, he won’t have to pay income taxes on the forgiven debt when he defaults. All that stuff will come TAX FREE!
What’s even more disgusting is that our REPUBLICAN representatives have no trouble calling forgiven debt “phantom income”
http://www.quickenloans.com/mortgage-news/article/682.html
note that his bill is RETROACTIVE to January 1, 2007.
I feel like I’ve been raped. I didn’t even get a mortgage interest deduction (because our Government deemed me ‘too rich’ to qualify), and these criminals go on tax-free shopping sprees.
from the link:
For example’s sake, say a homeowner finds a buyer for his home that he can no longer afford. In an effort to save it from foreclosure, the homeowner works out a deal to sell the home for $25,000 less than the homeowner owes. If the lender agrees to accept the reduced amount, thus avoiding actual foreclosure and cancelling the debt, the IRS will demand that income taxes are paid by the homeowner on the amount of $25,000. The homeowner loses equity, loses their home and is further financially stressed by being taxed on money they never received.
the very first sentence should send off alarm bells. most of these people could never afford these homes!!!
I love the way they say “the IRS will demand”. I mean, i can’t call up my rep. Anna Eshoo and say “Boo hoo! The IRS is demanding money from me each quarter! Make them go away” and expect her to help me.
But she helps others. What ever happened to “equal protection under the law.”
Jimmy, that is an image I’m enjoying. Thank you.
A sales manager at a flooring and tile company
Methinks that line of work won’t be so rewarding anymore.
Colorado, it seems that the preponderance of FB anecdotes concern people whose employment relates to housing - RE agents, construction, etc. I guess they were more likely to catch the fever because they were exposed to it more.
“Now at the age of 27, Dave owes more than a million dollars in mortgage loans. Sounds like he makes a lot of money, but quite the opposite is true. Dave is a college student and waits tables after school.”
Dave is part of that newer, smarter under-30 set we older, more skeptical observers heard so much about during the height of the mania.
1960’s: Don’t trust anybody over 30
2000’s: Don’t trust anybody under 30
2007: Don’t trust anybody.
‘Everybody was basically using their house as an A.T.M. machine’
That qoute is wrong. Everybody was using their house ‘assuming’ it was an ATM machine. But an ATM NEVER GIVES YOU LOANS, it gives you the CASH YOU ALREADY HAD.
When people took cash out, they weren’t taking cash that they had, IT WAS A LOAN THAT HAD TO BE REPAID.
If I go anywhere to get a loan, I know it will have to be repaid with my future cash earnings, and that it will cost me REAL money every month. And I know that I am in trouble if I have to get loans to cover my prior loans.
People got stupid if they figured that getting money out from their house was not a loan. The only money that you can get out w/o trouble is money you already had.
People corrupted the reasoning for a cash out refi. When we did that in 2002, we went from a 30 year 7% loan to a 15 year 5.5% loan. That way the money you get out is the money that you won’t have to pay in the interest for a 30 yr loan.
Get it?
They really didn’t believe that they would ever have to pay it back.
Oh, (sorry for the nitpicking), but you can get loans from an ATM: credit card cash advances!
does anyone remember when all those payday loan places started poping up? i kinda think that was the mentality these serial refiers have. it was no longer living paycheck to paycheck, it is living from payday loan to payday loan. it makes me sick to see that the banks would stoop to that level thinking it wouldent turn out the way it has.
Started seeing them proliferate in Tucson during the first half of this decade. They were like a fungus that suddenly appeared.
They had a TV ad in my area where they had a couple take the title to their car in and got a loan so they could have a weekend vacation. How crazy is that, putting up their car title just so they could blow the money on a short vacation.
I’ve seen similar ads in NZ. The one that really gave me the willies was the one that said to bring in some stuff as collateral, and borrow $100 or so on it to get you through to payday. Basically it was a pawnshop, but marketed to avoid the trashier connotations and make it sound sensible and legit.
“People corrupted the reasoning for a cash out refi. When we did that in 2002, we went from a 30 year 7% loan to a 15 year 5.5% loan. That way the money you get out is the money that you won’t have to pay in the interest for a 30 yr loan.
Get it? ”
How is getting cash out, equivalent to what you will not have to pay in the future, someway not a loan? How is that different from getting cash out that you will get back by selling in the future?
Both cases of borrowing, just based on different preditions on the future.
It is still a loan, but in the long-term, you end up saving money in interest payments by using a 15 year loan. If you take out money when refinancing from a 30 to a 15, there is much more justification in taking money out, since you will still be ahead in the money spent.
But when these people were given a toxic loan, and they could only afford the minimum payment, any additional money they took out was NEVER going to be able to be repaid. I don’t even know why some realtors told them that they could refi later and take money out.
My question was always ‘refi into what?’. If these buyers could not even afford the full PITI, what (conventional) loan was/is out there that would help them now afford their house?
“I don’t even know why some realtors told them that they could refi later and take money out.”
So they could make the sale. You think realtors give a rat’s butt what happens to you once you close escrow?
Late last week, was in the Boulder area, wondering if I wanted to be there just for the winter - for a bit more skiing in the Rockies. There are, near Boulder, some rather large apartment complexes in Superior/Broomfield. Was told that they are nearly full, and that they are seeing increasing numbers of renters who have been foreclosed upon former “owners”. I said ‘oh, you are aware of this situation, as the MSM has been quite mum about it for the longest time’. The young rental agent said “well of course we are, everyone knows about this by now”. Those apartments currently rent for prices which are, imho, ridiculous. They said that like hotels these days, they are adjusting their rates according to demand.
Meanwhile, have returned to Europe. Am, for now, fed up with paying through the roof for shoddy quality construction. But also, because so many folks prefer to be blind.
American Dreamer
“Dave Ormsbee has never been inside this Draper home, which he now owns. Dave says it was his good credit alone that bought a home in Draper and a house in St. George, both with no money out of his pocket.”
“Now at the age of 27, Dave owes more than a million dollars in mortgage loans. Sounds like he makes a lot of money, but quite the opposite is true. Dave is a college student and waits tables after school.”
American Idiot!
“Broker Larry McGee isn’t worried that home prices were down in October from a year earlier. ‘That reflects a realistic price given all of the foreclosures,’ McGee said.””
Again, let me point out that this quote is exactly what you would hear if you set the “Way Back Machine” to summer 2006 and landed in California.
That’s not fair. Colorado is generally thought to be a year or so ahead of California, bubble-bursting-wise. Look at foreclosure numbers to seewhat I mean. His point is that the depreciation is due to foreclosure sales. I don’t know if that is right or not, but I do know that in the past two years, Colorado has gone from #1 in the US to #8 or so in properties undergoing foreclosure proceedings, which would be indicative of a bunch of foreclosures getting unloaded.
My impression is also consistent with the description of the state of the market — virtually impossible to unload cheap properties (this segment was hit REALLY hard by foreclosures), and the buyers’ market for high end properties is as small as ever (salaries are ridiculously low in Colorado), but mid-priced properties, especially in the city and established burbs, are holding steady, and sales are edging up.
Yup, a lot of “cheap” (under 200K) houses were built for the low wage subprime crowd.
Where are those 1-10 million dollar houses? Vail? Aspen?
Good question. Even new construction in trendier areas like Wash Park and Highlands is barely above $1M, if that. And the stuff in the “up and coming” areas (Platt Park, Bonnie Brae, etc.) is certainly under it.
Maybe the really tony neighborhoods like Cherry Creek, City Park, Capital Hill? It’s not like the market is any worse than it’s ever been, it’s just that you don’t have younger doctors or lawyers making $500k/year in Denver like you do in NY or CA who can afford the $1.5M+ places. So the universe of prospective buyers is tiny.
The median home price in Aspen, I believe, is $3.5 million
Of course, it wasn’t too long ago that 180K bought a pretty decent house out here, and the entry level stuff was only 100K.
$200,000 will still buy a OK house in Aurora.
Hey! About your comment about Fiji weddings. That sure rings a bell…LOL.
‘hear if you set the “Way Back Machine”
- Please do not besmirch Mr Peabody and his boy Sherman with the housing dilemma.
But it’s nice to be reminded of them. This episode shows how Peabody adopted Sherman. Sorry for the commercials.
\http://videobeta2.adpqa.aol.com/video/tv-mr-peabody-and-sherman-episode-1/1828740
‘There just so much signing going on that you just don’t care what you’re signing after a while,’ says Dave.”
Hey Dave…the doc titled CDC… was your “Credit Death Certificate”… you can read the details about it on your lunch break at… KFC
Dave’s not here man.
LOL
This thread has some particularly upside down young people that have thrown away their future, for much ado about nothing…
RE: “It was amateur hour all around. Dealing with investment properties requires a knowledge of cap rates, rates of return, IRRs, vacancy rates, credit collection factors. You talk with most retail real estate agents, they could not tell you what those terms are, yet they were out there selling properties to investors, telling them what great deals they were.”
Truer words have never been spoken.
Hire a Realtor.
“He admits he made the mistake of never looking at what he was signing.”
Ah yes, a perfect candidate for an Army recruiter!
OK true story time
In my dept, we recently had a student employee that just graduated, double major BS in math and bio. Looked for a job for 5 months and couldn’t even get a pizza job.
She couldn’t go back to living with the folks since the folks came here from Tiawan. The student had dual citizenship, not parent’s, so she worked here and got her 1 yrs residency in CA. Next came student loans to get through school while supporting her parents the whole way. Come graduation, they go back overseas and ditch the daughter, their meal ticket washed out. Apparently the student had some savings that parents took as well.
The student who took on all the debt to take care of her parents and go to college? At the last minute she ditched her dual citizenship and enlisted in the Navy.
Ron Paul V’s Bernanke
Go down to third post and watch.
http://www.tickerforum.org/cgi-ticker/akcs-www?post=14935&page=2
That’s it… I am donating some dollars to Ron. Why not? They are losing value by the day, anyway.
An honest Republican. Miracles do happen.
People can slam socialist policies all they want but these stories, combined with our low test scores, poor health care, and poverty clearly show that capitalism has serious issues while socialism is working - and winning in many countries.
Funny, people slam “socialized medicine” as if they are somehow experts on the subject. Yet when they find out they have no coverage for the cancer eating them alive, I imagine they conclude any kind of medical coverage, even the socialized variety, beats death.
It’s all basically propaganda. People are living longer than us, have far more free time, and now have stronger currencies. This American dream thing was a sham.
I’m just pointing out the obvious.
I guess I just don’t see it. The mortgage and banking industries aren’t socialized already? Freddie, Fannie, FHLBs????? HUD forms for every transaction???? What am I missing? The government was plenty dirty in this game, they skimmed profits all the way up and they’ll profit all the way down.
The problem with capitalism is human corruption, the problem with socialism is human corruption. You’re full of it if you think that socialism will forever banish human suffering. Capitalism just gives the individual more control, bad things will always happen.
The only reason why that is pal is because we paid for the whole western worlds defense sense post WWII.
no, the reason is “socialized medicine” is a hell of a lot more efficient a health care system than the system we have. it costs less, covers everyone and nobody goes bankrupt.
Ive traveled around a bit, and the American system is busted. We really don’t have it much better than in a LOT of other countries out there, we just think we do. We had better potential, but its been shit on.
http://youtube.com/watch?v=nBnKh6B2cMw
It is grainy, but it makes your point. I, too, have traveled all around the world. When brainwashed Americans give me that “we are the richest, the best” I just shake my head.
It was interesting, last year, that when Toyota (I think) was deciding where to locate a new N. American assembly plant they chose Canada…because of the national health system. It made corporate health care coverage costs so much less than in the US that national health care was the deciding factor re location. It amazes me that corporations in the US aren’t all jumping up and down and demanding some sort of American national health system; their costs would be cut tremendously. I don’t want to get into a long argument about health care, but the fact is, we waste a huge amount of money on health care middlemen in the US. Insurance companies add nothing to the package except cost. My wife is an RN, and I sure don’t mind the increased wages she has been getting, but this can’t go on like it is, with 15%/year health care cost increases, year after year. Sort of reminds me of a housing bubble. So, John Law, I agree with you.
http://www.ibdeditorials.com/IBDArticles.aspx?id=279244057766107&kw=nhs
Medical treatment will always be rationed. Care may be abundant in many parts of the world, but it’s not unlimited. The question, then, is who does the rationing? The patient? Or the government?
For years we’ve warned readers that the universal health care model those on the left have been trying to force on the country will establish a system in which the state takes over medical treatment and makes decisions for the sick.
The ugly reality of this is evident in Britain, where the NHS is denying cardiac patients access to a vital device.
Drug stores in the US deny drugs to many patients everyday if they can’t pay for them. And drugs are a lot cheaper to buy in countries with national health care. My aunt just found out that her monthly oral chemotherapy that has kept her alive and well for the past three years and is being dropped by her insurance will now cost her $7000/month starting January 2008. We need to be able to negotiate with drug companies to lower prices.
The fallacy in comparing quasi-socialist (less so lately) countries like Sweden with America, and pointing out Sweden’s lesser rates of various social pathologies, lies in ignoring the fact that Sweden is populated, by and large, by Swedes, while America has to deal with Americans.
We have a religious culture that by and large does nothing more than baptize materialism, large ethnic groups encouraged by self-appointed leaders to nurse grievances — however real — well past the point where nursing them becomes self-destructive, a prickly Scots-Irish subculture that was “born fighting” and which hates to be told “no,” the wretched refuse of the world’s teeming shores, and something like 90% of the world’s lawyers.
Bottom line, it is my genuine belief that if America tried to graft anything like Scandinavian social democracy onto its present culture, there would be a trainwreck of truly epic proportions. It would make Argentina look like Switzerland.
Actually, if you can look past the very poor barrio on the outskirts of town, the city of Bariloche in Argentina does look a bit Alpine, complete with skiing, chalets, and excellent chocolates. I do agree with your conclusion, though. Our culture has evolved into a very ugly thing.
yeah.. the sick and fearful are a fountain of common sense, on the opinions of which we could build a thriving , healthy society..
socialism is the tapeworm in the gut of a healthy society.. poor societies cannot afford to be Socialist, which is why it eventually fails.
works pretty good for Europe. the best places to live are perenially located in Europe, most often Northern Europe. I’m sure you will find that socialized medicine is Europe is seen more as a good thing than as a tapeworm. seeing as how our healthcare system costs twice as much, doesn’t cover everyone, has lots of underinsured people and has worse health stats, I’m sure most Europeans see our healthcare system as the tapeworm.
socialism, including healthcare, works for a while. The problem is it sows the seeds of it’s own distruction, among them being a population who is entitled to schooling, set wages, healthcare costs, housing, food..
eventually you end up with the USSR, and i won’t be the first to propose the EU is on it’s way down the same path..
Just curious then, why do socialist countries seem to have the highest rates of suicide — even with what you fantasize is a better health systesm
http://en.wikipedia.org/wiki/Image:Suicide_rates_map.svg
Or imagine 14,000 old people dying during a heat wave — in socialist France.
“even with what you fantasize is a better health systesm”
I don’t have to imagine, the numbers tell me that “socialized medicine” is the best system. in the industrialized nations that have it, most live longers lives, pay 1/2 as much and every single person is covered. EVERY SINGLE PERSON. instead of greedy coroporate bean counters making health decisions based on the bottom line, your doctors make the decisions. they don’t have to beg insurance companies.
you may think you have health insurance, but you never ever are fully sure until you have to use it. hopefully you get something that is covered. if not, good luck.
you can complain about waits, but how long of a wait is never if you don’t have insurance? it’s until you’re so sick you go to the emergency room. then the taxpayers pay for it anyways! why not catch things early?
you can say that people come here for operations, but I can give you examples of US citizens, in supposedly the best healthcare system in the world, who go to places like India for operations.
“in the industrialized nations that have it, most live longers lives, pay 1/2 as much and every single person is covered.”
Well, they may live longer but that’s because of general lifestyle (less driving, more walking - and certainly fewer visits to McDs!) but they certainly don’t pay 1/2 as much. In Norway, income tax is 50%, sales tax is 25%, and the government has tons of oil revenues to pay for services to a much smaller population. THAT is how they pay for - not socialized medicine (conservative propaganda) - but national healthcare.
Scandinavia isn’t “socialist” under the classic definition of the term. The state doesn’t own large sectors of the economy, and (at least in Iceland and Denmark, the countries with which I have the most familiarity), business is regulated even less than it is in the U.S.
What Scandinavia does have is a generous welfare state — made possible, in large part, because Scandinavians are a mostly homogeneous population of responsible, self-reliant people, so government assistance doesn’t tend to perpetuate a dole-fed underclass like it has here and in Britain.
In other words, the state can pay for health- and child care, and maintain a healthy safety net, because it truly is a safety net for the truly needy.
In any event, it is the free-market economy of the Scandinavian countries that generates the revenues that are taxed to pay for the generous public benefits. I’d be thrilled to have them here — but since Americans aren’t Icelanders, we can’t just adopt the Icelandic system wholesale and expect it to fljuga.
So are you happy now with no regulation in our fantastic capitalistic system, that is not capalistic? You think we exist in a free society with pure capitalism? Such a state in the USA has not existed since TR Roosevelt or if you prefer, FDR.
all i’m saying is that capitalism is what builds wealth. Such a wealthy society can then afford to have socialist tendancies, redistributing some of that wealth to those who didn’t earn it.
It’s not bad thing at first.. many people who need help are helped..
However, socialism is not at all easy to contain once people get a taste of it.. it’s hard to draw the line.. it grows out of control. Spending eventually surpasses income. The wealth disappears. The socialist society fails.
Unless the underlying reason for the problems we have now is the “socialized” monetary system we now have. In that case, your whole socialist argument kinda falls a part…
The federal reserve system has destroyed the value of the dollar in an effort to prop up wall street. Creating these bubbles that even eventually collapse. And now the chickens have come home to roost.
You need to meet a few people who have lived in a socialist paradise or two joe.
“Socialized” medicine “works” by putting people into lines and letting them wait for treatment. I have relatives who have flown here from the UK to get simple cataract surgery as their wait in the UK was, literally, years. If you don’t do any treatment joe, it costs “less”. By the way, you do know men in Russia have the worst life expectancy in the developed world, no?
Check out the tax rates in former socialist countries too, joe. You’ll find many are much lower than ours and are “flat” to boot.
Yes, some societies have more free time, like France. They go to the beach in the summer. They live so well there that one year they let thousands die in Paris in a simple heat wave.
America isn’t paradise. Paradise doesn’t exist. But, if you’re willing to learn, think for yourself and improve your talent over time, America is a hell of a lot better bet than any other place. No guarantee but a better bet.
Proof? There is no dearth of immigrants who try to get into the US, from any place on earth, now is there? Socialism appeals to people who think others will or should take care of someone else. Would that it were so. Unfortunately, when you go to something as simple as the registry of motor vehicles you’ll find that those people who are PAID to serve you….don’t really care all that much, all that often, do they?
Whether its socialism, capitalism, communism or something else joe understand that no one is going to look out for your best interests better than you. Either you can accept this responsibility or not but just keep in mind this one little phrase:
“People aren’t AGAINST you, they’re for themselves”.
Like our healthcare here is better? We may have the best healthcare equipment and doctors in the world, but good luck accessing them if you don’t have insurance. Even with insurance you can wait weeks for a referral from your insurance company to a specialist. And COBRA is a joke. When I left job they offered COBRA @ $800/month. Then add the misery of when your employer picks new insurance that doesn’t cover your current doctor so you have to start all over again with new doctor. Most insurance won’t pay for a physical or any preventive care so much more money is spent down the line when problems are way more expensive. Even if you don’t believe in universal healthcare, tell me how the insurance companies making fat profits are helping anyone.
Two relatives of mine, both foreign nationals, recently had major surgeries under the “socialized medicine” arrangements of their native countries. They paid a cumulative total of about $200. Neither suffered substandard care, waited in long lines, ingested unsafe prescription drugs, had their doctors chosen for them, or encountered any of the other exaggerated or made-up horrors endlessly foisted on an ideologically stoned American population too scared of the boogeyman to realize that change can be good.
You obviously have never lived in a socialist country (a short visit and/or privileged foreigner status does not count). I have lived under socialism most of my life, and I will choose capitalism [with all its serious problems] over socilaism every time.
Quote:
“You obviously have never lived in a socialist country (a short visit and/or privileged foreigner status does not count). I have lived under socialism most of my life, and I will choose capitalism [with all its serious problems] over socilaism every time.”
Obviously you have not been to a doctor or a dentist lately so health care is probably still a foreign word to you in this capitalist America nation. And “Pray to the Good Lord Jehovah”, what socialist country are you from ? The Socialist Republic of Cambodia ? Heeeee, heeeee, heeeee…
“Allen said the number of new homes sitting unoccupied in St. George and in nearby Mesquite, Nev., remains a concern. In St. George, finished vacant homes comprised 37 percent of the total new construction inventory, while in Mesquite, finished vacant homes comprised 38 percent of the total newly built inventory, the report states.”
I was in St. George last year and the inventory then, was nothing short of amazing…
The real estate giveaway guide book was 1/2 the size of the yellow pages~
“Q: Investors? A: Investors is the wrong term for what occurred here the last two years. It is amateur hour and these people were speculators. Unfortunately, a lot of the agents who sold them these properties did not have the skill set and shouldn’t have been representing these people.”
Funny he missed that a lot of those “amateur hour” speculators WERE realtors(tm). My aunt retired and got her real estate license, she’s now the proud owner of a lot of FL real estate. She was a great teacher, she’s a good anut, but she wasn’t a very good speculator. At she has 10 year ARMS (with about 7 years left).
Interesting point! And it’s a shame that none of these bailout proposals exclude Real Estate Agents. Certainly a licenced R-E agent or a Realtor(TM) should know better, and shouldn’t be included in any bailout, including tax relief.
Who needs skill if property price rising forever is virtually guaranteed?
“Dave Ormsbee has never been inside this Draper home, which he now owns. Dave says it was his good credit alone that bought a home in Draper and a house in St. George, both with no money out of his pocket.”
“Now at the age of 27, Dave owes more than a million dollars in mortgage loans. Sounds like he makes a lot of money, but quite the opposite is true. Dave is a college student and waits tables after school.”
Hey, look, it’s another Casey… but this one says “The PEN made me do it!”
“Despite that, Dave was given mortgage loans on not just one but both of the homes. But how could a college student making $11,000 a year convince any lender to give him a million dollars in mortgages? Take a closer look at Dave Ormsbee’s loan application. It shows him as the owner of his own company, Ormsbee Graphic Design.”
“But there is no such physical company, it’s all created on paper, he says. ‘That’s the company that they had me make up,’ says David.”
ORMSBEE: “Your Honor, I was just strollin’ down the street on the way to my ‘business ethics’ class at Nouveau Riche University when this man in a black cloak, top hat and twirly handlebar moustache accosted me! He waved a gun in my face, stuck a pen in my hand and forced me to sign all these crazy papers, or else.”
JUDGE: “Or else?”
ORMSBEE: “Or else he’d tie my GF to a railroad track.”
JUDGE: “Uhumm… so you’d say you were coerced into signing those mortgage papers then?”
ORMSBEE: “Mortgage fraud was the case that they gave me.”
Fitch May Cut Private CDO Ratings in Insurers Review (Update1)
By Cecile Gutscher
Nov. 8 (Bloomberg) — Fitch Ratings said it may cut some of the private AAA ratings it assigns to collateralized debt obligations as part of a review of companies that insure the securities including MBIA Inc. and Ambac Financial Group Inc.
Fitch is assessing $100 billion of CDOs based on asset- backed bonds it doesn’t publicly rate. The new private CDO ratings will be used to determine the potential for CDO losses to erode the capital of bond insurers.
“We expect there could be situations that could lead to downgrades of three to four notches on insured structured- finance CDO transactions,” Fitch analyst Thomas Abruzzo said in an interview today.
http://www.bloomberg.com/apps/news?pid=20601087&sid=adDX.qWrMR3M&refer=home
“Funny he missed that a lot of those “amateur hour” speculators WERE realtors(tm). My aunt retired and got her real estate license, she’s now the proud owner of a lot of FL real estate. ”
Having a real estate license doe not mean whe is NOT an amateur. Since the criteria for getting a license is only
(1) breathing
(2) being able to pay the fees for the 1-4 weeks of classes, and
(3) passing a test - and in most states, it is an open book test
No level of education required nor training in economics or finance.
Never met a realtor yet (and we did commercial real estate law) whom I regarded as a source of advice on finance and investing.
Your aunt was merely an ‘amatuer pretending to be a professional.’
“Dave says he didn’t fill-out the documents. He admits he made the mistake of never looking at what he was signing. ‘There just so much signing going on that you just don’t care what you’re signing after a while,’ says Dave.”
what a liar!!! this guy needs to be horse whipped!!!! he knew exactly what he was doing. you are not tricked into signing million dollar loans. he knew exactly what he was signing himself into, he just thought the outcome would be different!!!
“Jim McCloskey, owner of the American Real Estate College, noted there is about a six-month supply of unsold homes on the market. …“At the bottom of the market, there are many ‘one-bedroom condos and townhomes that you can’t give away,’ he said.”
“GIVE” away?? Just who the hell does this guy think he is? You can’t expect them to just GIVE them away (even when no one wants them)!
Problem is, what he considerds “give them away” is probably 150+ x monthly rent.
If they were “giving them away” for the historic norm of about 100x monthly rent, and they were in decent condition, I suspect people would be showing up to get them.
Ron Paul ripping into Ben Bernanke.
http://youtube.com/watch?v=xTBrJNipytg
Our city council , last tuesday, was advised that massive cuts were in order due to the falling income from sales tax, auto tax, etc.
without changes would go negative in 2012 using all reserves.
California governor says cut state spending 10% on all departments.
As a senior citizen (84) I vote for all school taxes, And have all of my life.
i’m a big believer in education as well.
You probably voted for the State Lottery, as did most well meaning people.. unfortunately, instead of supporting schools, 97% of that money is thrown into general fund.
please do tell, what is your prop 13 assessed value for your home in CA?
Another Ron Paul ripping into Ben Bernanke.
http://www.youtube.com/watch?v=sVCStbbIvDg&NR=1
“This isn’t just about one or two cases. This is about dozens of people pushed to the brink of financial ruin.”
Pushed??? They ran like crazed lemmings to it. More emotional rhetoric to instill sympathy for people who committed financial suicide.
“To Serve Man”… It’s a cookbook!
Tougher bankruptcy laws now hurting banks that lobbied for them.
http://www.bloomberg.com/apps/news?pid=20601109&sid=ar909uO1CqHw&refer=home
“In St. George, finished vacant homes comprised 37 percent of the total new construction inventory, while in Mesquite, finished vacant homes comprised 38 percent of the total newly built inventory, the report states.”
“‘A healthy number is between 25-30 percent for those markets,’ Allen said.”
Is this part of the “new” new homebuilder business model?
“Q: Investors? A: Investors is the wrong term for what occurred here the last two years. It is amateur hour and these people were speculators. Unfortunately, a lot of the agents who sold them these properties did not have the skill set and shouldn’t have been representing these people.”
Ha ha ha ha ha ha……………….
Since when do real estate agents ever represent BUYERS? Of course there are a few buyer’s agents out there but I’m willing to bet that 99% of these “investments” were sold by agents representing the seller. They did their job exactly as expected.
Was in Northern Utah last week and overheard some (screwed) builders lamenting about their excess inventory. Funny enough, it was at KFC. No joke, one of them said, “The problem isn’t that there’s too many homes for sale, it’s just that there aren’t enough buyers.” It’s the price, stupid [or P/E if you hang out with Keith]. There are WAY too many spec homes in the $400k+ range in Utah and Salt Lake county. Median income barely breaks $60k. Note to builders: do your market research, the California gravy train left town last year. DROP YOUR PRICE AT LEAST 20% and you might actually sell something.
Unfortunately there are too many mom-and-pop builders who hang onto false hope that the market will rebound in the spring. Can’t wait to pick me up a nice bank deal in a couple of years.