A Credit Scenario That Had Been Unheard Of
The Boston Herald reports from Massachusetts. “Bank of America, Wells Fargo, Lehman Brothers and other financial powerhouses are threatening to pull out of the wholesale mortgage-lending market in Massachusetts because of Attorney General Martha Coakley’s proposed new mortgage-broker regulations, the Herald has learned.”
“Such lenders account for about one-third of all mortgage loans issued in Massachusetts.”
The Boston Globe from Massachusetts. “This is what real estate fever looks like in a down market. Almost 300 foreclosed Massachusetts houses will be auctioned at the Hynes Veterans Memorial Convention Center this weekend.”
“The properties for sale are mostly remainders. ‘They don’t tend to be in the best condition,’ said Terryanne St. Pierre, an associate broker in Salem. ‘They’ve been abused more often than not,’ St. Pierre said.”
“But the 2,000 or so people who attended yesterday’s auction were undeterred.After each property was introduced, men in tuxedos rushed around encouraging people to spend money.”
“‘Hey, that guy is about to buy your home!’ one auctioneer told a hesitant couple. ‘What’s another $10,000?’”
“Properties sold in a few minutes. Winners were escorted to a roped-off area to make a 5 percent down payment, for example, on a $300,000 house - the cashier’s check plus a personal check for $10,000. They were then escorted to an area behind curtains to qualify for a mortgage loan from Countrywide Home Loans.”
“Melissa Ferreira came to Hynes yesterday morning to buy her first house. The 28-year-old newlywed raised her paddle repeatedly as the price rose to $330,000. When the auctioneer stopped rapping and Ferreira realized she had won, she wept.”
“‘I’m an emotional wreck,’ she said. ‘I cried because I almost didn’t get this house and this is my dream house. I paid a little more than I wanted to spend, but it was worth it.’”
“A Victorian-era house on Washington Street in Norwood sold for $585,000 in July 2004. It sold yesterday for $350,000 to a group of four friends, investors who said none of them had seen it. They bought it, they said, because it seemed like a good deal.”
“The house has 2,800 square feet of space, with five bedrooms and a large backyard. Now, however, the polished wood of the living room floor is ruptured in several places, perhaps by burst pipes. The smell of a moldy basement permeates the house. Something with sharp teeth savaged the woodwork. The fire alarm chirps endlessly.”
“Chris Willis and Eli Sanchez were willing to pay $100,000 for a West Yarmouth ranch they considered a teardown. The bidding soared past $100,000 in a matter of seconds. The place eventually sold for $200,000, leaving Willis shaking his head. ‘They’re basically buying land,’ he said. ‘It makes no sense.’”
“Mike Gubla, a New Bedford contractor, also decided that the prices were too high. ‘There’s civilians bidding here,’ he said, explaining that inexperienced buyers were paying more than properties were worth. ‘I’ll come back next year, and the prices will be better,’ he said.”
“Ferreira saw her dream house for the first time last Sunday. She said she spent the rest of the week nearly paralyzed by nervous anticipation. Yesterday afternoon, her bid accepted on the house, she paced the financing room in high spirits, waiting for permission to leave.”
“She said she planned to drive to the house directly. ‘And when I get there,’ she said, ‘I’m going to throw up my hands and tell anyone, ‘This is mine!’”
Hartford Business from Connecticut. “Connecticut’s perceived immunity to the nation’s housing market slump and credit crunch is over. Reports published last week by Boston-based Warren Group reveal…a double-digit decrease in home sales along with an alarming number of foreclosures — at 2,948 — in Hartford County alone, reflect the state’s fractured housing market.”
“Statewide, there have been 12,575 foreclosures, with New Haven County hardest hit with 3,914 foreclosures.”
“While home sales have plummeted in the past, state officials do not recall when the number of foreclosures has been so great. ‘We’re concerned because this is not a typical situation,’ said Howard Pitkin, commissioner of the state’s Department of Banking. ‘This is not something that has happened frequently in the state, and we need to address it.’”
“Although foreclosures are now exploding in Hartford County, the writing was on the wall for several months. ‘We saw it coming. I should say, we dreaded it coming for a while,’ Pitkin said.”
“There are an estimated 71,000 subprime mortgages in Connecticut worth approximately $15 billion, and it is possible that up to 8 percent of those loans are delinquent, he said.”
“The seeds that started the current financing fiasco were created during the fiscal climate that followed the Sept. 11 terrorist attacks, Pitkin said. ‘It happened because the Federal Reserve brought about a credit scenario that had been unheard of,’ he explained. ‘Wall Street showed a willingness to buy pooled obligations, and mortgage brokers could borrow money cheap.’”
“Another contributing factor, according to Realtor Nicholle Dagata in Berlin, is that buyers also borrowed their closing costs. ‘These are people who saw their mortgage payment go from $1,200 to more than $2,000,’ she said. ‘This has happened in Farmington, New Britain and Berlin. It’s not just isolated in the big cities.’”
From Newsday in New York. “As Long Island’s economy and housing market boomed, tens of thousands of area residents saddled themselves with expensive mortgages, borrowing billions of dollars and counting on the equity in their homes to help pay their bills and build their wealth for them.”
“Now, that foundation of home ownership for many is crumbling, and the Long Island economy could pay the price. Nearly a third of the 107,000 mortgages given to Long Islanders in 2006 were high-cost loans…and are far more likely to go into foreclosure than their conventional counterparts, a Newsday analysis has shown.”
“Already across the region, home foreclosures are sharply on the rise, often doubling in the last two years in communities from Roosevelt to Westbury and Brentwood to Deer Park, Newsday found. In Brentwood, the number of initial foreclosure notices rose to 227 in the first six months of 2007, from 98 in the first half of 2005, while Glen Cove went from 10 to 24 filings in the same period.”
“Kari Sessa refinanced her childhood home in Huntington Station in 2005 and now may lose it. Kari and her husband, Keith, have owned the cape since 2002, when they bought it from her mother’s estate for $301,000. At the time, they had a mortgage payment of $2,100 a month, which they said they could manage.”
“But after a call from a now-defunct Melville mortgage broker, the Sessas decided to refinance to consolidate their debt. While acknowledging that they made their own mistakes, such as not carefully reading paperwork or bringing an attorney to the closing, they said they thought the mortgage would be one 30-year fixed rate loan.”
“But instead, they received two loans. That left them with a new monthly payment of $3,354, about $500 more a month than it would have been with a conventional, 6 percent rate loan. To make the payments, both Kari and Keith began working two jobs. Yet, the couple is still paying nearly half their income toward the mortgages. And, come March, their larger mortgage payment will rise sharply, adding another $800 a month.”
“All told, over the life of their 30-year loans, the Sessas will pay $500,000 more than if they had gotten one 30-year prime, fixed-rate loan.”
“Twice in the last year, the couple has fallen behind on their payments, only to dip into retirement savings to catch up. ‘We should have left it the way it was,’ said Kari Sessa. ‘We didn’t know this was going to happen.’”
“Business owners across Long Island have long depended on the cash flow of the local consumer. Now, because of the housing slump and subprime loan crisis, there’s less money for homeowners to spend.”
“Even the loss of two regular customers can make a difference, Americo Araujo said. Middle Island residents Rita and Larry Schel used to frequent Araujo’s Italian restaurant as many as five or six times a week. When Larry Schel became ill and the couple began to fall behind on their mortgage payments, they stopped coming.”
“‘When you lose a customer like this, it’s no good,’ Araujo said. But it’s more than just the Schels. Araujo reported that business is off 40 percent compared with last year, and he sees a direct link between the rise in foreclosures and his restaurant’s downturn.”
“‘People aren’t spending money like they used to be,’ he said.”
The Courier Times from Pennsylvania. “Brad Elliott said weeks ago that he’d learn the value of the bankrupt Elliott Building Group’s assets at an auction for its 14 planned developments, including The Preserve at Hilltown and Abington’s Rydal Waters.”
“Now he knows. ‘It was a bust,’ said Elliott, whose Falls development company filed for Chapter 11 protection in June.”
“Elliott said Monday that only two of the projects sold; Glen Meadow in Gloucester County, N.J., and the Ridings at Brandywine in Chester County. The others now belong to banks, which could choose to sell them or finish construction.”
“‘The bids were coming in, most had more than one, but the highest bids were 50 cents on the dollar,’ Elliott said. ‘They were bidding half of what the debt was…The current building community has enough inventory.’”
“Infrastructure improvements were 80 percent finished at Rydal Waters, he said. Both developments were slated to sell homes for $600,000 or more.”
“Elliott said some buyers made deposits on the Hilltown and Abington homes. Most who made deposits have been unable to get that money back because it wasn’t put in escrow accounts, the developer said. He would not say how many but added they have been added to the list of creditors in the bankruptcy proceeding”
“‘The Elliott Building Group will be liquidated and shut down and [I'll] be looking for a new venture after I get through this mess,’ said Elliott.”
“Properties sold in a few minutes. Winners were escorted to a roped-off area to make a 5 percent down payment, for example, on a $300,000 house - the cashier’s check plus a personal check for $10,000. They were then escorted to an area behind curtains to qualify for a mortgage loan from Countrywide Home Loans.”
This scene is sickening.
I wonder if using Countrywide was a condition of the sale. If not, I’d have left the payment, taken the contract and boogied to my own lender (my savings account!)
Did they get a limo ride to the new digs?
http://www.flickr.com/photos/14761398@N04/1810888156/
No one has learned anything yet! You are right this is sickening!
let the knife catching begin
Agreed, totally disgusting. Herded around like a bunch of cows headed to slaughter.
The scene has all the wrong elements to be considered clean. To the contrary; cash, curtains, ropes, etc. How is it the dumbassed FB’s did not run out of there fast? It sounds really warped.
Not too far away from where P.T. Barnum used to hoodwink gullible Americans, long ago…
Reminds me of the Wizard of Oz .
From Bens article …”Something with sharp teeth savaged the woodwork .”
could it be ….
(1) woodpecker
(2) prior fooked borrower
(3) a unpaid contractor
(4) a big termite
(5) a starving antelope
(6) something locked in the room
(7) the neighborhoodd kids
(8) rats
(9) bigfoot
(2
I like the part about the cheerleaders in tuxedos. Why didn’t they simply hire shills to do fake bidding?
If it’s like the auctions they’ve been having around here, the shills were there as well. Any time all of the houses sell quickly, I suspect this is the case. Usually, there are some properties that no investor will touch.
Maybe they did both?
“Why didn’t they simply hire shill to do fake bidding?”
Maybe they did that too.
With idiots like these, who needs shills?
They DO.
I don’t think I’ll ever buy property at an auction. I used to attend auctions and know the feeling of excitement and pressure. I’ve seen people win $50 gift certificate for $49 then act like they’d just swum the English Channel. Too easy to get carried away.
I went to one back home in VT in 2004. It was really sad. I stopped bidding at 60k. Some very misguided and dumb couple won (lost) at 130k. The house was used as a barn and needed to be leveled on 12 acres of untillable land. The “value” was in a 5 year old steel 40×60 Butler building on a slab and some metal working equipment. To this day, it is worth 60k max.
OK, since when does 10k = 5% of 300k?
My guess, as I have read some of the fine print for these things, is $10,000 cashier’s check in hand was required to bid. The balance of the down payment can be a personal check, cash, etc. Of course don’t forget the 10% auction fee! But you can probably wrap that into the loan…
Hmmmmm…. Boston. My wife was at her National conference last year, which was in Miami. During a dinner she sat at a table in a Cuban restraurant surrounded by seven other women (all PhD’s). One of these women, who lived in San Francisco, had found a new job in Boston. Her plan was to extract “equity” out of the SF house (which she would then rent) and use the money to get a place in Boston before “she got priced out of the market”.
My wife tried to educate this woman and her tablemates about the housing bubble (overinflated housing prices out of wack with incomes, sub-prime BS, increasing inventories, etc.) and then told the woman with the new job that she might want to wait before buying in the Boston area or extracting any “equity” out of her current home.
Every woman at the table disagreed, some loudly. My wife bet the women (a dinner) that the market in Boston would be in noticable trouble by their next convention which is occuring this week, in Boston.
Your wife will be collecting a free dinner this week. Things are very slow here. Had a conversation with a broker 2 weeks ago and she said things are dead.
Friend of mine bought a condo in Jamaica Plain a few months back. He thought the prices were right for him, and he doesn’t feel like he’ll have any trouble meeting the fixed payments. I was a bit dumbstruck, but presumably he knows his area better than me so I just wished him luck.
“She said she planned to drive to the house directly. ‘And when I get there,’ she said, ‘I’m going to throw up my hands and tell anyone, ‘This is mine!’”
More like, she’ll walk inside, see the wreck left behind from when the old owners ripped the place apart, and THEN she’ll really throw up her hands!
The contractors who were there for the bidding are right: Prices are still too high, especially for houses that have been neglected. This is only the first wave, and so long as the “civilians” are bidding, bargains will be scarce.
My sis, who lives up in CT, was telling me about all the people who bought houses up there, people who never dreamed they could and felt like “Pinch me, I’ve got a house!”. Sis told me that in fact a number of run down communities like parts of Bridgeport and Danbury saw neighborhoods upgrade as people took pride and put some sweat equity into fixing and improving and painting. But they were hosed into prices and mortgages they couldn’t afford and now that reality is setting in, payments are going up and foreclosures are taking place, there is a LOT of rage and many people are taking it out on the house they thought they owned.
Mwhahaha… Bridgeport…. where you get shot in broad daylight. Neither city is one I’d ever want to live in.
From what I hear, the Hartford area is no day at the beach, either. I think a year and a half ago, I read something about how people were being advised not to even set foot in the city for a couple of weeks, things were so bad. I spoke to a lady down here in FLA who used to be a paramedic in that area and she said they often refused to even go into the city on emergency calls because the risk was just too great.
pure BS - I work there every day and no such thing. I am female too…
Funny thing is, this idiots probably think once they move in they’ll just get a home equity loan to do the fix-up work. NOT!
Whatever happened to learning how to do the work yourself, then doing it over time, paying for helpers (if needed) and materials with cash?
Whatever happened to paying cash for houses?
So true, Slim. I spent 18 mos fixing up last house. Had a ball learning to to everything, paint (the right way), floors, faucets, light fixtures, landscaping. It was really an ego boost to learn and succeed at all the new projects. People would be much more physically and mentally healthy if they’de get off their butts and do something productive instead of focusing on entertainment and plastic surgery.
Why, thank you!
Did a reverse Veteran’s Day holiday and worked yesterday, but not today.
Today was a day for replacing This Middle Aged House’s hot water heater shed, Not only has it been beaten up by rain, the termites consider it to be a fabulous restaurant.
So, goodbye old shed, hello new one. Worked with the carpenter, and we got the whole job done in less than a day.
Best parts of the job were learning a few new carpentry tricks, and saving money. She deducted my carpenter’s helper and post-job cleanup labor from her bill.
“…and THEN she’ll really throw up her hands! ”
I guarantee she will be throwing up something else when she realises what she just bought and is obligated to pay for.
“…and THEN she’ll really throw up”
“She said she planned to drive to the house directly. ‘And when I get there,’ she said, ‘I’m going to throw up my hands and tell anyone, ‘This is mine!’”
WTF is wrong with this lady! In my mine she should be taken for a ride. What a F’n idiot!
There were photos of this little house in Bourne on the Globe site. It actually didn’t look to be in bad shape, compared to some of the others. No water view, though, or I’m sure they would have showed it, so it could not possibly be worth what she paid.
I just want to know where Melissa, the newlywed’s husband was while she was at the auction signing their lives away. Did she have him bound and gagged in the basement?
No, he was already at the courthouse, asking for an annulment.
No, Suzanne was keeping him “occupied.” She’s good at “research.”
OMG, jim. That was funny. As my mom used to say, get the mind above the belt and out of the gutter.
You guys and gals are a hoot.
Disclaimer: I no longer blog with liquids of any sort!
Stop domestic house abuse, before it starts.
“The properties for sale are mostly remainders. ‘They don’t tend to be in the best condition,’ said Terryanne St. Pierre, an associate broker in Salem. ‘They’ve been abused more often than not,’ St. Pierre said.”
“‘I’m an emotional wreck,’ she said. ‘I cried because I almost didn’t get this house and this is my dream house. I paid a little more than I wanted to spend, but it was worth it.’”
- Ah-oh! I think Melissa overpaid! WTF!
She will have more genuine tears of regret in the coming months as her neighborhood prices continue to decline for another 2 years.
I wept, too, as I read this story. I wept because it shows there are still FBs out there, bent over with their undies down around their ankles.
I look forward to reading about Melissa here on this blog in about two years or so, weeping about her mortgage, all the repairs and how “They didn’t tell me…”
Figures she’d have to wait in a pen for permission to leave. One of the sheeple.
“I wept, too, as I read this story. I wept because it shows there are still FBs out there, bent over with their undies down around their ankles.”
Waaay OT but blew my mind. I had a carpenter come to my office yesterday morning, late by 45 mins. In a frenzy he apologized and said that he left the bar and got on the subway Sunday nite and woke up yesterday in an alley in Queens with his pants around his ankles and a condom hanging out of his a$$. I was literally speechless and I’m still disturbed by the thought of it.
How was the carpenter’s work? (And by “work,” I mean carpentry.)
Dang, exeter, thanks for sharing!
Sounds like someone slipped him a mickey and then followed him to the subway. Personally, I would have made him go to the doctor for tests before I would have let him work on or sit in anything I might come in contact with.
I hate when that happens! LOL.
Come on, you telling me some guy is copping to being pirated? Hard to believe. Great story and dovetails nicely with the forthcoming experience of the average FB!
How’s this guy ever going to be able to forget that experience when he pounds nails for a living?
I’m still disturbed by the whole thing. This guy is never late, doesn’t need to be directed every step of the way etc…. He said it so fast and I was so taken aback. I just couldn’t respond. I said nothing. I mean….. maybe you should lay off the booze when stuff like this happens. I just don’t know….
Was he hot?
Yes, that’s the question that matters.
lmao…
Enquiring minds want to know!
The fact that the other trades call him “Fat Bastard” should tell you everything you need to know.
First, he got hammered. Then, he got nailed.
At least he didn’t find a fresh 30-year Opt-ARM contract sticking out of his rear…
LOL
Took advice from previous poster and do not blog with liquids.
Instead of telling you all the details, he could have just said that he was late because he got rear-ended on the way to work, giving you the impression that he was involved in a car wreck!
This is the sort of workers who get hired at the peak of a construction boom.
The good ones are still on the job in a bust.
WT… These are skilled trades guys. Govt. construction is literally on fire. Municipal, bridge and highway, utilities etc.
Unfortunately, it reminds me of a joke my buddy’s eight-year-old boy told him this summer: Dad, if you found yourself on a deserted beach with your pants down around your ankles and your a$$ buttered up, would you tell anyone? My astounded friend responded, NO! To which the precocious tyke asnwered, “You wanna go camping?”
Speaking of FBs, the triple-decker next to my (rented) condo on a beautiful, quiet street in mid-Cambridge sold for $1.2M on 8/30/07. Recent comps for similar apartments (1500SF) in this neighborhood have been in the $500K - $600K range, depending on condition. This place has not been touched in 40 years (landlady was notorious miser, known on the block as The Mean Lady). Plumbing, electric, roof, exterior, heat and windows would all need replacement, plus the usual cosmetics and who knows what else, in order to resell. But, conceivably a handy contractor (with an electrician/brother, plumber/uncle and painter/sister) could do the work for $100K, sell the apartments for $500K, and still walk away not looking too incredibly foolish. That is, if the buyer moved very, very fast.
Well! Drove by yesterday and the building was still sitting empty and untouched, three months after the sale. With no renovation, no resale, no tenants nothing but mortgage payments and interest piling up until next spring’s selling season, at the very earliest. Parked the car and peered through the window. Yep; there was The Mean Lady’s furniture, still sitting inside. Gotta be a story there…
The story is that Mozillo’s shareholders need to sell another building.
I’m sure you’re right. I was just surprised, because this was a deal in which the buyer could have actually made money (values are still holding in this neighborhood, propped up by proximity to H*rv*rd) but, inexplicably, failed to do so. And now it’s too late.
Between Melissa, the ropes and curtains, and the “investors” (gamblers) who bought sight unseen, this thread has a disgusting angle to it that will be repeated all too often for way too long.
This scenario will be repeated all the way to the bottom, I think. I’d just like to know what sort of mortgage Melissa got.
It couldn’t have been good, given they’re only putting 5% down. Their 15K “equity” will vanish the minute those checks are cashed.
I derive a great deal of knowledge and amusement on this site, but this morning’s thread has really left a sour taste in my mouth. This just ain’t gonna end well.
“A Victorian-era house on Washington Street in Norwood sold for $585,000 in July 2004. It sold yesterday for $350,000 to a group of four friends, investors who said none of them had seen it. They bought it, they said, because it seemed like a good deal.”
A year from now, these people no longer will be friends, and they will be suing each other and Countrywide too.
A Victorian-era house….They bought it, they said, because it seemed like a good deal”
“Investors.” Ha, I like that. “Speculators” is what they are. How could anyone make any kind of value claim about a 100+ year-old house without ever having seen it?
I had a full home inspection done prior to buying my 100yo house… three years later I’m still finding new things that need to be fixed. The inspection gave me ammo to negotiate a $5k drop (I wanted 10K) in the contract price, but I think the previous owners still made out like bandits. I would have to see at least 50% off from current market for me to think about buying a forclosure without a home inspection. Worse case is a total loss, i.e. a teardown. Even at 50% off, you may lose money. Seems like too much of a gamble to me.
NEaster -
I’ve mentioned on previous posts that I bid 40% under asking for a big (5K sf) fixer-upper. I estimated that it would need, maybe, $350K+ worth of repairs/upgrades as the systems are all 100+ years old and it is apparent that very little maintenance had been done over the years. The only maintenance done recently was the repair of grossly neglected items (e.g., rotted out, crumbling porch railing) in preparation for sale. All ready to lure the emotional buyer looking for old-world charm, but not recognizing the cost to make it habitable, let alone upgraded with today’s taken-for-granted conveniences (like decent water pressure).
The listing’s pictures are funny: pictures of the big entry door, the fireplaces, and the in-ground pool that needs to be filled in. Where are the pictures of the 1970s kitchen and the cracks in the plaster throughout the house?
House is still on the market. From this post, though, it sounds like some chump will buy it at a “bargain” price of 10% off of asking. Catch that knife, baby.
I had a full home inspection on a 3 year old house and 20 years later, I’m still finding things that need to be fixed. Next time I hire a home inspector, I’m going to hire one that thinks he is a proctologist.
Next time I hire a home inspector, I’m going to hire one that thinks he is a proctologist.
Now that’s funny… and I agree completely.
it sounds like some chump will buy it at a “bargain” price of 10% off of asking. Catch that knife, baby.
There’s the rub. There is still too much enthusiasm regarding owning real estate and too many fools with money/credit to buy yet. No need to compete with the knife catchers. Let them fail, then swoop in. We’re still 3+ years out at least. Maybe by late 2010…
“A Victorian-era house on Washington Street in Norwood sold for $585,000 in July 2004. It sold yesterday for $350,000 to a group of four friends, investors who said none of them had seen it. They bought it, they said, because it seemed like a good deal.”
“The house has 2,800 square feet of space, with five bedrooms and a large backyard. Now, however, the polished wood of the living room floor is ruptured in several places, perhaps by burst pipes. The smell of a moldy basement permeates the house. Something with sharp teeth savaged the woodwork. The fire alarm chirps endlessly.”
This house is a tear down. Water is the worst enemy to a house. They spent $350k for the land. Great investment morons…
Some people may say fire but I think water is worse. If there was a fire in the house, the damage would be obvious. Not so with water damage…
Dry rout and water damage can be dealt with fairly easily….Certain kinds of mold are another story….Takes professional containment and air monitoring to remove potential liability….
I have done a lot of forensic engineering work and I can attest that water does the most damage to a house. As a matter of fact, if a house catches on fire, unless it burns to the ground usually the majority of damage comes from water from the fire dept.
IMHO the only reason to put water on a house fire is if there is someone trapped that needs to be rescued, or if other property (neighbors) is in danger. The amount of water needed to put out the fire will total the house and make the insurance claim much more drawn-out and difficult. God forbid my house ever catches fire, but if so I’d rather it just burn to the ground.
I was remarking on basic water damage found due to water leaks….I would have to agree that if you turn a fire hydrant loose on a house that it is toast…..
After house fire, it was the fire dept Water that damaged the small part that wasn’t burned. Total demo.
Water ..love to swim in it…hate to wade in it.
I’m sorry, these yahoos aren’t investors, they are GAMBLERS!!!!
To be specific on what type of gambler:
THEY ARE LOSERS!
New reality TV show anyone?
It will be called AUCTION WINNERS!
subtitle: How to get hosed and feel like you’re having the time of your life
Snakecharmer, you beat me to it. They won’t be friends much longer.
“Something with sharp teeth savaged the woodwork.”
WTF?!
It must have been the ROUSes!
I’ll bet the backyard resembles the “fire swamp” complete with “lightning sand” (watch your step!).
Maybe it was the same thing that savaged the carpenter.
ROUSes
LOL
Here is what others who attended the auction said:
http://bostonreb.com/blog/2007/11/12/weekend-auction-report-reader-thoughts/#comments
http://www.bostonbubble.com/forums/viewtopic.php?t=545
Good comments, really gives an idea of how these things go. The sleaze in the market now shifts to auctioneers. LOL, someone posted that the auction company was the same one that did the Erik Estrada land infomercials.
If the guys in tuxedos were giving out any false information then the auction was rigged and the bidders could sue for fraud.
More from the second link, second page
3. BIDDING AND BUYING AT THE AUCTION
Reserve Price. All Properties have a Reserve Price, meaning the Seller of each Property has established an unpublished, minimum selling price. The starting bid is not the Reserve Price. In order to become the Winning Bidder for a Property, a Bidder must meet or exceed the Reserve Price and have the highest bid. The Auctioneer may open bidding on any Property by placing a bid on behalf of the Seller. The Auctioneer may further bid on behalf of the Seller, up to the amount of the Reserve Price, by placing successive or consecutive bids for a Property, or by placing bids in response to other bidders. If no bidders meet the Reserve Price, the Seller is under no obligation to sell the Property. The Seller may withdraw a Property at any time prior to the announcement of the completion of the sale by the Auctioneer. Auctioneer is not acting as an agent for any Bidder in any capacity, and is acting exclusively as the Seller’s agent.
I would not be surprised if that something were human. When I was in RE, it was common for foreclosed people to utterly destroy their homes on their departure. They would rip out appliances, break windows, gouge floors, bash walls, leave dirty diapers (and worse) festering around, you name it.
Maybe it was just a crazed opossum. Have you thought of that possibility?
“‘I’m an emotional wreck,’ she said. ‘I cried because I almost didn’t get this house and this is my dream house. I paid a little more than I wanted to spend, but it was worth it.’”
These auctions are the icing on the cake of the circus Americanus, we’ve become…
Miss anonymous got her 15 minutes of fame, “Winning” it at an auction, for the crowd of many hundreds to see. Imagine her in the spotlight as the bidding duel went on, and she kept her bidding paddle high in the sky, nobody was going to beat her, were they?
And to get mentioned in the paper?
It only gets better…
The Final Act: Convince people that if they buy via a reality show venue, (auction) they are getting a great deal…
“Melissa Ferreira came to Hynes yesterday morning to buy her first house. The 28-year-old newlywed raised her paddle repeatedly as the price rose to $330,000. When the auctioneer stopped rapping and Ferreira realized she had won, she wept.”
“‘I’m an emotional wreck,’ she said. ‘I cried because I almost didn’t get this house and this is my dream house. I paid a little more than I wanted to spend, but it was worth it.’”
Yet another way for realtors and lenders to scam people. If people just collectively told them to shove it all for 3 years these house would be selling for their real value, about 70% off.
“‘I’m an emotional wreck,’
Ohh, baby, you think you’re an emotional wreck NOW, come talk to us in a couple of years….
She must be doing pretty good in life if she can afford a 330k house at 28 years of age.
I wonder - she works all day in a miserable job while her prime child-bearing years fly merrily by.
Check out the photo gallery in the Boston Globe’s article…
The shed in Norton, MA…
Some Einstein walked away with this gem for 255,000!
Just because the prices are lower than 2 years ago – these soon-to-be FB’s think they are getting a bargain. Oh boy, are they in for a rude awakening in 2-3 years…
“Something with sharp teeth savaged the woodwork.”
WTF?!
hahaha something out of a Stephen King novel. the house is Haunted to boot!
no seriously, what seems to be missing here in the analysis is desire for home, for community. a place of ones own in very uncertain times. people (me included) want that sense of ’security’ in an acquisitional society, while the globe heats up and we as a country seem poised for yet another war with Iran. In unsure times the desire for material things is very strong. that one has some ‘control over their surroundings and their lives’ is comforting no matter how irrational it might be. For this reason the bubble in real estate will not deflate easily.
There’s a lot of truth to that. Both now and in the future, relationships are going to matter a lot more than homeownership, especially now that homeownership does not automatically confer relationships.
I’ve been gone for a bit, but for some reason this passage comes to mind.
“Beware the Jabberwock, my son!
The jaws that bite, the claws that catch!
Beware the Jubjub bird, and shun
The frumious Bandersnatch”
Looks like the next level of dip buying, eventual FB’s, are moving in to buy the “bargains.” To quote that oft used phrase, “Now is a good time to buy.” NOT!
These realtors and auctioneers and lenders are merely creating the illusion that they’re still in charge, funny enough, greater fools still exist to bid on this crap.
“I’m an emotional wreck,’ she said. ‘I cried because I almost didn’t get this house and this is my dream house. I paid a little more than I wanted to spend, but it was worth it.’”
I, I, I, my, I, I, well at least we know who it’s all about in this new marriage. Her moron hubby is already out of the picture in her mind.
Ain’t that the truth, Blano. I’m surprised that the guy’s nuts didn’t fall out of her purse when she went searching around for her checkbook.
lol
‘I paid a little more than I wanted to spend, but it was worth it.’
Only if you’re talking about a roll of Scotch tape, hon.
Great attitude to have about money.
Yeah, and why is she speaking in the past tense? She already paid more for it than she wanted to, and it WAS worth it?? She ain’t even made a payment yet, and how can she know it if was already worth it??
“Business owners across Long Island have long depended on the cash flow of the local consumer. Now, because of the housing slump and subprime loan crisis, there’s less money for homeowners to spend.”
I believe that the debt overhand was responsible for the slow crawl back to prosperity the Northeast experienced after the 1980s housing bubble. It took more than a decade for consumer-driven businesses to recover, because people were house-poor, because they bought at inflated prices.
Now even more parts of the country are affected, it isn’t just people who bought at the peak but also those who HELOCed who are screwed, and for those with median incomes over the state average, the new bankruptcy law doesn’t even allow that process to restore buying power.
“the local consumer.”
Consumer (spit). I really despise that word. I hear it all the time in the MSM, Brian Williams, particularly, likes to knit his brows and furrow his forehead while he reports on “consumers”. We’re not people, we’re not citizens, heck, we’re not even comrades, we’re “consumers”, a term I find de-humanizing. And I’m sure that’s the idea behind this especially offensive bit of newspeak. After all, what does it matter if people lose their jobs, their homes, their families, their lives due to crime and war. They’re not humans, they’re consumers.
BINGO Palm. Add to that “home”. A hotel room can be home. A refrigerator box down on The Bowery can be considered home. A HOUSE is what you buy. A HOME is where you hang your hat.
That’s for those in the private sector, who see us as consumers and worry we’ll stop being suckered.
In the public sector, you aren’t people you are taxpayers. And you pay no matter what.
Top shelf rant! That word is insidious.
Hear Hear! Not only are you a consumer, but you have to sell yourself too! Ain’t it grand being both a consumer and a product simultaneously?
Now where did I put my ID number?
Well, people can call it tin foil hat all they want, but dehumanization is the general idea, as prescribed by the Council on Foreign Relations, Tri-Lateral Commission and Bilderbergers. Particularly, the pride and decency of American people is being beaten to a pulp. Here’s a few from the not-yet-late (unfortunately) Henry Kissinger:
“Military men are dumb, stupid animals to be used as pawns for foreign policy.”
Woodward and Bernstein The Final Days in chapter 14
————————
“Intelligence is not all that important in the exercise of power, and is often, in point of fact, useless.
———————–
“It is an act of insanity and national humiliation to have a law prohibiting the President from ordering assassination.”
Statement at a National Security Council meeting in 1975.
———————–
“I can think of no faster way to unite the American people behind George W. Bush than a terrorist attack on an American target overseas. And I believe George W. Bush will quickly unite the American people through his foreign policy.” Statement from 2000.
———————-
“Depopulation should be the highest priority of foreign policy towards the third world, because the US economy will require large and increasing amounts of minerals from abroad, especially from less developed countries.”
———————-
“Today Americans would be outraged if U.N. troops entered Los Angeles to restore order; tomorrow they will be grateful! This is especially true if they were told there was an outside threat from beyond, whether real or promulgated, that threatened our very existence. It is then that all peoples of the world will pledge with world leaders to deliver them from this evil. The one thing every man fears is the unknown. When presented with this scenario, individual rights will willingly be relinquished for the guarantee of their well-being granted to them by their world government. ”
I n an address to the Bilderberger organization meeting at Evian, France, on May 21, 1991. As transcribed from a tape recording made by one of the Swiss delegates.
Sorry, Ben, please delete that post, I got a little carried away. The book 1984 really got to me as a pup and that “consumer” word really set me off.
Hey Palm, Here is the latest “tin foil” making the rounds. It’s about a two beer read. The guy is legit (he googles as being editor for Forbes, doesn’t mean he isn’t nuts though) but it’s a pretty freaky story, entertaining for us “cappers” (as in tin foil cap).
http://www.rense.com/general77/fulf.htm
Nah leave it. Kissinger is scum.
I believe having tin foil hat moments demonstrates a persons ability to think outside the general consensus. As long as you don’t play in those fields for too long you are usually the better for it. Most people here were derided about the existence of a housing bubble. Not quite as tin foily as “Bilderbergs”, but to the general public the idea that there was a housing bubble was screwball.
Remember just because you’re paranoid, it doesn’t mean they aren’t out to get you!”
No, you are 100% spot on! There is little doubt that our current leaders want to “abolish the people” or better yet, they want to “dissolve the people, and elect a new one (from the 3rd world)”.
Palmy,
thanks for the quotes. if it’s true the good die young, then herr kissenger is freaking immortal. if and when he does finally kick off, i hope they cremate him. i’d hate to think of him buried in American soil.
The Nigerians have it.
Sounds like you took the red pill.
Well done, Palmetto. Well done !!
I guess the new motto is you are what you spend.
Not exactly new. One of the most liberating feelings in the world is not owning things. I had a mentor once who said “You don’t own things; they own you.” At this point, it would take me years to liquidate but certainly much less time to give it away.
After house fire…walking away with only a Red Cross bag with comb,toothbrush and my car keys.(thankfully in CA) the feeling was an odd one,nothing at all to worry about, nothing to lock up, nothing to pack, surreal.
Your point is materialism is binding and heavy to ‘carry’
and it is. I guess the similarity would be to go camping with only a swiss army knife a tarp and your good sense.
Suddenly you find yourself getting real.
Was that mentor called Tyler Durden?
On the front end we “consume”, on the back end we “evacuate”. That makes FB “evacuees.”
Still pondering the hapless carpenter… For one, I didn’t think guys shared that type of TMI. And if you’re going to jump someone in an alley seems rather quaint that the perp used a condom.
This may be why CW is doing the cattle call in tuxedos:
Countrywide Volume Continues to Decline
http://preview.tinyurl.com/2cbehy
Countrywide originated $21.96 billion in mortgages in October, down from the $41.9 billion originated during the same month a year ago. But, Countrywide’s October originations increased 4 percent from September origination volume.
“Mike Gubla, a New Bedford contractor, also decided that the prices were too high. ‘There’s civilians bidding here,’ he said, explaining that inexperienced buyers were paying more than properties were worth. ‘I’ll come back next year, and the prices will be better,’ he said.”
Mike pretty much summed it up.
Any of you thinking of opening a business anytime soon?
Caveat Seller!
“Even the loss of two regular customers can make a difference, Americo Araujo said. Middle Island residents Rita and Larry Schel used to frequent Araujo’s Italian restaurant as many as five or six times a week. When Larry Schel became ill and the couple began to fall behind on their mortgage payments, they stopped coming.”
“‘When you lose a customer like this, it’s no good,’ Araujo said. But it’s more than just the Schels. Araujo reported that business is off 40 percent compared with last year, and he sees a direct link between the rise in foreclosures and his restaurant’s downturn.”
“‘People aren’t spending money like they used to be,’ he said.”
Interesting. Araujo is an Iberic name. It would be like eating at Fontani’s Taqueria.
Palmetto nailed it. We are going to see this kind of action all the way to the bottom and that’s several years away. Now the stock market. Folks, The Financial Gangsters of Wall Street have lost a lot of money. They want it back. Once investors money, be it 401k or mom and pop retirement money, arrives in the coffers of Da Boyz, as far as they are concerned it’s now their money. They will manipulate this market up and down - up and down - more than usual, skimming all the way until they have got their money back. To do this, they send out their shills in the form of analysts with the good or bad news depending on which way they want the market to go. Today, it’s good news. WalMart is booming (lol). All boats are lifted because, obviously, the American consumer still has money to keep the economy going. Wait! In the next few days, Da Boyz will take the market down again, skimming as they go.
Here is a back-of-the-envelope calculation on this exact topic. Have to scroll about half-way down to read it.
http://www.independencejournal.com/
Mike, I was going to say, YEE-HAW, how about that Dow? Sort of confirms my theory of a controlled crash, with some daily ups and downs, but basically a long term down trend. yeah, Wal-Mart, that’s the ticket! It’s not a stock market anymore, it’s a dangerous casino/trader/hedge fund market.
In the last bust it was called “rotation.” Clearly some sections of the economy and their stocks are trash — then dot.coms and tech, now finance, housing, construction. But stocks in general is still thought a winner, so when money pulls out of some sectors it goes into others.
The money will go around and around until it disappears.
“The money will go around and around until it disappears.”
Just like in any well functioning toilet.
“Just like in any well functioning toilet.”
BWAHAHAHAHAHA!
the money doesn’t disappear. it goes from your wallet to someone else’s. bagholders who were buying AAPL and GOOG furiously “on the dips” may have made money today, but they just took it from someone else on Friday and Monday.
Walmart is 10% of retail sales in this country which explains their joy. They leave out that they are doing price cutting 4 weeks early to get those sales.
Same store sales, excluding gasoline, up 1.5% over the previous year. Now adjust that for price increases. Of course pricing is proprietary information not released by Walmart. I suspect that unit sales were pretty much flat, or slightly lower, and that all of the revenue increase was due to price increases (especially food).
I expect the US equity market gains of today will be lost by the end of the week.
Increasingly with every thread, Ben is showing us the contagion spreading, on all levels, socio-econiomic…
Debt is their common ground.
“‘I’m an emotional wreck,’ she said. ‘I cried because I almost didn’t get this house and this is my dream house. I paid a little more than I wanted to spend, but it was worth it.’”
Go ahead and be emotional and cry Melissa. It is a perfectly normal reaction when you get GANG RAPED by an Auctioneer, his Shills and the Tux Boz.
I’m certain that your newly aquired Idiot husband will be supportive and very understanding when you explain all of the exciting and gory details to him
Beyond the GSE’s there is no demand for mortgage debt. It does not matter if BA and others opt out of the market because their model is to off the paper to Fannie. We are quickly moving to a new crisis in the mortgage industry. Will Fannie become the new FDIC of mortgage banking. Like saving accounts would you put money in a non-insured saving account, bet not. The question though is per the flow of funds report the FED says the US Real Estate market is worth 21 trillion dollars, doubt that Congress wants to put that debt on its books along with SS and the rest. Just my guess sooner or later folks will start waking up to the fact that the US RE is so overpriced that investors will not buy unless the gov’t provides some sort of warranty.
BAC just announced they had to pony up for a money market fund. (plus a 3B writedown)
Ron,
Nice call. I was wondering when we’d get around to the “real” story. What does (or doesn’t) happen to some 28 y.o gal at an auction isn’t really that interesting to me. NOW… the fate of the entire MA mort. mkt? That’s where the thunder is!
Clearly the state regulators need to tell BofA, Wells Fargo and Lehman to take their extortionist approach, their YSP and cr@ppy attitude and go do business some where else! That’s what we “should” be discussing!
Once investors start a flight to safety they normally look to gov’t backed securities,in the case of mortgage debt to say that a gov’t warranty will be required to fund a loan says much about the true value of the asset being funded.
This realization has not hit the MSM but my guess is that behind the covers in the financial sector it is raising very large fears about the future. liquidity contraction is one thing a collapse brings on a different picture.
“Beyond the GSE’s there is no demand for mortgage debt.”
Not quite true…you can still get Jumbos, although at 60 to 80 basis points above conforming.
It’s just that investors have little appetite for using “mark-to-model” on loan collateral (inflated appraisals) and buyer incomes (stated income, aka liar loans)…or high loan-to-value loans, or high debt to income loans, or…
OT: a small business w hard assets in a strong local market may go for 4 or 5 times earnings
makes you wonder about all that groovy growth priced into the market
“makes you wonder about all that groovy growth priced into the market”
We don’t look at earnings, or P/E ratios…all we need is “eyeball views” on our web page and market share.
Oh, wait, wrong bubble.
No writedowns for Goldman and they’re still short mortgages:
http://www.marketwatch.com/news/story/goldman-ceo-sees-no-big/story.aspx?guid=%7B4AF9FAF2%2DB0E2%2D4ACA%2D8134%2D5BBD5FCACFD6%7D&siteid=yhoof
bloomberg:
“Goldman’s Level 3 assets, for which market prices are so scarce that companies use internal models to gauge their value, accounted for 6.9 percent of the New York-based firm’s $1.05 trillion total at the end of August…`Just because they’re in Level 3 doesn’t mean we’re not pricing them correctly,” Goldman Chief Accounting Officer Sarah Smith said in a Nov. 9 interview. “We mark our positions to the point where we could exit at that moment.”
If they know what the market is for these securities then why are they in the level 3 pile??? Sounds like BS to me.
For those bashing CA because within the major urban areas, 80% of the area is rundown, poverty stricken, etc., (unless you ’stick’ to west LA or north San Diego), here’s a news flash: almost every large city in America is like that! I’ve lived in Miami, SD, LA, ST. Louis, Philadelphia, Boston, and Chicago and traveled extensively through many others. I challenge anyone to name a large city where more than 30% of the region is not run-down, urban blight.
30% seems reasonable (in perverse kind of way) since about 30% of Americans are “blighted”. Still 30% is way better than 80%.
Of course this is why I don’t live in a big metro area.
“For those bashing CA”
Don’t get yer panties or tighty whiteys in a bunch…the more bashing, the less people move here. I *like* the bashing.
Yeah, I always tell my midwest relatives that it sucks in SoCal, stay away, tell a friend how bad it is. Don’t believe the glossy images of “The OC”. We have fires, earthquakes, we’re overrun by gangs, freeway snipers, and rampant corruption ala Randall “Duke” Cunningham. We’re all cuckoo Scientologists.
My heart goes out to everyone who lost their homes in the SoCal wildfires….Truth be told, however, the week that the County was shut down for business was incredibly serene in a surreal way. The roads were clear, people were friendly, a real sense of community. SoCal hadn’t felt this way in 20 years.
Florida takes its share of bashing, and like CA, we also have a pretty large community of Scientologists, except the ones I’ve stumbled across here seem pretty level-headed and decent. In fact, the fellow who pulled my a$$ out of a really bad jam 20 years ago was a Scientologist and were it not for him, I don’t even know if I’d be around to post on this blog. So I get pretty bemused when I see words like “cuckoo” associated with one of the most decent folks I’ve ever had the pleasure to know.
Whatever the case, I think both Fla and Cali have been inundated with the effects of too many people and too much development.
Reminds me of a chapter in my Psych 1 book … it was about what causes so much homicide and other awful things in a society. They did studies with rats — finding: Too many rats in too small a place. Guess they can’t do economic studies with rats … wait maybe they can … there are plenty of them in the money houses.
SoCal hasn’t been that way since the Olympics in the mid 80’s when you could drive a freeway.
Keep telling em that CA is horrible.
Ps. many cities across Am are indeed blighted because to many people are poor/middle class and are working to hard to keep up their homes, and time off is spent on the couch/football games etc. Just plain worn out and too tired to care it seems.
Not that a hefty pay raise would help many,still couch potatoes,but many would like to improve their surroundings just can’t afford that and food or insurance with 2+ jobs.
The Olympics in 84 was bliss. They forced employers to have employees come to work on a staggered basis, making transportation much easier. I’ve never understood why they don’t use staggered work hours and more telecommuting to ease traffic. So many jobs could be done from home with technology. You can even transfer phones to be answered by assistants at home. But then, who would be there to dial out calls for all those busy executives who somehow can’t make a call for themselves when at their desks?
Don’t believe the glossy images of “The OC”.
I don’t. Most of OC looks like Santa Ana, and not Laguna Niguel.
About 15-20% of Philadelphia is urban blight. Most of the rest is blue collar housing stock: row homes. Now, it is true that a lot of the recent killings are occurring in those same blue collar neighborhoods.
(My definition of urban blight: uninhabitable. I’m not talking “pioneer” or gentrified neighborhoods that are still rough around the edges.)
How ’bout Seattle. Because we’re different here.
“‘I’m an emotional wreck,’ she said. ‘I cried because I almost didn’t get this house and this is my dream house. I paid a little more than I wanted to spend, but it was worth it.’”
It’s belief systems like that which got us in to this mess in the first place. Hubby should have grabbed the auction paddle from her and used it on her behind.
‘Hubby should have grabbed the auction paddle from her and used it on her behind.’
No, because that might have been fun, and therefore neither dissuasion nor punishment.
He should have grabbed the auction paddle and ‘done an exeter’s carpenter’ on the nearest tuxedoed auction pimp right then and there, if he wanted to make an effective statement.
You people are missing the point….if there are idiots STILL OUT THERE who buy like this, then there will be others.
The mind is a very powerful thing….and most of the population is easily brainwashed and manipulated. Do you think the housing bubble would have happened is such “wise” investors such as yourselves were more plentiful and as careful?
“if there are idiots STILL OUT THERE who buy like this, then there will be others.”
Your point is…what?
Of course there will always be people willing to buy. And that’s important because…?
“and most of the population is easily brainwashed and manipulated.”
And that’s why this whole thing could vastly overshoot on the downside…even to the point of lowering house prices to the point that renting costs *more* than owning for a (small?) while, as people keep hearing about those that bought recently getting creamed.
‘The mind is a very powerful thing’
In my experience, you are wrong.
‘….and most of the population is easily brainwashed and manipulated.’
Oh, well, yeah, okay. Now you’re back to being right.
Agreed. The mind is a very weak thing. Herd mentality and Madison Ave advertising is a powerful thing.
GREED is the major psychological driver.
That’s what got us into any bubble, and that’s what sustains them — it will also be the undoing. Will we finally see the end of greed? Sadly no. A new crop of humans is right behind the economically fallen. Remember … another is born every minute.
10 ways to solve the housing bubble:
As ongoing subprime fears send bank shares plummeting, ousted Merrill Lynch and Citigroup chiefs take responsibility for the firms’ $8.4 billion and $14.9 to $17.9 billion write-downs, respectively, and Congress mulls overhauling the mortgage-lending industry, the question on many lips remains: Is there a way out of this mess?
Yes, say some industry experts.
http://www.abcnews.go.com/Business/IndustryInfo/story?id=3855722&page=1
Brilliant. What do these people do for day jobs?
“It appears those who created the CDO and the SIV* forgot about the LBO*, HLT* and the RTC*. When in doubt, steer clear of three-letter acronyms, which historically stand for SOL (s— out of luck) and LYA (lose your a–).”
Only smart thing in the whole story.