Many Of Those Sweet Deals Are Turning Sour
The Toledo Blade reports from Ohio. “A slump in the local condominium market is mirroring slowing sales of single family homes. The 391 condos sold in metro Toledo and outlying areas from January through October is down 8 percent from the same period a year ago, and the average sale price dropped 4 percent to $157,527, according to the Toledo Board of Realtors.”
“‘There is an excess housing inventory. It’s the simple economics of supply and demand,’ said Dan Lepkowski, an agent in Toledo.”
“The trend of empty nesters who want to downsize into condo units but must sell their homes first are among the factors holding back the market, he said.”
“Kathleen Ryan, of Sulphur Springs Realty in Toledo, said excess residential inventory can cause sellers to take substantially less for their homes. ‘We don’t have the people moving from out of town and coming into the area like we have had in the past,’ she said.”
“The Realtors report shows a steady drop over the last three months in condo sales in Lucas County: 18 units were sold in October; 27 in September; and 29 in August. Jon Modene, president of ReMax Masters in Perryburg, said the 625 condos listed for sale in Wood and Lucas counties in October was…worse than the 515 units in 2005.”
“Still, the outlook for the condo market continues to outpace the residential market, in part, because the bulk of the foreclosures are being made on single family homes, he said.”
The Detroit News reports from Michigan. “Danny Stokes used to sell drugs, before he discovered it was safer and more lucrative to sell mortgages. ‘We are seeing people who two years ago were involved in drug trafficking,’ said Mark Bowling, supervisor of the FBI’s regional office in Macomb County. They slide into mortgage fraud, he said, ‘because it’s easier, it’s safer and the amount of profit is incredibly high. Once they’re in the mortgage fraud business, they see how easy it is.’”
“Inflated appraisals are so common that it’s almost impossible to accurately value properties in some parts of Metro Detroit, said Liza Manzella, a Shelby Township appraiser. Things are particularly bad, she said, in parts of Detroit. ‘You can’t find any in a whole neighborhood that aren’t fraudulent,’ she said.”
“Mortgage fraud was easy for Hani Mortada. From 2002-04, the Lebanese citizen went from a struggling part-time college student in Dearborn to a mortgage loan officer with $25,000 in the bank and a Cadillac Escalade in his garage. In those heady days, money came fast and the chances of getting caught were slim.”
“‘I knew (lenders) would not call to verify (loan information),’ Mortada told a federal jury in Detroit. His group of scam artists had ‘the best underwriters and the best banks — you would not even believe what they would do.’”
“Derek Brown knew Detroit had a problem when a grocery clerk he knew quit his job to become a mortgage loan officer.”
“‘Everyone was selling mortgages. There were mortgage offices on every block,’ said Brown, past president of the Detroit Real Estate Brokers Association. ‘One day bagging groceries and the next day selling my mother a mortgage? What the hell is that?’”
“Today, many of those sweet deals are turning sour. In August alone, there were 3,900 new foreclosure notices in Detroit.”
“‘There were people who couldn’t read or define a loan application who were selling $300,000 loans,’ said Emil Izrailov, who started his career selling subprime mortgages and is now chief operations officer of Kaye Financial Corp. in Bloomfield Hills.”
“On the other side of the table, home buyers were asking for loans that would have seemed outrageous a few years earlier. In Shelby Township, John Karpinki got a $650,000 no-money-down mortgage just 22 months after he was released from prison, where he spent 12 years. The home is now in foreclosure.”
“‘People would come in and tell me what kind of loan they wanted,’ said Nicole Jackson, who worked in the subprime market in Detroit for years. ‘If I didn’t sell them a loan, the person down the street would.’”
“In effect, mortgage lenders today act less like banks than like car dealers: Once a mortgage is sold, their interaction with the homeowner is done. Instead of making money on 30 years of interest, lenders make their money on closing fees. As lenders became further separated from the risk of bad loans, their goal changed: Quality didn’t matter; quantity did.”
“A lot of people made money on Ethel Cochran’s home during the years. After buying her home for $8,000 in 1987, Cochran now owes 14 times that amount — multiple refinancings larded with commissions have left her with a $116,000 mortgage she can’t repay.”
“Her latest lender took a $30,000 loss on the house. Her neighbors are losing money, too: Foreclosures drop the value of nearby homes.”
The Daily Herald from Illinois. “In DuPage County, auctions are held at the sheriff’s office in Wheaton twice a week because of the increased number of foreclosures lately, compared to once a week last year.”
“In the Northwest and West suburbs, 6,662 households received foreclosure notices from January through September. That amount exceeds the full year of 2006, which had 6,428, according to data provided by Kaneville-based Record Information Services.”
“When auctioneer Mary Lee Kopp got to the Winfield property, she announced the opening bid at about $308,000. Having no bids for the Winfield property, Kopp said, ‘I now declare this property sold’ back to Washington Mutual Bank.”
“As many as 25 homes can sell in one day, said Peggy Rinck, sheriff’s department civil division supervisor. One auctioneer had done the job before. Now two more people are needed to assist with the paperwork.”
“‘We’re just barely able to keep up now,’ Rinck said.”
“Crystal Neubauer wants others to know how she lost her Grayslake home. She contends she and her husband fell through the cracks of a corporate lender that had grown too large, that didn’t have enough workers to help them with mortgage problems.”
“‘My husband got laid off, and we kind of went through a period of time with one financial blow after another,’ she said. Last fall they missed a payment.”
“They had considered selling their home when prices were still strong but were not sure where they could move. They also thought things would work out once they got jobs. Then the housing market slowed while the Neubauers’ loan issues increased. It seemed impossible to them to sell the home for even as much as they owed on it.”
“Eventually, Randy Nosalik of GNR sold the home in what is called a short sale because it was for less than the mortgage. He negotiated with Wells Fargo to accept the lower price.”
“The home was sold for around $138,000 in September, Crystal Neubauer said. The mortgage had been about $168,000.”
“‘They accepted in the long run thousands less than what we owed them. It doesn’t make sense. It was appraised before this whole thing started for $214,000 to $220,000,’ Neubauer said.”
USA Today reports on Illinois. “As in many college towns across the country, the real estate market in Champaign is sheltered from the highest peaks and lowest troughs of the national housing cycles.”
“Between July and September, sales of single-family homes were up 9.4% over a lackluster third quarter last year, while prices edged down slightly.”
“In any market, there are always strong and weak pockets, and in Champaign, condos have taken a beating. Only 116 condos were sold in the third quarter, down from 141 in the year-ago period. Prices, meantime, plummeted 23%.”
The Star Tribune from Minnesota. “Even though foreclosure prevention counselor Melissa Hansen’s job is busier, it’s gotten easier of late. In early October, the company handling a client’s mortgage suggested simply subtracting $21,000 off her client’s $121,000 mortgage debt.”
“Ocwen Financial went on to suggest a permanent cut in Thomas Stroud’s interest rate to 8 percent, even lower than his initial teaser rate, so the building maintenance worker could manage the monthly payments on his north Minneapolis home, which otherwise was headed for foreclosure.”
“‘I would like to say all this happened because I was so savvy and wonderful, but quite frankly the company just offered it,’ said Hansen.”
“Counselors say that, at least occasionally now, they’re breaking through servicers’ previous logjams. Cheryl Peterson, manager of (a) foreclosure prevention program, said in recent months they’re getting loan modifications for 20 percent of clients. That comes as their work has increased. Already they’ve worked closely with 206 homeowners this year, up from 152 in all of 2006.”
“Lenders’ backs are against the wall. With so many interest rates adjusting higher, sometimes for people who can no longer afford the lower rate, and housing prices stagnant if not declining, refinancing is out of reach for many, Peterson said.”
“Mortgage services have said their investors will sue them if they modify mortgages. Mortgage-backed securities come in all shapes: Some are all-principal; others, all-interest; some are high-grade, low-risk; others, the opposite. Given that variety, any changes servicers make will mean losses for some and not others.”
“And the losers will call their lawyers, the servicers said.”
From WDIO.com in Minnesota. “We’ve all heard about the foreclosure problem in the United States. The Northland is not immune to the problem. In fact, 1,000 homes in Saint Louis and Douglas County alone have gone in to foreclosure in the last two years.”
“The number of foreclosure cases is shocking. 1,000 foreclosure cases in Saint Louis and Douglas County in two years. A look at civil court records show people from all over The Northland in all price ranges.”
“Realtor Michelle Lyons says there is a foreclosure near you. “I have them in Denfeld, Lincoln Park here in Piedmont, Lakeside, Proctor and I also go down to Kettle River, Askov.”
“Saint Louis County has seen almost 400 foreclosures this year. Douglas County has just over 150 foreclosures. By the end of 2007, over 1,000 foreclosures are expected in the two counties alone.”
“As a financial counselor, Dan Williams has counseled many people facing foreclosure. ‘In this area for instance there’s been a huge proliferation of sub-prime loans in the Duluth, Grand Rapids even in the Hibbing area.’”
“A study by The Minnesota Housing Finance Agency says 21% of sub-prime loan holders in Duluth are at least two months late. That’s one out of five. The Minnesota Mortgage Association says almost every one of them will end up in foreclosure.”
“Foreclosure sales can be bad news for everyone else on the market trying to sell. There is a lot of home sale competition. Today, there are over 200 homes for sale in Douglas County. 1,600 homes for sale in Carlton, Lake, northern Pine and Saint Louis counties.”
“Williams says all homeowners are affected by the sub-prime issue.”
“This house in the Piedmont neighborhood is owned by the bank. It’s been on the market for six and a half months. The original $140,000 price has been cut $10,000 and there’s still no offers on the table. ‘It’s a drastic impact on the value of your home,’ he said.”
‘Mortgage fraud was easy for Hani Mortada. From 2002-04, the Lebanese citizen went from a struggling part-time college student in Dearborn to a mortgage loan officer with $25,000 in the bank and a Cadillac Escalade in his garage. In those heady days, money came fast and the chances of getting caught were slim.’
‘I knew (lenders) would not call to verify (loan information),’ Mortada told a federal jury in Detroit. His group of scam artists had ‘the best underwriters and the best banks — you would not even believe what they would do.’
And yet there are still posters that will insist that this housing bubble ‘just happened.’ Sure. Grocery sackers handing out $600k loans with no verification ‘just happens’ all the time, huh?
For me, these articles show that whether an area bubbled up or not may be irrelevant.
IIRC a prior article stated over half of Wayne County mortgages taken out in ‘05 or ‘06 had ARM resets. This was a year or two into our one-state recession and will cause even further damage down the road.
So far I’ve been pretty impressed with the Detroit News coverage….they kept the bleeding heart stories to a minimum.
I would agree. Also the length and depth of the articles the last couple days was rather surprising.
Not to knock Toledo but it sucks. Can’t imagine anyone moving and actually living there.
“Mortgage fraud was easy for Hani Mortada.
Let’s see how easy it is for him when he is doing time in the state prison! I’m certain “Buba” will keep him company during his stay in the state prison.
Question: Wouldn’t this Leabnese citizen have to be in the US on student visa? (I don’t know the rules.) Even if the mortgages were not fraudulent, is it legal to sell mortgages on a student visa?
Whatever, this guy must be living it up, if all he had in the bank was $25K and Escalade payments. Maybe I should bail out this poor unfortunate *sniffle.*
They changed the rules a couple of years ago. I think on a student visa you can work 20 hours a week and full time during breaks. I’m sure you can accomplish a lot of fraud in only 20 hours a week.
This sentence really bopped me over the head:
There were mortgage offices on every block.
In Tucson, that’s still the case. But I think that more than a few of them will empty out in the next few months.
“Danny Stokes used to sell drugs, before he discovered it was safer and more lucrative to sell mortgages. ‘We are seeing people who two years ago were involved in drug trafficking,’ said Mark Bowling, supervisor of the FBI’s regional office in Macomb County. They slide into mortgage fraud, he said, ‘because it’s easier, it’s safer and the amount of profit is incredibly high. Once they’re in the mortgage fraud business, they see how easy it is.’”
Ah, the various Mortgage Brokers Associations must be proud of this association… lets see, I’m considering a lucrative yet illegal career switch - do I sell illegal drugs or mortgages?
they better get used to 1/2 % commission, if that
In response to Ben and Thor posts :
Mortgage Brokers and Lenders must of been hiring punks , drug addicts and thieves to handle these loans .The loan agents that committed fraud would have to have a comfort level with illegal activities to begin with .If Mortgage brokers can’t screen their employees or double check the loans from their criminal employees ,than who wants to use these bad actors anymore .The bad ones will make it bad for the few that are good .
I have never accepted the fact that because the risk was passed on to the Secondary Market , that made it OK to not underwrite these loans and prevent fraud .A Company has a duty to oversee the employees ,especially commissioned sales people ,and this is also true with real estate companies and their sales people IMHO .
It looks like there was a total breakdown regarding any checks and balances and even management closed their eyes to whatever was going on .Wonder if managers got a big bonus for production in offices .IMHO … Purge all these creeps out of the system …please.
I’m considering a lucrative yet illegal career switch - do I sell illegal drugs or mortgages?
Go through the criminal court system and visit your local prison and I am certain that will help you make your choice! A few nights with “Buba” will certainly bend you over in a direction you never thought of when making the career choice.
As the old saying goes:
You can steal more money with a briefcase than a gun.
Phiss.phiss ! Hey Yo…Yeah Man,I mean YOU! ..Over here…here in the alley. Wanna Big House, Mortgage, refi or a Lexis FIX Man? Got some Good Stuff here man. Got some Countrywide Gold Turn-on or some Wells Fargo Wunderbar…Fabulous stuff. …Hey..There’s NO COPS here man…you paranoid or something …everythings Cool Man. Just sign here and I’ll have you in your New Pink Hummer in no time
LMAO!
“I’m just a businessman.” - Vito Corleone.
Or:
“Some will rob you with a pistol,
Some with a fountain pen.”
Ty Webb: You take drugs, Danny?
Danny Noonan: Every day.
Ty Webb: Good. Then what’s your problem?
Danny Noonan: I don’t know.
“A lot of people made money on Ethel Cochran’s home during the years. After buying her home for $8,000 in 1987, Cochran now owes 14 times that amount — multiple refinancings larded with commissions have left her with a $116,000 mortgage she can’t repay.”
Now that’s just pathetic. The article said she refinanced so she would have lower payments. The house cost *8,000 DOLLARS*!!!!! She’s owned it for 20 years…How high could her original payments have been???
Here’s the refinancing schedule:
1987: Purchased home with an $8,000 mortgage
1997: Refinanced for $20,000
1998: Refinanced for $32,000
2001: Refinanced for $68,000
2004: Refinanced for $90,000
2005: Refinanced for $104,000
2006: Refinanced for $112,000
2007: Refinanced for $116,000
2007: Home is foreclosed
The above refinance schedule is crazy . In 2006 the borrower only got 8 thousand dollars and in 2007 the borrower only got 4 thousand dollars . It looks like in 2005 when this borrower refinanced for 104k they went beyond what they could afford because there is not much difference between 104k and 116k .From 2004 onward it looks like the amount taken was to pay the fees for the loan .
Don’t know if the borrower kept on refinancing to reset to a teaser rate each time , but before 2005 it looks like they were pulling small sums of cash and after that it was to get the payment down after adjustments from the prior cash infusions .
This borrower could of sold in 2004 ,had they been cut off by the creep lender just trying to make more money .Instead, another foreclosure on the books because of creepy lending and dumb borrowers .
There is no way that house on that street was worth $116,000. The rampant mortgage fraud inflated the appraised values the lenders used. There will be significant % losses on Detroit city proper homes.
It appears EVERYONE is in on these Mortgage Scams. The City or local Gov’t County Clerks Offices, Recorders, Asscessors and others that record these phony transations and inflated values. They never NOTICED or turned a BLIND EYE on to a dump of a house worth $8,000 going to $116,000 because of re-fi’s or all these other Frauds UNTIL just Now ? Give Me a eff-n Break !
These cities and officials just nodded and winked to protect their slice of the of the RE Tax PIE.
“Oh Wow..b..b..But I’m JUST DOING my JOB…Recording Mortgage Fraud and Inflated Property Values for City Tax Purpouses”
Could HAVE, for God’s sake, not could “of”…
How do you find out that kind of info anyway?
It was in the original article
D’oh!
But I have seen posts here where people were able to dig this out of the county’s records, and so far I haven’t been able to figure out how to do that in Missoula.
How did she manage to still OWE on an 8K house after 10 years of payments?
It seems that being an honest citizen who respects the law, goes to work on a regular basis, saves money and supports a family, isn’t the way to get ahead in the USA anymore.
The best way is to become (at the top of the sh*t pile) a company executive, rob steal, cheat (think Enron and CountryWide and now scores of mortgage companies and banks) before getting caught when the scam collapses and fired. Then walk away with $50 million.
Or, at the lower end of the sh*t pile, give up selling drugs, stealing cars or being a pimp and go into the mortgage or real estate industry.
Sure doesn’t look like honesty pays these days……
Ok I know a lot of people aren’t Ayn Rand fans, but she does have some great quotes. This one seems especially appropos.
“When you see that trading is done, not by consent, but by compulsion - when you see that in order to produce, you need to obtain permission from men who produce nothing - when you see that money is flowing to those who deal, not in goods, but in favors - when you see that men get richer by graft and by pull than by work, and your laws don’t protect you against them, but protect them against you - when you see corruption being rewarded and honesty becoming a self-sacrifice - you may know that your society is doomed.”
Recently read a “Happy Thanksgiving, You’ve Earned It” editorial written by the head of some Ayn Rand association. Really left a bad taste in my mouth, suggesting that Thanksgiving is all about people patting themselves on the backs for promoting their own self interest, and suggesting that all of the traditional meaning of the holiday was made up by nutcases.
In the above quote from her, it’s ironic that that which she deems to cause the doom of society is a result of her own philosophy of people looking out for themselves without government interference.
One other thing about Ayn Rand - her philosphy can be (and has been) easily mistinterpreted to mean that one should persue his own self-interest, regardless of its negative impact on others and without regard for honesty and integrity.
when you see corruption being rewarded and honesty becoming a self-sacrifice
Kind of sums it up…….
I still believe in being honest and I think honest people will win. But, there is no substitute for common sense. Alot of these folks would lost their money one way or another. Ponzi scam, church investments, or sending money to Nigeria. As I read these stories and others, I`m thinking, you could ask most 12 year olds if they thought this would work long term and I beleive most would say no! Common sense will carry you a long way in life.
Regards,
Lane
Mike,
Honest pays in everyway that counts IMO.
I sleep well at night!
I agree but far too many come to honesty or Jesus for that matter after the raping & pillaging is over….
Much easier to look for Jesus if you have $50M put away. Less time working more time looking.
Finding Jesus is another matter.
Then walk away with $50 million.
Until they are convicted. What the general public does not hear about these executives is what happens after they are convicted.
Take Bernie Ebbers, former Worldcom CEO. He lost everything including assets and money plus the 25 year sentence he is currently serving. If he does not die in prison before he gets out, he will have zero left and nothing to retire on. You can be assured that will happen to those caught committing a felony crime in the mortgage mess!
And Ken Lay died of a heart attack leaving a very wealthy widow without spending a day in prison.
Life is not fair. Not everyone will get their due.
I dunno, an early heart attack might be considered getting his due.
IMHO ,Ayn Rand did believe in being honest in business transactions ,with everyone acting in self-interest .If everyone was honest ,people could act in self-interest and it would be a win-win situation ,verses someone trying to rip the other party off through fraud or misrepresentation . When the mortgage brokers and borrowers and all the players resorted to fraud in these business transactions ,than it went outside of what Ayn Rand would consider each party acting in self-interest .Ayn Rand did not believe in cheating to get what you want, in spite of her belief in pure capitalism ,at least that’s what I got out of her books when I read them when I was 15 years old .
And since Ken Lay died on appeal his sentence was commuted thereby eliminating the ability for any recovery…Yes, he died, but we all die sooner or later….His wife, and family will live a life of Luxury on the ill gotten gains of a thief and as generations pass this will all be forgotten….Something wrong with this picture ??
And Ken Lay died of a heart attack leaving a very wealthy widow without spending a day in prison.
The estate of Ken Lay is in the process of being stipped to zero. The widow will not be wealthy! Imagine the preasure Lay was feeling facing life in prison, that most certainly led to his cardiac arrest.
Maybe I am in error….I thought I read that his conviction was overturned due to the fact that a dead man cannot appeal…If in fact that is the case, how do you collect ?? Even if you go the civil route, how do you sue a dead man ??
Civil lawsuits may proceed against the estate of a deceased. The expungement of his conviction due to his death has nothing to do with the several civil suits filed against him and the other Enron malefactors.
The PTB will never try and convict those ultimately responsible for this mess (themselves). The purveyors of a dishonest monetary system will never be held accountable. The best we can hope for is displacing their power with an honest system not built on debt.
anger-inn …What about the fast one they just pulled with the Feds making over 50 billion in short term loans to Countrywide, based on their junk loans . If this isn’t a forced taxpayers bailout ,I don’t know what is . Now after they do the dirty ,the good Senators want to investigate . I am sick and tired of the people in power pulling fast ones and than investigating after the fact .
“no one wins but the thieves, so why try?” Wilco, I think.
This sums up a historical criticism of capitalism. The idea is particularly apparent in the third world, and becoming more so here.
“Even though >foreclosure prevention counselor >Melissa Hansen’s job is busier,
we will pay for armies of these councilors- we being the taxpayers
She works for Habitat.
I’ve done more than a little bit of volunteering for Habitat. On the plus side, I’ve learned A LOT about construction. I’ve also worked with some of the most wonderful people I’ve ever met.
On the minus side, I’ve seen a lot of Habitat houses go to people who just have too many kids. I know that birth control is an anathema to some, but darn it, if you can’t keep it in your trou or your legs crossed, you’re going to have a hard time getting ahead if you’re poor already.
I’ve also seen Habitat homeowners move in to their new digs, then go on a vehicle-buying spree that would put the rest of us to shame. Heck, some of them have nicer rides than the volunteers who built their freakin’ houses!
Thanks. I feel better now.
Habitat sent me a mailer asking for a donation. It had some story about a little girl who couldn’t succeed in school when her family rented (because she was ashamed of her living situation), but then they got a Habitat house and she became an A student. Whatever.
I thought it was crazy that they would ask a renter (in a professionally managed rental building so it is not like there is even a question of my status) for money so that others could experience the “pride” of homeownership. I thought it was even more crazy that they would equate school success with a child’s parents owning a house and then send that to renter parents asking for a donation.
The mailer you received is very typical of what Habitat sends. You’ve got the formula down pat. And, TTYTT, it doesn’t motivate me to bust out my checkbook either.
But, to be fair, I’d like to note that one Habitat homeowner who I’ve come to know is now able to work fulltime because she’s in a better living space than before. The apartment that she and her husband used to live in was so full of mold that it made her ill.
Which meant that she had to stay home, stay sick, and not work at all.
At one Habitat event, she stood up and stated, “Now I can breathe!” And that’s something that most of us take for granted.
Slim, both of your pluses have to do with benefits to you. I think this is true of most charity. What were the other gains, other than the building supply companies and the HH bureaucrats? How in the world can it be right to just give somebody a house? I know it sounds like a hateful thing to say, but I’ve come to the conclusion that most charity is harmful to its recipients and society, and borders on being immoral.
“He was a cruel man. . . but fair.”
Paul, Habitat doesn’t just give people houses. They have to apply and be accepted. Then, if it’s single parent-headed household, 200 hours of sweat equity labor are required. If it’s a two-parent household, they have to work 400 hours.
And they do. I’ve worked with quite a few families. Some of them still come out and volunteer after they’ve moved into their houses.
BTW, Tucson’s Habitat affiliate has been around for 26 years and it’s built 271 houses. Want to know how many foreclosures there have been? Two. That’s all. Compare that number to any of our local subprime lenders, and I think that Habitat-Tucson stacks up quite well.
Slim - interesting comments. What I hear in Jacksonville is not as positive - shoddy construction, lots of whining about who deserves and gets what, etc.
Now, I do like the idea of the “winners” coming out and helping out on others’ houses. This would make Habitat more like the old “community” idea of the way S & Ls or Credit Unions worked (it’s almost hard to remember that it actually wasn’t that long ago that banks were not permitted in the residential mortage business).
Just wondering: Do you (most) write off your personal expenses, such as gas, tools, meals, etc., either as unreimbursed business expense, or as charitable contribution?
WTF???????????
you guys post to a blog which the idea of “giving” anyone a house should be ludicrous.
The H fo H people came to our office (land development and development services) and we THREW them out, literally.
These cretins thought we should help them build a house and give it away to AN IMMIGRANT FAMILY, while many hardworking people, born in the area, could not afford to buy prudently and so rented for their families.
H for H - what do -gooder commie BULLSHIT!!!!!!!!!!!!
“‘There is an excess housing inventory. It’s the simple economics of supply and demand,’ said Dan Lepkowski, an agent in Toledo.”
I doubt that the issue is simply supply-and-demand. That economic theory assumes that there are no discontinuities or non-linearities. That the deviation from the “cross-over” i.e. where supply and demand are equal and the price is stable, is a smooth path. This is in a non-linear region. This means that house prices cannot “revert to the “mean” to establish stability. There is no smooth path on the curve to do this.
Cute little tricks like rate cuts, helicopter drops, bailouts, “spin”, just won’t work. Even a zero percent mortage interest rate will not solve it, and “zero percent” is a disconnect response!
We are screwed.
Roidy
Your comment indicating discontinuities is a good one. As a part time econ prof I have often been dismayed how all of the supply/demand price functions are generally considered to be smooth and continuous. Yet history has shown time and again that this is not always true.
We can saw this for example (last August?) in what I now call the Paribas Parable. Paribas woke up one morning, while finishing a cup of coffee, and went out to price their MBS/CDO/SIV whatever they were. But like an episode of the Twilight Zone, they could get no price.
Overnight, the function had gone discontinuous. (queue Twilight Zone theme music please)
Just curious……seeing yesterday’s and today’s stock market gains, could there be a short squeeze underway???
No, the ralley is because the news is so bad that the FED will probably cut rates so people are loading up and going to ride this sucker’s ralley and make a nice profit. Then the stock market will dive close to 12,000 before another rate cut.
Up 500-700 points then down about 1500 points. Wash, rinse, repeat.
Just your run-of-the-mill “rate cuts will save us” nonsense.
Ah, death by a thousand rate cuts.
The rumor now is that the FED is going to level off at 3% by next year. Are they stupid? Inflating away the economy seems rather non lucrative long-term.
Yes, the crack-monkey, card-carrying members of the RATECUT cult are at it again. This is a world where the worse the news is, the higher the market is going to go… Yah, right.
What these jackas*es don’t realize is that in ALL previous rate-cut regimes, e.g. 1929-1932, 1990’s, 2001-2003, all were periods of MAJOR wall street DECLINES, not increases.
F*tards…
death of the dollar by a thousand rate cuts.
We want (fun)Yuns! We want (fun)Yuns! (chant)
“The Center for Responsible Lending estimates that mortgage fraud has cost Metro Detroit $500 million in bad loans, lost property taxes and reduced values of nearby homes.”
Wouldn’t the fraud increase taxes and values at least temporarily? I guess what I’m asking is how does fraud affect the property taxes?
Yes, but those are already starting to revert backwards.
Unfortunately the local govmints factored in future plans based on those higher comps and taxes and now they’re starting to realize they have to scale back.
On a local radio show yesterday morning the County Executive of the wealthiest county in the area said he’s already had to pare back spending projections by $6 billion. 2007 is the first year EVER (recorded anyways) that property values and taxes are declining in that county. That can’t bode well for the rest of the area.
Oakland?
Yes.
What they are not mentioning is that they should NEVER have had that 500M dollars in the first place.
Inflated apprasials and sales figures pushed up taxes and the city continued to book the profits from the RE market. However, that tax increase was a farce, it was based on figures that were fradulent, and should never have existed in the first place.
A more correct statement would be “500M dollars not being collected because bubble values are starting to vanish from the books”.
“‘Everyone was selling mortgages. There were mortgage offices on every block,’ said Brown, past president of the Detroit Real Estate Brokers Association. ‘One day bagging groceries and the next day selling my mother a mortgage? What the hell is that?’”
That quote, and that collection of anecdotes, are some of the best yet. Several years ago and before I started posting here, I too remember seeing an overabundance of mortgage and appraisal businesses in strip malls, often with an Escalade or a Mercedes parked out front, which struck me as odd.
I’m also in an irritated mood, because during the holiday I overheard a well-meaning but ill-informed relative complaining to my wife that “snake charmer seems to be having a hard time making a decision” on homeownership. I have a hard time making certain decisions, all right — bad ones.
Snake Charmer,
I come here to keep my sanity…hang with us!
I also have a few relatives on the “when ya going to buy” bandwagon. One of my well place Leigh laser stares to temporarily blind them usually does the trick
Leigh
““snake charmer seems to be having a hard time making a decision” on homeownership”
Misery loves company. Just smile and wave.
Hey, it sounds like you should be grateful. As soon as that relatively tells you it’s a terrible time to buy, you will have a sure-fire indicator that you should run out and purchase.
Toledo ? downtown condos ?
Lubbock Tx makes sense now
Toledo’s dead, been that way for years. I know several people who have come to Columbus from there. No prospects in Toledo.
Downtown condos? Hope springs eternal, that’s the only way I can explain it.
Toledo has a great art museum.
At least in Central Ohio, “condo” means something a little different than in the eastern cities. In the DC area, condo almost always meant buying an apartment or perhaps a townhome in a new community. In Toledo, “condo” might refer to owning the dwelling and owing HOA fees on the lfront yard, community space, and clubhouse/cybercafe/hiking trails etc. The dwelling itself can be
1. an apartment (not usual),
2. a townhome,
3. a “ranch condo,” which is basically a one-story rowhouse with a garage sticking out
4. a “patio home,” I have no idea what this is
5. Or even some single-family homes, but you don’t own the front yard.
it’s creepy. But nobody has any business buying an apartment in downtown Toledo. Single-family should be cheap enough to skip the condo rung on the equity ladder. And if you’re the type who likes urban living, Toledo is not for you.
I can’t believe people bought this stuff.
a “patio home,” I have no idea what this is ??
Zero lot line single story attached product…….
They must give you 2 plastic lawn chairs and a potted plant with a table when you “pull the trigger” of your suicide loan
Oh YUCK! I guess that PR people deserve a raise for the name “patio home.” (But thanks for the definition.
I remember going for walks in Maryland just outside the DC line. Streets of Sears catalog Craftsman with older Queen Anne and 3/2 colonial mixed in too. Some 1930’s small brick Tudor revival cottages (I want one!) and two made out of real stone. Same small lots, but still great neighborhood. Room for a small yard and trees too.
Nowadays, we get stick attached product, and we don’t even get to buy the yard. Meh.
In Shelby Township, John Karpinki got a $650,000 no-money-down mortgage just 22 months after he was released from prison, where he spent 12 years.
- Here in SoCal, John would of qualified for 850k easily. If he was illegal he would of only got 775k.
In Champaign, they are definitely building more land.
Champaign-Urbana is made up of two independent towns (Champaign, and, um, Urbana), with independent governments, taxing rates, etc.
The tax rates for Champaign is lower than Urbana, but still pretty high. IIRC, a $250k house will pay ~$500/month in taxes.
However, contiguous with Champaign is the Village of Savoy. Not only is their tax rate lower than Champaign’s, but you don’t pay property taxes your first year.
Why buy a 10-20 year-old house in Champaign, when you can buy a new one in Savoy for slightly less and with a big tax break? Well, that seems to be what has been happening in CU: build, build, build. The entire area is filled with corn fields as far as the eye can see.
Having said that, I was just glancing at prices, and they only seem to have gone up 20% since 2002. Yes, a little high, but nothing like the 175-250% that the coast saw during the same period of time.
As for condos, the only people who own condos there are older folks who don’t want to take care of a big house, singles that don’t want to take care of a big house, and rich kids from Chicago.
“…and rich kids from Chicago.”
In this bubble it must really have become the “in” thing - Midwest parents buying, or helping to buy, their kids condos. Here in Chicago proper, on any given weekend, one can spot many 45-60 y.o. parents helping a 20something shop for, or move into, a condo. Buy a condo while the kid is in school, buy another to get the kid started.
Has this ever occurred before? Making such huge outlays of capital one someone who has yet to earn their first check?
This is very common in 3rd world countries. Wealthy parents buy (or at least help with major $$$) property for their college aged kids. Perhaps a sign of where we are headed. I wonder whose picture will be on the 1 Amero bill? Benito Juarez?
And if you don’t know who Benito Juarez was, you will eventually.
I have a vague idea because I like Bette Davis movies.
Ah, but that’s what perplexes me…how really wealthy are those parents? How much HELOC money from homes in Arlington Hts. IL, Grand Rapids MI, or Appleton WI has wound up in Lake View/Wrigleyville condos? Or are they using cash from the sale of family farm? Or are they all financial geniuses who just “talked to chuck”?
There are several million households in this country who qualify as millionaires (without including the house).
For now.
Purchasing a condo for junior to live in while away at school was pitched to many parents as a way of riding the appreciation wave to pay for college costs and to take advantage of another mortgage interest deduction. In South Bend, IN, ~75% of condos within 2 or 3 miles of the Notre Dame cmapus are owned by parents for this reason.
How do you think South Bend will hold up? What’s the feeling there? I admit, the logic sounds appealing - what with N.D. and all - so it will be interesting to learn what happens.
The condo market has slowed to a crawl with only 6 sales in Oct. and 96 listings which works out to a 16 month supply. Much more inventory is coming on line too. As you pointed out in another message, you have to wonder where the money is coming from to buy these things. Appreciation has to be nonexistent if there is that much supply already built or in the pipeline.
Condomania came late to here, but it has struck with a fury. Some projects are feling a lot of hurt either because they were doomed from the start (typical overpriced downtown BS designed to attact the nonexistent empty nest baby boomer) or are too far from ND’s campus to make sense for students.
There has never been much appreciation here, so prices aren’t seriously out of line with local incomes. There has been LOTS of mortgage and appriasal fraud, and the first wave of indictments is probably just a few weeks away.
“Has this ever occurred before? Making such huge outlays of capital one someone who has yet to earn their first check?”
It happened when I was in school 20 years ago. In my day, the policy was that freshmen had to live in the dorms. The only exception was for freshmen that lived at home. To get around that, mommy and daddy bought jr. a condo so that he was technically living at home.
Of course, jr. never got to experience campus life and became socially isolated, but that’s a different story…
Now that I think of it, I also saw this first hand 25 years ago.
The crashing condo market shows where the crazy speculation has been. As with many college towns, the prime driver has been parents buying a small house or condo for Junior to live in and rent out the rooms. With an interest only loan and full occupancy, you might just break even with the payments. With double-digit appreciation, the parent can then sell 5 years later for a nice profit.
Unfortunately, these properties are not fundamentally good investments, don’t cash flow positive if full costs are included, and only make sense in a world of 10% annual appreciation.
BWHAHAHAHA!
“Temporary mortgage problems were peaking back in August when many of the sales closed in October were being negotiated,” Yun said. “We continue to see the biggest impact in high-cost markets that rely on jumbo loans.”
http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=079eab54-a996-469c-b528-1b52734036a2
“Danny Stokes used to sell drugs, before he discovered it was safer and more lucrative to sell mortgages.”
Yesterday,WT wanted to know what “class” of people were competent to sit on corporate boards. My answer–drug dealers. Same business model–plunder while destroying your customer base. Trying to nail mortgage fraud is like chasing cockroaches–for every one they catch, several hundred more escape. And are you expecting a disorganized and utterly demoralized Justice Dept. to handle any major probes?? We lost billions in cash, and tens of thousands of weapons to the insurgents in Iraq because of the government’s vast carelessness. If street corner thugs could game the mortgage system, you can bet mortgage fraud has been a major financial boon to Al Queda and allies.
“If street corner thugs could game the mortgage system, you can bet mortgage fraud has been a major financial boon to Al Queda and allies.”
Mortgage fraudsters being tried as domestic terrorists. Hmmm, that has a nice ring to it.
Danny Stokes is small fish, he only traficked the mortgage. But the king pins were enjoying their super fat bonuses in the Wall Street. The FBI should go after them. The kingpins are the ones who created SIVs filled them with toxic loans and duped the dumb investors. Mortgage fraud was only possible because the investors were hungry for the junk and the Wall St types fed them the same.
“left her with a $116,000 mortgage she can’t repay…Her neighbors are losing money, too: Foreclosures drop the value of nearby homes.”
If the amount your house will sell for goes up a lot and then comes down the same amount, you are *not* ‘losing money’. Just because you could have sold for more at the peak, doesn’t mean that that phantom equity was money you earned. It came, it went, and you still have your house. Big deal.
Your point is true for long term owners arroyogrande ,but recent buyers will lose their value when foreclosures hit the neighborhood .
The one thing that I don’t understand is why recent buyers think they are entitled to a profit so quickly after just buying a property . Heck ,back in the old days you were lucky if you came out ahead the first 5 years of home ownership ,(if you add the cost of selling ).
So many borrowers were on a two year plan . Two years from buying until the time-bomb mortgage blows up ,two years to get the tax free gain ,two years to pass the buck to a greater fool ,two years before the real truth of not being able to afford the loan comes up ,two years to get a raise before the loan adjusts, etc. etc.
How these loans and homes were sold during good times was a set up for failure with this short term thinking the commissioned sales people peddled .But I agree with you that long term owners never had the gains to begin with ,unless they refinanced and we know a lot of them did.
The perceived “Value” of some of these housed by Insurance Companies will propably go down once “Tony the Torch” gets out of prison. I believe he’s getting out early for “Good Behavior” on a 5-7 yr rap for apt arson and contracting the sale of the bricks…before lighting up.
Anyhow, his prison appears to be still standing
j/k
Yeah - what is she complaining about - she got over $100K in 10 years tax free for doing nothing.
I’ll have #13: The sweet, then sour market taste plate, with fried price.
LMAO…
I’ve always thought that proper individual financial/monetary policy education from parents is more important that “Don’t do drugs” or “Don’t have unprotected sex.” Both the liberals and conservatives who run public education ignore what is the most important pillar for an individual’s comfortable future: spending and income.
I could care less about drug dealers, since I know they’re just a side effect of bad medical policy (City, State and Federal). It’s expected.
When it comes to mortgage brokers, though, it surely isn’t a market inefficiency that created this fraudulent atmosphere, it is part and parcel of the entire economic policy we live under: fractional reserve-based inflationary credit.
You can NOT fix fraudulent loans just by writing more laws, licensing brokers, or adding more regulation to the pile that already exists. The system has a flaw in its design: when people know that can promise te same money to two people (a borrower and a depositor) legally on the books, there will be fraud. Your checking and savings accounts are fraudulent numbers, even if legal. There is no way to fix it without ending fractional reserve banking immediately. This is more important than fixing or ending the Federal Reserve’s power.
I harbor no anger or resentment towards real estate agents, brokers, banks and Wall Street anymore. I stopped with the anger a few months ago when I realized these people were smarter than most: they saw the legal loopholes, and made a bundle. Good for them. It’s how the system works, because the people who made the system what it is (the voters, and mostly those over the age of 40) wanted it this way.
When you create a monster (which is 100% the previous voters’ collective fault alone), don’t be surprised when a few people find a way to control that monster for their own protection. Real estate agents, brokers, bankers and Wall Street found a way to control it. They fed it. They rode it to big profit.
But I am not surprised that the monster got away. I am a big contrarian, maybe one of the biggest on HBB. But I don’t have a lot of respect of reliance on most contrarians because the ONLY one who has any value or worth is the one that can prove that they profited from their opinions (shorting stocks, etc), or those who backed their opinions with a moral resolve that they COULD have made money, but refused, but still backed up their opinions with time frames.
I knew it would explode. It was evident (read any Austrian economist’s writings from the past 60 years). What isn’t evident is that most of us contrarians refuse to put blame where it is due: on the backs of the voters who birthed the monster over the past 80 years.
Dear ole grandpa is to blame. Boomer mom and pops are to blame. Remind them regularly when they start freaking out about retirement. I told my dad this morning: “If your dollar tanks, it’s your fault. If your retirement doesn’t cover your needs, it’s your fault. I’ll help you and care for you, but don’t put the burden on me any more.”
Hillary? Giuliani? If you support them, you’ll do worse to YOUR kids.
“Dear ole grandpa is to blame. Boomer mom and pops are to blame. Remind them regularly when they start freaking out about retirement.”
Overall, I agree with your view, Dada, especially on the restoration of the Republic, Ron Paul, etc. But the boomer stuff needs to end, IMO. As a tail end boomer, I don’t get squat myself, and while I’m not fond of the so-called Greatest Generation, a spiral is a spiral whether it is going up or down. Every generation blames the one before, but few do anything to arrest the downward cycle except natter about it. The current crop of boomer politicians is advised by and relies on Xer staffers, for the most part, from my own experience, as vicious and stupid a generation as ever was spawned, if you want to get into generalities. However, that may well be the fault of their boomer predecessors, and the boomers were the fault of the Greatest Generation, who were the fault of, yada-yada and so on, until we get far enough back to blame the Romans, and the Greeks before them. Ooops, I didn’t go back far enough to the Cro-Magnons, who eliminated the Neanderthals and were probably responsible for the whole bloody mess.
My point is, a person of goodwill and intelligence is needed no matter what generation they come from. Lectures on retirement to boomer parents or grandparents are useless, when your own security and earning power could go up in smoke at the whim of a fascist or socialist government, or due to social unrest.
By the way, when you lectured your father about burdens, did he happen to mention anything about the expenses and effort he put into bringing you up from a pup? Or did you spring from the womb all wise and self-sufficient?
Umm, lest this generational thread degenerate into a food fight, permit me to say something. I recently had the privilege of meeting another member of this group for dinner. Although he was about half my age, it was a truly enjoyable evening.
So, let’s call a truce.
And let’s put more effort into meeting each other face to face. We have a lot in common, even though we vary in age.
I’ve always thought that proper individual financial/monetary policy education from parents is more important that “Don’t do drugs” or “Don’t have unprotected sex.”
I don’t know. No one ever got AIDS from a toxic loan.
But you are right in that its very important to be financially literate. I am telling my kids that they should take a Finance class when they get to college, regardless of their major.
I recommend sooner than that, even if you have to home school it yourself or load up on videos or whatever. (In addition to your teaching them, or course.)
Those CC card marketers are gunning full time for your kids, trying to turn them into perfect consumer mallrats before they turn 18. They even have Bux cards to train them to spend at Hollister. And TV ads are featuring younger and younger people.
When i was in 8th grade, I took a short “consumer education” elective. Sure, we spend a lot of time looking for subliminal images in beer ads in magazines, but we balanced checkbooks, and it sure taught me that when I started earning money, everyone would be trying to part me from it.
A.B.Dada …Can’t say that I agree with your post .The system worked for years because of prudent underwriting and down-payment requirements . I am angry at Wall Street ,the rating agencies ,the commissioned sales people ,the investors , Greenspan and the regulators , the appraisers ,and anybody who engaged in falsehoods to make a buck . This housing boom was a matter of lack of application of regulations and the laws so Wall Street could pull off their money making investment schemes for people looking for yields .This false housing boom was a Black Swan event , a perfect storm ,that came about because all interested parties ,trying to make a buck ,breached their duty to stay within the laws and regulations . I have my ideas on why this fake real estate run up came about ,but that would take a long post ,but suffice to say it was not because you can pin it on one generation being to blame IMHO.
There is only one person I blame for this. Greenspan. He lowered the rates and created this fiasco. Too bad Bernanke is as bad as Greenspan. I know that come 2015, all of us will still be quite sad about the state of our economy. We have bad people running our system.
I believe Ben asked a while back not to waste his bandwidth on generational warfare. It’s counterproductive and just plays into the divide and conquer scam IMHO. I think families should be concentrating on helping each other through the hard times to come instead of making generalizations and blaming.
Yun said he believed the drop in sales, which left activity in October 20.7 percent below the level of a year ago, was nearing its end. He said a greater willingness of lenders to start offering jumbo loans again and the use of Federal Housing Administration-insured loans in place of subprime mortgages will help generate a rebound. Lawrence Yun has been called a serial bottom caller and this looks no different from his last 20 predictions and he has been wrong every single time. Then in his next prediction he states that this was the expected behavior. As if they had predicted prices were going to fall.
Hindsite is 20/20.
“Kathleen Ryan, of Sulphur Springs Realty in Toledo, said excess residential inventory can cause sellers to take substantially less for their homes. ‘We don’t have the people moving from out of town and coming into the area like we have had in the past,’ she said.”
Uhhh . . . since when have people been flocking from the four corners of the earth to . . . Toledo? (No offense to Toledoians–just curious).
Who knows….I live almost exactly between downtown Toledo and downtown Detroit, and I don’t see much difference other than Toledo is smaller, and they have a nicer zoo methinks (much less walking than Detroit’s). Fewer ghetto sections maybe.
Isn’t there a John Denver song about Toledo?
Watching Da Boyz, a.k.a The Financial Gangsters of Wall Street, at work is amazing. They’ve lost a lot of money through the major element which motivates them. Greed. Far more than they have stolen in bonus payouts over the past several years which paid for those multi-million $$ apartments in New York or retreats in Martha’s Vineyard, retirement home in Bermuda, etc.
Now the crap has hit the fan, they need to fill the coffers big-time. To do this, they will use the Fed, the tax payer, politicians, funds they manage, etc, but it’s the stock market which I watch on an hourly basis which is a thing to behold.
There is massive “skimming” taking place. These guys make the old mafia “skimming”, when they ran Las Vegas casino’s, look like amateurs running a three card trick on a city street.
Da Boyz use the news to manipulate of course, mostly via comedy shows like CNBC’s Market Watch. The beauty of one of their “skimming” tricks is the “gap up” or “gap down.” It’s basically the same as the house edge which casino’s have.
For those unaware of a “gap”, it simply means that if, say, a stock closed at $10 last night, when it opens this morning it will be $11.00. Difference being $1. As Joe Blow, you cannot get in on that move. Only Da Boyz can. Y’see, they are protected by the SEC. Then, as is happening now with many stocks, they then take the $10 stock down to $10 or $9 (assuming it was a $1 gap up). Simply put, along with all the other “tools (the Fed, politicians passing legislation which helps nobody except their paymasters on Wall Street) they will slowly steal enough money to replenish their coffers. Might take them a year. Maybe longer but at the moment they are in full steal, rob, cheat and plunder mode. Much more than usual. Take a look at the 401k’s this year.
We must think ourselves lucky Bush didn’t get his “private social security accounts” legislation through. If he had, Da Boyz would be plundering that fund for everything it’s worth. That’s probably the reason Bush tried to get it through - so that his pals could have yet another fund to steal from.
Remember: “The working class plan for Saturday night - the rich plan for decades.”
The Big Lepkowski (theory)
“‘There is an excess housing inventory. It’s the simple economics of supply and demand,’ said Dan Lepkowski, an agent in Toledo.”
that was cool
dude
I’d love this job (NOT)
http://biz.yahoo.com/ap/071128/bush_economic_adviser.html
“Mortgage services have said their investors will sue them if they modify mortgages. Mortgage-backed securities come in all shapes: Some are all-principal; others, all-interest; some are high-grade, low-risk; others, the opposite. Given that variety, any changes servicers make will mean losses for some and not others.”
I know many have said this to be the case but could clueless politions and judges make laws to override the investors, ie make it possible for the Mortgage servicer to modify the loan without investor concent and the investor would just have to accept it? I have a feeling this would be the only way to help most of these dead beat financial incompotent moron’s stay in there home since 99 percent of the loans are not held by the banks or lender they got the loan from…
How can the legal system stand in the way of ‘Contract Law” ? If the loan service people don’t have it in the contract clauses to alter terms to prevent a foreclosure ,than they don’t have it .If the loan service people have a contract clause that they can alter loan terms for the benefit of the funds to prevent a foreclosure ,than they have it.
These mortgage scams, dishonesty with other people’s livelihood and money in the U.S.A reflects what this nation’s morality, social and family value, a good heart human being, an honest hard working person, is in serious testing phrase. If we the U.S.A declared ourselves the mightiest, the strongest, the police of the world policy then how can these kind of things happened in this land by the very same U.S citizens that wave the star-spangle flag every opportunity they can to show the world that the U.S.A is the best country in the world. Are we ???
I have heard people say with a very straight face that “morality is unnecessary, as the market will keep corruption in check”
“Inflated appraisals are so common that it’s almost impossible to accurately value properties in some parts of Metro Detroit, said Liza Manzella, a Shelby Township appraiser. Things are particularly bad, she said, in parts of Detroit. ‘You can’t find any in a whole neighborhood that aren’t fraudulent,’ she said.”
This is something that concerns me more than the lax lending standards. We’ve had lax lending in this country for a long time but I began to realize back in 2005 when I first lurked here that this bubble is mostly caused by fraud, lots of it. YOu see it in the mountains of legal shenanigans and cronyism at the local level, you see it with the financial fraud that permeates the entire economy, the lack of civility and trust that has worsened in the last decade, etc, etc, etc. If this bubble was caused by screwey fundamentals, then yes I would think that housing would only go back to 2000 levels (without ‘inflation’ adjustments). But now, with my worst fears of rampant fraud confirmed, this could be much uglier than 2000 prices. How low they go, I don’t know. I think that any kind of venture, whether it’s a company or a government or religion or whatever needs to have a certain level of legitimacy in order for it to continue to maintain any kind of influence in society. If you find out that someone was lying or manipulating you, that brings out the bad in a human. That’s partially what happened over in Albania, and we know how well that went. Even when I was in middle school I started to notice the levels of BS and fraud in the USA. If a middle schooler could have figured that out, it says multitudes about the ‘intellectuals’ and ‘experts’.
“I harbor no anger or resentment towards real estate agents, brokers, banks and Wall Street anymore. I stopped with the anger a few months ago when I realized these people were smarter than most: they saw the legal loopholes, and made a bundle. Good for them. It’s how the system works, because the people who made the system what it is (the voters, and mostly those over the age of 40) wanted it this way.
Dear ole grandpa is to blame. Boomer mom and pops are to blame. Remind them regularly when they start freaking out about retirement. I told my dad this morning: “If your dollar tanks, it’s your fault. If your retirement doesn’t cover your needs, it’s your fault. I’ll help you and care for you, but don’t put the burden on me any more.””
It’s about time someone said this. The majority of people want to pin the blame on the Boomers for the recent ‘economic crisis’. To be honest, I blame it on the so called “Greatest Generation” and those before. They were the ones who voted in all of the self-serving politicians who got the USA involved in all of the weird government programs we have today, all from Social Security and Medicare to the overinflated mess we call a military. They wanted money for nothing, chicks for free. Well, they got something allright. Are the Boomers better? No, not really, but they aren’t the primary group responsable for this mess. Neither is Gen X or Gen Y. In my own generation (Gen Y) there are all sorts of stupid political ideas being floated around, tons of them.
Like you stated before, AB, I don’t really hold much anger towards the CEO types like I used to. Do I think they are justified in their actions? Hardly. I haven’t met a CEO yet who is 100% honest with whomever they do business with. That’s just how your ancestors conducted themselves long ago. Same thing with your politicians; Bush promised us no nation building, no wars, yadda yadda. Then what are we doing in IRaq? Afghanistan, I could partially understand. But Iraq? This seems wierd to me. But then again, Bush and the Congress are doing exactly what America wants them to do. People thought Congress and Bush were A#1 until they could no longer scam each other over. We had 90% approval ratings of Bush on 9-11-2001 even though the country was still run like $*@*# back then. Now, Bush is evil incarnate because the housing market seized up. DO I support Bush? No. I knew he was trouble when he first came into office. However, he and the Republicans come across as inept clowns rather than tyrants. As for the Democrats, the current bunch seem like Nazis to me. Perhaps the big two switched roles; Republicans are commie pinkos, Democrats are SS Nazis. Not like that’s any better. As for the third parties, well, they really aren’t that much better either. We need to cut it out with the political party (PP) obsession overall.
I see the problem as a “Law and Order” problem ,that came about because the society of all generations needed to make money because prior ways of making money was not happening . Yields were low on CD accounts ,jobs had been outsourced ,baby boomer acted because of facing retirement they didn’t save for with inflation considerations, ,young people went for the boom because of lack of good paying jobs and lack of a manufacturing base in America anymore.
In a 15 year span of time ,somehow the Corporations in America took over and the balance scale tipped toward global markets controlling America and American employees are now in competition with slave labor in other countries .Wall Street even gained the power to change the entire structure of prior prudent lending systems in favor of making a buck off the global money supply looking for yields in a to low Fed interest rate environment by Greenspan. Buying on margin and leverage became the name of the game ,and fraud was the means of execution on all levels, while Americans became debt slaves to keep their standard of living going .
If that is what you think then you are utterly ignorant of the underpinnings of facsism and National Socialism (Nazis.) They kowtowed and sucked up to the lage and powerful business interests. The largest financial contributors to the National Socialists in the 1920’s were displaced Romanovs (Grand Duke Kyrill who was the heir to the throne of the Tsar) and Henry Ford (yep -the car guy.) The money-interest supporting the National Socialists were solely concerned with increasing their own financial gains and economic power.
See, “The Russian Roots of Nazism: White Émigrés and the Making of National Socialism, 1917 -1945 ” (Be warned: It is heavy-going for a non-historian who is not well read in the history of social thought, economic history and political movements.)
The fascist/National Socialists also preached miltarization and the duty of the people to obey, and the need to protect their country from “them” - which meant anyone who was not a member of their country (Germany, Italy, Spain etc.)
Right wing movements have always been driven by those in the upper income brackets - France from Napoleon on, Germany, Italy, etc.
Try again.
Right wing movements have always been driven by those in the upper income brackets
Kinda like today’s “Minuteman Project?” Or the Evangelicals? Those upper income drivers?
What is happening in DuPage County is interesting (if you read the Daily Herald series.) DuPage County is the third or fourth richest county in America (after Marin in the Bay Area and Fairfax in the DC area.)
According to the article, about 115 homes a week are coming before the foreclosure judge (there is only one judge who is handling the case load for now.) She tries to help people but, as we know, she can’t always do so. Their situations are just too dire.
Some of the stories in the article ARE genuinely heartbreaking (people who have owned for several years but the husband gets laid off or is injured or sick and they can no longer afford the house payments on one salary and have no financial cushion.)
At least in the article, there weren’t the California type stories of the cash-out refis (though that is happening in the Chicago area too.)
No income level is being spared the foreclosure demon. Just this week I saw a $649,000 home in Lake Forest, a $1.2 million home in Highland Park and a $2.3 million condo in River North in Chicago all go to foreclosure auction. While the cheaper homes and condos are more common, increasingly, the upper bracket is being affected.
Also here in Chicago, at least one developer has been foreclosed on by their bank on a mid-rise building. Building had 22 units or so and they only sold 4 (at outrageous prices, of course.) Bank is foreclosing.
Prices aren’t really declining in the Chicago area (yet.) But sales are dead. Sellers are still holding onto hope that someone will buy at the elevated prices- but they’re not.
2008 will be the year of reckoning for sellers in Chicago who have had their property on the market for a year or more. We have sky-high inventory right now (and this is the “down” period in Chicago.) Anyone who really wants to sell in 2008 will have to lower their price.
Sabrina, what’s worse, is that the teardown craze continues apace. Here in Naperville, they are still knocking down “$500,000″ houses and building “$1.4M” houses in their place. Amazing.
http://chicagorealestatedaily.com/cgi-bin/news.pl?id=27257
This is the third condo complex in the last week to have a foreclosure suit filed against it here in the Chicago area.
And, so,Plato’s “The Republic” seems to indicate that the revolution will be coming as the people get upset with the dishonest politicans.
Perhaps that is the Ron Paul that will be the savior.
Or have you forgotten “The Republic”?
jack
My daughter is studying the Greek philosophers so I was looking for quotes. I was amazed at how many still hold true.
Well, I do acknowledge that our manufacturing base isn’t as strong as it used to be, but that is easily solved. For the record, I’m seeing plenty of stuff made in USA in the stores, and not just foodstuffs. I foresee a lot of manufacturing being repatriated to the states simply because much of the crap made overseas isn’t very good in quality. Also, I’m doubtful China, Indonesia, and Brazil will be countries in a few years. None of their governments are viable, and if they should break up as countries, well, I’m doubtful that we’d see a lot of goods coming from them as they do now. Manufacturing as an industry is actually much stronger than people give credit for; manufacturing only employs maybe a little over 16 million people here but accounts for about 1/7 dollars in national income. There’s several reasons why manufacturing is in a ’slump’. One, the big auto makers have been slipping for years, and it’s mostly due to corporate management that is out of touch with their customer base. I’m still curious as to why the majority of the cars coming out of GM/Chrysler/Ford are your 8mpg CUVs or SUVs or whatever they call them. A second probable reason is the quality of the American worker. I think most of the middle class and so forth is overpaid, not underpaid. Quite a few of the workers are of a poor quality: they bring their personal and familial problems to work, they’re reckless with equipment, managerial employees run their departments like a social club, many of the ‘yuppie class’ middle management micromanage everything, they get into pissing matches with each other, they’re rude when talking to customers and suppliers and they’re unreliable. Are all American workers bad? No. But I’m doubtful that we will be rehiring back a lot of the workforce here into manufacturing. I suspect manufacturing will be much more automated than it is now, and Chinese factories are not the wave of the future. A lot of people are thinking that the only way to get ahead in life is to get a Masters degree or a Doctorate. I’m beginning to think you may not even need a HS diploma if you want to be able to make ends meet in the future. I say that because I see the educational industry going by the wayside of the computer industry; the college degree will be shorter, more powerful, and cheaper. A college education of today is, sadly, mostly just political garbage and bureaucratic hoop jumping. Educational institutions are notoriously slow to change, and I would doubt that the UOP model of education will exist in the future. Also, I’m doubtful that we as a people would tolerate companies forcing someone applying for fry cook at Applebees to have a PhD in Culinary Arts. Even with the dimwitted politics in this country, we’d probably have come apart before then.
The American worker needs to be a good worker if we are going to bring back our base here in American . By the same token the Corporations need to give a little more to the wage earners in American ,but not to the point of the lack of balance that occurred prior to the 90’s. I’m just trying to say that there is a balance here between employee and employer ,but Americans will never be able to compete with slave labor from other countries IMHO.
“If that is what you think then you are utterly ignorant of the underpinnings of facsism and National Socialism (Nazis.) They kowtowed and sucked up to the lage and powerful business interests. The largest financial contributors to the National Socialists in the 1920’s were displaced Romanovs (Grand Duke Kyrill who was the heir to the throne of the Tsar) and Henry Ford (yep -the car guy.) The money-interest supporting the National Socialists were solely concerned with increasing their own financial gains and economic power.
See, “The Russian Roots of Nazism: White Émigrés and the Making of National Socialism, 1917 -1945 ” (Be warned: It is heavy-going for a non-historian who is not well read in the history of social thought, economic history and political movements.)
The fascist/National Socialists also preached miltarization and the duty of the people to obey, and the need to protect their country from “them” - which meant anyone who was not a member of their country (Germany, Italy, Spain etc.)
Right wing movements have always been driven by those in the upper income brackets - France from Napoleon on, Germany, Italy, etc.
Try again. ”
Uhm, no I am not ignorant of history or politics. The majority of your Democrats are from upper class society, and in practice there isn’t much of a difference between Communist and Nazi politics. Both of the major parties in this country embrace these idealogies. Guess what? The Republican party passed the first federal income tax in history. Who was president at the time? Old Abe Lincoln, a devout Republican. The Democrats at the time were opposed to equal rights for slaves (only one of the reasons for that Civil War). In Communist China and most of your communist countries, gay marriage is considered a capitalist vice. It’s banned. Likewise, plenty of your so called ‘right wing’ countries have all sorts of weird laws regarding taxes and what you can and can’t do with your property. You have in this country Roscoe Bartlett who is a shill for the peak oil movement. He’s pushing for much of the stuff that the PO types are pushing for. He also votes against a bunch of stuff that I would think would help society better (he is supposedly a right winger). I can also guarantee you that people like the Kennedys and the Clintons would be more than happy to have you thrown in jail if they could pass laws to limit your freedom of speech (hate speech vs. being unpatriotic. Same thing).