One Or Two Cows Start Running Then The Stampede Begins
The Bradenton Herald reports from Florida. “A record 372 foreclosure actions were filed against Manatee homes in November, the Manatee County Clerk of Circuit Court’s office reported Friday. That shattered the previous monthly record, just set in October, and pushed this year’s record-setting total to 2,254 cases. Very Reyna, a clerk who handles foreclosure actions as they are filed, had only one word for it: ‘Overwhelming.’”
“‘Every day we get a load of cases dropped off and it usually takes us until the next morning to get through them,’ she said. ‘By the time we’re done, the next load’s here.’”
“‘Foreclosures are still happening for the same reason they’ve always happened: loss of a job, death and divorce,’ said said Rich Workman, president of the Florida Association of Mortgage Brokers. What’s different now is that the homes’ market value has fallen below what is owed, Workman said. Hurting the most are those who bought at the housing boom’s height, he said.”
“A sizable portion is speculators who did just that, said Pete Minarich, a CTX Mortgage Co. branch manager in Bradenton. ‘There are a lot of people simply choosing not to make payments” and walking away to limit their losses, he said.”
“Gilbert Smith, a bankruptcy and collections attorney in Bradenton, said local foreclosure filings might drop in December as lenders hold off because of the holiday season, but likely will return to high levels in January.”
“Workman said foreclosures won’t drop until property values start going up. Until then, he half-jokingly urged Floridians to pray for snow - in hopes of persuading winter-weary northerners to look southward.”
“‘If they have a bad winter, we’ll have a great spring,’ he said.”
The Sun Sentinel. “It’s the neighbors who must make up the money when condo owners don’t pay their share of maintenance fees and special assessments. And while failing to pay isn’t a new problem, it seems to be happening more frequently now, callers tell the South Florida Sun-Sentinel’s condo line.”
“Many of the delinquents are investors walking away from property, or owners who can’t afford adjustable-rate mortgage payments that have ballooned.”
“At the Deerfield Lake condo in Deerfield Beach, 18 of the 75 owners have stopped paying since earlier this year. They are angry over a $1,400 special assessment imposed by the board to renovate roofs on the covered parking areas. They have refused to pay that as well.”
“Gregory Ward, a Fort Lauderdale attorney, is seeing similar problems throughout South Florida as a result of associations having to file liens and foreclosures against so many owners.”
“‘Anecdotally, we’ve been hearing of a lack of timely repairs and problems with the day-to-day operations, such as garbage removal, because boards are now so preoccupied with collecting that they can’t administer the property,’ he said.”
The Naples News. “It took a few weeks, but local government money managers throughout Collier County have pulled at least $78.6 million out of a state-operated investment fund. And they aren’t alone.”
“Local government money managers around Florida have taken out nearly $10 billion, about 40 percent, of the pool’s assets after its mortgage-backed holdings were downgraded.”
“‘We had been pulling money out since the rush on the foreclosures took place,’ Collier County Clerk of Courts Dwight Brock said Friday. ‘We foresaw there would be a rush. When everyone started pulling out, it was sort of like Black Friday in the Depression.’”
The News Press. “Officials representing hundreds of local governments with their money locked in a state fund frozen 24 hours earlier tuned in to a Friday afternoon conference call with a 16-member advisory board and staff of the State Board of Administration.”
“They rejected SBA efforts to survey depositors on what losses they can stomach, and instead demanded to deliver a message to Gov. Charlie Crist and SBA trustees CFO Alex Sink and Attorney General Bill McCollum seeking reassurances of state support and confidence.”
“Crist and trustees of the State Board of Administration are to meet again Tuesday to consider whether to allow at least emergency withdrawals, and how to deal with continued jitters over $2 billion in mortgage-backed investments held by the fund.”
“‘One or two cows start running then the stampede begins,’ said Richard Pinsky, representing local housing authorities that now have $22.6 million in operating funds and investments they can’t touch.”
“‘Had we all just held tight, most likely no one would have lost a nickel,’ said Polk County Clerk of Courts Richard Weiss, who admits he was at the front of the pack in the run by withdrawing $450 million earlier this month.”
“The largest remaining player in the investment pool is Florida’s state-run property insurer, Citizens Property Insurance. The insurer has $1.9 billion in the frozen fund. Spokesman Rocky Scott said there is no immediate need for the assets, but Citizens had been forced to withdraw from the investment pool to keep pace with the diminishing fund.”
“The insurer’s own investment guidelines require that it hold no more than 10 percent of the state pool. Otherwise, it can afford to wait for its money.”
“‘Capital preservation for us is most important,’ said Citizens’ CFO Sharon Binnun.”
The Palm Beach Post. “The pool offered slightly better returns than money market funds and established a track record of safety, making it a no-brainer for government officials such as Palm Beach County Treasurer Jim Beard.”
“However, the pool became less of a no-brainer a couple of months ago, when Beard noticed that the so-called asset-backed securities in the fund’s portfolio put it at risk of being hurt by the mortgage market’s meltdown.”
“Beard said he grew suspicious as the state fund’s yields ballooned to 5.5 percent in August and 5.7 percent in September, well above the rates paid by money market funds.”
“‘How is this possible?’ Beard recalled wondering.”
“Beard and other investment specialists in the county’s clerk and comptroller’s office began questioning state board officials about mortgage-related risks. Uncomfortable with their answers, Beard decided to look elsewhere for a haven for the county’s money.”
The Herald Tribune. “Another Manatee County bank has been slammed by the real estate downturn. First Priority Bank of Bradenton posted a loss of $4.8 million in the third quarter as its bad loans soared by more than 500 percent. The loss is a major hit for a bank of First Priority’s size.”
“First Priority already is looking to raise additional capital through a stock sale, President George Najmy said Friday. ‘I don’t think anybody anticipated the real estate market to take as severe a downturn as it did,’ he said.”
“The bulk of the problem loans involve residential real estate acquisition and development projects, he said, with 8 to 10 loans ranging from $2 million to $4 million. The bank was one of the area’s most aggressive lenders when times were good. Najmy said the bank has stopped acquisition and development lending.”
“‘With the economy turning, that growth is coming back to bite us a bit,’ he said.”
“First Banks Inc. of St. Louis completed its purchase Friday of floundering Coast, paying a rock-bottom price of $12.1 million, or $1.86 per share. That is $10 million less than the First Bank’s original offer, a sign that Coast’s loan problems had deepened in recent weeks.”
“First Banks will move quickly to jettison the Coast name, which some say represents one of the biggest business busts in Manatee County history.”
“Coast’s shareholders voted Monday to sell to First Banks, even though they did not know what the final price would be. In the merger agreement signed in August, $1.86 per share was the lowest the price could sink before either bank could back out of the deal.”
“The 71/2-year-old bank had little choice but to sell at any price, given its crippled financial condition and damaged reputation since the loan crisis was revealed in January. The stock was trading at $16 before the problems surfaced. At that price, Coast would have fetched $104 million.”
“First Banks will take on more than $80 million in bad loans, more than 100 borrower lawsuits, and a federal lawsuit by shareholders who claim they were bilked by Coast officials who masked the bank’s troubled condition.”
“Many of its overdue loans involve borrowers with investment homes who stopped making payments when their builders went out of business and left unfinished homes.”
“As the housing market continues its retreat, developer William Vernon is soldiering forward with his Rivé Isle project in Manatee County.”
“He has simply invested way too much to back down now.”
“Vernon, a Longboat Key resident with upscale housing projects across Florida, has spent $30 million developing the Rivé Isle Golf and Nautical Estates and more than four years cutting red tape to get it approved.”
“The time may not be ripe for even more $1 million homes in the region, but Vernon is convinced he has a product like no other, and the long, arduous road he has traveled to develop the project is fueling his ‘market-be-damned’ attitude.”
“It is anyone’s guess when the project will be fully built out and populated. ‘If it was back three, four years ago, I’d probably say a couple of years. People were buying anything and everything,’ Vernon said. ‘Now, they’re a little more careful.’”
“That reality has struck many area developers as sales have stalled or halted in a number of high-profile developments.”
“The SevenShores project, for example, announced earlier this year it would suspend sales and offer deposit refunds for its 352-acre development on Perico Island. That followed an earlier price cut as high as 22 percent for some units.”
“Vernon has had to reassess his own pricing. Less than a year ago, Rivé Isle announced that the minimum asking price for a lot and home was $1.5 million. Today, it is $1 million.”
“Vernon may be in a better position than some developers to weather the current economic storm. He bought the land for River Wilderness and Rivé Isle in the mid-1990s for a now-paltry $6 million.”
“It could prove to be a bumpy ride. The median sales price for homes in the Sarasota and Bradenton markets has dropped more than $100,000 since it was about $350,000 at the start of 2006. Inventory remains high across the region, including for high-end developments like Vernon’s.”
‘Beard said he grew suspicious as the state fund’s yields ballooned to 5.5 percent in August and 5.7 percent in September, well above the rates paid by money market funds. ‘How is this possible?’ Beard recalled wondering.’
It isn’t possible, and IMO there is something that hasn’t come out about this run. This is way above what 10 year treasuries are yielding, so something was going on.
Idiots were chasing yield again, locking up the fund is weak. Did managers park needed funds in this? There were some comments about allowing redemptions to make payroll.
They were chasing yield by being in mortgage backed paper to begin with, yes, but why offer such a high rate at the end of the summer? That’s more than twice the MM rate at some of the local banks here.
Could it have been to bribe managers into keeping the money deposited? And if so, they were surely taking big loses. Was all of this legal? More to come out, IMO.
I bet it has something to do with this:
http://www.reuters.com/article/fundsFundsNews/idUSN3046902620070830
They have got to be kidding!
Yep. Lehman was the one that sold the bulk (if not all) of securities to Florida’s fund. Man these people are scumbags.
Time for the entire extended shrub family to exile themselves to their spread in Paraguay. Hasta La Vista, Baby!
Great catch, Palmetto. Wonder if Jeb will be taking a little advice from his brother Neal, he of the Silverado S&L fiasco, on how to handle the fallout. neal of course is now safely ensconced in Dubai, as an “investment advisor”.
Follow the money, spike. The US has borne the burden of the bush family far too long. Yep, Neil’s in Dubai, being safely protected by the family’s Arab buddies and it is no accident that Dobuy is looking to scarf up some assets in Florida.
BTW, a little OT, but speaking of Dobuy, did anyone else see 20/20 on ABC last night? Some kid got lured into the desert and gang-raped and Dobuy’s legal system accused him of being a homosexual and wanted to punish him for it. Like the teacher in Sudan who named the teddy bear Mohammed and now has a mob screaming for her execution. That’s justice in these Arab countries. For all the its 21st century glitz and glamour, Dobuy has a legal system stuck in the dark ages. We’re not ready for “globalization”. In fact, as Americans, we’re complete sitting ducks with our “rule of law”. It works for us (sometimes), within our boundaries. But it is not compatible with the legal systems and mores of other countries and our embassies can no longer protect us abroad in many places.
Ready for it - Puullleeezzz! Like I want to have anything to do with a place that decides women can’t drive a car or go out without a male escort. Yeah - that’s going to go over big with American women. Although I kinda like the whole bhurka thing - imagine if men couldn’t tell anything about a woman’s looks because all of them were covered up.
But..but…the MSM talking heads keep assuring me that Islam is a religion of peace and tolerance.
“our embassies can no longer protect us abroad in many places.”
Who am I kidding? Our system can’t even protect us at home in many cases, which is what happens when the rule of law goes into the crapper. Florida’s teachers, firefighters, janitors, lower level civil servants, etc. now have their paychecks at risk because of the high level politicians and deal makers. Where is Florida’s Attorney General, Bill McCollum, in all of this? What’s he doing about mortgage fraud? What’s he gonna do about the Bush cronyism that brought this about? Nothing, I’ll bet. Because he’s a friend of Jeb. And some wonder why people just become apathetic and eat and shop. Who can blame them?
Sammy - I suspect many are peaceful and tolerant. I’m talking laws not religion. Like we don’t have fanatics here that want everyone to live by their religious beliefs?
‘Lehman was the one that sold the bulk ‘
- There is a lot of shorting on Lehman currently.
Word has leaked that they are not ‘revealing’ the bad debt that they are carrying! Surprise!
While there are always fanatics in any religion, the Koran is pretty darn explicit and fairly consistent in how it says to deal with infidels, women, etc. What makes the religion dangerous is a small extremely violent minority seems to always be lurking. From what I have seen and read, Islam is no religion of peace.
are they crazy:
“Sammy - I suspect many are peaceful and tolerant. I’m talking laws not religion. Like we don’t have fanatics here that want everyone to live by their religious beliefs?”
+1
A majority of this paper was sold to SBA by Lehman Brothers. Bush, as the state’s top elected official, served on a three-member board that oversaw the SBA until he retired as governor in January. In August, Bush was hired as a consultant to the bank. Lehman spokesperson Kerrie Cohen, speaking on behalf of Bush, said they had no comment and would not say when the bank had sold Florida the paper. SBA did not return calls.
While SBA wouldn’t confirm, Bloomberg reported the amount of debt in default is around $900 million.
Wow, SoBay, thanks for the heads-up! I’ll bet, as result of this Florida situation, this becomes big news over the next few days. I’ll expect to see it on this blog. Whew! I’ve often felt this whole housing bubble is interlocked with seemingly dis-related events (which is why I sometimes get annoyed with the whole “this is a housing blog” objections to political comments, etc).
Interesting, when you think about it, that Florida has been more or less ground zero for some very strange events in this country, like the 2000 election debacle, etc. I just had the weirdest feeling that this whole political/financial house of cards is about to implode right here in FLA. Well, you can put down Florida all you want, but for pure entertainment value, it can’t be beat, not even by Cali. Never a dull moment here.
spike, thanks for putting this back in perspective and putting the thread back on track. I took us a bit off track with my comments about Dobuy, etc. It was inflammatory and I shouldn’t have done that. It is just that the local news is widely reporting that FLA plans on selling off some of its assets like toll roads to foreign companies and I’m furious as hell about it. If shenanigans like this didn’t take place, there would be no need.
Hey P~
From readin’ all your posts, I think you really need your own talk show down there in Gator Land.
You’re right on top of it all and got that populist demeanor.
Howie Carr has got nothin’ on you!
And he’s pullin’ in $700k!
Some guy by the name of Dean Chambers has beat me to it with his cable access show. Very bizarre, but rather entertaining. I might call in on this subject.
Palmetto,
you, diogenes and paul in jax are fav posters of mine, so Florida has no shortage of smart guys. Florida is entertaining but NY is a sinkhole of state corruption.Today you have Bruno, who heads the state Assembly employed also as investment guru to the unions who work on construction projects he approves with state budget. Nice trick huh. And Guiliani as mayor billing the city agancy for the disabled for ’security” while canoodling in the Hamptons with his mistress, leaving wife Donna behind.
I think this is up to Florida’s standard.
Florida sets a standard all its own, and leads the nation in misfeasance, malfeasance, nonfeasance and DUMBfeasance. The SBA shutdown is not getting the attention it deserves in the MSM, probably too scary to look at closely.
“While SBA wouldn’t confirm, Bloomberg reported the amount of debt in default is around $900 million.”
SO FAR.
RE: And Guiliani as mayor billing the city agancy for the disabled for ’security” while canoodling in the Hamptons with his mistress, leaving wife Donna behind.
Spike66-Huge disclosure. Whatta sleaze.
Sinks his ship IMHO.
Hats off to the leakers.
http://larouchepub.com/other/2007/3446rudi_midwife_greenspan.html
Guiliani bilking NYC for his wife or mistress, is small potatoes compared to his role as Greenspan’s cohort in unleasing the “wall of money” that enabled the credit binge that caused the housing bubble.
RE: Had we all just held tight, most likely no one would have lost a nickel,’ said Polk County Clerk of Courts Richard Weiss, who admits he was at the front of the pack in the run by withdrawing $450 million earlier this month.”
Listen to this idiot.
Famous last words…like Paulson’s “everything contained”
With all that’s transpiring, I’d now rate the credibility of government at any level at one big, fat, zero.
hd, it reminds me of the whole Enron debacle and the accounts of the employees being frozen, etc., while the pigs and traders got their money. Or Mozilo cashing out his options while CFC goes bust and the shareholders take it in the shorts.
In other words, “If the rest of you had not cut and run after I did, everything would be OK now. Shame on you.”
JOINT VENTURE…
JV
Standard and Poor’s has made inquiries about whether the freezing of the pool will impact municipalities ability to serve their own debt in an article I read yesterday. Could be another shoe to drop in this fiasco.
Unfortunately I cant’ find the link.
Carte blanche
This time it’s different
Oh, the horror
“Workman said foreclosures won’t drop until property values start going up. Until then, he half-jokingly urged Floridians to pray for snow - in hopes of persuading winter-weary northerners to look southward.
This is Rich…
Crist almighty was urging Floridians to “pray for rain” a few months ago, and now they want to “pray for snow”.
Soon the Atlantic Ocean, will be preying on you…
I was more focused on the entry statement: “Workman said foreclosures won’t drop until property values start going up.”
Why should forclosures on “homes” have anything to do with property prices. The homeowners should be paying off their house like they have always traditionally done. It seems the new “models” for determining loan safety based on FICO were just a wee bit flawed, wouldn’t you say??
what happens to florida if the northerners can’t come down to vacation in the winter and buy homes?
We would have a lot less traffic, and I wouldn’t have to fight for parking or highway space.
I think this would be great!!
What is happiness to a Floridian?
A NewYorker headed back home, with a Canadian under each arm.
Well, diogenes, much as I dislike to dump on out-of-staters, I will not be unhappy if Florida goes back to being what it was, a low income, low expense, low profile state. It has to happen, now.
Florida’s profile won’t go lower until its population does. Maybe FEMA could arrange massive evacuations of underwater Floridians to sports stadiums all over the country.
Just like the desert..
a Washingtonian with 2 Canadians under each arm..
Alaska Airlines going north..
“‘There are a lot of people simply choosing not to make payments’’ and walking away to limit their losses, he said.”
Walk America
Run Forest, run!
“A sizable portion is speculators who did just that, said Pete Minarich, a CTX Mortgage Co. branch manager in Bradenton. ‘There are a lot of people simply choosing not to make payments’’ and walking away to limit their losses, he said.”
This is a point I have made numerous times. You keep hearing about people “unable” to make their payments and “losing their homes”. I say BS, most of them WON’T make their payments. Let them rot.
And why can’t they make their payments? Maxed out credit cards, luxury cars or gas guzzling SUVs, houses full of electronics and faux designer furniture, closets stuff with way too much, fancy restaurants and vacations and then cry they can’t pay the mortgage.
Or how about their company reducing their income but the CEO and mgmnt gets ALL the bonuses equal to the reductions? How about those who never got that promised pay raise? Got “downsized”…
Not all are scum.
Then there are all the rest of em.
Exactly the reason why freezing ARMs will do nothing to help this market. To many people bought at prices that we will not see again in years. It makes no sense for them to continue making payments on a depreciating asset.
“First Priority … President George Najmy said Friday. ‘I don’t think anybody anticipated the real estate market to take as severe a downturn as it did,’ he said.”
Why trust liars/idiots with your moneys? Withdraw. Run.
Why is it we could clearly see what others could not? Are we gods?
He is a bank President so he is expected to lie. What puzzles me is all those “economists” that claim this was unexpected. Is their reputation and dignity really that worthless to them? No one that even received a C grade at an economics class at a local community college could have seen housing go up more than 20% a year, and incomes just going up 3% a year, and not have thought to themselves something very, very wrong was occuring. Money aint magic ppl.
Conclusion: Oddly enough, for some people, the intersection between (A) academic knowledge, (B) common sense, and (C) application to one’s livelihood is the null set.
“Workman said foreclosures won’t drop until property values start going up.”
Sheesh. I understand the twisted logic. Theoretically, if property values go up, people can sell their homes for what they have into them and move on without foreclosure. But, those homes are not worth the inflated property values. So the only way foreclosures will drop is if the market is allowed to take its course and bottom out, let the vultures clean up the carcasses.
Totally agree.
However, you can see the government and agency folks who did absolutely NOTHING to stop the hyper-inflation (can we say Greenspan who can’t spot a bubble when it’s growing to epic proportions) are now clamoring over themselves to save the borrowers.
Personally, I am sick of this crap.
They should be saving our currency and saving the prudent.
Let’s force the issue. IF Bernanke and Co. really want to drop rates to where are money has absolutely no investment value, then let’s make it so.
I am seriously considering removing ALL MY SAVINGS OUT of the S&L where they lend it to others to compete against me, and into a BOX.
Let the FED print money to fill our SD Boxes and let none of the new money go to loans.
This will put an end to this madness.
Stop lending to the Banks. Make them pay us for our money.
Remember the 0.75% per annum at the bottom of Greenspan’s reign. WE were robbed while flippers made tons of cash speculating with our savings. Let’s stop them this time.
On Dec. 11th when the FED drops rates, let’s pull out ALL of our money. They won’t have any reserves.
They won’t be able to support new loans.
End Game. Raise rates to support SAVERS and retirees.
RE: They should be saving our currency and saving the prudent.
Amen, brother.
diogenes, you said everything I wanted to say. And said it much better. BTW, love the screen name, it is very fitting in these times. And your astute observations on the Florida and Tampa Bay area way outclass my at time disjointed rants.
Why does it matter if someone is upside down unless they HAVE to sell? Why is that an excuse to bail on a financial obligation. All this whining about saving homeowners houses when they are willing to bail because they see enough profit to make it worth it to keep the house, I just don’t get.
Inability to carry the cost without HELOC from the start. No equity, falling price, no HELOC.
Boy do I agree with your post arc . Freezing the interest rate on people who don’t even need to sell is a joke . What about if the borrower took out equity loans or if they have a lot of equity in their property and they could sell without a short sale or foreclosure ?
We are all paying for the powers that be attempts to save the housing market . Again , why are the people who created this mess, or let it happen, the same clowns that are trying to solve the mess? Right now the entire loan system is still corrupt .Best thing that could of happened was that the market got tight so the jerks couldn’t continue with the faulty lending ,and we should of got tight underwriting with the omen of Katrina in 2005 (property underwater ).
It seems the “powers that be” created the problem, and now are creating the solution so they can be seen as “good guys.” I see major social change with a lot of pain from here to there.
“Workman said foreclosures won’t drop until property values start going up. Until then, he half-jokingly urged Floridians to pray for snow - in hopes of persuading winter-weary northerners to look southward.”
“‘If they have a bad winter, we’ll have a great spring,’ he said.”
What he doesn’t get is that at one time FL and OH, PA, etc. prices were the same and now FL is 3 to 5 times higher than the same house here. Most people moving south want to do a lateral move housewise and moneywise, so 10 feet of snow still isn’t going to get them the pay the exhorbitant prices. Maybe NY & NJ will, because their prices were always 3x FL in alot of areas. Plus, people in FL aren’t hurting anymore financially than the rest of the country. People up here can’t buy anymore than people an FL can buy. Workman need to realize no one can or wants to pay these inflated prices anywhere in the country.
“it was sort of like Black Friday in the Depression.”
This from the guy who was in front of the pack to make his county’s withdrawal. Somebody in Florida remembers history.
So First Banks of St. Louis buys Coast for 12.1 million, down from the share price value of Coast in January of 104 million.
Nice haircut.
“First Banks Inc. of St. Louis completed its purchase Friday of floundering Coast, paying a rock-bottom price of $12.1 million, or $1.86 per share. That is $10 million less than the First Bank’s original offer, a sign that Coast’s loan problems had deepened in recent weeks.”
SH$T, this is my bank here in Illinois and I have some MM exposure with these guys. Man this is getting to close to home for me. Yikes.
if one ever wants to see a negative NPV investment this it. first banks is foolish to pay any price for this POS on an unassisted basis. the only way to be insulated from the coming massive legal bill was to buy the POS from the FDIC after it failed. wonder how many times over they will lose $12.1 million. the banking supervisors should slap a cease & desist order on first banks for just being this stupid. the only good thing for the FDIC is that the deal papers over their imprudent supervision of coast. there are many more bank failures on their way in FL, unless the HBs get a forbearance deal like the FBs.
“It’s the neighbors who must make up the money when condo owners don’t pay their share of maintenance fees and special assessments. And while failing to pay isn’t a new problem, it seems to be happening more frequently now, callers tell the South Florida Sun-Sentinel’s condo line.”
More bubble fallout. IMO, a condo or HOA in Florida is NOT where you want to be during this meltdown. From my own experience, this is further exposure for the good guys who pay their bills. They have to take on the burden of the deadbeats. Right now, a condo or a home in a HOA in Florida is a toxic time bomb.
don’t forget the hurricanes.
HOA’s in general are starting to look like time bombs. The shared liability for upkeep of the premises will not be covered when a certain percentage of participants default on their assessments. Many HOA’s may go out of existence, and the entire HOA concept may be discredited for generations.
“The largest remaining player in the investment pool is Florida’s state-run property insurer, Citizens Property Insurance.
The insurer has $1.9 billion in the frozen fund. Spokesman Rocky Scott said there is no immediate need for the assets, but Citizens had been forced to withdraw from the investment pool to keep pace with the diminishing fund.”
LMAO. Floridians are about to receive a second application of the Joshua Tree related to insurance. “Thank you sir, may I have another?”
wow, the taxpayers are really getting it. how can so many gov’t agencies be caught up in all of this? the rest of us might own florida with how much help we may need. maybe an equity deal?
just wait until there is another round of hurricanes the disaster fund in florida goes broke and it becomes a national one.
Ok, so part of my thinking of why housing price boom is because the average buyer (Joe6Pack) has no real clue as to the cost of home construction or quality.
Two things come to mind:
1) An extensive 20 page checklist of how to value home construction. Like a home inspector would do. And this should be public record on a house. Explain exactly how insulation was installed and where, the exact brand and model of air conditioner, etc, etc. And the “expected lifespan” of each thing in the house. Don’t expect that Plasma TV to last 5 years, but surely the electrical wiring should last for 50 years.
2) Detailed photos and video tape should be made to document the construction of the house. Show work that is BEHIND the walls. Show the foundation under the carpet. If this adds $2000 to the cost of the construction, fine. It would eliminate a ton of fraud, and make it much easier for the buyer and the bank to evaluate the property.
Radical, but transparent! People should be able to review a house by just going over the photos/video and documentation. Would eliminate a lot of the mystery of why one house is worth $800,000 and another $350,000. And yha, location, location, location. But that is only true if fundamentals are sound (the house itself).
You are not on the right path here.
Pricing has absolutely nothing to do with value.
This is a speculative mania based on CHEAP LENDING, and NO STANDARDS, making borrowing an easy Gamble.
This is a casino. We are auctioning off properties with monopoly money. How many do you want?
They won’t cost you anything, and you can sell them at any time for a huge profit.
What are your bids? Remember, the money is FREE.
At least for 2 years, and by then you can either re-finance or flip it to someone else who really can afford to buy it.
Under these rules, PRICE has no relation to value.
SHACKS in California were selling for $300k.
Why? Because someone thought they could flip them for $400k.
Do you think they cared if the place would last 2 years?
“A record 372 foreclosure actions were filed against Manatee homes in November, the Manatee County Clerk of Circuit Court’s office reported Friday. That shattered the previous monthly record, just set in October, and pushed this year’s record-setting total to 2,254 cases.
Oh, the Huge Manatee!
http://www.flickr.com/photos/ulrichp/1362599/
My friend whose rise and fall of “equity” I have catalogued on here for three years has gone from 100K+ in appreciation (summer of ‘05) to units identical to his being offered at 85K less than he owes by bank REO departments.
At this point, I really do feel sorry for him.
I remember you trying to talk some sense into him. To bad he didn’t listen.
after awhile getting smacked with a large trout just makes you dumber.
Oh, the Huge Manatee!
Best mis-quote of the day, or perhaps the year!
“They rejected SBA efforts to survey depositors on what losses they can stomach, and instead demanded to deliver a message to Gov. Charlie Crist and SBA trustees CFO Alex Sink and Attorney General Bill McCollum seeking reassurances of state support and confidence.”
Alex Sink (female) has extensive experience in banking and ran on a platform of protecting Florida’s finances from the backdoor dealings of Florida politicians. I believe she means well, but she could be in way over her head. On the other hand, this situation will show Floridians what she’s really made of. I don’t envy her. She is up against some major financial gangsters here and if she decides to go head to head, her life is at stake, literally.
Fodder for a bumper sticker:
Sink is Sunk
I keep seeing all these news commercials about freezing teaser rates. Anyone know what they are really talking about? It cant really be as dumb as it sounds can it? I take that back, it sounds like the Bush Administration is supporting it.
Before they reward those that bought sh*t they couldnt afford, shouldnt they be sending subsidy checks to everyone that rented between 1999 and 2005? Who supports this? Is it just ppl with dirty hands? Republicans should hate the welfare aspects. Democrats should hate this as it stands in the way of letting the markets make housing affordable again. Ethical ppl should hate it because it rewards the guilty at the expense of the innocent.
I think, of 100 mortgages that have a teaser rate about to reset:
25 will be 2nd homes and thus ineligible
25 will be investors and thus ineligible
25 will not be able to make the payments even under the teaser rate
15 will be so upside-down they will decide to leave the keys on the counter.
5 will get lost in the shuffle and be foreclosed anyway
So that leaves 5 of the 100 that could be helped. Of those probably 3 will lose their house when the loan eventually resets, and 1 will sell before then and rent. So all this effort will be to help 1 of every 100 sub-prime mortgage holders.
What about people that refied or heloced and already got their equity - do they qualify?
How will they determine who can pay? What will be legitimate household expenses - will they require folks to live within a bare bones budget? Leigh alluded to the idea that it will have to be blanket because they won’t have the resources to judge each case individually.
They won’t do any of those things.
The new rules will simply be that the new rate is the old rate, frozen for 2 years, to stop the foreclosures. This won’t be about what’s fair and reasonable. I have never seen a government program that was. This about stopping the panic.
Therefore, the crooks will be rewarded with more cheap money, an extension of a liar loan.
Where’s my 3% housing loan, Mr Paulson???
Oh, and one more thing.
I’ll bet the FED supports the bank with any losses that would occur.
In other words, the “work-out” will relieve the borrower, but the FED will print the lost cash flow that was supposed to occur and give it to the bank….sort of accounting hocus pocus that says the FED will get repaid sometime in the future.
It’s all smoke and mirrors, folks.
I am just angry about the whole concept.
It pisses me off too. The fact of the matter is that no innocents took out teaser rate loans. They reset at very high rates and are not an appropriate product for ppl that intend to buy a home to live in for an extended period. The only ppl that took them out were flippers or those that couldnt afford the house in the first place. Why we give a crap about them is beyond me. They gambled (I use that term loosely since housing speculation in a world of now money down and teaser rates, and limited recourse for deficiencies, does not have the downside that other gambling does) in conspiracy with crooked banks who intended to get the junk mortgage off their books immediately, and now they want some freaking reward. F*** O**!
Diogenes — you might be right, but I think there is at least as much chance that the freeze will be nothing more than conversion of the lost interest to negative amortization. That would accomplish most of what the banks really want, which is to spread the carnage out over time. It also would not piss off the public in an election year.
First Banks is my bank, have a mm and business account with them. Anybody care to chime in on if this is a good thing?
Don’t put all your assets in one bank, ever.
Amen.
Last month speaking with WAMU bk mgr, going over my acct.
said mgr, ‘let’s fix this now, we don’t want to lose more clients’.Apparently WAMU is losing clients over them being charged incorrectly and not getting it fixed so they are just walking/closing accts.
Have one money bag under mattress, one in this bk, this bk, and this bk. And some misplaced in coat pockets. Come winter time it is like ‘christmas’.. Voila another 20.
“Many of its overdue loans involve borrowers with investment homes who stopped making payments when their builders went out of business and left unfinished homes.”
Once again, they get the story completely wrong. The overdue loans were made by investors who stopped making payments when they realized the PONZI scheme was over and they would not make their easy $100,000.
THEN, the builders were in trouble and stopped construction, and then houses went unfinished. Too many “investors” backed out of the deals. Then the shoe dropped.
Hello all:
Sorry I’ve been MIA - very busy, but here’s a tip - check out this Budget site- shows where folks are moving:
People moving to CA get a discount on certain sized-trucks.
Also “To anywhere in the USA from WA, OR, ID, or MT.”
http://www.budgettruck.com/Discounts.aspx
~Misstrial
‘I don’t think anybody anticipated the real estate market to take as severe a downturn as it did.”
Such crap, they just didn’t want to believe it as they all had to much invested and were terrified to face the reality and didn’t want this thing to end. Screw the others, screw our children, screw anyone that ever had the dream of home ownership. I am now rich because it and I love it.
Statements like ” that growth is coming back to bite us a bit” and
I remember hearing “a bit of froth” as well, being ways to describe this crash as well as “soft landing” and “market correction”.
It pisses me off when I continue to see people still trying to down play what is currently happening.
On a side note, I am finally starting to see some deeper discounts on land in Loxahatchee. A 1.25 acre lot being advertised for 89,900 that would have sold for 250,000 during the peak. I know I will not pay anymore than 30,000 for one but this is a great start.
I really want to buy two acres for my dream home and then be able to have my horse in my own own yard and buy my husband something nice he can ride.
With a 2-acre lot buy yer husband a nice Toro riding mower.
With cupholders, of course.
“and buy my husband something nice he can ride.”
A hot 21-year old comes to mind.
Oh man, NYC, that was really tacky.
“They rejected SBA efforts to survey depositors on what losses they can stomach, and instead demanded to deliver a message to Gov. Charlie Crist and SBA trustees CFO Alex Sink and Attorney General Bill McCollum seeking reassurances of state support and confidence.”
Here is the point I made yesterday. WE will be asked to PAY for the malinvestments of the STATE and City managers. The losses will come form TAXPAYERS.
Do you think a government employee is going to loose money on their retirement funds?? Never.
We will get soaked, once again, for their incompetence and lack of knowledge of their investment portfolios.
The STATE should be suing the brokerage houses that sold them this crap, but I doubt they will recover.
WE will pay, most assuredly.
As posted above, Jeb Bush as governor sat on a 3 man board that oversaw investments in Florida’s SBA until January, when he was replaced as governor. Then in August, he became a consultant for Lehman. Lehman sold the majority of these investments to Florida.
Currently, both Bush and Lehman are ducking reporters.
These are not the pension funds…these are “short-term” investments for funds needed for payroll etc. The pension fund so far has not been raided by withdrawals. Does beg the question of what the pension fund, of approx. 120 billion is holding, and did Lehman sell most of the investments to the fund while Jeb was governor.
You know there’s some nasty stuff buried deep in the pension fund.
Thanks for the correction.
I thought this fund was a general pool in which all governments temporarily parked their money while awaiting disbursements.
Lehman has a well-deserved reputation as a shady operator. BTW, Lehman reports 12/15, Goldman 12/16. (I actually snuck into LEH on the long side last week and scored a couple of points - you could tell by how spikey it went on the upside in the early morning Thursday that it has a lot of weak shorts.) Will be interesting to see what they say - if they are credible in their write-offs, and they aren’t too severe, the stock could be OK, even if they are a bunch of sleazeballs. I do expect to see a general sell-off as the Fed decision gets closer (late next week or early the following).
So much for that $240 average property tax saving!
With the writers’ strike and all, Florida has decided to stage its own version of “It’s a Wonderful Life” for the holidays.
LOL!
“At the Deerfield Lake condo in Deerfield Beach, 18 of the 75 owners have stopped paying since earlier this year. They are angry over a $1,400 special assessment imposed by the board to renovate roofs on the covered parking areas. They have refused to pay that as well.”
This means the remaining 18 get to pay a special assessment of $5,800. Ass usual, the responsible get to pick up (and pay up) after the irresponsible. These remaining 18 must be feeling like special asses by now.
Got 10% down?
Roofing work is probably twice as expensive as it needs to be because of over-regulation of construction industry in Florida. Probably a 4 X 12 shed roof on parking structure with no plumbing, nearby wires, etc. - sickening to think of what stuff like this costs due to nanny-state-ism.
once again FL is in the lead
but NV has taken over the % in foreclosure spot
now I’m wondering about state investment cess”pools”
whose next ?
Makes you wonder if there are any funds anywhere that are not polluted with MBS garbage.
Florida is going to get it big time. Anyone here from Florida want to speculate as to what happens next? I’ll bet your condo market disappears completely.
“I’ll bet your condo market disappears completely.”
That’s happened before. Used to be a joke about “What’s harder to get rid of than a ______________(fill in the blank)? A condo in Florida.
Median prices? This is how they stay up. http://www.thetrumpet.com/index.php?q=4469.2740.0.0