Not Enough Effort Was Put Into Understanding The Risks
The Journal News reports from New York. “For months Marie Chantale Joseph and her husband, Daniel, have been unsuccessfully trying to refinance their home before their interest rate spikes in April. Already, Daniel, a taxi driver, is working 18 hours a day and on weekends to pay the approximately $4,800 a month they owe, and Marie, a babysitter, works as many hours as she can.”
“Banks they have approached say they cannot better the terms of their two adjustable mortgages: one at 11 percent and another at 8 percent that total $520,000.”
“Marie Chantale says she and her husband didn’t know the financial implications of their mortgage when they bought their home in Elmsford. Their mortgage broker gave them very few details, she said, and they didn’t ask many questions. Their only home-buying experience was in their native Haiti.”
“‘In my country it is different. No one can come and take your home away from you,’ said Marie Chantale, who must pay about $8,000 a month beginning in April, or lose her home to foreclosure. ‘Here, if they know you don’t know what you are doing, they take advantage of you.’”
“‘Earlier, only conventional mortgages were available. Then you had subprime mortgages. Now you have negative amortization, interest only mortgages, balloon payments, and all the ramifications that come with it. These mortgages were meant for the seasoned investors. First-time homebuyers don’t understand the risk. They are setting themselves up for failure.’ said Edna Rivera, executive director of a not-for-profit community-based housing service.”
“Keith Gumbinger…a New Jersey-based publisher of consumer loan information, said borrowers should have informed themselves about the biggest financial investment they are likely to make in their lives.”
“‘It’s not that the mortgage broker held a gun to someone’s head to lend the money,’ Gumbinger said. ‘Brokers don’t have a fiduciary responsibility. It’s the borrower’s responsibility. You can say no and challenge. You can hire a lawyer.’”
“The mid-2000s was a time of plentiful credit, low interest rates and lenders eager to loan money. As part of the hardsell, lenders advertised mortgages like car salesmen advertise cars, in monthly payments. Borrowers responded enthusiastically because it brought their dream of homeownership within reach.”
“Few took into consideration the contingency that housing prices would fall or they wouldn’t be able to refinance.”
“‘When people are closing, they are in such a euphoria,’ said Vedeta Hanley, executive director of a Rockland housing service and referral agency. ‘A lot of people go on faith, and they believe that when I get to the fork in the road, there will be answers.’”
“Beth Blecker, a financial planner, says she had to dissuade clients from pulling their money out of investment portfolios and putting it all in real estate. It was a difficult job, she said, considering the rapidly rising prices of homes in the Hudson Valley and the low interest rates. Even conservative savings programs like IRAs were allowing people to withdraw money to invest in the housing market, she said.”
“‘It’s not just greed, it’s human nature,’ Blecker said. ‘Sometimes it’s just getting caught in the motion. You think you must be stupid if you don’t do this.’”
“Tobie Stanger, a senior editor at Consumer Reports, recalls how real-estate expos around the country attracted potential investors wishing to make a quick buck. Nobody was immune to the lure, she said, and not enough effort was put into understanding the risks.”
“‘Don’t just blame the borrowers,’ said Stanger. ‘People at the top of the food chain, too, didn’t know.’”
The Democrat & Chronicle. “Rochester’s real estate market is continuing its zigzag pattern. Compared with areas such as Florida, Rochester is in good shape. ‘Rochester now proves out to be the hot spot of real estate in the U.S.,’ said Bob Miglioratti of ReMax Plus in Brighton.”
“The market has slowed from its recent peak in 2005, though certain areas such as Brighton remain strong, said John Arquette, general manager of Nothnagle Realtors. But ‘there is an abundance of listings in Greece,’ Arquette added.”
The New York Post. “Dear John: Don’t you think that it would be best for everyone if the price of a house was to go so low as to make it affordable again for normal working people? I mean $700,000 for a crappy house in Jackson Heights, Queens? That’s what we are trying to protect? N.O.”
“Dear N.O.: Would it be good if real estate prices plummeted? Yes, for people, like my son, who are looking to buy into the housing market. But no, homes prices falling greatly would not be too good for people who already own a home, are over-borrowed against it and now face imminent financial danger.”
“Worse, all those millions of folks who did overextend themselves, now threaten the health of the US economy. This has become, as the economists say, a macro-economic issue of the highest level. So, on balance, I’d say that a modest drop in housing prices would be a good thing. A severe drop, not good at all.”
The Eagle Tribune on New Hampshire. “The home at 12 Woodlawn Ave. in Atkinson…is just one of more than 430 in Rockingham County that were foreclosed upon this year because of defaulted mortgage payments.”
“When a home is taken over by the bank, a transfer of deed notice is typically sent to the town clerk. This year, more than any other, those notices are piling up. Newton’s interim Town Clerk Mary Jo McCullough has worked for the town of 4,500 people for several years.”
“‘I’ve got about 20 (foreclosed homes) this year,’ she said. ‘I don’t even think we’ve had 20 collectively in the past five years that I’ve worked here.’”
“And as far as McCullough can tell, there is no particular pattern to the foreclosures. ‘They’re so scattered, they’re in all parts,’ she said. ‘They’re in expensive neighborhoods, they’re in older homes, they’re in places over by the junction, they’re everywhere.’”
“‘Someone will not be able to sell their house for the $350,000 that it’s worth when a bank is selling the same home down the street for $300,000,’ said Mark Oswald, a Realtor in Londonderry. ‘The bank just wants to get out of what they’re owed, which makes it tough for sellers. In the eyes of the buyer, why would I pay ($350,000) when I can get the same house for ($300,000).’”
“Between 2004 and 2007, the number of mortgage holders who were delinquent on their subprime adjustable rate loans more than doubled to about 20 percent, according to the New Hampshire Housing Finance Authority. And by the middle of 2008, the state expects about 900 foreclosures per quarter, tripling the state’s rate from 2004.”
The Boston Herald from Massachusetts. “Carlson GMAC is closing its Woburn headquarters, shuttering 14 sales offices and laying off 50 workers. Just days earlier, mortgage giant Washington Mutual closed all seven of its Massachusetts offices, laying off 53 Bay State workers.”
“‘I think the industry overall is overbuilt for this market, and we have to see some reductions in overhead,’ said Bruce Taylor of ERA Key Realty Services, which has cut some 20 of 300 positions over the past 18 months through layoffs and attrition.”
“The Massachusetts Mortgage Bankers Association estimates the state has lost 10,000 home-loan jobs this year, while the Massachusetts Association of Realtors’ membership has dropped by nearly 2,000.”
“Carlson CEO Judy O’Brien said the closures represent a long-overdue consolidation. But she and others admit the tough real-estate market also played a role in the cutbacks.”
“‘If sales are down, revenue is down,’ said Ruth Pino, a Carlson GMAC branch executive in Gloucester.”
“About 75 mortgage firms with significant Massachusetts operations have either quit the state or gone belly-up. ‘I would have to say 20 percent of (Massachusetts mortgage workers) have lost their jobs over the course of the last 18 months,’ said Kevin Cuff of the Massachusetts Mortgage Bankers Association.”
The Boston Globe from Massachusetts. “The collapse of the residential real estate market has stalled ambitious efforts to turn the Fort Point district into a lively, hip neighborhood of homes, offices, shops, and night life.”
“Instead, with the office leasing market in Boston surging and space scarce, developers are choosing to convert the funky old brick warehouse buildings to office and commercial uses.”
“‘That community with lots of residents is going to take a lot longer to achieve than had been anticipated by the planners,’ said Vivien Li, executive director of the Boston Harbor Association. Li said the area is getting busier, but ‘it tends to be driven by the office workers and people coming to the restaurants.’”
“The sale last week of two warehouse buildings on Summer Street vividly highlights these abrupt market shifts, and symbolizes disappointment within the community that the old Boston Wharf Co. district will not soon teem with life 24/7.”
“Archon/Goldman, the former owners, had initially envisioned converting the two properties into luxury condominiums, launching the area’s transformation into a community where people live, work, and play.”
“As recently as last year Archon/Goldman and others were promoting a vision of Fort Point in which upscale residential units would replace cheap artists studios. Even families would live there. Young professionals could walk to work. The sidewalks would be crowded at noon and night with pedestrians and shoppers, with restaurants and clubs adding to the draw.”
“Valerie Burns, a Fort Point resident, said there’s some unhappiness about the slow development of residences, but no panic. ‘I just think there’s a sense of reality about how fast the neighborhood is going to grow,’ she said.”
“Another property owner, Commonwealth Ventures LLC of Southport, Conn., is pushing ahead with redevelopment of the office space component of Channel Center…while holding back on additional residential it had targeted for the center.”
“On nearby Congress Street, Berkeley Investments recently elected to rehab one building into first-class office space with ground floor retail, while holding off redevelopment of 381 Congress, to see whether the office sector reaches saturation or the condo market recovers.”
“But Berkeley is testing the residential market with 92 luxury condos at FP3. Prices will range between $350,000 and more than $2 million. It will open in the spring, and will have a large restaurant complex.”
“Richard M. Griffin, VP of acquisitions, said the company decided to stick with its original condo plan for the project because the buildings were better suited for residential uses, and that it would have been too much to make all of its 1 million square feet of property commercial space.”
“‘We’re accomplishing what we set out to do in the neighborhood,’ said Griffin.”
“Berkeley has sold about 20 percent of the units, he said.”
“If successful, the combination of Berkeley’s condos, additional office workers, and new entertainment and dining venues could persuade other developers to revive the residential component in the Fort Point neighborhood.”
“‘Once you make the buildings lively at a ground level and add amenities, more than just a Dunkin’ Donut,’ it will attract both residents and workers, said John Miller of Lincoln Properties.”
‘As recently as last year Archon/Goldman and others were promoting a vision of Fort Point in which upscale residential units would replace cheap artists studios. Even families would live there. Young professionals could walk to work. The sidewalks would be crowded at noon and night with pedestrians and shoppers, with restaurants and clubs adding to the draw.’
‘Valerie Burns, a Fort Point resident, said there’s some unhappiness about the slow development of residences, but no panic.’
Don’t panic Valerie, you just bought into a load of ‘promoting a vision’ and now get to pay for it for a few years, while the developer spends your money in the Caymans.
I hear Cayman vaults are flooding substantially, due to Gulfstream V Effect.
I live in an area that’s a bit like the one described in the article. We have more than our share of artistic types around here, but they’re not in the majority.
What’s moving into the area could best be described as solid middle class. Not artsy. Not hip. Not edgy. They’re just salt-of-the-earth people who are looking for affordable housing in central Tucson.
Mmmmm, Tucson.
I miss it. I spent a few days there this past Thanksgiving, Slim.
What is so wonderful about Tucson is that the initial waves of stucco garbage in the ’50’s and ’60’s completely missed it. They were still building houses out of brick (well, slump block) into the ’70s’.
I love all those neighborhoods where every damn house is different and many of them are on .75 acre lots.
Cheers!
Lavi, we’ll have to get together when you come back this way.
And, be forewarned, HBB-land, the Tucson HBB meetups are going to come roaring back in the New Year. We will be meeting under the “It’s Different Banner.”
Oh, silly me. I should have called that banner the “It’s Different Here” banner.
…the Tucson HBB meetups are going to come roaring back in the New Year.
Excellent. I plan to make more visits to Tucson this coming year.
You can’t ‘make’ an art district, it just happens. About the best these developers could ever hope for would be faux hipster doufuses. Old Key West for example wasn’t ‘planned’, it just happened, then the developers tried to come in and make it even more artsy and just f$cked it up. Key West will go back to an actual artsy town as this bubble implodes. Apparently back in the 1950s Key West was a seedy dump, which is how it became the town with flavor that it was til a few years ago.
You can’t ‘make’ an art district, it just happens.
Correct, Andy.
Generally artists like to find places that are cheap and realtively safe. They settle in and do the grunt work. After the restaurants and shops appear, come the galleries, boutiques and nightclubs. Around this time professionals looking for a hip urban experience figure out the neighborhood is a cool place to live. This process occurs over a period of time, it doesn’t just get zapped into place because some developer decided.
You can’t ‘make’ an art district, it just happens.
Correct, Andy.
Generally artists like to find places that are cheap and realtively safe.
Fort Point WAS an arts district. I had a studio there for two years and was surrounded by painters, printmakers, photographers, etc. It was a very large community of creative people. They”ve all been pushed out for luxury condo developments.
I spent most of my adult life hanging out with the artsy, hip, edgy crowd.
Most of ‘em are teachers now, or work $10/hr service jobs at coffee shops, book stores, record stores, etc.
Ain’t no way in a normal economy they could afford a $350K+ condo.
…The sidewalks would be crowded at noon and night with vagrants standing around a barrel of burning rags pedestrians and shoppers browsing storefronts filled with knockoff video cameras, cell phones and boom boxes offering no payments for 90 days, with restaurants “taco bell” and “strip” clubs adding to the draw.’
“Young professionals could walk to work.”
These people need to get off the New Urbanism joy ride. Do they even open their eyes when they walk about?
My neighborhood has plenty of public transit and is very walkable - but the “young professionals” clog the streets with their imported sedans and sissy crossover SUVs nonetheless. Even with $3 gas the walkable city is a myth - so stop trying to sell it, REIC, against the stark reality. Poorly planned development got us into this mess and more poorly planned development won’t get us out. We need real transport planning/policy - not more artist renditions of yuppie theme parks!
Yeah Ben, I think the Fed knew exactly what they were doing. It was engineered thusly. There is nothing Federal about the Fed. It is a privately owned bank. And these private owners control the economy. Maybe if they microchipped us then they would have full control. Nah, that’s conspiratorial. Er, but, could they possibly have motives that are not in are best interest? Who knows because: The owners of the Fed is a SECRET. OK smart ones, how come they keep the names of the owners SECRET?
“‘In my country it is different. No one can come and take your home away from you,’ said Marie Chantale, who must pay about $8,000 a month beginning in April, or lose her home to foreclosure. ‘Here, if they know you don’t know what you are doing, they take advantage of you.’”
In my country (I’m a naturalized citizen) you will never buy a house without money.
‘Here, if they know you don’t know what you are doing, they take advantage of you.’
Right, like nobody gets taken advantage of in Haiti.
Aren’t we better than Haiti? With all the flag waving we’re #1 bull$hit going on, you’d think we’d offer up real protection for people who just plain get taken advantage of.
Taken advantage of? She’s a baby sitter with a $8,000/month mortgage!
Ben,
So these immigrants should have known better but the fact that the mortgage broker and real-turd did not perform due diligence as a means of good practice and attempt to dissuade these two losers from a known hazard is acceptable?
At least she can leave and go back to Haiti. The bill collectors won’t go there.
These people admit to not even asking any questions. They are only a victim of their own stupidity which you and others freely and often criticize, with much justification.
Now suddenly they’re victims you want to save?? Nice lack of consistency. At least you’re still consistent with getting in your slams. Thank you for your tolerance of diversity. Truly inspiring.
Oops, sorry Ben, posted in the wrong spot.
I’d say.
LOL @ exeter, you can’t be serious… I’m finding it hard to believe that a cab driver and a babysitter thought they could buy a house for 520k nevemind make a payment of $4800.00.
Do cabdrivers make that much in New York to even put $4800 a month piti within reach by any stretch of the imagination. Brokers did their part sure, but I mean really…come’on
Go back and READ what I posted. Did I suggest ANYWHERE that they ought to be bailed out? For God sakes some of you guys are friggin’ narrow in your logic. These morons from Haiti are clueless and we all know it. The Real-Turd and mortgage broker took advantage of the situation. Had there been clear and concise criteria for qualification, this situation for the immigrants would never happen, the investor wouldn’t have been scammed and the bank wouldn’t be taking a needless and stupid loss. But no…. we’d rather excuse deceptive and scurrilous real-turds and mortgage brokers.
get a grip.
Maybe “it’s different” in the northeast….flag waver bad, FB good.
Exeter is correct. I don’t think these guys should be bailed out either but the Real-turd and broker bear some responsibility. Brokers are already getting it in the shorts and if you ask me it’s time for the Real-turds to get their’s now. Why are Real-turds not regulated like other people who give financial advice? Why should Real-turds be allowed to tell people “real estate never goes down and you can’t go wrong with real estate”? Why should they be allowed to tell people things like, “you can always refinance later and if things go bad you can sell in a year or two at a profit”? A stock broker or financial planner could never make claims like that about any investment. They are barred from doing so by their own regulatory body. So I ask you all WHY AREN’T THESE FRACKIN REAL-TURDS REGULATED!?!
End of rant…
Exeter
The Real-Turd and mortgage broker took advantage of the situation.
Come on we all know how things were getting at the end! For these guys it was do or die. I’m quite sure the Real-Turd and MB had no choice at this point but to lie cheat and steal. It was simply impossible for first time buyers to buy, there was nothing available to qualify for. The equity train was running out of new buyers to burn for fuel and now sits dead on its tracks.
Good point, exeter. From the stock market bubble of the ’20’s and crash in the ’30’s, we got the Securities Act, Securities Exchange Act, Investment Company Act, Investment Advisers Act…
I know some people tend to think all regulation is bad prima facie, but the reality is those laws have done a hell of a lot of good. With any luck, perhaps in the aftermath of this debacle we will have a better regulated and more transparent real estate market.
Right on AC. the flag waving anti-regulation screech monkeys are silenced the minute they or someone important to them are on the losing side of a transaction wether it’s real estate or anything else.
The GOOD part is :
working 18 hours a day doesn’t leave much time or energy to create a family….
It takes a few minutes to create a family, if they are really in the heat.
Do I want to be in a cab where the driver has been driving 18 hours straight? “Hey, buddy- WAKE UP! …. I think I’ll get out here if you don’t mind…”
Sorry but one basic thing wrong here with this housing economy is that dumps are priced to suit a median income and moderately decent houses are priced to put a median income couple into the poor house eventually.
I disagree with “Dear John” and believe that housing values need to come down to where they are more in line with incomes.
Home values were inflated to obligate stupid buyers so banks and financial hacks could make more money on reselling their loans at prices that are out of line with the actual value of the stupid house that started all of these FB-er transactions.
In other words, a greedy time has been had by all.
Haitians are a tight community in New York…and if her husband is a cabbie, he’s no befuddled goat-herder.
Odds are her ‘community’ realtor got her into the house, and her paperwork is stated lies. And she bought more than a half a million dollar house? She believed what she wanted to believe–that she could game the American system for a fortune. Well, game over.
Your biggest purchase, financial layout of your life. etc, and your not going to get a 2nd, 3rd or 4th opinion - give me a break. Yes blame everyone else except the person that is ultimately responsible - look in the mirror buddy.
You are so righ Exeter! So right! I know for a fact, that it is immpossible for a person from Haiti, to be a lying, greedy, con-artist thief! It is just IMMPOSSIBLE! At least, in your mind it is. Shut off the GD flute music and open your eyes!
No doubt! I’m very liberal, but when I read that line I nearly threw up in my mouth. The idea that Haiti, the poorest country in the Western hemisphere, has a more ethical culture is absurd.
Imagine financing a house in Haiti. It’s a failed state for crying out loud. And house means a shack made from garbage that’s sliding down the hill. I have great compassion for the unfortunate folks who were born in such dire circumstances, but to compare the situation there unfavorably with the situation in the US is really pushing it.
A Haitian taxi driver with a 500K house.
And I am afraid to spend over 250K.
The world has gone mad.
The difference is that you know how much money $250,000 really is. He just looks at it as a monthly payment.
“A Haitian taxi driver with a 500K house.”
I’d love to see how fast he drives in order to maximize his daily fares. I offered a guy a fixed amount of money once to take me to La Guardia from Port Authority, and that guy drove like Mario Andretti! Except Mario doesn’t wear a towel on his head.
That’s because you plan on paying for it.
And house means a shack made from garbage that’s sliding down the hill.
That would explain why no one in Haiti takes people’s homes away - it’s simply not worth the trouble.
“And house means a shack made from garbage that’s sliding down the hill.”
Wait… are you talking about Marin or Malibu? Or… sorry. Haiti. Got it.
“And house means a shack made from garbage that’s sliding down the hill.”
Wait… are you talking about Marin or Malibu?
Obviously you have never been to Malibu..
I stand (or sit) corrected. I meant the “sliding down the hill part” and failed to see “garbage” in my morning daze. Teach me to copy and paste before having coffee.
And what happened to Jose Padilla is nothing compared to what the Tonton Macoutes would do to you.
In a way they did get taken advantage of.
If a house in suburban Elmsford is going to available to a Black, immigrant family, then it’s going to be available to a Black, immigrant family. The only issue is price. And because of the bubble, they overpaid. A conventional mortgage on the same house at $250K, and they can make the payments.
And that’s where we need to go. Though the suburbs aren’t going to like getting there, and in the end they’ll be lucky if they are home to people who work as hard as these.
“Dear John: Don’t you think that it would be best for everyone if the price of a house was to go so low as to make it affordable again for normal working people?”
Yes!
As the son of immigrants, I can tell you people to NOT underestimate them. They know exactly what they are doing. They are just like everyone else - it’s ingrained in their head that property “always goes up”. And indeed it is true in their homelands where inflation sometimes goes to 100% (or more) per year.
My father in-law took out a $150k home equity loan to build a house in his home country. This after his educated son in-law (me) told him not to do it and we wouldn’t bail him out.
Now the NY house price has fallen and the house in the home country is 1 year behind schedule as the contractors are taking their sweet time.
Let’s not forget mortgage payments are being made on the NY house because there is still $200k (1st mortgage) and $150k (HELOC).
Recently my wife told me that they wanted her to ask me for $5,000. It’s not a lot of money, but it’s the principle - especially after they treated me pretty bad but that’s another story. I want them to feel real pain before I step in.
Pension income is about $4,500 per month including Social Security.
Immigrants are addicted to debt.
Immigrants are addicted to debt.
My parents were immigrants and debt-phobic. The only time my dad carried debt was if it was advantageous to his business’s tax return.
(I know anecdotes aren’t going to prove anyone’s point, just weighing in with the opposite experience.)
In USSA, House Foreclose on You.
(yeah, it makes no sense)
In Soviet America, condo flip you!
LOL!
Ha! Good ‘un.
I bet they don’t have JT’s in Haiti as well.
“Not Enough Effort Was Put Into Understanding The Risks”
When a bunch of neophites on a message board can figure it out, I have a hare time believing this statement!
‘Tobie Stanger, a senior editor at Consumer Reports, recalls how real-estate expos around the country attracted potential investors wishing to make a quick buck. Nobody was immune to the lure, she said, and not enough effort was put into understanding the risks.’
‘Don’t just blame the borrowers,’ said Stanger. ‘People at the top of the food chain, too, didn’t know.’
I guess we can count Consumer Reports at the top of the food chain, too. Cancel my subscription!
I guess we can count Consumer Reports at the top of the food chain, too. Cancel my subscription!
I blame the borrower for not doing the math and research! Just too many people (sheeple) out there that want huge rewards without doing the work.
“Nobody was immune to the lure”
NO, lots of us were immune to the lure. Consumer Reports is now flat-out lying.
The Journal News reports from New York. “For months Marie Chantale Joseph and her husband, Daniel, have been unsuccessfully trying to refinance their home before their interest rate spikes in April. Already, Daniel, a taxi driver, is working 18 hours a day and on weekends to pay the approximately $4,800 a month they owe, and Marie, a babysitter, works as many hours as she can.”
Ok…
Here’s your reality tv show:
Pit the strawberry picker in California with $750k house, vs. the taxi driver/babysitter Vooduo in New York with $600k? house, vs. any number of Floridian property owners (just pick one @ random).
The reason why the banks won’t refinance is because the banks need that $4,800 a month to pay off the losses on the places that have already gone into foreclosure.
Its also why the banks bagman Greenspan wants to give cash to these people so they can then give it to the banks. The banks made their fees off of the strawberry pickers and taxi driver/babysitter but now they don’t want to bear the costs of their bad decisions
Here’s your reality tv show:
Pit the strawberry picker in California with $750k house, vs. the taxi driver/babysitter Vooduo in New York with $600k? house..
- We will pit any of our SoCal idiots against all comers!
Brilliant!
Pit the strawberry picker in California with $750k house, vs. …
Who Wants to be a Debtonnaire?
Only if we can get Regis to m.c. it.
“Marie Chantale says she and her husband didn’t know the financial implications of their mortgage when they bought their home in Elmsford. Their mortgage broker gave them very few details, she said, and they didn’t ask many questions. Their only home-buying experience was in their native Haiti.”
Could there be any Creedence to her statement?
http://www.youtube.com/watch?v=4R6nmKjcSeU
If you didn’t see this bubble years ago, then you should park your money underneath your mattress.
Very obvious to anyone who understands markets even marginally.
When the herd is bragging. Go the other way…..
–
“Tobie Stanger, a senior editor at Consumer Reports, recalls how real-estate expos around the country attracted potential investors wishing to make a quick buck. Nobody was immune to the lure, she said, and not enough effort was put into understanding the risks.”
Most promoters are charlatans. Why would they waste their time “into understanding the risks?” Not only they underplay the risk, they even deny there is any risk in real estate. Money is out there to be picked like fallen fruit fro a tree.
If you can make a quick buck, and keep it, what do you care what happened to the gullible at the other end of your promotion? It does boil down to morality, and not legality, of one’s actions.
Jas
Amoral or immoral? I tend to believe that a culture of moral relativism has reduced us to the lowest common denominator which is amorality. Good or bad, right or wrong does not even enter peoples minds during their quest for the dollar (or the quest for yield for that matter.)
There has never been ethics in finance.
“Good. Bad. I’m the guy with the gun.”
“Rochester’s real estate market is continuing its zigzag pattern. Compared with areas such as Florida, Rochester is in good shape. ‘Rochester now proves out to be the hot spot of real estate in the U.S.,’ said Bob Miglioratti of ReMax Plus in Brighton.”
“The market has slowed from its recent peak in 2005, though certain areas such as Brighton remain strong, said John Arquette, general manager of Nothnagle Realtors. But ‘there is an abundance of listings in Greece,’ Arquette added.”
I was born in Rochester and spent my early childhood there. As a matter of fact, as an infant my first bedroom was a closet in my parents’ cramped apartment in Greece, NY. Characterizing Rochester as a real estate hotspot is like calling a carp a game fish. That area has exported people for decades.
Carp is the traditional xmas dinner for Bohemians like me…
Never touched it.
Must be served with potato salad. Delicious….
I know we Bohumks are cheap, but wow. Never heard of that one!
I have memories of my Dad taking me fishing on the Erie Canal. The catch was limited to a couple of carp.
Carp is the traditional xmas dinner for Bohemians like me…
Ick. Two strikes against carp - they’re bottom feeders (I’d hate to think of what’s in their system), and there are a lot of bones to have to deal with.
It’s not uncommon for many a bathtub in Prague to have a couple carp swimming around for a few hours, before they get served for xmas dinner.
There is a great article in todays LA Times Business about the Palmdale / Lancaster forclosures.
It gets better!
Arnold announces Health Care for the entire state of Ca! Oh wait, it has to be approved by the voters.
Sobay,
I’m confused, last week Arnold declared a Fiscal Emergency because of a budget shortfall of 14billionup from 9.8 billion. So did you folks discover oil in Eureka, or were you planning to put the cost on the state’s credit card and then default? Botswana is far better managed than California–and that’s no joke.
“Dear John: Don’t you think that it would be best for everyone if the price of a house was to go so low as to make it affordable again for normal working people? I mean $700,000 for a crappy house in Jackson Heights, Queens? That’s what we are trying to protect? N.O.”
“Dear N.O.: Would it be good if real estate prices plummeted? Yes, for people, like my son, who are looking to buy into the housing market. But no, homes prices falling greatly would not be too good for people who already own a home, are over-borrowed against it and now face imminent financial danger.”
Dear John:
Then how come all you real estate rally monkeys cheered and insisted it was all good when prices shot up at an unrealistic pace completely funded by bogus money? And commissions for you remoras were at a all time high? And don’t you greedy little Leahry lapdogs think that those people already “over-borrowed” are going to default anyway, no matter what? So you want the prices to stay too high for the majority to buy with real money, so you have a rat’s ass chance to squeak out another 6% from any knife catchers out there that???
and…the Nobel Prize for economics goes to…
“‘If sales are down, revenue is down,’ said Ruth Pino, a Carlson GMAC branch executive in Gloucester.”
LOL!!!
Ditto LOL…..It’s interesting how CSNBC Business channel is now labeling the speculators defaulting as ‘The Housing Crisis “. Isn’t this wonderful ,lenders and speculators gambling bets didn’t pay off and now its a “housing crisis”. Firstly, the speculators didn’t plan on living in the property anyway, and second ,why is a gambling problem a National Housing crisis when the builders overbuild to sell to speculators looking for greater fools ?
The current problem should be called “The Wall Street and Institutional Lenders Gambling Problem”, or, “The Crime Wave That Hit America “.
I suppose if this news outlets call this a “Housing Crisis ” ,than all the cheerleaders start jumping around with rah rah rah and everybody will ignore Justice and just open up their pockets and save the gamblers .
I gotta ask……what’s the “S” in CSNBC??
S = Sinister or Sarcasm or just plain Silly
I thought it was an attempted portmanteu of CNBC and MCNBC
Me three on the LOL. And I really have to get to work!
Oh, just stick around the Arizona Slim ranch a little longer…..this is much more entertaining than work.
lmfao!!!!
Excuse me …CNBC …..meaning cable channel .
/////
“Dear John: Don’t you think that it would be best for everyone if the price of a house was to go so low as to make it affordable again for normal working people? I mean $700,000 for a crappy house in Jackson Heights, Queens? That’s what we are trying to protect? N.O.”
“Dear N.O.: Would it be good if real estate prices plummeted? Yes, for people, like my son, who are looking to buy into the housing market. But no, homes prices falling greatly would not be too good for people who already own a home, are over-borrowed against it and now face imminent financial danger.”
“Worse, all those millions of folks who did overextend themselves, now threaten the health of the US economy. This has become, as the economists say, a macro-economic issue of the highest level. So, on balance, I’d say that a modest drop in housing prices would be a good thing. A severe drop, not good at all.”
////
Not good at all. Not good for whom? For fools who either borrowed or loaned money that could not be repaid. And for other fools who thought their house was their sole retirement investment. Let us all keep paying while the little grasshoppers keep playing? Was that how the story went???
As for macroeconomics, I think Thoreau had it right:
“When masses of people are suddenly thrown out of work, it suggests they weren’t well-employed.”
I really hate this kind of talk. This is pure bluster, hand-waving without any supporting data. “Health of the economy”? What exactly does that mean? “Macroeconomic issue”? Please spell out in detail how requiring people to live within their means is a macroeconomic issue, and how it outweighs the macroeconomic issues of toxic loans and unaffordable housing.
What these people don’t realize is that there is no silver bullet here. They want small price declines for affordability reasons but no so much to hurt the overall economy. The problem is, with small declines houses are still utterly unaffordable and either people will not be able to buy (a deep freeze) or we’re setting ourselves up for more and more foreclosures in the future.
Maybe a long decade long Japan-like decline would appear to be the best solution for these people but I think that’s just prolonging the pain…
…but I think that’s just prolonging the pain…
Nuttin’ wrong with that. Lots of pain means that people are likely to be very, very cautious the next time around.
Maybe a long decade long Japan-like decline would appear to be the best solution
Not gonna happen in the US because of the following (even one of them would suffice):
1. Very restricted new supply in Japan kept prices falling slowly. In contrast US builders will keep building as long as prices remain above the norm - so who’s going to buy all those houses?
2. Culture of responsibility in Japan kept FB’s paying instead of walking. US - nuff said.
3. High Japanese savings rate supplied a cushion against financial distress. US - nuff said.
4. Because Japan doesn’t borrow from the rest of the world, it had the freedom to drop interest rates. The US cannot tell the foreign lenders who supply >$2 billion a day what interest to charge on their loans.
If he wants to talk macroeconomics, then what are the ramifications to the economy if his son pays $300k more for a home that he would havehad there been no bubble? Including financing, that’s over a half million dollars tapped out of other portions of the economy for the duration of that mortgage.
It really doesn’t mater what these buffoons say. It is inevitable FBs will lose their homes, prices go down, recession is coming. Feds can’t fix it. The train is almost at full speed. Everybody seems to be an expert but they never had experience preventing a recession. Not even Bernanke.
“‘When people are closing, they are in such a euphoria,’ said Vedeta Hanley, executive director of a Rockland housing service and referral agency. ‘A lot of people go on faith, and they believe that when I get to the fork in the road, there will be answers.’”
“Why is the cork on his fork?
To prevent him hurting himself and others…”
http://www.youtube.com/watch?v=nqMc9B7uDV8
Oklahoma…Oklahoma…Oklahoma!!!!!!
I have to go to the bathroom. Ahhhhhhhhh
Not mother?
“When people are closing, they are in such a euphoria”
Don’t they say the same thing about drowning?
Only a complete idiot goes goes into the largest economic decision of their lives without a guardrail of fear fencing in their euphoria.
‘i shop [for $h!ti can't afford]; therefore i am.’
I’m still waiting for somebody in the MSM to state the very simply obvious:
“prices will fall until the median home in an area is affordable to the median income in the same area.”
Why is this so difficult to understand?
Well, that’s not exactly true. First, there is a percentage of people who should never own a home. So I would take that group out of the mix before I considered the median.
Furthermore, you would also have to consider the move-up effect. Even in a stable market that appreciates at the rate of inflation, owners are gaining equity with this appreciation. (I’m talking real appreciation not bubble appreciation here.) They are also paying down principal so after 10 or 15 years they would normally have decent equity. They can then apply this equity to a larger house if they choose.
I would say the better estimate is that the median person could afford a median **starter** home as non-starter homes should usually be purchases by people have have a decent net worth saved up.
Well, that’s not exactly true
Well….yes it is. Doesn’t matter whether the occupant buys the house or rents it.
Rent = the real per month value of the house in the market place.
So the 30-40% who don’t own, will be renting.
And there is 100% of the population.
legal question- HOW can the fed make all these wild proposals ?
forgiveness-freezing- thawing
how is any of this within their authority ?
Regulating the expansion of credit is clearly within their authority. Problem is that it’s much too late for that for this particular cycle. The time to prevent this mess with prudent regulation of the expansion of something as potentially dangerous and destabilizing as credit has passed.
they could do road work etc……..
“Worse, all those millions of folks who did overextend themselves, now threaten the health of the US economy.
Nothing wrong with road work. A good friend’s late husband did it for many years.
‘Here, if they know you don’t know what you are doing, they take advantage of you.’”
Ignorance of the law is no defense! An educated consumer mitgates the likelihood of being taken advantage of by unscrupulous business practices. Hence, do the math and research before you sign the contract!
Today’s NYTimes has an article (online) saying that the few people who were trying to warn the fed officials about subprime lending excesses were rebuffed during Greenspan’s regime. I curse Greenspan everyday using choicest epithets. If my cursing has any effect, and past evidence shows it has, he will suffer badly in his dying days and in afterlife. He shouldn’t be allowed to talk to the media anymore. Hot tar should be poured down his throat to incapacitate him.
Excerpt from NYTimes:
“Edward M. Gramlich, a Federal Reserve governor who died in September, warned nearly seven years ago that a fast-growing new breed of lenders was luring many people into risky mortgages they could not afford.
“But when Mr. Gramlich privately urged Fed examiners to investigate mortgage lenders affiliated with national banks, he was rebuffed by Alan Greenspan, the Fed chairman.”
Also, they should cut his d*** off. Andrea Mitchell has no use for it.
Judas Beast
I just posted a comment about the proposed Fed rules which will “protect” future home buyers. Not enough proposed rules controlling realtors and brokers of course. In the article I read, they were also praising Bahgdad Ben Bernanke, cousin of Iraq’s propaganda office known as Bahgdad Bob, for stepping up to the plate to address the problems. The writer also mentioned how Mr. Magoo was lax in regulatory oversight when he was in office. Really! Gee, you think? My question: Then why was the press annointing Mr. Magoo with phrases like, “genius of economics” and “The Maestro?” We are knee deep in b.s and still sinking.
Excuse me while I go take a Greenspan.
…was luring many people into risky mortgages they could not afford.
Nobody forced those people to sign on the dotted line. It is the responsibility of the individual buyer to be aware of what they’re getting into, and exercise a healthy bit of caution and enlist the help of knowledgeable/qualified people if there are things they don’t understand, or are unclear on, about an agreement they are poised to enter into.
This just in: The Fed bringing in new regulations to protect home buyers in the future. I just read it quickly but one thing stands out very clearly: There are not enough regulations and penalties to control the realtorwhores and the mortgage brokers. Looks like the NAR and the Mortgage Brokers Association have a hand in what’s being written. Gee, what a surprise.
I read it too and must say all the recommendations are common sense. This has always been the problem with the “no regulation” crowd. They become so brainwashed by the notion that any regulation is bad, but they don’t realize that in most cases regulation is designed to protect…you and me.
Regulation is almost always the result of RECKLESS unregulated corporate behavior. Here’s an idea.
If you don’t want your industry regulated don’t act like assholes.
I wonder if the FED realizes that the proposed regulations will mean fewer buyers able to get financing, which means lower house prices, which means more defaults, which means more banks in trouble, which means more FED action to bail out the banks, etc, etc, etc…
- Fewer buyers = they shouldn’t have qualified in the first place
- Lower home prices = true market prices
- More defaults = reality
- More banks in trouble = their own fault for being stupid
- More Fed action to bailout banks = guaranteed
Except the last part, it all sounds good to me.
There is an inherrent conflict between preventing people behaving stupidly and protecting them from the consequences of their actions if they do. Almost any action that tends to prevent bubble formation will tend to deflate the current bubble more quickly.
Actually I don’t think there are any regulations in this for the Real-turds. They are getting off scott free.
‘In my country it is different. No one can come and take your home away from you,’ said Marie Chantale, who must pay about $8,000 a month beginning in April, or lose her home to foreclosure. ‘Here, if they know you don’t know what you are doing, they take advantage of you.’
Yeah, in Haiti no one takes advantage of you, everybody is fair, the government is honest, and there’s a pot of gold at the end of the rainbow.
There’s not really much profit in re-possessing shacks and there’s a good possibility nobody knows who owns the land anyway. Besides which, give the local police chief $50 and he will protect you even if you’re in the wrong. Of course, if the guy repossessing gives the police chief $75, you have a problem - or you can up the anti to $100. You gotta love these people who come third world toilets and come up with the, “In my country,” crap….
My unpolitically correct thought always is “go home” if it sucks so bad and you don’t like the rules/culture here. Immigrants almost always have that choice. I’m guessing that she’s not going to go back, just like my esteemed upstairs neighbor from the Sudan, who is disgusted with the American “lack of culture” is a permanent leech here.
just like my esteemed upstairs neighbor from the Sudan, who is disgusted with the American “lack of culture” is a permanent leech here.
That made me chuckle. I can almost see this person - like an incidental character in a humorous novel - living on government assistance and constantly bitching about the crassness of American culture.
Funny you say that, as I could bet a mcmansion that he/she/it is complaining about a lack of HER/HIS/ITS culture….
Yet if asked is completely unaware of any other culture but his/hers/its!
WTF? How did somebody from Sudan even FIND Vermont? Bizarre.
“Rochester’s real estate market is continuing its zigzag pattern. Compared with areas such as Florida, Rochester is in good shape. ‘Rochester now proves out to be the hot spot of real estate in the U.S.,’ said Bob Miglioratti of ReMax Plus in Brighton.”
Rochester had it’s Kodak moment, eons ago.
“‘Someone will not be able to sell their house for the $350,000 that it’s worth when a bank is selling the same home down the street for $300,000,’ said Mark Oswald, a Realtor in Londonderry.
Stunning. Just stunning. I love quotes like this.
idiotic comment…it depends on the deal. if they are putting 50% down..they can go forward. if they only have 5% down they have to come up with the balance. the question is will they or should they. Its not that they can’t. Welcome to the real market. Is that 50k worth it in the long run or is it bad money thrown away. I have seen it happen in corporate relo programs.
“‘Someone will not be able to sell their house for the $350,000 that it’s worth when a bank is selling the same home down the street for $300,000,’ said Mark Oswald, a Realtor in Londonderry.”
Does he mean that the house is worth $350,000 even though it would only sell for $300,000 at most? What does “worth” mean? I thought it means the value that it would actually sell for, not some arbitrary value.
Someone will not be able to sell their house for the $350,000 that it’s worth…
The Force is definitely strong in this one.
What does “worth” mean?
It’s worth as much as someone is willing to pay!
Just ’cause some punk owes 350K on a shack, doesn’t make it “worth” 350K.
I feel Patton comming on.
“No poor dumb punk ever made a house worth $350k by owing that much on it. You make a house worth $350K by finding some other dumb punk willing to owe that much on it.”
but I thought Best buy - was kickin asz
http://finance.yahoo.com/q?s=BBY
A World War 2 Dear John letter was bad news, it meant your honey left you for an available man in the states, while you were fighting overseas…
Here’s today’s version:
“Dear John: Don’t you think that it would be best for everyone if the price of a house was to go so low as to make it affordable again for normal working people? I mean $700,000 for a crappy house in Jackson Heights, Queens? That’s what we are trying to protect? N.O.”
Aladinsane, that was my first thought when I read this letter. As in, “Dear John, I’ve had enough of this housing market, and I’m not going to pursue a relationship with a house until it’s affordable.”
$700K for a 2 family is about right….And just 7-8 years ago it was worth 1/2 that, and might just might at $350K break even as a rental.
Like someone is going to pay $2500-3000 a month for a 3 bdrm rental in jackson heights…
Dec. 15: Illegal immigrants are rethinking their decision to make the U.S. their home, and instead are heading north to Canada. NBC’s Kerry Sanders reports.
Psst. Canada, I have a friend of a friend over at the Turkish embassy..
I saw that. There’s a loophole in Nafta somewhere that lets undocumented mexicans cross into Canada. They interviewed a mexican family, jobless, enjoying a government supplied apt., food and health and education. It was Windsor, Ont. , just across the border from Detroit. Also said they were kicked out of Collier County, Florida, where the cops are now allowed to enforce immigration laws.
Canada does not tolerate illegal immigration. Besides a strong commitment to the rule of law, Canada also has a very large legal immigrant population who do not want illegals competing with them for jobs and social services, so illegal immigration is opposed right across the political spectrum.
Australia is like this as well.
Yogurt,
see if you can find the video from nbc evening news…I looked at the website but didn’t see it. They interviewed a Canadian gov’t official who conceded that what the Mexicans are doing represents a loophole in Nafta..sounds like the Canadians will have to close the loophole in the treaty to protect themselves.
But for now, Windsor Ontario and it’s taxpayers are footing the bill for the Mexican family booted out of Florida.
“‘Once you make the buildings lively at a ground level and add amenities, more than just a Dunkin’ Donut,’ it will attract both residents and workers, said John Miller of Lincoln Properties.”
How about adding a Voodoo store?
You’ve got the voodoo economics thing going, already.
It would compliment the surroundings…
I dunno, the Dunkin Donuts is the liveliest business where I live. On the other hand, the variety store across the street selling the commemorative Tupac Shakur shirt with the inscription: “I ain’t mad at ‘cha” - not so much.
…the Dunkin Donuts is the liveliest business where I live.
If there’s thugs and graffiti, would that make it a “Punks’n'Donuts”?
Here is the sort of people who have been running America’s mortgage market, per Bloomberg:
“One week in 2002, Daniel Sadek was $6,000 short of covering the payroll for his new subprime mortgage company, Quick Loan Funding Corp. So he flew to Las Vegas and put a $5,000 chip on the blackjack table. ‘I could have borrowed the money, I suppose,” Sadek says. That wouldn’t have been his style.”
http://www.bloomberg.com/apps/news?pid=20601170&refer=home&sid=alNDZa.Hm6O0
“The great proof of madness is the disproportion of one’s designs to one’s means.”
Napoleon Bonaparte
Here’s a surprise
What Stipanovich, 58, hadn’t told his boss, Florida Chief Financial Officer Alex Sink, was that Lehman Brothers was the same firm that had sold the state fund $842 million of mortgage- backed debt in July and August. Those securities defaulted within four months, and totaled more failing debt than any other bank sold the state, Florida records show. “At the time, I never knew it was Lehman Brothers that actually sold us these investments,” Sink says.
Sink also was unaware that former Florida Governor Jeb Bush, who incorporated Jeb Bush & Associates in February 2007, a month after completing his second term, had been hired as a consultant to Lehman Brothers in June.
http://www.bloomberg.com/apps/news?pid=20601109&sid=aj3K4H7aXnBM&refer=home
ie Lehman paid Jeb a load of cash to get Florida to buy worthless paper. That family is amazing.
“‘In my country it is different. No one can come and take your home away from you,’ said Marie Chantale,”
Haiti. I guess she’s saying that it’s better there. Well, let me tell you about Haiti. I was there in 1993 when Aristide was ousted by Baby Doc. The place is a complete sh!t hole. There isn’t even a government to corrupt because it’s complete lawlessness. Think Compton or Crenshaw on a nation-state level. I can think of few places on this planet that are worse than Haiti - it’s that bad. Yet here she is suggesting that it’s better in Haiti because there a bank can’t take your home. That suggestion is so inane and insulting, I don’t even want to comment further. Rather, I suggest we grab both of them and ship them back to their land of home ownership paradise - Haiti.
I didn’t intend to start a separate thread on this, but when I read the comment I became furious and had to fire off an immediate post. Usually I check for proper placement.
I’m still grinding my teeth thinking about these ungrateful you-know-whats.
Here’s a song to steel your nerves…
http://www.youtube.com/watch?v=HcokCLbdxuw
I’m pretty sour on immigration, legal or illegal, as well as the refugees the Feds foist upon us. I live in ny and i run into a lot of the same attitude from a variety of ethnic groups…
it’s not about coming here, being self-sufficient and contributing to the country, it’s about what America can do for me…I’m here, i’m an immigrant, i got my hand out.
Haiti is still officially the poorest country in the western hemisphere, I think. No mean feat.
What is intersting about this thread is that, if you come from Haiti, your point of reference is so twisted that you have no idea what a house is supposed to cost. So you borrow the 500K-plus for an Archie Bunker-like place in Queens with 20 years of deferred maintanence and you think, hey, I’m from Haiti, this is Buckingham Palace! It’s got running water!
Meanwhile, the cabby husband can clear $200 a day driving, if he works 12 hours. So if he takes one day off a week, he can actually make the nut on the $4,800 mortgage (until it resets).
They live off the wife’s babysitting money and life is good - if you’re from Haiti.
So I am not as shocked at this as posters appear to be. If you just moved to Mars, how the hell are you supposed to know what “normal” is?
They actually beat out Cuba?
Yes, by a long shot.
A little info on Haiti…
“An estimated 80% live in abject poverty, searching for scraps of food to survive or pieces of refuse to build a lean to. More than half of the population, including two-thirds of the children, suffers from malnutrition. About 76 of every 1000 children die before reaching their fifth birthday… Haiti’s literacy rate is about 53%.”
The impovershed take a bit of sugar, water or milk, or whatever they have and mix it with CLAY to eat. Mr. & Mrs. Chantale may not be feeling lucky right now, but - even after the unfortunate loss of their home - they have got to know full well that they’re better off as FBs in America than are 80% of Haitians.
http://www.foodforthepoor.org/site/c.dnJGKNNsFmG/b.3459377/