Most Of This Pain Could Have Been Avoided
It’s Friday desk clearing time for this blogger. “Clearwater leaders hailed the $100-million Water’s Edge condominium tower as the catalyst that would kick-start downtown by creating a high-class residential base. But a newly discovered mistake in the purchase contract between buyers and the seller threatens to puncture the city’s vision and leave the developer with a mostly empty tower.”
“Buyers can opt out of the sale and get their deposits refunded, plus interest. With the condo market in a downward spiral, some local real estate agents, brokers and city leaders expect that to happen.”
“Jim Warner, a broker on Sand Key, said he knew one speculator who was ready to walk away even before the mistake was discovered. ‘That’s the option,’ Warner said. ‘They should build a big door because that’s where people are going to go - out.’”
“The cocktail parties in which 100 or more condos were sold in a matter of hours are long over. Now, developers are happy to sign a few buyers in a month. With more than 1,000 condos opening in six towers in 2008, this will be the year that Nashville residents show whether urban living is something the city will embrace or let fall flat.”
“Those who plan to sell or rent their units said they see little chance of prices collapsing below their initial investments.”
“‘I think for the pre-construction buyer, it’s a good deal,” said Ke Qin, a 26-year-old engineer who bought a unit in a building that, during the height of the condo frenzy two years ago, once put a block of 200 rooms under contract in less than two days. ‘The prices are very reasonable.’”
“It was a rough year for Sullivan’s real estate market, and that could mean bad news for the county’s economy in 2008. Not only were there fewer sales and dropping home prices, but also more people are losing homes and properties to foreclosure.”
“David Knudsen, a Sullivan Realtor, said the market hasn’t dried up, just changed. ‘I’m not seeing Wall Street up here shopping this winter,’ he said. ‘In a typical month in 2005 and 2006, I would be contacted by three or four investors looking for large-acreage parcels to subdivide. I haven’t heard from an investor looking for parcels to subdivide for at least three months. To me, that part of the market has just dried up.’”
“Realtors in Greater Cincinnati continued to paint an optimistic picture of the real estate market. That did little to help the stress level of Thomas and Rachel Dzieran, who have been trying to sell their Mason home for 18 months.”
“They paid $475,000 for their house on Rosebrook Way. It was recently appraised for $455,000 and they just reduced the asking price to $439,000. They also have a second mortgage, via a home equity loan.”
“‘We’ve lost equity,’ said Rachael. ‘We actually cashed out part of my retirement to purchase the home, so I lost that other retirement equity and didn’t get any equity in the house.’”
“Thomas Dzieran said he believes when the house sells and closes, he’ll have to write the buyer a check for between $20,000 and $30,000. ‘We thought the market would be fine if we needed to move and it’s not,’ he said.”
“The real estate market in Lincoln, Neb., is usually as good or as bad as the annual harvests. Not last year, says agent Marcia Weddle. ‘Farmers had a great crop, it didn’t get hailed out and real estate has gone to heck in a hand basket,’ she says. And now, foreclosures, though still relatively low, are popping up in a city that 30 years ago rarely saw one.”
“Sales of newly built homes have been falling since 2003, when it seemed every door framer had become a contractor and built homes on speculation, says broker Bob Moline. ‘Those guys are gone,’ Moline says.”
“Still, he says, many buyers assume they have the advantage. They’re coming in with low-ball offers of 15% to 20% below the asking price, so sellers have to negotiate to get the deal done.”
“Housing starts in Eudora, which had been humming along in the earlier years of this decade at nearly 100 annually, slowed to a mere nine in 2007.”
“Higher energy costs, tighter credit policies because of bad loan practices and a glut of new homes on the market as builders sought to take advantage of what had been a boom market all contributed to the slow down.”
“The best use of the current respite could be much to make the city affordable and livable when housing development booms once again.”
“Super-low interest rates. Strong economy. Low unemployment. Lots of people moving into the state. That’s typically a recipe for a booming housing market. But not now, and not in Utah.”
“‘Housing prices are out of whack with incomes and there needs to be price adjustments,’ said Wells Fargo economist Kelly Matthews said. ‘There’s no way we are going to be able to work our way out of this situation without having some price adjustments. We’re just too far out of line.’”
“Cindy Huerta is trying to sell her 3,700-square-foot home near downtown Salt Lake City and has lowered the price from $699,000 to $579,000 for buyers who don’t have an agent.”
“Huerta bought the home in February of last year. But in August, she was forced to shut down her subprime mortgage company when business dried up. She has since found a full-time job at only a fraction of her previous income. Even if she sells the property for $579,000, Huerta said she is going to have to bring about $20,000 in cash to closing.”
“Even so, she is hoping for a quick sale because each month she is draining her savings to stay afloat. ‘I can’t keep this going for months and months,’ she said.”
“The head of homebuilder Ryland Group Inc. didn’t offer much hope for a quick turnabout as he discussed his firm’s losses Thursday, saying there is no end in sight for the housing slump.”
“Calabasas-based CEO R. Chad Dreier said home prices were ‘very high’ in both Northern and Southern California. Despite recent price declines, ‘it would take a pretty strong deal, with a great price and good terms to convince me to jump into that market,’ he said during a conference call.”
“During the late great housing bubble, as my personal worth inflated like a cheap Miami boob job, I naturally felt obligated to peruse the editorial pages of The Wall Street Journal.”
“My millionaire status was based on the assumed worth of a 70-year-old stucco cottage. Lately, my million-dollar house isn’t. Not even close. And The New York Times reported Wednesday that some leading economists are now saying it never was. Worse, the economists said that current real estate prices need to fall another 30 percent before Florida real estate gets real.”
“So not only am I not a millionaire anymore, turns out I never was.”
“Banks in Spain are being penalized as fallout from the U.S. subprime market makes its way to the country that contributes most to Europe’s economic growth. A rapid cooling of Spain’s housing market will reverberate through Europe because the country has contributed more than a third of new jobs in the region and accounted for almost a quarter of consumer demand over the past two years, according to Lombard Street Research.”
“‘This country has been living off easy credit since 2001,’ said Gonzalo Bernardos, professor of economics at Barcelona University. ‘Everything became so cheap that people started to speculate. This is going to get worse.’”
“The biggest barrier to stabilizing the chaotic U.S. housing market is the oversupply of homes that cash-strapped builders are flogging at rock-bottom prices, former Federal Reserve chairman Alan Greenspan says.”
“‘If there were some kind of alchemy whereby we could pick up all these 300,000 units, that would stabilize the markets,’ Mr. Greenspan told a Vancouver audience.”
“Mr. Greenspan also defended much-reviled subprime mortgages, which were typically extended to borrowers who wouldn’t qualify for conventional loans. The products were valuable because they made it easier for more people to buy homes, he said.”
“In his remarks, Mr. Greenspan admitted he was caught off guard by the rapid growth in subprime mortgages, saying there was a lengthy delay in data coming in on the products and that when he finally saw official tallies, ‘he couldn’t quite believe it.’”
“America’s housing meltdown has spawned an epidemic of home foreclosures and job losses. It has dealt huge hits to the bottom lines of big homebuilders and Wall Street banks. It has sent the stock market into a frightening tailspin. It’s triggering fears of a recession and sending shock waves to financial markets around the world.”
“Most of this pain could have been avoided had it not been for greed, imprudence and sloppiness on the part of everyone from homebuyers to mortgage lenders.”
“Reckless homebuyers, mortgage lenders, real estate speculators and Wall Street investors who took risks and got burned must, as a general rule, suck it up and move on. American taxpayers shouldn’t have to pay for their mistakes, which often resulted from greed, dishonesty, wishful thinking and throwing caution to the wind.”
“Some Americans were skeptical long before the housing collapse. They would, for example, hear about a young couple of modest means buying a $200,000 home and wonder how on earth they could afford it.’
“In short, lending practices got far too loosey-goosey. The next time there’s a housing boom, such laxity shouldn’t be allowed, lest we want an inevitable housing bust to follow.”
“A young couple should wait to buy a home if the only choice is to take out an ultra-risky subprime loan. And if you’re a lender, how could you sleep at night knowing that you had made such a potentially problematic loan to someone blinded by the prospect of realizing the American dream?”
“The negative impact of the housing meltdown probably will total trillions of dollars when you take into account everything from tumbling home values to falling stock prices.”
“Will we learn from this? How on earth could we not?”
Another week of building a housing bubble consensus! My thanks to those who support this blog. Please check back this weekend for news, your market observations and topics.
Another boffo weak!
Sending you semollians, soon.
Keep up the good work!
“The biggest barrier to stabilizing the chaotic U.S. housing market is the oversupply of homes that cash-strapped builders are flogging at rock-bottom prices, former Federal Reserve chairman Alan Greenspan says.”
does anyone even listen to this guy any more? at some point AG will become background noise. blablablablalbalblablabla bla.
Dr. Estranged Love is this week’s….
Master Of The Obvious (MOTO)
Congrats, Maestro!
I’m not prone to violence.
I would so love to b*tch slap him a good one…I’m not strong enough to use a 50lb trout or JT!
Someone just make him stop talking!
Leigh
LOL! He always make my blood boil, too. But I have to say I’m starting to genuinely feel sorry for Bernanke. Poor guy. People hate him when he cuts. People hate him when he doesn’t cut. There is absolutely nothing he can do that won’t make him a vilified figure for years to come. And yet it’s really Greenspan’s fault, not his. When will people figure out that the damage is done, that it doesn’t really matter what Bernanke does (short of actually printing more cash Weimar-style)? I’m not even sure if he’s figured it out yet. Like I said, poor guy.
Oops…did not clarify myself, my humble apologies AC.
It’s Greenspan I want to b slap!
Actually, I feel a bit sorry for Ben too.
If he had one ioda of sense, he’d resign with dignity!
Just my couple of cents!
Leigh
Obi wan Ben Bernanke really has no skin in the game, so why is he doing his master’s bidding for them?
He has everything to lose and nothing to gain, from sticking around.
Let’s hope he doesn’t cut another one!
In my rich fantasy life I envision BB adressing Congress with a short litany of reality bytes, like: “The only hope for the country is to roll the Fed into Treasury. Cancel the national debt, which is naught more than myriad bookkeeping entries on the Fed’s ledgers. Close the doors on the IRS, and make a bonfire of the tax codes…with the exception of the section investigating tax fraud….”
Of course someone would shoot him with a poison dart before his utterances could inundate the airwaves, but as I said, my fantasy life is rich.
“Section 4. The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.”
14th amendment, US Constitution
…..no prob…..simply amend the amendment….it’s fashionable these days to simply disregard the conditions of signed contracts in spirit, if not in deed….
Come on, he’s so damn fragile a 5 pounder will do the job.
a real estate contract that was written that gives the buyer a way out WITH their deposit … and earned INTEREST ?!?!
HOLY COW - that just beats all. I bet the person or entity that drew up that instrument had been fired, tongue lashed, or given what-for by the lenders & builders. I can just hear the screaming & gnashing of teeth by the monetarily & publicly humiliated lenders. There is nothing worse than someone’s ego taking a bruising, especially the type-A overaggressive desk jockeys.
Thats just incredible for the buyers to actually have some recourse in a contract, much less a level playing field. As we’ve seen here many times those contracts are always written to favor the sellers/builders, and to hell with the buyers.
Wow. just - wow! I wonder if these buyers know just how lucky they are?
Contracts may have used the generic term ‘FB’ instead of the legal name of the signee.
“does anyone even listen to this guy any more?”
Somebody must have heard his suggestion to deliver moneys directly to cash-strapped households, since that is exactly what the stimulus package proposes.
““Mr. Greenspan also defended much-reviled subprime mortgages, which were typically extended to borrowers who wouldn’t qualify for conventional loans. The products were valuable because they made it easier for more people to buy homes, he said.”
So what was the GD point of it all. They ‘bought’ houses they couldn’t afford and now they’re losing them. Dragged through the trauma of a foreclosure, overstressed budgets and the ridicule of the HBB…And he still brags about it. The man is a menace.
Go ahead and slap the idiot, Leigh…
I’m picturing a scene out of “Airplane”, except with HBBr’s lined up in the aisle waiting for their shot at AG.
Doesn’t even know what he’s saying - just repeating what he picked up off Ben’s blog.
I guess it’ s time to donate again.
I’ll send you my ENTIRE “economic stimulus package” check, PLUS an additional $10!
Unintended consequences:
http://news.yahoo.com/s/nm/20080125/bs_nm/usa_mortgages_bonds_jumbo_dc_1;_ylt=Aj0PzGJ0XzTqLlCQ3d9e5SUG1vAI
Can you believe anyone would be buying loan packages if they don’t know what the loans are? This is just some additional butt-puckering on the part of the buyers of these packages.
I have estimated Calgary prices to have declined by about 15%. However, currently our population is continuing to grow but not as fast as in prior years. Local home builders have build 20 - 30 percent less homes than last year. It appears that we currently have a balanced real estate market. Not a flood of resale’s on the market for sale and no indications of major foreclosures.
Only time will tell…
I was in Whitefish MT on a snowboarding trip two weeks ago and spoke to a few Canadians about the market up there. They said that while the dollar is down they love buying “little stuff” in the US - as it is cheap right now (including cars- not so small to me), but the housing market is stupid expensive and set-up to do the same thing, eh?
I did a little work in a downtown condo building that was originally finished in 1979. By the time sales were made, only 8 were sold. Then an investor came in, bought the rest, and rented them out till the new condo boom started again.
The building was sold again to investors who planned on upgrading them with (!) granite counters, SS appliances, etc.
Guess some people thought it was ‘different’ this time around.
Perfect comment from, “its not my fault”, Greenspam
“‘If there were some kind of alchemy whereby we could pick up all these 300,000 units, that would stabilize the markets,’ Mr. Greenspan told a Vancouver audience.”
When I asked him to explain that comment in English and not greenspeak he said,
“If we are not going to play by my rules, then I am going to take my toys and go home”
The only alchemy involved was the easily lead, turned into sheep.
Greenspan’s Alchemy: Turning Granite into Fool’s Gold.
“‘If there were some kind of alchemy whereby we could pick up all these 300,000 units, that would stabilize the markets,’ Mr. Greenspan told a Vancouver audience.”
Nonesense. Builders would immediately rush to build more on discounted lots thinking that they could make a nice profit even at the current market price — unless, of course every other builder was thinking/doing the same thing.
None sense, nonsense, no sense, whatever…
Hey Aladin/GHog,
(Alchemy) ah…such a beautiful word from such a fouls mouth (not you)!
Instead of b*tch slapping Alan, given the opportunity, I would, without hestitation, ask him to define the word!!
When he would not enunciate, then…er…this is a family blog.
Any display of violence is wrong.
Please, please, make it go away.
AG is not for me! EVER!
Thanks to all for letting me vent.
Ya just can’t make this stuff up!
Leigh
grrr…Leigh will be nice. That man burns my hairs!
Oly baaaaaaaaaaaaaaaby,
Where are you?
Deep Breath,
Leigh
The feds pi$$ed away 150 billion on a so-called stimulus plan, but if the 300k units are absorbed by the feds at 300k each, that would only cost 90 billion. Buy, bulldoze, and build could be a good jobs creation program.
Greenspan is an expert on alchemy - all those years of turning paper into gold.
Could there be another person on the planet who fits the title of Alchemist better?
http://www.slate.com/id/2182709/
Interesting. “How the Feds Stopped the States from Averting the Lending Mess” or, Way to Go W!
Unbelievable. The Office of Comptroller of Currency pandering to the extremist loons at a Federalist Society meeting? Friggin criminals. How about some jail time?
Do we still have a Justice Department?
“In his September 9th letter to President Bush, Mr. Hawke called the Office of the Comptroller of the Currency ‘one of the truly great agencies of the United States Government, recognized throughout the U.S. and internationally as a bank regulator of unequaled quality.’ In particular, Mr. Hawke noted the OCC’s innovation on the supervisory side, including developing risk-based supervision; pioneering the integration of economic and quantitative analysis into the supervisory process; constructing early-warning tools to focus on institutions that present the greatest risks; and developing ways for community banks to meet the needs of their customers. He also noted the OCC’s work in the international arena, in assisting with the formulation of a new capital regime for internationally active banks, as well as its outstanding record of accomplishment in the area of consumer protection.”
Another moment illustrative of the worst administration in modern American history, possibly all of American history.
The buzzards are circling…
http://www.bloomberg.com/apps/news?pid=20601087&sid=aL3G8RVixvWs&refer=home
Now that BAC has tentatively agreed to buy CFC, the loss suit gives BAC the ability to cancel without penalty. The buzzards should have waited, BAC is worth a lot more than CFC.
“The state and city pension funds’ combined losses due to Countrywide’s declining stock price were as much as $100 million, Thompson said on Nov. 30.”
Just one pension fund and one city people. Everyone assumes that government pensions are secure, but with poor investing, are they? Florida last month, NY today, who’s gonn’a show up tomorrow?
Not to worry
The supreme court just ruled on an Enron case and all these criminal banks that helped steal from pension funds and other investors will be let off the hook.
http://www. washingtonpost.com/wp-dyn/content/article/2008/01/22/AR2008012200966.html?wpisrc=rss_business/government
W-Crap in Cincinnati
“Realtors in Greater Cincinnati continued to paint an optimistic picture of the real estate market. That did little to help the stress level of Thomas and Rachel Dzieran, who have been trying to sell their Mason home for 18 months.”
OK, a little late for Christmas, but hey, it’s still winter.
Oh schadenfrued, Oh schadenfrued,
How lovely are your tranches.
Oh schadenfrued, Oh schadenfrued,
How lovely are your tranches.
Oh schadenfrued, Oh schadenfrued,
Fun not alone in summertime,
But in the Winter’s frost and rime.
Oh schadenfrued, Oh schadenfrued,
How lovely are your tranches.
‘Tis not alone in summer’s sheen
Its reach is broad, and cash is green;
It looms for us when Realtors blow,
And Kudlow pumps, while hooting snow.
Oh schadenfrued, Oh schadenfrued,
How lovely are your tranches.
freud, not frued. (spelling Nazism allowed w/r/t German)
“Will we learn from this? How on earth could we not?”
That’s what I thought about the late-1980s/early-1990s real estate crash — that after people got burned such a housing price bubble would never inflate again.
But when I try to tell the Trump wanna-bes (irony there) on Curbed that I bought my house for 1/3 the peak sale price of an identical house on the next block, after seven year of inflation made the real decline even deeper, they just talk right past it as if it didn’t exist.
And that is why you will become a multi-millionaire during the next property bubble, as will everyone who has studied it honestly over the past few years and can recognize its return.
I figure in 2018-2020 there will be huge profits made on houses bought only a few years before. Prepare.
I don’t think buying and selling a few condos or houses in any one area is every going to be a dependable way of making money. There’s no fundamental reason for a house to ever appreciate faster than wages go up, and they require maintenance and taxes just to hold their value.
I’ve got a reasonable pile of money and I’d never buy any property hoping to make a profit on it.
2018-2020? You mean, when the full nub of the boomers are finally starting to kick the bucket and/or giving up their homes? Yeah, housing will be roaring back around then - not.
Despite reading this blog, I’m afraid you really don’t understand just what’s happening right now - your grandkids may think owning used houses is a good idea, but I doubt your kids will.
I agree Jim D.
The looming demographic issue is the real story, and not one politician has talked about it while on the campain trail.
Why not just go long on banks and home builders and then cash out those options near the peak? You can get your millions there without worrying about mortgages, property taxes, carrying costs, etc.
I have the feeling there won’t be another house bubble in my lifetime for several good reasons, but if im wrong, ill be a few million richer.
Remember in the 90s after the disaster; when Greenspan and the fed had “relaxed” requirements on reserves on loans.
I said buy gold at that point. I was shocked at how long things held up.
Also note the gold market is also a bit of an illusion. The US still has a massive reserve. What happens when the decide to sell off?
Define “massive,” for us and keep in mind that “massive” must be relative to the approximately 1,000,000,000,000,000 (one quadrillion) dollars in existence, counting derivatives contracts.
I don’t understand the derivatives market. I thought they were like options and can expire worthless but not really sure.
As far as the gold market goes the ETF with all the gold has more reserves than many nations BUT the logic is still there. If it get high enough in value the government can release a massive amount of gold. At last look on the mess that greenspan made the US had an order of magnitude more gold.
So the price would plummet.
The US selling gold would be great. That would shed some light on the subject.
The Fed was originally bound by law to hold either gold certificates or treasury securities as a backing for their notes. Do they own the physical bullion, or does the Treasury? If the Fed sells their certificates, their notes are then backed solely by treasury debt? Does the holder of the certificates then legally own the gold? What backs the Treasury securities? The power of the government to tax? What will the gov’t collect? Fed Notes backed by Treasury debt, apparently backed by the power to tax? Now that is some circular logic. I am all for the selling of the gold. That would be a drama to behold.
Look for a full page Wall Street Journal ad next Thursday accusing the US Gov’t of surreptitously feeding gold into the market by using derivatives, gold swaps and leasing to suppress the price of gold in order to defend the dollar and give the impression of low inflation and a stable reserve currency.
Won’t this be ironic after they sell their gold to make gold illegal? Then they can confisciate it right back!
“Kudrin said Russia had achieved stability in recent years because of its gold and currency reserves, now the third-largest in the world.”
http://www.themoscowtimes.com/stories/2008/01/24/042.html
Russia was a net seller of precious metals in 1980, and a net buyer nowadays…
Things Change
RE: The US still has a massive reserve.
Per previous HBB poster-Conversion of outstanding fiat dollars to supply of domestic US gold holdings = gold @ $41,000.00 per oz.
How do you know the US has ANY reserve left? When was the last time it was audited?
“Will we learn from this? How on earth could we not?”
“That’s what I thought about the late-1980s/early-1990s real estate crash ”
And the stock market bubble, and the south seas bubble, and tulipmania, and…
I think it’s hardwired into our brains, something that used to help when we were at risk on the savanna, but now just gets us in trouble. I plan to teach my kids how to capitalize on that behavior, as I don’t see it ever stopping. A little to Machiavellian perhaps?
“‘Farmers had a great crop, it didn’t get hailed out and real estate has gone to heck in a hand basket,’ she says.”
Oh my heck — who’d've thunk a tsunami could roll inland all the way from Wall Street to Lincoln, Nebraska?
That’s my husband’s home town. How anything there could cost more than about $150K will be a mystery to me forever.
I’ve spend some time in Lincoln, NE. Very quiet, pleasant little land grant college town. Hot and humid in the summer, cold/windy/cloudy in the winter. With faculty salaries in the mid-60’s and university staff paid peanuts, $200k should buy a NICE house in Lincoln.
Why does every mope believe that just because farmers had a great year last year they will spend freely?
There are more expensive items than a house that most every farmer would like to acquire. The harvesters used in the Iowa/Nebraska fields are half a mil now.
For many farmers last year meant not having to work a 2nd job.
But this year is not starting off so good. Seed corn price is up 75% from last year, fertilizer is up 50%, fuel is up (even without having to pay rd use taxes it is still a large expense). Then the vagaries of the weather come into play. Like getting “hailed out” in August. Then you hope to salvage enough to pay for the cost to plant next year.
Go Monsanto! Nothing quite like suicide seeds!!!
FB says to Realtoad “Where are we going? And why are we in this handbasket?’
Interesting comments from Nashville. Here’s the thing in regards to ‘urban living’ in that city: The city is so small you can practically walk through it in an hour or so. Add this to the fact that you can easily live within 5-10 minutes of the city and already be in the suburbs or in some cases rural neighborhoods with SFH’s for 100k or so and it begs to ask why anyone would pay 250-400k for a loft in the downtown area?
I’ve been paying close attention to Nashville, and even with the usual winter slowdown, the supply of homes is only 1,000 less than it was in the summer, which is still drastically higher than the start of last summer.
Because that $400K loft will be worth $1 million in five years… Duhhh… You must be a bitter renter if you do not understand this. Real estate only goes up. 10% a year is in the bag.
Hey Darrell,
I hope you see this. I need to apologize to you for jumping on you in an OT post on dog food. My response was obnoxious. I was having a lousy day and I really jumpled on your post.
Please accept my apologies. It was stupid on my part.
I haven’t read it yet, but I will keep the appology in mind when I read your comment.
“Banks in Spain are being penalized as fallout from the U.S. subprime market makes its way to the country that contributes most to Europe’s economic growth.”
The rain
in Spain
falls mainly –
on the banks?
The pain
in Spain
falls from the main
US banks?
“Banks in Spain are being penalized as fallout from the U.S. subprime market makes its way to the country that contributes most to Europe’s economic growth. A rapid cooling of Spain’s housing market will reverberate through Europe because the country has contributed more than a third of new jobs in the region and accounted for almost a quarter of consumer demand over the past two years, according to Lombard Street Research.”
——————
Let me get this straight - because the Spanish housing market is cooling, it is somehow the fault of the US subprime collapse? Were US consumers buying large numbers of houses in Spain using subprime loans? Or is this just piling on in typical Euro-trash fashion, blaming the US for all their troubles as usual? From what I read, it was BRITISH citizens buying property in Spain, with subprime loans from BRITISH banks, such as the late Northern Rock.
Funny to think though that J6P from Stockton deciding to put new tires on the pickup truck instead of paying the mortgage is causing the entire global financial system to collapse. Nice to know where the power really lies.
Everything is being called the “US Subprime” this or that. I believe this decade has a name that will stick in the history books.
Actually, I might just be headed toward Europe when it looks like a bottom is well in, maybe in 3-5 years? I just had a visit from a friend who moved to the south of France six years ago, and it sounds like an upscale version of SoCal with lower prices for everything but houses. I think I’m going to check in in the Nice market once in a while - who knows?
“where the power really lies” — so true. A couple of years ago one of the borrowers in an AZ mobile park said something to me about my “owning” half the park. I don’t. I don’t have notes on half the park, either. Maybe I have notes on 5% of the lots in that particular park. Anyway, this person was imputing great power to me, and I just started laughing. I said, “I’d be skrood if all of you simultaneously decided not to pay the mortgage!” …but they haven’t. As usual, I can report with pride that none of my borrowers (anywhere) is in default. (y e t)
az lender
impressive return on yer loans. no defaults. nice!
share some secrets of successful loan-making to the rest of us. I an no fan of that shyster donny trump w/his perm scowl which his offspring also wear as some trademark of a sneer veneer. tell us the real path to make good loans & avoid filing foreclosures. do you:
1) have a pair of black suit wearing samoan bouncers accompany you on rent collection days?
2) drive a beat up truck w/gun rack & pit bulls in the bed? woodchipper w.some red drippings in highly visible spot out back … ?!
3) offer discounts to early payments and/or double discount for date w/goodlooking tenants ?
4) wait, wait, dont tell me (love you NPR & Paula Poundstone), I know, its that legendary ” MAFIA STAFFCAR” bumper sticker !
c’mon now, let the hoi polloi in on a few tips. better yet, hold a seminar at the local holiday inn too. we’ll give you testimonials on-camera. Hell, I even have all my teeth!
ok I forgot to add ( I know it can be a deal-breaker ) that I also have a stain-free T-shirt too. somewhere around here . . . maybe over by the star trek action figures.
Yes, thats right, they are ACTION FIGURES, not DOLLS, I say. So does my therapist. Ok, day pass is almost up / library is closing.
later
It’s called the five Cs of credit: capacity, collateral, capital, character, conditions. Put them all together and you have negligible loan losses. The problem was most lenders ignored capacity and capital and OK’d the craziest conditions (option-pay, toggle-bonds, etc.). Underwriting was based on character only (willingness to pay as measured by credit scores).
That good lending az- lender . IMHO ,the best insurance against default is a good down payment and a accurate appraisal .
AZ: If I understand what you do, you loan people the money to buy their mobile homes/lots - you don’t actually own the lots, right?
I’m thinking that what ever move I make at this point will be the wrong one.
Either a buy a REO in a bottom fishing move and prices continue to plummet because capital constrained FNM FMC can’t but the loans.
Or perhaps I don’t buy and the democrats (friends of FNM and such) spin the debt cycle up again with even more bad loans. The massive inflation becomes a death blow and the economy completely tanks.
Not sure which will happen.
My plan is to stay out of this and stay in a defensive investment portfolio (holding gold, commodities, oil, conservative stocks).
As much as I’d like the bubble to burst the Fed/Treasury can inflate like heck and monitize debt (print money) and savers will get burned to a crisp. There seems to be a strong likelyhood of this.
I realize the long term effects will be really bad to the economy but politicians only think of time to the next election. Unless people wake the heck up. Since the leaders in all the primaries are mainstream guys (Obama, Hillary, Rommney, McCain) it still hasn’t happened.
I’m think of reading that book on why societies chose to fail.
Well, as we saw in this week with that massive rate cut, all kinds of plans for saving homeowners, a ’stimulus’ package and so on, that lasted a grand total of two days on Wall Street. With today’s almost 200 point loss, it is becoming clear to me that rate cuts are the market’s crack cocaine at the moment at the party doesn’t last very long afterwards. So I’m more inclined to say correction and recession over any rebound.
We can’t “be sure which will happen,” but we probably share an opinion about which is more likely. It is unlikely that housing will reflate, since so much of its overblown price was based on the expectation of immediate further profits. It’s true they can pump loads of funny money into the economy, but that would not be a reason to be buying an REO right now. Wait just one more year and see if we get anywhere (I mean, any progress towards rational RE prices). I grant you, it could be any number of years, but that “any” number could also be as little as one or two.
I don’t see how the stimulus package will have any effect on housing. Those checks will not be enough for those facing foreclosure to get right, won’t be enough for a down payment, won’t be enough to clear up bad credit, won’t be enough to change LTV ratios, won’t be enough to change DTI ratios, won’t make values go up and won’t change houses back into ATM machines. Am I missing something?
But all “real Americans” are up to their armpits in debt. We obeyed out commander-in-chief, and after 9-11 we went out and spent because we didn’t what the terrorists to win.
It is only you terrorist sympathisers that refused to spend yourself into a unmanageable debt that will be harmed by the coming hyper-inflation.
And, I hope everyone took this post sarcastically as intended.
Its called “Collapse,” but it really deals more with ravaging of natural resources than monetary/debt policies. Good read though.
(in response to James’ comment about why societies fail)
We are probably going to be an addendum to the book
“They’re coming in with low-ball offers of 15% to 20% below the asking price….”
It was common to make such offers in a normal market and settle for 10%. It was factored in usually. What’s the name for the 40 to 50% off bids? Insult, I guess.
Ill be low balling for 30% off. 15% bah
If he thinks 15 to 20% is a lowball offer, he doesn’t know how low my balls can go.
I propose that HBB’rs start to make “insult” offers of about 10% of listing price to select individuals, such as the couple in FL that got their place for 200 something and jacked the price to 1.1 million. Also to this clown; he’ll then accept the next 15% off list “lowball.”
“They’re coming in with low-ball offers of 15% to 20% below the asking price….”
Right! When I bought my house in Sunnyvale 17 years ago (now 100% paid off
there were multiple offers. And still we got the house for about 3% less than the asking price. We started at 10% off, then raised it.
This was just how the world used to work, and will work again!
“Cindy Huerta is trying to sell her 3,700-square-foot home near downtown Salt Lake City and has lowered the price from $699,000 to $579,000 for buyers who don’t have an agent.
Huerta bought the home in February of last year. But in August, she was forced to shut down her subprime mortgage company when business dried up. She has since found a full-time job at only a fraction of her previous income. Even if she sells the property for $579,000, Huerta said she is going to have to bring about $20,000 in cash to closing.”
So does this say that she bought at a high price of $600,000 last Feb, then listed it less than 1 year later for $699,000, and now has dropped the price radicallyto $579,000, for a special price drop just for you (!) of $120,000?
Insane. It’s no real price drop at all, just from her insanely inflated number. If she bought at 600k, could I offer a 30% discount of $420,000? This would probably be an insult, though.
Wait another year, and sellers will be begging to be insulted.
I can see them simply walking away(or short selling) and the buyers will be low balling the lenders and getting them for cheap
of course when the market was rocketing upwards every week for years you NEVER saw or heard sellers whining about too many offers, or too gosh darn high prices. The HELL with the buyers: if they want to buy the house, let’em pony up the cash. And jump thru stupid hoops like writing letters about how badly they want my place, and promise to feed the squirrels.
SO what a delicious, fitting, ironic twist to see the tables turned, so completely, so soon. Whats really hysterical is watching all the sellers expecting sympathy from the very market they tried to extort all these years. And I tell ya what, if I was looking at a house to purchase from a person I’d make em write ME a convincing letter about why I should buy their house. damn straight I would !!
Old saying is you better be careful of the back you walk on the way up, that it might be the azz you have to kiss on the way down.
got botox ?
You missed the best part:
“Even so, she is hoping for a quick sale because each month she is draining her savings to stay afloat. ‘I can’t keep this going for months and months,’ she said.”
This is why no one should be in the market to buy right now. Until the last fool is parted from his/her money, market clearing prices cannot be reached.
And thank you Cindy, for telegraphing your financial hemorrhaging to every shark in the water. By telling everyone you can’t keep it going for months and months, you are pretty much guaranteeing that they will wait until you can’t! Kinda like the yutz the other day that said that his highest bid at auction was going to be 700K, pretty much guaranteeing that that was what he was going to be paying (unless he of course was the shill).
I’m doing a survey:
Of those of you with kids, how many have basketball hoops in their driveway/back yard?
in driveway 2
one 10′ (regulation); 1 adjustable for g’kids
None…we go to the local parks to shoot some hoops. OK, not really shoot hoops, more likely to play a game of “HORSE”.
yep. In the driveway.
Nope, against the HOA
I live in a 17 foot wide attached rowhouse, and park my one 11 year old car on the street. I don’t have a driveway. And my backyard is a 17 x 20 brick patio followed by a 17 x 10 garden.
Basketball is the city game, but my girls don’t play hoops.
Looking for a home, one of the things we are looking for in a neighborhood is the lack of bb hoops. BB hoops, whether they are free standing monsters or garage disgraces are all thump-thump noise machines. Ever try to read a book or concentrate during a basketball game? Relax on a weekend surrounded by bb hoops - not gonna happen. Similar to one of my ex neighbors who was called Mr. Lawn and Garden because he had to mow his lawn 3-4 times a week during the summer. That’s why I enjoy the winter; the noise from the less aware is much less.
“A 26-year-old engineer who bought a unit in a building that, during the height of the condo frenzy two years ago, once put a block of 200 rooms under contract in less than two days.”
OK folks - how did this happen? Does this guy have several hundred thousand in the bank to cover 200 down payments at 20% down. Let me guess, he got zero down - no documentation financing or the condo people let him reserve these places without a deposit. At 26 years old, this guy probably doesn’t make enough to purchase one condo under traditional mortgage standards yet he can sign a contract for 200 of them????
Totally and completely nuts!!!!!
I think that means 200 units in his building were once sold in two days, not that this individual bought all 200.
Yes — it’s poorly worded, but clearly it’s the building that put the 200 rooms under contract. Otherwise, we would have already read about this guy.
Dang… I’m glad that was cleared up. I thought we had a super-Casey.
Got popcorn?
Neil
“My millionaire status was based on the assumed worth of a 70-year-old stucco cottage. Lately, my million-dollar house isn’t. Not even close. And The New York Times reported Wednesday that some leading economists are now saying it never was. Worse, the economists said that current real estate prices need to fall another 30 percent before Florida real estate gets real.”
I make you millllinaire, the Tom Vu way…
http://www.youtube.com/watch?v=K853GykeGH0&feature=related
“So not only am I not a millionaire anymore, turns out I never was.”
Love it!!! Now can we get the MSM to go back to the Donald Trump show and show us the current financial status (net worth) of all those young millionaires who made their bucks in RE that he was looking to hire.
At least one guy ‘gets it’.
“The negative impact of the housing meltdown probably will total trillions of dollars, when you take into account everything from tumbling home values to falling stock prices.”
Hmm. I might argue that the “negative impact” was baked into the price rise that made both stock-ownership and home-ownership foolish from a cash-flow point of view. BB’s rate-slashing hasn’t changed my ability to charge 9% to my most credit-worthy borrowers, and a nearly equal yield is still available on the sovereign debt of the Republic of Brazil. Someone (on this blog?) posted something not too long ago about Citi issuing a 7% preferred — admittedly risky, but the common dividend would have to be dropped first. Not satisfied with moderate returns, “investors” go into highly leveraged “products” - and you might as well count houses here - and now that they are all trying to cash out, I wish them all the bad luck they deserve.
““Some Americans were skeptical long before the housing collapse. They would, for example, hear about a young couple of modest means buying a $200,000 home and wonder how on earth they could afford it.’”
I was wondering the same a few years ago. I honestly thought the median income was $100,000 a year, which of course would explain how all those people were affording $300k starter homes. I didn’t know about exotic loans till later.
Because I was retired I also thought income had skyrocketed to explain how people could afford such prices . The powers that refused to regulate the housing industry screwed everybody. Anybody of right mind would of known that you can’t allow a big loan without the buyer having skin in the game .
Who would of thought that lenders would of approved loans based on qualifying the borrower on a fake low low low teaser rate ,whereby they could no longer qualify within a short time( in spite of it being a long term loan ). Who would of thought that lenders would fail to prevent fraud and volume would become the goal .
The stupid greedy borrowers were set up for a big fall ,but now the whole society is suffering because of this fake run-up in housing . I’m suffering from witness abuse .
You thought $100,000 a year was the median income?
Yep. Because I was retired ,and a long term RE owner , I had no way of knowing what kind of lending was taking place . Some of my neighbors mentioned that they could not afford to buy the same house that they now lived in (that was in 2004).
When I started to find out what kind of loans Lenders had been making (when I started to tune into this blog ) ,than a cold shiver went down my spine. There was no question in my mine that a epic crash would take place in real estate . It really has been shocking to me that this happened in the first place . Its a mad mad mad world now to me . Right now I find it hard to make financial decisions because I can’t trust what these mad-hatters in power are going to do . It use to be that one could make logical choices and you would tend to get positive results . I hate trying to outsmart evil .
A new regulatory idea.
I myself don’t believe in too much regulation but over the past few months it has come clear to me that it is needed in banks. The problem I perceive is banks have figured out how to black mail the tax payer.
Now before people start screaming that what’s needed is less regulation not more, here me out.
The problem is banks have figured out how to privatize the profits and socialize the losses. They do this by watching each other and following each other. Once they start to converge on an idea they all walk lock step down a path they know will end in disaster. But they figure if all the other banks are doing it, the government will be forced to bail them out, because the economic pain will be to great otherwise. Meanwhile they make amazing profits while the scam works.
Under the current system some CEOs are fired (usually with massive compensation both before and during the firing) but so what. You made a billion dollars.
Here is a sketch of a very different regulatory plan.
1) If a bank fails for any reason, there is an automatic 3 year jail sentence for all directors and officers who have worked at the bank at any time in the last 3 years. There is no chance of paroll and the sentence can be increased to as much as 25 years by a judge if they feel the officer or director has acted in bad faith.
You will get a trial to determine if you worked at the bank in question, as an officer or director, and to ascertain that the bank failed.
2) If you need to go to the discount window, the bank must give up senior equity in the bank at 80% of current value for the amount taken from the discount window. In other words they are selling senior equity at 80% of true value.
This equity that the banks give up, will be sold on the open market within 5 years after the Fed receives it.
The proceeds of this money will be returned to all income tax filers at a flat rate the year after it sold by the Fed.
3) Banks will not be able to borrow more than 50% of their current market value from the discount window.
4) All senior officers and board of directors compensation, in excess of 10 million dollars, inflation adjusted, must be held in escrow for 5 years before being dispensed to the earner (the tax would also be payable at the time it comes out of escrow).
5) Escrow accounts must hold their assets in cash or cash equivalents and must be placed at an unaffiliated institution to the bank.
6) If for some reason a banks tier 1 capital falls bellow 8%, the escrow accounts will be used to restore tier 1 capital to 10%.
7) If the escrows accounts are required to restore the banks tier 1 capital, the money will be taken from the oldest accounts first. All monies taken will be forfeited by the beneficiary of the account. The bank can chose to recompensate the directors and executives that lose money from their escrow accounts, but the repayment is considered compensation in the year it is received and would need to be escrowed for another 5 years.
6) Attempts to increase the non escrowed compensation of directors or officers of a bank by using 3rd parties, SIVs, off balance sheet accounts, and kick backs, sub-banks, or any other method will upon discovery subject all officers and directors to a minimum 10 year jail sentences. All persons involved in setting up such schemes will be subjected to a minimum 5 year jail sentence unless they are the first to report it to the appropriate regulatory authority.
As I said this is a sketch. I am actually in favor of relax or eliminating other regulation on banks. The idea is to actually give banks more freedom to do as they chose.
However what this regulatory regime would do is tie the interest of shareholders and bank officials to the future. Banks would still have the ability to “black mail” the tax payer, but senior members of the bank would pay a dear price for doing so.
The 3 year window was chosen as bubbles tend last around a little more than 3 years between blow up and collapse. Hence an official should be able to bail out if they feel their bank is being mad and avoid a jail term. The 5 year rule is designed to ensure that there is plenty of “capital” to help restore bank health in the event of disaster.
The goal is to prevent banks officials and shareholders from extracting huge payouts in the good times, and then getting bailed out when things go south.
This plan is not perfect, but it is blue print. Post feedback!
Oliver
You put a lot of thought into your post . The entire lending systems need a overhaul from Wall Street down to the lenders on the front lines .These creeps had the deposits of this Nation and other Nations in their hands and they blew it . I’m not so sure that criminal acts where not already committed on higher levels of management ,but a bail out would prevent Justice .
In utter shock here…
Just found out a rogue Calico, embezzled 7 Billion cat treats from me.
…without your noticing a single cat seed missing
I really really want a new 32″ Vizio LCD HDTV from costco for 629 bucks, somebody talk me down…
You can get the same tv at walmart for 589. Great tv…have two.
really? u like? the reviews are so anal…
Spend 1200 on a 42″ plasma Panasonic. Far superior picture. In some things, you really do get more for the buck.
i thought they said plasmas suck 2x the juice? besides 42 inches is too big to fit my armoire! speak french morticia…
I heard they use a ton of electricity, whereas most consumer electronics use so little that we don’t even worry about it.
Go for a walk and allow this urge to pass.
“I really really want a new 32″ Vizio LCD HDTV from costco for 629 bucks, somebody talk me down…”
Is there really something worth watching on it?
There’s great stuff to watch, but you have to pay. So much on discovery, National Geo, history channel, classic movies, science channel, bbca, any type of other entertainment you could want. There’s all sorts of on demand channels and there’s music channels. A good HD TV, good sound and you have it made without having to deal with driving, parking and the public.
i get all the entertainment I need from this blog and watching everything around us implode in near real time.
Folks:
Remember that the “Stimulus Package” isn’t yet a done deal. While I sincerely doubt that any members of Congress or any Senators will seriously oppose it (they’re basically buying votes), it would still be a good idea to write a REAL letter (not email) sent Priority Mail or Fed-Ex to your rep.
Make it short and VERY CLEAR, otherwise there’s a risk it’ll be misunderstood. Get your basic point across in the first sentence, and continue if you must. Most likely some clerk or page will read the first few words and see which pigeonhole your position belongs in.
For example:
Dear Congresswoman:
I urge you to oppose the economic stimulus package. We do not need to have checks mailed out to millions of Americans, nor should we raise the “conforming” loan limit.
The so-call tax-rebate is grossly unfair because it rewards people who haven’t paid any taxes, and doesn’t provide anything to those Americans who pay the most. I fear this money will be used to get people deeper into debt.
Raising the conforming loan limit is unthinkable since housing prices have been falling. A much better idea would be to lower it, to $300,000.
I have a much better suggestion for a stimulus package:
The first two items encourage savings:
1. Reduce the tax rate on dividends to 10%.
2. Remove income limits for IRA’s. Raise the contribution maximum to $40,000
And, to pay for all of this, I propose:
3. Repeal the recently-passed legislation that permits deadbeats to keep their windfalls, tax free.
4. Authorize the IRS to collect income taxes based on stated income amounts on mortgage applications, if higher than W2 and 1099 income
Thank you for your attention:
Sincerely:
Reuven S******
“4. Authorize the IRS to collect income taxes based on stated income amounts on mortgage applications, if higher than W2 and 1099 income”
If this passes, alot of people will be royally screwed and paying the IRS for the rest of their lives
*I’ll* be paying the IRS for the rest of my life! Even into retirement because I managed to save enough money.
Why shouldn’t someone who committed fraud (lying on a loan) in order to take a speculative gamble have to pay taxes for the rest of his life?
In exchange for not being arrested!!!!!!!!!!
——————————-
Why shouldn’t someone who committed fraud (lying on a loan) in order to take a speculative gamble have to pay taxes for the rest of his life?
Personally, I really like the 50% accelerated depreciation schedule. I’m blowing about 200K on an orchard development this year, and I will spend the deductions wisely, grasshopper. I won’t pay an taxes this year and probable next, so in some ways it’s all good.
The only reason my congressman would vote against the proposed stimulus package would be if he thought this helped the “rich.” Perhaps raising the conforming loan limit would be just than.
As lies go by…
“In his remarks, Mr. Greenspan admitted he was caught off guard by the rapid growth in subprime mortgages, saying there was a lengthy delay in data coming in on the products and that when he finally saw official tallies, ‘he couldn’t quite believe it.’”
Captain Renault: I’m shocked, shocked to find that gambling is going on in here!
[a croupier hands Renault a pile of money]
Croupier: Your winnings, sir.
Captain Renault: Oh, thank you very much.
Captain Renault: Everybody out at once!
Is Larry Kudlow off the coke? He just said, the FED needs to stop cutting or we’re going to have another bubble.
I must be dreaming.
No, he just had one too many.
Off topic, have you noticed supermarkets cutting back on premium groceries? Today while shopping at a local supermarket I noticed:
1. No more premium butter. It was all cheap mass produced junk. Three months ago the store stocked an Irish butter and an English butter.
2. Substantial cutbacks in premium alcohol; the ‘top shelf’ of wine was dramatically less expensive than what was offered a year ago. Most of my favorite wines doubled in price during the bubble and are now priced at ~85% of their previous list price.
3. Cutbacks on premium breads. Some are still there, some of our favorites are gone.
4. Instead of premium beers being front center, its the mass produced affordable brands.
5. Constantly growing shelf space for the store brand.
Ok, #5 is a long term trend. But the other’s scream ‘cutbacks!’ I’ll post this tomorrow in the local market observations section, but I was wondering, is this happening everywhere?
Lightsaber
From birdseed (4.99 - 5.99 for 5 lbs) to bread (3.99 - 4.39 a loaf for Arnold), the prices have increased 20% and 10%, respectively over the past two weeks. I have not seen a diminishing display of premium brands, but the standard brands have increased in price dramatically.
no, that is going to be geographically specific. its pure supply and demand.
True. But this is a global bubble; how much is it impacting other areas? A store doesn’t go from six premium butters to zero without a drastic turn around in the local spending habits.
bizarroworld,
I have seen the basics go up in price too. But its odd to see so many premium items disappear; for years I’m used to what is being offered shift, not a down gauge in quality this quickly.
I’m quite familiar with ‘trial marketing.’ So when a new items appears/disappears or displaces an old favorite, that isn’t anything special. But what I’m noting is a down-shift in the variety offered. Much more floor/shelf space is being dedicated to ‘down market’ products.
One new display for one brand of cheap beer is normal pre-superbowl. But in previous years, there were large islands of various premium brews. This year? Corona (which I don’t consider premium) was the only brand besides the mass-produced domestics.
Got popcorn? (Please keep stocking that!)
Neil
Pop Secret Jumbo Pop (for those microwave popcorn fans)! On sale, still two six-pack boxes for $4. I’ll let you know if prices increase for that staple!
You are talking about Whole Foods… yes, I’ve noticed.
That would explain why I couldn’t find the Brownberry bread just twenty minutes ago!
RE: is this happening everywhere?
It will be in Ford auto making country.
F is buying out or offering early retirement to 54,000 workers or 93% of it’s current domestic work force.
New hires to replace those who leave will earn on av. $14.77 per hour-or half the amount workers are making now.
hmmm….do I hear the toilet running?
Go good-bye quality is Job #1 and adios FMC.
Just the OPPOSITE here Store brands are hidden real good….just the national brands at a higher profit margin are getting more shelf space
I go to Bristol farms and trader joe’s mostly. I buy/eat less food, but of way higher quality the bulk of which is fresh produce. I figure eating well cuts down on health care costs.
After my stop shopping pledge this week how are they going to entice me?
The pricey grocers are going to have to call BB to get me to open up my wallet for frilly extras.
Guess how many ways there are to make brown rice:
Curry brown rice
Soy sauce brown rice
Pesto brown rice
Steak seasoning brown rice
Salad dressing brown rice
Mogadishu brown rice
I will never eat:
white beans
lentil beans
kidney beans
lima beans
garbonzo beans
refried beans
baked beans.
Exception: cuban beans.
What’s wrong with beans……
Beans, beans
a wonderful fruit
the more you eat
the more you toot
When I was young my mom turned on the dinger.
If I didn’t eat my yucky food, I’d get a soapy mouth.
This is priceless, and I am sure it was predicted on this blog as well. A woman sues the realtor, she thinks she over paid!!!!
http://www.truveo.com/Woman-Sues-Over-Price-of-House/id/1343110451
Those kids on the vid have no clue. They seem to be reading from some I-have-never-seen-this-crap-but-I’ll-fake-it-anyway script.They will be part of the rude-awakening very soon. Mom! You never told me it would be like this! I have to pay for my mistakes! How come you got to retire after 20 years of servitude, but I won’t be able to buy a new beemer off my HELOC? I thought you loved me! Sorry, but this gets stranger every day.
I think these lawsuits are a great idea! The entire Realtor(TM) racket needs to be taken down. Realtors(TM) make a big deal about their “expertise”. If they were such experts how could they not see this coming when I, with zero expertise in real estate investing, knew it was inevitable.
Talk about the elephant under the rug…………..
Banks May Need $143 Billion of Reserves for Insurer Downgrade.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aYQVdsjDrc2M&refer=home
How come the the assholes can write insurance policies with out sufficient reserves?
What the heck kind of insurance is that?
And we are going to bail the guys out so we can keep paying low rates? How does that make sense? Why don’t we use the money to pay off the debt? Not sure I’m understanding this but as soon as the insurance had to actually pay; it became an immediate bankruptcy risk.
Man, people suck!
http://news.yahoo.com/s/afp/20080125/lf_afp/uspropertyfinanceanimals
Unfortunately, animals suffer in the best of times, just ask Michael Vick. I have been in the wonderful company of a number of fine Greyhounds that were displaced after their racing days, and they are wonderful animals, especially considering their prior treatment. If you want to know the caliber of a human, take a look at how they treat their animals.
In the near FB future - Mommy, where’s Fido and Fluffy? Nevermind sweetie, just sit down and eat your dinner.
Here is an example of how those option ARMs are working out for the banks.
Not surprisingly, FirstFed said that option ARMs hitting a forced recapitalization were “a contributing factor in the higher level of delinquent loans.”
During the fourth quarter of 2007, just over 1,800 borrowers, with loan balances of approximately $830 million, reached their maximum level of negative amortization and had a resulting increase in their required payment. The bank said that it estimated that another 2,400 loans totaling approximately $1.1 billion could hit their maximum allowable negative amortization during 2008.
(To make it clear: that’s $1.9 billion in forced resets against just $128.1 million currently reserved for loan losses.)
FirstFed holds a portfolio of $3.2 billion in one-year adjustable rate mortgages, including payment option mortgages; it holds another $1.1 billion in three-to-five year ARMs (also including payment option products).
Hinting at how the drop in California home prices is affecting servicing operations, FirstFed said it wrote down $2.4 million of $21 million in REO inventory. REO has skyrocketed at FirstFed as well; the bank held just $1.1 million in REO one year ago.
I was out at the local large used car lot today (Saturday) & test drove a couple of cars…. I WAS THE ONLY ONE THERE…. NO OTHER CUSTOMERS…..
When I drove up to the lot.. the salesmen swooped on me like stink on a monkey.
This is a VERY LARGE & very well-known car center in the heart of San Diego.
The salesman said that it’s really dead… & suggested that it might be the weather…. I chuckled & left.
Yeah, they have some really terrible weather in San Diego! That’s one of the reasons people keep leaving San Diego to move to Fargo, North Dakota.