A Greater Example Of A Fool Theory
Wink News reports from Florida. “The housing market. It’s been a dirty word in Southwest Florida as the insatiable appetite for real estate hits starvation mode. ‘It’s always on your mind. Is it going to sell and when is it going to sell?’ said Rachel Hilsmann. ‘We originally started at about $315,000 and this is the 3rd time we’ve had it in the market and we’re now at $199,900.’”
“They’re questions that Hilsmann hopes to soon get answers to. She and her husband bought a condo as an investment more than two years ago. $30,000 in upgrades later, still no luck with selling it.”
“Numbers from the Realtor Association show that the percent of sold to active listings in the greater Fort Myers area, has nearly doubled in the past 12 weeks. And buyers are getting some pretty good deals. Some agents also say they’re seeing three bedroom, two bath houses under $200,000.”
“‘A couple years ago, It was up to $200 a square foot. I just saw something today that was $63 a square foot,’ said Realtor, Jen Buffington.”
The Tampa Tribune from Florida. “Bill Lee, a top executive with Sabal Homes in Lithia, always assumed he would bring his son Brian into the family business. But now that Brian is in college and thinking about a career, Lee has had to pass on some unpleasant advice instead: Better get a Plan B.”
“The reason: Brian Lee is about to enter the work force at a time when small homebuilders are weathering one of the toughest housing markets in decades. It’s forcing some builders to consider closing.”
“‘It’s a tough time to get into this business,’ said Bill Lee, vice president of operations at Sabal Homes.”
“During Florida’s recent housing boom, Lee said, his list of competitors grew. ‘A lot of people jumped into this business who shouldn’t have,’ he said. ‘They went from foreman to owner-operator. Some of those folks aren’t making it now.’”
“Some of the newer builders, said Sunrise Homes VP Bob Appleyard, were quick to build as much inventory as possible to meet the expectations of buyers. When the demand began to wane, they were left with too many empty homes they couldn’t sell.”
“‘It’s what some people called the greed factor,’ Appleyard said.”
“It’s a tough lesson to learn, he said. ‘I suspect next time we have a run-up home cycle, builders will get stuck with too much inventory again.’”
The Sun Sentinel from Florida. “Some South Floridians who lose their houses to foreclosure try to get even. They’ll strip the plumbing, ruin the carpets and rip out doors.”
“Jim Banford, broker-owner of Real Estate Asset Disposition Corp., saw roofing tar in the toilet of a house in West Palm Beach. A 2-foot fish and cement were poured down the toilet at another of his listings nearby.”
“‘I’ve seen everything, but that was pretty memorable,’ said Banford, whose West Palm Beach-based firm markets and resells foreclosed properties across Florida.”
“Exasperated lenders are getting wise to the ruse and offering ‘cash for keys’ deals, essentially paying homeowners as much as $2,000 not to take out their frustrations on their properties before leaving. Roughly half of all foreclosed properties are returned to the bank with substantial damage, according to a national survey of 1,500 real estate agents.”
“‘Unfortunately, it’s always the bank’s fault,’ said Wes Yancsurak, an agent in Jupiter. ‘In a lot of cases, we have to bring in big dumpsters to clean these properties out. It’s just an absolute disaster.’”
“A North Palm Beach house sold recently for $225,000 in a neighborhood where homes are valued at $300,000 or more. A Cooper City house had been appraised at $349,000 but likely will go on the market for $225,000 because it’s in such poor condition.”
“Some owners skip basic maintenance once it becomes clear that Foreclosure is inevitable, said Terri Gerlach, an agent in Plantation. ‘People have fallen out of love with their homes, and they treat them badly,’ Gerlach said.”
The Montgomery Advertiser from Alabama. “Last month, only about 3,500 of the 43,000 homes on the market statewide found buyers, according to the Alabama Center for Real Estate at the University of Alabama. The time it’s taking to sell a home and the prices being paid are well off what they were just a year ago in the River Region, just as they are across the state and the nation.”
“Sandra Nickel has been a fixture on the local real estate scene for nearly 27 years. In the last three years, she has watched the housing inventory in the River Region more than triple — from 1,800 to 6,000.”
“Leonard Zumpano, chair of real estate and professor of finance at the University of Alabama, estimates it would take 12 months to clear the inventory. At this time last year, there were 20 percent fewer homes for sale in Montgomery.”
“‘We had an irrational market that was skewed by easy credit,’ Zumpano said. ‘And sooner or later, it’s kind of a greater example of a fool theory — you think you can afford it, and the market conditions change and you’re stuck with this property.’”
“Catharine Olson put her home in Prattville’s Kingston Oaks subdivision up for sale a year ago February, hoping it would sell by the time she moved in June to join husband Daniel in Mississippi.”
“The house didn’t sell before the Olsons moved, saddling them with the $900 mortgage payment for another five months. Fortunately, the family didn’t buy a home in their new community of Columbus.”
“‘It was stressful every month,’ Catharine Olson said in a telephone interview from Mississippi. ‘You keep playing a head game with yourself, and keep thinking this month it will sell.’”
The Sun News from South Carolina. “Tough times in the real estate market means many Realtors are calling it quits, according to the Coastal Carolinas Association of Realtors.”
“About 963 members of the association decided not to renew their membership this year, bringing the number of Realtors on the Grand Strand to about 3,100, said Charlie Brindel, the association’s executive VP.”
“The decline is a change from the days of the housing boom when there were 80 to 100 new Realtors on the Grand Strand every month. The number of Realtors doubled between 2004 and 2006 when home and condo sales were skyrocketing.”
“That was when it was a sellers market. Realtors got multiple offers on any given property, and offering prices were often higher than what sellers asked. ‘People would line up,’ said the association’s market analyst Tom Maeser. ‘They didn’t even have to run ads.’”
“Now, buyers have the upper hand because there’s a surplus of inventory that sellers are trying to unload. That also means Realtors have to work harder to make a sale.”
“‘I think a lot of people got into real estate when real estate was easy. Anybody could have sold real estate in 2005,’ said Travis Miller, broker in charge of Exit Realty. ‘Now it takes skill and perseverance and determination. You’ve got to take it seriously.’”
“Penny and Michael Mims, who became full-time Realtors in 2007, said that even the most aggressive of marketing plans weren’t enough for them to break even selling real estate. They decided to get new jobs in December after losing about $9,000 on advertising and spending more than 40 hours a week trying to make a sale.”
“‘We ended up listing about five houses and sold one,’ Penny Mims said. ‘You just can’t make a living doing that.’”
‘Sean Snaith, director of the Institute of Economic Competitiveness in the University of Central Florida’s College of Business Administration…was interviewed by Sentinel staff writer Christopher Boyd. Q: You only recently revised your assessment of Florida’s economy, saying the state is probably already in a recession. A key reason you changed your forecast was the Florida Agency for Workforce Innovation’s revision last month of its 2007 employment statistics. Instead of continuing to gain jobs in late ‘07, as the agency had earlier reported, Florida actually has been steadily losing jobs since last summer. Are you concerned about the reliability of the reporting?’
‘A: No. I was surprised to see that happen, but sampling error is part of the business of taking surveys. While, when the revise data came through, it certainly changed our outlook, it didn’t necessarily make me question the data we receive on a month-to-month basis. That’s still very useful.’
‘Q: A steep decline in the residential construction industry led Florida into the downturn. How long do you expect the housing market will suffer? A: It depends on how we define suffer.’
‘Q: How confident are you personally? Are you traveling on vacation this year?’
‘A: We will, up North in July. And right now we are in Animal Kingdom. Somewhat confident, but I’m not counting on getting a raise this year as a state employee. We didn’t get one this year, and I don’t anticipate we’ll see one next year as well.’
Snaith doesn’t anticipate getting a raise. Fancy that. It takes a special person not to acknowledge the connection between his bread and what butters it. I would call him pathetic, but I guess that depends on how we define “pathetic.”
Typical goverment employee….His worst fear is that he won’t get a raise….
We haven’t been geting any for years, even though the company made about $70,000 profit per employee. Considering that we have more employees In Chindia than in the first wold I would say that its safe to assume that net profit was greater than worldwide payroll.
Anyway, I can only imagine what will happen when we have our first hiccup and seriously miss analysts expectations. I expect that there will be major layoffs in the US and Europe.
So you’ve been in the same job for years without a raise. This is kind of like that saying about poker; “if you look around the table and can’t figure out who the sucker is, it’s you”. Seriously, why would you stick around for years and years without a raise? Look at it from your employer’s point of view. They give you 0% you take it. They give you 0% again, you take it again. What possible incentive is there to give you anything other than 0% if you sit there and take it year after year?
“What possible incentive is there to give you anything other than 0% if you sit there and take it year after year?”
In the current and likely imminent economic climate, the incentive of otherwise not having a job comes to mind.
You bend over and take it. They give it to you again, so you bend over and take it. What possible incentive is there to PUT AWAY THE LUBE?
“What possible incentive is there to give you anything other than 0% if you sit there and take it year after year?”
Come back again when you are 55+ and have 5 weeks of vacation, etc., etc. If you step off the merry-go-round in your 50’s or 60’s, chances are that you are not going to be allowed to get back on.
So you’ve been in the same job for years without a raise.
So far its only been two. I have decided that is enough and have started a search. What I do find pays even less. And they wonder why CS enrollments are in the crapper.
But we have a lack of IT workers in the US! We need more H1B visa’s!!!!
At least he’s not a private sector wage slave too stupid to ask for a raise.
Oh, we ask for them. We are just politely told “no”.
“At least he’s not a private sector wage slave too stupid to ask for a raise.”
As opposed to the myriad of self-made, fabulously wealthy posters such as yourself? Whatever you say.
Yes, I noticed that too,Bob. I guess it’s different here on the Internet. In there work I have done I have Met , probably over a Million People in my life . And very few are consideridered Rich or very well off.
But here on the internet , 99% of all people here , graduated college, started out at $120 K per year, and by 28 aquired Multi-Million Dollar retirement funds through their brilliant Investments in the stock market, all while raising 4 kids in a fabulous Lifestyle.
The money genuises on this on this one Blog’s combined money skills and capital could easily pay for the war in Iraq , pull us out of a recession, and pay off the national debt with money left over.
I don’t understand why anyone here would even worry about the price of a house.
BTW I’m 48 years old, and retired twice already. I’m not rich. Never wanted to be. I’ve made millions, lost millions , and blown millions . I’ve made easy money, hard money and every kind of money.
I’ve lost everything in one blink of an eye. Every step I took in life I learned a little more and I’ve pulled off some things many would consider amazing.
Point is , Money is part of life and both can change in an instant. All smart people are not rich and all rich people are not smart.
All the rich people I know, don’t have to run around telling everyone how rich and successful they are and how everyone else is a poor idiot.
Awwwwwwwhhhhh. The poor guy. Maybe Oprah can help him out with her give-away show.
but I guess that depends on how we define “pathetic.”
Pathetic: A person much like Snaith who consistantly misses their economic forecasts, but continues to put a positive spin on the economy even when their income has not kept pace with inflation.
“And right now we are in Animal Kingdom.”
Whoa! That’s a loaded statement - coming from a guy who cannot define “suffering”.
Sean ‘Sampling Error’ Snaith
Snaith’s job is simple on the surface: Research the area of concern; collect data on that research; analyze the data against the original hypothesis. From his comments, he is confident in his research; he trusts the data; but was surprised that the analysis was not confirmed by real time events.
If data analysis has taught me anything, it is to question all the data all the time - and then always error to caution. To cheerlead like Snaith has done over the last 4-5 years is such poor form. Sean Snaith: Master of Lies, Damn Lies and Statistics.
Approximately 30% of the data I collect is so flawed as to be useless, even though it is an accurate, actual measurement of what I want to look at. Sometimes it’s taken over too long a time with insufficient resolution, sometimes it’s taken over too short a time and I miss significant events. Other times there are calibration or other system issues, those are harder to diagnose.
If you don’t know what you are looking at and what fundamental properties drive the process you’ll never know if your measurements and analysis are correct.
And that knowledge makes you one steely-eyed missle man, Climber.
In some of what I do, we are constantly told not to draw conclusions after performing a data analysis - that’s mgt’s job.
If I had to side with a government employee or a corporate gangster, the government employee is my pick every time.
So, everyone who works in the private sector is a gangster. I see.
Liberalism is a mental disorder.
- Dr. Michael Savage
“the government employee is my pick every time.”
I see that you have never spent time with the helpful folks at the Dept. of Motor Vehicles in NYC.
I’m not happy that I missed one of our infrequent HOA meetings the other night. We haven’t yet had a problem with abandoned houses as the Reos are being maintained by someone, even if it is the neighbors, so far.
But what’s the HOA plan down here in South East Florida when that stops? When we have more REOs than we know what to do with? I’ve already seen two go through foreclosure, REO, and then back on the market with a new knife catcher, but I don’t expect that to be the trend.
We’re already getting “abandoned house” parties, what happens when it moves to damage …
“We’re already getting “abandoned house” parties, what happens when it moves to damage …”
It’s going to get a whole lot worse before it ever gets better. I watched a home in my neighborhood sell for $119K a couple of weeks ago. It needs a ton of work, but that one little sale is going to make it hard for anyone trying to sell.
The investors, real estate agents, and mortgage companies got us 75% of the way into this mess. They’re nowhere to be found now that the house of cards has fallen.
RE: It’s going to get a whole lot worse before it ever gets better. I watched a home in my neighborhood sell for $119K a couple of weeks ago. It needs a ton of work, but that one little sale is going to make it hard for anyone trying to sell.
An area appraiser, desperate for current sale,s will zero in on this transaction like a hawk.
Even if he makes a condition adjustment, the underwriters will probably negate it to keep any negative future time adjustment and L/V ratio in their favor.
This is the inverse of when realtor’s considered one BS high end sale to an ignorant out of state transferee as “making a market”-LMAO…
Of course the data will get then plugged into all the instant underwriter computer models.
Adios neighborhood equity.
Real easy on the way up-hell to pay on the way down.
The crummiest house in a neighborhood sells for nearly as much money as the nicest house in the bubble run-up, and in a down market it leads prices downward…
Computer Comps kill.
“Realtors got multiple offers on any given property, and offering prices were often higher than what sellers asked”
every one of these should be investigated for fraud.
“every one of these should be investigated for fraud.”
There was no fraud on the buyers side of the table here. Blame the real estate agents who advised their clients to buy into this feeding frenzy. Blame the appraisers who put whatever the mortgage broker wanted. Blame the mortgage broker who said that a $300,000 house was affordable on a $35,000 salary.
Personally, my realtor never had to advise me to “buy” - I was already looking to buy when I went to my realtor. The people to blame are sometimes the buyers because many, many of them were speculators/flippers who drove this crazy market up in the first place. If anyone made money or hoped to make money off of real estate in the past five years, they are to blame.
“Personally, my realtor never had to advise me to “buy” - I was already looking to buy when I went to my realtor.”
The problem is too many people got into that business when times were good. Therefore, when you’re sitting with your friend who just got into the business…or your friend of a friend…they were talking up the market. Buy now or be priced out forever.
“‘We had an irrational market that was skewed by easy credit,’ Zumpano said. ‘And sooner or later, it’s kind of a greater example of a fool theory — you think you can afford it, and the market conditions change and you’re stuck with this property.’”
He meant “Greater Fool theory”, right? These guys are slow learners, addicted to gambling. Fine, unless you do it with someone else’s money (i.e. the bank’s).
From the blog of a real estate investor:
“The solution to avoiding this problem is twofold. First, never think you are smarter than the market. While you may be smarter than me and the next person, the market always wins out because of the law of averages and the herd mentality. Second, hold fast to your investment principles. Always have an investment standard and process. More importantly, stick to it. Avoid emotional investing and stay away from the herd. If something doesn’t make sense, do not do it.”
“The solution to avoiding this problem is twofold.
If you can’t afford to lose it, don’t invest it!
People have fallen out of love with their homes, and they treat them badly
I have to say this attitude reeks of expecting to financially ‘get away with it’. By that I mean these ‘owners’ seem to assume that there will be no further repercussions, no matter what condition they leave the dwelling in.
It could, of course, be the case that they d*mn well know that they will be left completely without attachable assets, but I wonder how many of these folks simply believe the lender can’t or won’t come after them for redress.
I remember some interesting tales from the UK a few years back, when the current bubble was in full swing. People with a fair bit of equity from a couple of trades were being hit with big liens because of judgements made against them several years previously.
Maybe the US is different, but in the UK (and where I live in Australia) the financial institutions have a long memory.
“Roughly half of all foreclosed properties are returned to the bank with substantial damage, according to a national survey of 1,500 real estate agents.”
I know it sounds old fashioned, but I think these vandals should be prosecuted and thrown in prison. This certainly shows how literally trashy many of the boom “buyers” were then and are are now. These are the same thieving slobs our government leaders want to “rescue.” Water definitely seeks its own level.
It’s more of a tort than a crime though isn’t it? I mean the occupents are putative “owners” and can do whatever, but they’re actually wasting the bank’s property. I don’t think they’d jail people for that.
That’s true but the owners’ behavior is skewed by the fact that in many cases once the foreclosure is done there is no further recourse. Debtors should not have an “out” for debt they incur. That leads to a distortion of behavior to what would otherwise be considered irrational.
the owners’ behavior is skewed by the fact that in many cases once the foreclosure is done there is no further recourse.
Can’t the bank pursue a deficiency judgment in most states?
I don’t know which states are non-recourse. I think someone posted that list at one time…
I’d speculate that most of the time the legal costs for the banks are probably so high that it’s not worth going for deficiency judgements on the average foreclosure.
Devil’s advocate here, but I don’t think these people did so much wrong that they could be prosecuted. It was THEIR house, if I make a mistake and think I can dispose of concrete in my toilet as stupid as that is it’s not against the law if it’s still my house. Now, if people trash the house after the bank has foreclosed it’s vandalism, but otherwise it’s just trashing your own house - not against the law.
The problem here is banks not being able to get recourse in a lot of states, so if the people take a 20k loss on the value and turn it into a 70K loss on property value the bank can’t come at them for any of the loss 70 or 20.
The real problem is that you can’t get blood out of a rock. The cost to pursue is greater than the likely recovery.
occupents are putative “owners” and can do whatever…………
Wrong. If they are holding a mortgage, as in the examples cited, ALL mortgages require the “owner” to maintain the property and to keep it in good condition. It is a term of the agreement to lend the money…….to keep safe the collateral. I would say they are destroying the Banks property until the mortgage is satisfied.
It’s more of a tort than a crime though isn’t it?
It is a civil tort unless criminal intent is found. Criminal intent would be a form of knowingly and intentionally causing economic harm via destruction of property once the property has been foreclosed, use of arson and maintaining a common nuisance as just some examples of criminal charges that can be filed in some states.
Most of the time the public never hears the outcome of the person who destroys their property. However, I have seen many cases like these in the past and I can assure you that you would not want to be in the shoes!
I was staying on Singer Island last week (which is my second time since XMAS) and the condo right before the bridge on Blue Heron in the middle of the war zone still looks empty at night. Does anyone know how many of those condo are sold.
Also, the condo on Singer Island that Catalfumo is building 2700 Ocaen seems to be about be about finished. The building looks nice but I question how many of those condo are sold. In the building farthest from the ocean there are six units per floor ranging from 1725 sq ft to 3035 sq ft, in the building closest to the ocean there are only FOUR units per floor ranging from 3600 sq ft to 3950 sq ft. Plus there are penthouses with 6425 sq ft and a tower suites with 7,445 sq ft. Does anyone in the area know if many are sold and for how much? http://www.2700northocean.com/default_content.html
Ahh, the Marina Grande. Park your Bently in the one of the most dangerous neighborhoods in the entire country. Got to love the crack houses right across the st, no?
Anyway, from my observation (I live in PBG, about 5 miles away), it never really has any lights on at night; I would imagine that the building is mostly empty; it was built at the height of the boom.
And really, honestly, until you experience this neighborhood, the 500/sq/ft that they were asking for this building just does not register. It’s my 2nd fav building of this boom, right after the Landmark; 1M+ dollar condos in the mall parking lot. At least the Marina Grande was a LITTLE cheaper for the awful location!
“…right after the Landmark; 1M+ dollar condos in the mall parking lot.”
Landmark is still wishing for $500,000 for an unfinished unit these days. It will make great public housing in 10 years!
If I had a choice I would much rather me in the parking lot of the Gardens Mall than in the hood at Riveria Beach.
You know the loan officer who made either of those loans got paid for making a loan not necessarily a good loan.
A 2-foot fish and cement were poured down the toilet at another of his listings nearby.”
This crash is starting to hit new lows when people resort to fish abuse, I am ashamed to be an American.
Bass-O-Matic ‘08
They’re questions that Hilsmann hopes to soon get answers to. She and her husband bought a condo as an investment more than two years ago.
Well no. An investment is an asset that generates income. If the condo had really been an investment, they’d have no need to sell it.
An investment is not “something I think I can sell for more than I paid for it”, whatever J6P might think.
Cheers to that. People treat homes the way that some people treat stocks. The problem is, even stocks shouldn’t be bought and sold just on their current value, but rather on dividends paid or, in the event of a pro-risk policy, some sort of liquidity event. As far as I can tell, I can’t just ‘cash-out’ my house, especially when I’m buying my position with borrowed money.
Lots of investments don’t generate income: non-dividend paying stocks, commodities, precious metals, land, lots, and 0-coupon bonds. An investment isn’t a bad bet simply because there’s no intermediate, periodic cash flow.
RE: “Exasperated lenders are getting wise to the ruse and offering ‘cash for keys’ deals, essentially paying homeowners as much as $2,000 not to take out their frustrations on their properties before leaving. Roughly half of all foreclosed properties are returned to the bank with substantial damage, according to a national survey of 1,500 real estate agents.”
Ransom money to low-life white trash. Great culture we are.
USA, no more Numba #1, GI
“Ransom money”
All’s fair in Love and War when you’re dealing with the Housing Pirates of the REIC Bust.
I don’t get this attitude. I just don’t get that there’s any reason it’s ok to trash a house because you’re going through foreclosure. No one was forced to buy in the first place, nor were they forced to buy more than they could afford or take an exotic loan. Is there no dignity or self respect left in society?
>>Is there no dignity or self respect left in society?
To ask the question is to answer it.
No. I bet you conservative people wouldn’t trash a house, though. Just sayin’.
“Ransom money to low-life white trash. Great culture we are.”
Stop blaming the homeowner. If they’re able to hand over the keys, they most likely aren’t the “investor” scum that made this mess. Most of them are the ones who got caught up in the “better buy now” scheme that the real estate “professionals” were selling. Shame on them for getting caught up, but why not take $2,000 to leave peacefully?
Yeah, the poor, ol’ consumer, never responsible for a thing. How could a common guy every possibly have done anything wrong? I am he.
“Yeah, the poor, ol’ consumer, never responsible for a thing. How could a common guy every possibly have done anything wrong? I am he.”
I didn’t say the consumer wasn’t responsible for a thing. I said, let’s put the blame across the board. If we were looking at a fault pie chart, I would put the homebuyer who bought a single family home to live in at less than 10%. Should he have read the whole loan package? Maybe..but you’re paying all of those closing costs for a “professional” to help you through the process.
“Maybe” he should have read the home loan package?! When you sign on the dotted line, you’re agreeing that you have read it and that you agree. The professionals are paid to make sure all the i’s are dotted and t’s are crossed but the signor is the one who is ultimately responsible - and doesn’t it make sense that a person borrowing hundred of thousands of dollars would take a few minutes to look over the numbers one last time? C’mon, let’s at least require a little accountability from the person who started the whole process in the first place - and is expected to see it through.
Stop blaming the homeowner.
I can’t see one reason not to blame the ‘homeowner’ alone for destructive behavior like this. What possible good would it do?
Even a baby throwing a tantrum doesn’t cost society thousands of dollars. These vandals should have to pay for the damage or go to jail, just like anyone else.
These vandals should have to pay for the damage or go to jail, just like anyone else.
When they meet Bubba or Bubbette for the first time, I bet they will regret their moment of rage!
Fear the Bubette!
It is much more likely for a resident homedebtor to resort to vandalism and theft. A specuvestor would not care, and would be more likely to wish the home be kept in good condition, so as to lessen the ultimate loss.
> “Ransom money to low-life white trash.
They aren’t all white.
Pretty standard in the 1980s; but banker’s have short memories. When foreclosure is likely it’s a good banking practice to offer the borrowers a few thousand bucks for a deed, contingent on their maintaining the property until title and possession passes. This way the banker minimizes legal expenses and gets a property in decent condition (further expense reduction). I suspect that this practice is not followed by servicers of securitized home loans, other than those in FNMA, FHLMC, and GNMA pools.
EXACTLY tux, the whole mortgage pools mess is what really enabled the piss poor decision making on the way into this, and is keeping up with the bad decision making out of it.
‘Q: A steep decline in the residential construction industry led Florida into the downturn. How long do you expect the housing market will suffer? A: It depends on how we define suffer.’
Snaith Pliskin…
http://i213.photobucket.com/albums/cc201/DaisyDuke0106/escape_l.jpg
if he’s a gov worker he won’t suffer at all
Here in SFL this week..some observations:
1)Went to Sawgrass MIlls Mall…only foreigners shopping and not very busy…Shops are outlets..every store has “sales”
2)Spoke to the locals..God forbid you are a mortgage broker/realtor..you are now selling something else(one is even brokering fish now!)..even had someone ask if my husband was hiring for our business…
3)Home prices may be going down but everything else is going up on price! Surprised at the cost of alot of things compared to where I live now
4)Taking the kids to theme parks for the weekend was real easy to get on site hotel reservations..prices have come down!
5) More shops/stores out of business or downsized…
4)Taking the kids to theme parks for the weekend was real easy to get on site hotel reservations..prices have come down!
Just curious, which resort and how much (Orlando, right?). We have a soccer tournament in SoCal this summer and the hotels in the Anaheim area are pricier than in years past.
Well, the houses are getting trashed, but that will put builders back to work - as remodelers/repairers. I’m guessing insurance will figure in here somewhere… and will be looking to see my homeowners’ insurance bill rise some time in the future… not a lot, but at least a little.
And I do think it’s a tort, not criminal. Perhaps an attorney will chime in.
“And I do think it’s a tort, not criminal.”
Not an attorney, but in an industry closely related to this mess. I’m on the tort bandwagon as well. There’s real property and personal property. You can do whatever you want to your personal property. Real property is everything physically attached to the house. As far as I know, you have the right to the real property until the bank takes it back. If you’re not taking good care of your home, you’re in violation of your mortgage agreement…nothing criminal there. If the bank is taking the house back you were already in violation to begin with. Last I checked we don’t have debtor’s prison in the US.
I ran into these problems in ‘93 to ‘95. The central question was: did the damage occur before the foreclosure? If it did, then the damage was present at the time of the foreclosure and the property was bought “as-is” with the damage. The foreclosing lender might have a claim against the former owner for “waste” or destruction of the collateral, but then again the foreclosing lender probably also has a claim against the former owner for the note deficiency too. Most of that would be uncollectable or would get discharged in a bankruptcy proceeding.
In several cases, however, I was able to demonstrate that the damage was done *after* the foreclosure occurred so the new owner could take judgment against the former owners as part of the eviction process and could conveniently seize or levy against property as it was being taken out to the curb. The downside, of course, was that most people who had to actually be evicted (less than 1%) had nothing worth seizing. Even the folks who had riddled the house with bullet holes had taken the guns elsewhere by the time the eviction rolled around. Other folks, like the ones who mixed tar and sand and painted the hardwoods throughout the house with the combo, didn’t fare as well. They got prosecuted for malicious vandalism.
I’ve never understood that mentality, though. I mean, but for the loan, those folks would never have lived in the house at all in the first place. They also didn’t pay the loan for at least some time prior to the foreclosure and certainly not after the foreclosure, so what happened to that money? The honest folks went and got another place. It’s the dishonest or just plain surly folks who resort to these measures.
If its intentional conduct perpetrated by the titleholder that, in effect, doesn’t hurt the titleholder but does hurt the mortgage holder, then I am fairly confident that in addition to it being an actionable tort, it also violates the criminal law (there’s usually an obscure section of the law that can be dragged out in a proper instance). However, most prosecutors are busy enough and would likely exercise their discretion to leave this to the parties in the civil arena.
“Well, the houses are getting trashed, but that will put builders back to work”
http://en.wikipedia.org/wiki/Broken_window_fallacy
This will depend a lot on the facts. Most HO insurance policies require the home to be ‘occupied’. If the mortgage holder places the home in foreclosure, it is a ‘change in condition’ which requires notice to the carrier. Failure to notify the carrier may void coverage. If the house is vacant for more than 60 consecutive days, that WILL void coverage. Woe to the mortgage company who fails to comply. The insurers can and do play hardball just like mortgage companies. Name me another business that retains salaried lawyers by the thousands per company.
And Macattack, it is a tort. An intentional tort if the homeowner busts the stuff up himself, negligence if he leaves the door open.
Finally, I don’t think rates will be affected all that much. Insurers operate under the ‘theory of large numbers’. In other words, get enough mass data and you can extrapolate some pretty accurate numbers. Plug in vacancy rates, late payments, taxation tables by zip code and I think you can make some reasonably accurate predictions. We insurers started staffing up in our property departments last year. We also believe in global warming. Ask our coastal policyholders.
And what insurance company covers a claim if you take a baseball bat to your car? Not mine!
It can be criminal mischief: all that is needed is to show that the property “belonged to another” and was damaged in a willful and malicious way. If the damage exceeds $1,000, it’s a 3rd degree felony in FL. Also, if the occupants take appliances or other fixtures once the place is in foreclosure, like that awful woman from the St. Pete Times article, it’s felony grand theft. Why bother paying the filing fee for the civil suit, when you can get their a$$es slapped in jail (or prison) and get a restitution order to boot?
“It can be criminal mischief: all that is needed is to show that the property “belonged to another” and was damaged in a willful and malicious way.”
Your burden of proof is much higher…beyond a reasonable doubt. Also, the property does not belong to another. It belongs to the homeowner and bank jointly. Neither the bank nor the carrier cares a whit about whether the homeowner goes to jail. We are strictly interested in the Benjamins.
These article about things going bad remind me of one thing in American buisness. Its hard to argue with the cheerleaders.
Things are going well and you spot developing problems or future trends. You get labled as Mr Negativity or some such thing. Not a team player. You really get driven out of a lot of places when you don’t drink the koolaide.
I get that in the electronics industry all the time.
I’m sure most everyone on here has been hit with some of that and been burned. Until the disasters actually happen we are treated like some kind of heretics. Normally we are unemployed by the time a disaster strikes though.
I wonder what the conversations are like then?
Oh well.
Oh, why does this sound all too familiar?
I have come to the conclusion that this is the “American Way” of doing business.
2, 4, 6, 8
Cyanide Laced Kool-Aid tastes Great!
Did you know that 25% of people can smell or taste cyanide?
Luckily I smelled it once during an autopsy (on a person who committed suicide) and would know if someone spiked my Kool-Aid with it. It has a terrible, overpowering odor if you can detect it, and kills rapidly in sufficient doses.
oops…meant to type that 25% of people CANNOT smell cyanide…genetic variation
And when that 25% or people eat asparagus, and then take a leak, well, their chronicles are LEGION
Middle class realizing it’s in a vice. Eventually this will result in social unrest. Crank up the food stamps.
http://news.yahoo.com/s/ap/20080409/ap_on_bi_ge/middle_class_poll;_ylt=AjNbX3Mt_6eqUoLPCxc1ICWs0NUE
Middle class maybe starting to realize it’s not middle class . . .
A few of us have proposed that this realization has been around for a while and is what fueled the bubble. They know that they aren’t going to get more money at work, so it was time to flip houses.
They know that they aren’t going to get more money at work, so it was time to flip houses.
Bingo! And I can only wonder (fear?) what’s next now that the “home equity” well has run dry . . .
The war on the working class isn’t over yet folks. There are still a few of us earning a respectable living.
Out here in SF, California, the middle class as typified in the American vernacular is totally gone. From a middle class lifestyle, what used to be the upper middle class is now middle class since a family earning dual six figure incomes ( 200k) might only be able to afford a small 2 bedroom house here. The middle class are now the working poor. The working poor… usually barely making it or homeless.
They say that California leads the nation in future trends. Let us hope that this example doesn’t come true for the rest of the country.
They say that California leads the nation in future trends. Let us hope that this example doesn’t come true for the rest of the country.
Reading this made me upchuck, just a little…
I hope you’re right and this correction/recession/collapse/whatever helps bring a lot of things back into balance.
Hopefully this is a wake up call and they will not let the gangsters anywhere near Social Security. That would be the heist of the century, and they have tried many times.
Repeat after me folks: Wall Street is loaded with gangsters that spend every waking minute trying to separate you from your money.
Every waking minute.
they will not let the gangsters anywhere near Social Security
The gangsters are the ones that set up and have perpetrated the ponzy scheme knows as SS, they’ve been running it the whole time.
SS has long since been looted (not by wall street, but their close associates the U.S. Gubmint). It’s filled with IOU’s now, the cash took a walk a long time ago.
Not only that, but SS was one of the absolute worst returns on your money taken out of your check that you could possibly come up with. Even a low wage earner would have seen tremendous gains compared to SS if they had the same amount put in anything even half ass decent.
As it is you now have a huge bucket of IOU’s that you are relying on generation Y to pay for you, and all this while they see they won’t ever get anything out of SS because it’s bankrupt.
Good luck!
“Some South Floridians who lose their houses to foreclosure try to get even. They’ll strip the plumbing, ruin the carpets and rip out doors.”
“Jim Banford, broker-owner of Real Estate Asset Disposition Corp., saw roofing tar in the toilet of a house in West Palm Beach. A 2-foot fish and cement were poured down the toilet at another of his listings nearby.”
___________________________________________________________
Toilet training for adults, South Florida style.
It’s the bank’s own fault. They get EXACTLY what they deserve for lending money to vagrants with zero down. Giving any bum on the street half a million dollars so he/she can run around bidding up housing prices. You reap what you sow. Hopefully the banks will learn their lesson and soon we will return to the days where you need 20% (or better 30%) down to buy a house. That keeps the riff raff out and the jingle mail at bay.
It’s a slippery slope when you employ a scorched earth policy on your own home…
What will they do for an encore?
‘A: (Snaith) No. I was surprised to see that happen, but sampling error is part of the business of taking surveys. While, when the revise data came through, it certainly changed our outlook, it didn’t necessarily make me question the data we receive on a month-to-month basis…’
That’s why I don’t pay attention to any of that blather. Statistics and sampling and measurements can really make you crazy and irritable, in my experience. I just pray to Sweet Baby Jeebus to make the problem go away, and then I go drink some beer.
So far this is really proving to be a superior work path.
I think I will tel the IRS I had a “sampling error” and not pay most of my taxes……
I said it before and I’ll say it again, the small minority of people who damage foreclosed property should be prosecuted plain and simple. It’s one thing to be a stupid idiot in your personal finances, it’s another thing altogether to be a person who vandalizes property. Put these stupid vandalizing idiots in lockup where they belong.
20% a day will keep the riff raff away…
Ria, do you understand what a “non-recourse” mortgage is?
“‘I think a lot of people got into real estate when real estate was easy. Anybody could have sold real estate in 2005,’ said Travis Miller, broker in charge of Exit Realty. ‘Now it takes skill and perseverance and determination. You’ve got to take it seriously.’”
There are similar stories in different fields; the term I heard once was “Bull Market Jockey”.
Why work when you can just ride a market to prestige and rich retirement? It has tremendous appeal to the lazy, vain, and under/un - employed. No need for experience, education, hard work, or savings. Just put your feet on the desk, take the orders, and make $$$. That’s what it’s all about in America; land of the free lunch, home of the brave order taker/ Bull Market Jockey.
Where do I sign up? Seems like the only thing it requires is identifying the boom-area, and timing it right. Oh yeah, probably also a good idea not to spend all of your windfall earnings, since they will not last. Most of them seem to lack that last bit.
“Why work when you can just ride a market to prestige and rich retirement? It has tremendous appeal to the lazy, vain, and under/un - employed. No need for experience, education, hard work, or savings. Just put your feet on the desk, take the orders, and make $$$.”
And another part of the article mentioned that Realtors are leaving the profession in droves. What will they do now? Aside from the jokes about stripping, hooking, robbing, etc.
Seriously, where will all these ex-Realtors go for jobs in this economy?
I know what ‘nonrecourse debt’ is, but I don’t know what you’re intimating with the term ‘recourse mortgage’. If (and I’m not saying you are) rationalizing any criminal behavior, I’m strongly in disagreement.