The Rarefied Atmosphere That We Had
The Columbus Dispatch reports from Ohio. “For decades, central Ohio residents could count on steadily rising home prices that provided a bedrock of financial stability in good times and bad. That ended in 2005. Franklin County home values peaked that year, and the median sale price began dropping for the first time in at least 25 years, a Dispatch analysis found.”
“If not for the loose subprime-mortgage cash flowing from Wall Street, Alice Goff probably would not have become a homeowner in 2005. Last month, Deputy Eddy showed up on her porch. She and her 13-year-old daughter needed to leave.”
“Goff and her then-husband were looking for a place to rent in December 2004 when they ran across a mortgage broker’s sign that said ‘No down payment’ in front of a 90-year-old house on the South Side.”
“Although the couple lived on government disability payments for Goff’s mental problems and the income from his cleaning business, they snapped up the home. ‘It was exciting at first,’ said Goff. ‘They made it so easy.’”
“Goff’s home sits where scores of subprime loans meet plunging house prices. There were 482 home loans signed in Goff’s census tract from 2004 through 2006, and just over half were subprime. In Goff’s neighborhood, the median price of single-family homes went up 45 percent from 2000 to 2005, peaking at $79,999, according to county records.”
“But since then, the median sale price has slid 15 percent, to $67,950 last year.’
“Goff’s home cost $84,900. The interest rate on her Wells Fargo mortgage started at 9.95 percent and could never go lower. It reset every six months, and could reach as high as 15.95 percent. After six months, her monthly payment jumped from $636 to $766.”
“Goff divorced in 2006. When she was late on a payment, the monthly total was reset to $1,301, she said. ‘I didn’t know it would have got that bad,’ she said. ‘I think they knew I really didn’t qualify for the house, but they played with the numbers.’”
“Wells Fargo took back the house in March through a sheriff’s sale, paying $36,000.”
“Franklin County deputy sheriffs William Eddy estimates that 70 percent of those being evicted countywide are renters. That’s because lenders peddled many of the risky mortgages to landlords and property investors.”
“‘They ran out of chumps who wanted to be homeowners and tried the ‘I want to be Donald Trump’ crowd,’ said Paul Bellamy of a Columbus-based legal advocacy group that helps homeowners fighting foreclosure.”
The Daily Tribune from Michigan. “The dramatic drop in home values has left some Oakland County residents feeling cheated, while others don’t see a quick turnaround.”
“In Oakland County, current property taxes are based on values as of Sept. 30, 2007. ‘Everything you read seems to point toward continued lowered home sales prices,’ said retired Oak Park police officer Kurt Skarjune, who lives in a 2,800-square-foot contemporary Cape Cod-style home in Commerce Township. ‘However, assessments aren’t accurately reflecting the lower home sales prices,’ he said.”
“The market is also affecting the prices of lofts in downtown Royal Oak. Tom Barjak, a realtor (who) sells lofts… said he has had to reduce the prices for many higher-priced lofts, some as much as 30 percent.”
“‘Our premium loft went from $389,000 to $280,000,’ he said. ‘The higher price range has dropped.’”
“A new option Barjak said his company is beginning to offer is a leasing option for lofts. Renters can lease a loft anywhere between $1,900-$2,100. ‘We’re only leasing them because we can’t sell them,’ he said. ‘It’s more advantageous to lease (than let them go unoccupied).’”
The Chicago Tribune from Illinois. “Homeowners in danger of foreclosure increasingly are looking to beat the bank to the process by selling their homes for less than the value of the mortgage, with their lender’s permission. But real estate agents say the growth of the short-sale market is having a detrimental impact on the overall housing market because it brings down comparable-sales data, making neighborhoods look less valuable.”
“‘It screws up a lot of stuff,’ said Jason Pietrucha, a broker in Glenview, adding: ‘It’s without a doubt the healthiest part of the market right now, that and bank-owned properties.’”
“A company that acts as a negotiator between real estate agents and lenders, recorded a 380 percent increase in its short-sale activity in the Chicago area between the first quarter of 2006 and this year’s first quarter.”
“‘When I go through the MLS, and I do it daily, I see ‘pre-foreclosure, must need bank approval’ all over the place,’ said Bo Buchanan, a real estate agent in Oswego.”
“Stephen Johnson of Crystal Lake, a former branch manager at a wholesale mortgage lender, is selling his home short for $220,000, when it appraised 14 months ago for $290,000, the same amount he said he owes on his mortgage.”
“Johnson had borrowed 100 percent of the home’s value in 2007 at 10 percent interest to pay for his wife to attend law school and had hoped to refinance at a lower interest rate. But he lost his job when the lender he worked for folded, and by the time he found another job in October his mortgage company already had begun foreclosure proceedings.”
“He submitted the buyer’s bid of $220,000 in January to his lender and was told less than two weeks ago that the bid was accepted and the transaction would have to close by June 15. His credit report will still take a hit, but Johnson reasons that showing that the loan was settled for less than the full amount is better than looking like he just walked away from his responsibilities.”
“‘If the short sale hadn’t been approved I would have had to be out Aug. 15 as a foreclosure,’ Johnson said. ‘The last thing you want your neighbors to see is the sheriff knocking on your door and putting your stuff out on the street. I feel bad because prior to this I was always the one who paid [on time] and understood the market.’”
The Journal Sentinel from Wisconsin. “Pedro Medellin, a young bank teller who lives with his mother, knows he isn’t a typical homebuyer. ‘With what I make,’ he asks, ‘how would I get approved for a mortgage?’”
“While earning $9.25 an hour, Medellin struggles to pay a $103,500 high-interest loan for an often-vandalized house on Milwaukee’s north side. The city assessed the property at almost $40,000 less.”
“As housing prices were rising year after year, lenders across the country had eased underwriting standards. As a result, many homebuyers were able to secure high-interest loans without disclosing such basic information as their employment, income or assets. The real estate boom stalled, and many subprime borrowers found themselves unable to refinance or sell their homes.”
“His introduction to the world of real estate came early last year when a friend encouraged him to supplement his income by becoming a property manager. The friend then hooked up Medellin, who earns less than $20,000 a year, with his sometime-real estate partner Randez Long.”
“‘I’m not a bad guy,’ said Long, who has launched a handful of small companies. ‘I don’t have to swindle people on a property deal to make money.’”
“Long has helped his younger sister take out subprime mortgages to buy about a dozen Milwaukee properties, most of which are being lost to foreclosures or fire sales, according to courthouse records and Long.”
“To try to figure out what was going on, Medellin took the bills and other paperwork to his boss at Waukesha State Bank, Juan Morales. After just a minute or two of scanning Medellin’s paperwork, Morales said he realized that his employee had bought a house in Milwaukee.”
“‘He asked me what it was. I said it was a mortgage,’ Morales recalled. ‘He was floored.’”
“Morales said he didn’t understand how Medellin got the 30-year loan. ‘Simple math would tell you he couldn’t afford it,’ said Morales, a banker for eight years.”
“Appraiser Michael Davis…set the value for the house on N. 34th St. at $115,000 - the exact price listed on the purchase offer and the amount for which it was sold. Appraisers are required to make an independent judgment of the house’s value.”
“In two interviews, the appraiser defended his work, acknowledging he used the offering price in his calculations. Appraising real estate, Davis said, is an inexact science.”
“‘All it is, is an opinion of value, sir,’ Davis said. “You could say it’s worth $2, and I could say it’s worth a million.’”
“From the start, Central States had limited information about Medellin. The type of loan that he received did not require him to report his employer, income or assets. His impressive credit score in the mid-700s helped guarantee that the loan would sail through, said Central States’ director of operations.”
“Christopher Whalen, managing director of a California risk management firm, (said): ‘In the rarefied atmosphere that we had in this country, my dog could have gotten a mortgage. With a paw print, it might have gotten through.’”
The Post Crescent from Wisconsin. “Buying a house is one of the biggest decisions a young couple can make. Making that decision when your husband is finishing a second tour of duty in Iraq requires added finesse.”
“Neenah’s Stephanie Waitrovich, 23, took a second walk through her new home Saturday just a day after purchasing one of 20 houses for sale at the first Great Fox Valley Home Event, which continues today.”
“Stephanie and 2-year-old son Benjamin will move into their new home June 27. Husband Josh, 23, will reunite with his family later this summer. ‘(The house) kind of fell into our laps and we couldn’t pass it up,’ she said.”
“Developer Fox Valley Homes, which is owned by Robert and Stephanie Millay, came up with the idea to sell the houses in one weekend to promote the first phase of the company’s new 161-lot housing development.”
“Robert Millay likened the innovative marketing approach to the stock market. ‘This is our theory: What do you do with stocks? Buy when they are low. Why not try it with housing?’ he said.”
“Houses including lots were sold at discounted prices from $119,000 to $139,000 - $30,000 less than valued.”
“‘Subcontractors and contractors are slow during winter,’ Robert Millay said. ‘When we approached with this possibility of building 20 homes at once, they were drooling.’”
The Pioneer Press from Minnesota. “The sour economy and continued deterioration of the real estate market are driving down profits for Twin Cities-based banks, according to figures released Thursday from the Federal Deposit Insurance Corp. A growing number, in fact, are losing money.”
“Of 121 banks in the Twin Cities, more than one-fifth posted losses in the first quarter, according to the FDIC. Last year, 14 percent of Twin Cities banks posted a first-quarter loss.”
“‘One reason banks’ earnings are down this quarter is because they set aside a record amount of earnings to take care of problem loans,’ said David Barr of the FDIC. Most of those problems loans are real estate related.”
“‘Our losses are coming because we’re reserving, knowing the real estate market continues to turn down and we have builders (who are customers) who haven’t been able to sell homes,’ said Heidi Gesell, president of BankCherokee, a 100-year-old bank in St. Paul that reported a loss of almost $700,000 in the quarter.”
“Though most banks in Minnesota are solid and doing well - despite a tough first quarter - the list of ‘problem’ banks on the state Commerce Department’s watch list has doubled in the past five years, Murphy said.”
“That list is not made public, but Murphy said about 10 percent of the 330 banks that his department regulates are on it. When asked if its possible a bank in Minnesota could fail, Murphy said: ‘There is a chance of that.’”
Lots of good detail in the Ohio and Journal Sentinel articles.
They were good articles Ben.
I believe that the story of mortgage and appraisal fraud is just the tip of the iceberg for the City of Milwaukee, Milwaukee County and the surrounding counties.
This was one of many slick low level frauds on a inner city delapidated SHACK but it attempted connect the dots from owner, buyer, middlemen con artists, front companies, appraisers, lenders, title companies tied up in this shell game scam.
Also don’t forget that the City of Milwaukee employees and officials knowingly and willingly went along with this Pozi scheme for higher property Tax Revenues and associated Fees.
I am waiting until the higher end Fraud Fun and Games bursts loose on the big name banks and lenders and the more affluent neighborhoods in cities statewide and it directly involves our wonderful RE professionals
Oh, and Ben, I read another article in the Dispatch entitled “Mortgage Meltdown” and it indicated that there will be articles spanning the next three days in a series, this coming week.
For your heads up.
“Of 121 banks in the Twin Cities, more than one-fifth posted losses in the first quarter, according to the FDIC. Last year, 14 percent of Twin Cities banks posted a first-quarter loss.”
“‘One reason banks’ earnings are down this quarter is because they set aside a record amount of earnings to take care of problem loans,’ said David Barr of the FDIC. Most of those problems loans are real estate related.”
_______________________________________________________________
When I think of the housing bubble, Minneapolis isn’t the 1st city that comes to mind, but look at the dreadful condition of the banks there…
I wonder what the lion’s share of bad loans are?
HELOC’s or small homebuilder loans?
“When I think of the housing bubble, Minneapolis isn’t the 1st city that comes to mind, but look at the dreadful condition of the banks there…”
We need to talk.
Ben has pointed out many times that Bloomington, MN was one of the subprime capitals of the U.S.A. Do you remember Bloomington? Bloomington is where the “Minneapolis” airport is actually located. It is also the home of The Mall of America. I first heard the word “subprime” in December 2003 in Inver Grove Heights, MN. It was rampant. I believe the shyster was working out of Bloomington at the time.
Minnesota has a huge housing bubble that dates back to about 1998. We are talking houses selling before they were even fully listed, for more than asking with multiple offers. This lasted through 2004 or 2005. I have one friend that bought in 2002 that did just that. They paid more than asking. She admitted that today, in 2008, they could not get back what they paid. Woo hoo!
I know a lot of Minnesota FBs. Denial runs rampant. Prices are down a little and set to go down much further. Inventory is high. Overbuilding was rampant, especially in the exurbs of the Twin Cities. You know the story. Places that 20 years ago were considered the end of the earth are now loaded with overpriced McMansions.
I believe Minnesota banks are in trouble for construction and HELOC loans. It is probably a mixture of both. Tons of people were pulling money out of their homes. A friend of my sister was getting divorced in 2006. Her and her idiot husband were selling their home and then both going to declare bankruptcy. There was an offer at $195,000 that the bank pretty much had to accept. This moronic couple owed $215,000 on the house. These fools had bought the house for $80,000 more than 10 years earlier. I wonder which local bank had to eat that one. Whoever paid $195,000 for that house is either now a serious FB or has also let the house go back to the bright eyed lender.
This will get ugly in places that wouldn’t first come to mind. Minnesota is just one of the many.
$400k lofts in Michigan:
‘Our premium loft went from $389,000 to $280,000,’ he said. ‘The higher price range has dropped.’
Wisconsin:
‘As housing prices were rising year after year’
$300k houses in Illinois:
’selling his home short for $220,000, when it appraised 14 months ago for $290,000, the same amount he said he owes on his mortgage.’
Decades of rising prices in Ohio, capped by a 45% surge:
‘For decades, central Ohio residents could count on steadily rising home prices that provided a bedrock of financial stability in good times and bad. That ended in 2005. Franklin County home values peaked that year, and the median sale price began dropping for the first time in at least 25 years, a Dispatch analysis found.’
‘In Goff’s neighborhood, the median price of single-family homes went up 45 percent from 2000 to 2005, peaking at $79,999, according to county records. But since then, the median sale price has slid 15 percent, to $67,950 last year.’
The housing mania in the midwest simply ended sooner than on the coasts. They’ll probably be better off for it.
A foreclosure on the block on which I grew up was listed at $149,900. I think a knife-catcher decided to try to catch it. The tax assessed value was $224,000. I wouldn’t give you more than $90,000 for this outdated dump.
The mania has ended but the sheep are slow to catch on.
It all boils down to numbers, and there were one heck of a lot more people in California that bought houses @ 2x to 3x what people paid in middle America.
And HELOCalifornians borrowed liberally from The 1st National Bank of Their House, much more than any other state. (nearly 3x as many new cars were bought with home loans in Ca. vs. the rest of the country in 2007)
“I believe Minnesota banks are in trouble for construction and HELOC loans. It is probably a mixture of both”
Good post NYCBoy and I believe that the two largest banks in Wisconsin are in trouble for exactly the same reasons and have a very HIGH probability of being on the secret Fed Watchlist(73-75) for the again for the same reasons..construction and HELCO loans.
Two of the largest have taken large hits on large multi-million constuction defaults within the last 2 quarters and had to increase their reserves for residental defaults . I believe that Wisconsin was about 13th highest in HELCOs last year and they are heavy into what they considerd suppousedly “SAFE” Alt-A and Primes.
The Minnesota ISN’T alone in this housing, banking and loan mess by a long shot.
Regardless of WHAT the MSM, Banks and REIC SPIN, I guarrantee that a whole lot of banks between Duluth, Mn and Naples, Florida are headed for big trouble.
There also could be a few between Victorville and Newark that made a few now worthless loans on what you could call… Borrowed Time
So the Feds acknowledge that these loans were made fraudulently or were ill-advised, yet are still bailing out these banks so they can STILL make loans like this in order to save the economy? WTF?
Anyone know how the lakefront second home market in MN and WI is doing? My grandfather had a summer home in Spooner and I always enjoyed spending time there.
Also, when the weather is nice, which is a few days a year, Minneapolis is amazing. Have lots of relatives in the Lake Harriet, Lake Calhoun and Minnehaha Parkway area. The architecture is amazing. Not to mention true pedestrian neighborhoods, surrounded by parks and beauty.
Having just got back from Wisconsin I can tell you that they are still dreaming that all of their lake fronts are made of pure gold. Everybody that signed a mortgage thinks they are rich beyond words.
There are a lot of beautiful areas in Minnesota, including the Minneapolis lakes area. But that beauty can only command as much of a premium as people can actually afford. Expect a disaster.
True. I have no doubt they will fall, just brought back fond memories of my time in the area. I have an interest in 1920’s through 1930’s architecture (story book tudors, etc.) and the Minneapolis lakes areas has done a great job of preserving them.
I was thinking about buying a fishing cabin on my grandfather’s lake in 2000. You could get three acres with 150 ft lake front on a 1000 acre deep lake with clear water for about 130k. I went back two years ago and smaller lots were 300k with modest cabins starting at 400k. I think you can get about 50k off now. When you need to get away from things, a fishing cabin is the best relaxation I can find. If they get down below $250 again I will have to consider.
I was drinking with a Minnesota real estate agent the other day. He sells in my hometown. He is making nothing. He has 2 rental properties. He has trouble finding good tenants for those. But this Trump wannabe wants to get 10 properties. I don’t know who would lend to him. Somebody said something about my “negativity”. He made some smart-a$$ comment. It took everything I could muster not to say, “I can’t wait to hear tales of your starvation”. Optimism still runs deep.
There are 11,000 lakes in Minnesota. They are not that rare. There is no way prices should be where they are at. If you build a house on those properties the upkeep costs are high. But people aren’t worried. Price appreciation will take care of that. Ponzi scheme at its finest. Prices will fall below that 130k.
NYCityBoy - thanks for all the posts about Minn. I loved the place when I chance to visit.
VT isn’t the subprime capital of the US but the same total disconnect happened between the wage base the housing prices (obviously). All the bubble prices in the midwest have a familiar ring to them here.
I see alot of the economic parallels between Minn./Wisconsin the rural parts of New England. Practically noone here farms or logs for a living. Everyone I know either commutes to work (at least 20 mins, most closer to 1 hour), is part of the tourist industry, or is in some sort of building related trade.
In the long run, how sustainable is to have everyone have a vacation home on a lake (or VT’s ski slopes, mountains)? Environmental impacts aside,what happens to the economics in rural tourist areas when America decides it doesn’t have the money to travel so much? How appealing is that second home if you have to save money just to get there?
…and don’t forget the mosquito repellant. There’s A LOT of em around those lakes.
It should be called “Mosquito-sota”
But that beauty can only command as much of a premium as people can actually afford. Expect a disaster.
That was the type of quote I was looking to respond to.
I have quite a few coworkers that own homes (plural is appropriate) or lots on various lakes in a variety of states. It really doesn’t matter what state we’re discussing, the thought process was all the same; “They’re running out of waterfront land.” Typically these individuals own a number of other homes. While all have been financially prudent, they also all at the point where they want to retire and will have to sell their “working home”.
I’m still trying to figure out the guy who owns land (acres!) on an Idaho lake (he just sellected the blueprints to build to), his underwater ‘working house,’ and now is bidding on a McMansion near his work (but he’ll retire in four years). Maybe I need to drink more? I seem to get stuck on the financial math that screems “STOP!”
Got Popcorn?
Neil
Just goes to show you that this housing bust is far from over.
I think part of it is an escape mechanism too for some ppl. When you have a crappy week at work you can think of your lake front property and plans to retire. I certainly know on occassion that the only way I make it by during difficult times is scheduleing a vaction or working on my retirement plans. Last week, I worked over 70 hours under insane deadlines. It was such a week.
I realize the difference between dreams and reality, but sometimes dreams are all you have left.
Sellers have already mentally spent the money that they think their homes are worth. I’m sure their credit card bills and debt load have reflected that for awhile now.
None of them talk to actual buyers about property values, of course…they just remember those heady dinner conversations during the good times.
RE: Appraising real estate, Davis said, is an inexact science.”
The mea culpa of a known number hitter.
The Appraisal Institute’s Professional Standards of Appraisal Practice would beg to differ.
I concur with hd74man. An appraisal is not simply a subjective opinion. It should be a measurement of value based on empirical, verifiable evidence. Many, many years ago I took the basic and income property appraisal courses of the SRA. I was impressed by the skills required to do a proper appraisal as well as the somewhat scientific method you are supposed to follow. Any property appraiser who says an appraisal is just an opinion and that one opinion is as valid as another is either incompetent, or corrupt, or both.
Friends in San Rosario, by O. Henry
http://42opus.com/v7n4/friendsinsanrosario
Banking on a twist ending…
On May 30, 2008, First Integrity Bank NA, Staples, MN was closed by the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) was named Receiver. No advance notice is given to the public when a financial institution is closed.
The FDIC has assembled useful information regarding your relationship with this institution. Besides a checking account, you may have Certificates of Deposit, a car loan, a business checking account, a commercial loan, a Social Security direct deposit, and other relationships with the institution. The FDIC has compiled the following information which should help answer many of your questions.
I expect that beginning in September we will read every Saturday morning that either the FDIC or the NCUA was appointed receiver of an insured depository institution. Receiverships always take place on Friday after close of business to allow time for the insured deposits to be transferred to another institution.
Never, never, ever have uninsured deposits in an FDIC/NCUA institution and only buy bonds/paper of money center banks that are too big to fail. Check the holdings of your MMFs. I was shocked a couple of years ago to find how much paper of mid-sized and regional banks were in most money market funds. The regulators will close down such institutions when insolvency is unavoidable.
Also, don’t be concerned about the reserves of the FDIC. The FDIC has statutory authority to issue full faith and credit US bonds. An insured deposit is as immune to credit risk as savings bonds and US debt securities.
The FDIC didn’t state what caused this tiny, $53 million bank to fail but as of March 31 it had on its books $5.1 mil in construction loans, $13.9 mil in business loans, and $7.9 mil in income property loans. These traditionally elevated credit risk loans accounted for 50% of total assets.
It looks like failure resulted from management’s decision to invest aggresively in risk loans and failure to properly evaluate such risk. By the way, as of March 31 the bank had $5.0 million in outstanding loan commitments. All of this tells me that the bank was managed by either crooks or foolish gamblers.
“Johnson had borrowed 100 percent of the home’s value in 2007 at 10 percent interest to pay for his wife to attend law school and had hoped to refinance at a lower interest rate. But he lost his job when the lender he worked for folded, and by the time he found another job in October his mortgage company already had begun foreclosure proceedings.”
“He submitted the buyer’s bid of $220,000 in January to his lender and was told less than two weeks ago that the bid was accepted and the transaction would have to close by June 15.
In the end, his wifes law school education was in paid for by the lender taking a loss on the short sale. I love it every time these lenders get shafted. Serves them right.
My father paid many of my college expenses via credit card. Once my sister and I graduated, he ended up declaring bankruptcy.
I call it the Citigroup scholarship fund. My sincere thanks goes out to them.
Dang, why can’t i have the ba!!s to do this?
Oh heavens, the plan doesn’t take courage: merely a failed business and poor planning.
Also, I thought you were of the female variety of person. You need the “ovaries” in that case.
Madam Ovary d’Burlington:
Putting together a failed business and engaging in poor planning entails having “ovaries”?
Don’t call yourself down. Just because Hillary put together an abysmal campaign doesn’t mean it’s because she has ovaries. :- )
It really does look like Johnson played his cards perfectly. For centuries, the little guy was always at the mercy of the big, mean, bankers.
I love seeing the tables turned.
Orwell’s Fargo managed to lose $49k on a cheap home in flyoverville, USA…
Imagine how they’re doing on the $849,000 home loans, double-plus good perhaps?
_____________________________________________________________
“Goff’s home cost $84,900. The interest rate on her Wells Fargo mortgage started at 9.95 percent and could never go lower. It reset every six months, and could reach as high as 15.95 percent. After six months, her monthly payment jumped from $636 to $766.”
“Goff divorced in 2006. When she was late on a payment, the monthly total was reset to $1,301, she said. ‘I didn’t know it would have got that bad,’ she said. ‘I think they knew I really didn’t qualify for the house, but they played with the numbers.’”
“Wells Fargo took back the house in March through a sheriff’s sale, paying $36,000.”
This is what I don’t understand. IF the home was priced at 36,000 (now or then) and IF the mortgage was a respectable 6 or 7% fixed for 25 years, a person with modest means could afford that setup. You could maybe work full time at McDonald’s or Wal-Mart and have a shot at it.
But here we have a foreclosure, a lost home, and Wells (Orwells) Fargo takes a 49,000 hit on principal after jacking the works to 15.95 %? Who the hell benefits here?
And the entity who got the property after the sherriff’s sale still has to fork over maintenance costs, back taxes, and god knows what else to live in the place or rent it out again.
I just don’t get it. But maybe it’s because I’m a dumb Canadian. I don’t the heck know.
“‘They ran out of chumps who wanted to be homeowners and tried the ‘I want to be Donald Trump’ crowd,’ said Paul Bellamy of a Columbus-based legal advocacy group that helps homeowners fighting foreclosure.”
OUCH!! I like this guy!
“Appraiser Michael Davis…set the value for the house on N. 34th St. at $115,000 - the exact price listed on the purchase offer and the amount for which it was sold. Appraisers are required to make an independent judgment of the house’s value. . . In two interviews, the appraiser defended his work, acknowledging he used the offering price in his calculations. Appraising real estate, Davis said, is an inexact science. . . All it is, is an opinion of value, sir,’ Davis said. . . You could say it’s worth $2, and I could say it’s worth a million.’”
If others are appraising property at $2 and you think you can say it is worth $1,000,000, because it’s just an opinion, you really need to do some jail time Mr. Davis. Except for very, very unique properties, deviations in determining market value should be narrower than 20%, and in stable markets 10% tops. In cookie cutter communities we are talking 5%.
The appraiser hits the number and Moodys gives the junk MBS a AAA rating- All very nicely lubed. I wonder how the Chinese, Germans, pension funds, etc. now feel about where their investment funds went and the royal a$$ reaming they took. Will they ever trust the US again?
Will they ever trust the US again?
In a true patriotic spirit, what I want in my heart of hearts is for them to leave us all alone. It’s not practical, of course, but in my gut I understand isolationism.
I hear you Vermontergal.
I rather we remove ourselves from the world stage, and take care our problems here first.
As someone who used to visit your country in years past, I felt you were a world leader and a great example in many aspects. In fact, Canadians in years past tried pretty much to follow in America’s footsteps, and for damn good reasons.
And I know that most Americans worked HARD and appreciated the value of a hard day’s work and a buck (many still do but are being drowned out)!
If the United States can return to what she once WAS, as a whole, that would be an awesome thing to behold.
If this is any consolation to your “patriotic spirit” Vermontergal, if I see a label that says “made in the U.S.A. or made in Canada”, I gravitate toward buying those items first.
I think that countries that MAKE STUFF, make good quality stuff, that people need, will and should do well. It’s time to get back to fundamentals.
As I’ve seen others write, just selling each others’ houses back and forth doesn’t make much of an economy.
“But real estate agents say the growth of the short-sale market is having a detrimental impact on the overall housing market because it brings down comparable-sales data, making neighborhoods look less valuable.”
“Detrimental” to whom? Whether or not they “look” less valuable, they are less valuable, but not necessarily less valuable relative to other neighborhoods. Nothing like sales to end the REIC-preferred mark-to-fantasy model. If nothing sells they aren’t happy. If sales are for “too little”, they aren’t happy either.
“Christopher Whalen, managing director of a California risk management firm, (said): ‘In the rarefied atmosphere that we had in this country, my dog could have gotten a mortgage. With a paw print, it might have gotten through.’”
Dog Gone, Economy
Rarefied atmosphere, eh? Maybe the lack of oxygen at high altitudes does something to the brain…
Johnson, a former manager at a loan broker said ‘I feel bad because prior to this I was always the one who paid [on time] and understood the market.’
Mr. Johnson, I bet you never understood the market, don’t understand it now, and never will understand the home loan market.
“Although the couple lived on government disability payments for Goff’s mental problems and the income from his cleaning business, they snapped up the home. ‘It was exciting at first,’ said Goff. ‘They made it so easy.’”
You wonder if the “Government” knew he also did cleaning work before they handed Taxpayer $$$ to him in the form of disability payments.
LOL. But they can make I think 1200/mo at least without interfering with SSD. Still, a cleaning business?? That’s pretty hard work. Maybe he had some flunkies doing the heavy lifting, but I can’t get over the impression that SSD/SSI is a huge scam. For some people I know it’s the holy grail, because with that you also get Medicare & Section 8, which ain’t bad in a town like Missoula.
I’ve done volunteer work that involves direct contact with poor people. My take was about half of them are scamsters. I no longer do that, and now support the Humane Society of Silicon Valley where I’m quite sure the creatures they support aren’t scamming anyone! (Plus, they smell better than those section-8 SSD/SSI types)
I was under the distinct impression that Social Security Disability in the United States was EXTREMELY hard to get; hardly worth the ridiculous monthly pittance that it provides.
Somebody please step in here and correct me if I am wrong.
I speak as someone who collects disability in Canada. It takes years, reams of paperwork, and constant harrassment from the government to prove that you’re sick and without the benefit could lose your life. It’s not the ticket to the “good life”, trust me. It’s a pain in the ass mostly.
I do sympathise with the Goss’s situation; however, being on disability only provides enough for a modest rent if you are lucky. I know a few who are on the streets and have a plethora of health issues. They should be happy with being renters, though. Homeownership is such a pain and hassle even moreso if you’re battling severe chronic illnesses!