Do Foreclosures Only Go Up?
Readers suggested a topic on the record number of foreclosures. “Do foreclosures always go up? And when will asking prices finally reflect the glut of foreclosures coming back on the market? I can wait forever if necessary, as renting is still cheaper than owning. ‘Home foreclosures and late payments set records over the first three months of the year and are expected to keep rising, stark signs of the housing crisis’ mounting damage to homeowners and the economy.”
“The latest snapshot of the mortgage market showed that the proportion of mortgages that fell into foreclosure soared to 0.99 percent in the January-through-March period. That surpassed the previous high of 0.83 percent over the last three months in 2007. The report by the Mortgage Bankers Association also found that more homeowners slipped behind on their monthly payments.”
A reply, “Inspired by that post, I’m wondering if we could discuss the number of people putting off the inevitable with the help of credit cards.”
“Are there any published data that points to numbers and how many people would start defaulting on other loans once revolving credit is shut off? Is there any data that analyzes time frames to default against numbers of those reaching that point?”
From Business Week. “With the subprime mortgage crisis already crippling the U.S. economy, some experts are warning that the next wave of foreclosures will begin accelerating in April, 2009. What that means is that hundreds of thousands of borrowers who took out so-called option adjustable-rate mortgages (ARMs) will begin to see their monthly payments skyrocket as they reset. About a million borrowers have option ARMs, but only a fraction have already fallen due.”
“Among the states expected to be worst-hit is already battered California. Today, outstanding option ARM loans in the U.S. total about $500 billion, about 60% of which were sold to California homeowners, according to Credit Suisse.”
“But California won’t be alone. Homeowners are also frighteningly vulnerable in states such as Arizona, Florida, New Jersey, and others.”
“‘Most of the public is thinking that the subprime thing is over, but this is another thing waiting,’ said Chandrajit Bhattacharya, mortgage strategist at Credit Suisse Securities. . ‘The problem for these borrowers is that once you go underwater, it’s very hard to refinance, and if you cannot refinance there is very little option for you.’”
From UPI. “Since 1992, when the Department of Housing and Urban Development became the regulator for the Federal National Mortgage Association and the Federal Home Loan Mortgage Corp., the federally chartered companies have been obligated to help expand the availability of mortgages, The Washington Post reported Tuesday.”
‘But, as consumer groups warned banks were offering mortgages with low initial payments — called ‘teaser’ rates — to unqualified buyers, HUD neglected to assess the risks, the Post reported. ‘For HUD to be indifferent as to whether these loans were hurting people or helping them is really an abject failure to regulate,’ Michael Barr, a University of Michigan law professor, told the newspaper.”
“Between 2004 and 2006, Freddie Mac and Fannie Mae helped set lending trends by purchasing $434 billion in securities backed by risky, subprime loans. Now, with 3 million to 4 million mortgage foreclosures expected, Congress is considering a move to find a stronger regulator to oversee the Freddie Mac and Fannie Mae, and may do so before the July 4 recess, the report said.”
The Boston Herald. “Massachusetts foreclosures have plummeted to a more than two-year low, but experts see the drop as temporary - the result of a new law requiring lenders to wait 90 days before seizing homes.”
“Market tracker the Warren Group reported yesterday in its Banker & Tradesman newspaper that lenders initiated just 390 Bay State foreclosures last month. That’s an 88 percent drop from April’s 3,327 filings, as well as the first time since January 2006 that lenders launched fewer than 1,000 foreclosures a month.”
“Experts suspect lenders simply delayed most May foreclosure filings three months until August. ‘From our perspective, we haven’t really seen things slow down,’ said Bill Minkle of Ensuring Stability through Action in Our Community, which counsels homeowners facing foreclosure.”
“Critics say the law essentially lets deadbeats stay in homes an extra 90 days, extending a six- to 12-month court procedure that lenders already followed. ‘You’re dragging out what’s already a very long process - and the end result is probably going to be foreclosure anyway,’ said Kevin Cuff of the Massachusetts Mortgage Bankers Association.”
The Enquirer. “Gov. Ted Strickland is expected to sign legislation this week requiring sheriffs to automatically record deeds within 14 days of a judge signing off on a foreclosure sale. The goal: to stop homes - and some homeowners - from ending up in a legal limbo in which, on paper at least, no one owns the home. When that happens, properties deteriorate, lawns go unmowed and cities don’t know whom to cite. Sometimes, former owners get socked with fines or bills after losing the property.”
“House Bill 138 simplifies the process of identifying a property owner after foreclosure. It also requires buyers of foreclosed homes to pay the balance due within 30 days of the sale.”
“Strickland’s Ohio Foreclosure Prevention Task Force recommended passing House Bill 138. The task force expressed concern about a paper-filing game often played by lenders who buy back their foreclosed properties. Until a deed with the new owner’s name is filed with the county recorder, code enforcers can’t hold anyone responsible for deteriorating properties. And vacant homes can attract crime and other problems.”
“But foreclosure lawyers say banks aren’t entirely to blame. Sheriffs can be slow to release the deeds to them, they say, and federal regulations for government-backed mortgages also can tie up paperwork. Speculators often buy at sheriff’s sales in hopes of flipping the properties without ever taking full possession.”
“House Bill 138 won’t affect the growing number of federal foreclosures or state foreclosure cases that are abandoned by the banks even before the sheriff’s sale.”
The Kansas City Star. “Some nights Terry and Carrie Madden won’t even step onto their patio in Waldo — the stench and mosquitoes from the abandoned swimming pool next door are overpowering. The Maddens’ cash-strapped neighbors moved out in August, and the lender on the now-vacant house let it fall into disrepair. The pool is slime-green. The grass is knee-high. Once Carrie Madden had to call police to chase away burglars.”
“‘It’s frustrating,’ she said. ‘It’s an eyesore, and it sits right at the entrance to our neighborhood. It’s not only a blight, it’s unsafe.’ Not what you would expect in a neighborhood of homes whose average value is about $280,000.”
“City officials say the house on West 69th Street is a prime example of a little-reported but increasingly worrisome trend: Lenders are delaying foreclosing on homes vacated by owners who can’t keep up with payments. Maintenance then stops, or it falls on taxpayers. And neighborhoods have to deal with a growing cancer of blight and falling home values.”
“‘Someone has to maintain the property,’ said Nathan Pare, the head of Kansas City’s dangerous buildings department. ‘If the owner surrenders the house, then it’s up to the bank. But some banks aren’t doing it.’”
“Why some banks aren’t quickly foreclosing on vacated properties is open to debate. The trend runs counter to the common assumption that banks want to get rid of distressed properties as fast as possible. City officials say some lenders delay taking possession because they want to avoid paying taxes and upkeep. Legal aid lawyers say banks may be trying to hide steep losses that could attract regulators. Industry officials say lenders are swamped during these difficult times.”
“‘I’ve not heard of any intentional acts,’ said Berry Laws III, a creditor’s attorney who represents lenders in foreclosures. ‘There’s just a glut. Lenders are overwhelmed with properties.’”
“Whatever the cause, experts say that the trend, which began around January, is spreading silently across the country and suggests that the number of failed mortgages may be far higher than official foreclosure counts disclose.”
“‘There are more and more properties falling through the cracks,’ said Joe Schilling, a founder of the National Vacant Properties Campaign. ‘What it means is that the crisis is a lot more complex than anybody knows. And the conclusion is that this is going to get much worse before it gets better.’”
The Sun Sentinel. “Now, the mortgage crisis is spawning health hazards. With foreclosures on the rise, officials are fielding more complaints about fetid, algae-choked pools that could become breeding grounds for bacteria, toads and disease-carrying mosquitoes.”
“In Wellington, William Bucknam waged a months-long battle to get the pool at his neighbor’s foreclosed house cleaned. ‘It had a terrible color and it smelled because something was growing in it,’ said Bucknam, who lives next door to the house on Nevis Place.”
“It’s impossible to know how many filthy pools there are in all of Broward and Palm Beach counties or how many houses with pools have been abandoned. But South Florida is known for its pool homes. Nearly one of every three Broward homes has a pool. The percentage rises to nearly half in Palm Beach County.”
“With more than 5,000 property owners facing foreclosure in the two counties, the number of abandoned pool homes easily could run into the hundreds.”
“Wellington can fine property owners who fall behind on a pool’s upkeep, and that process started for the home on Nevis Place, Chief Code Compliance Officer Cindy Drake said. The case still is scheduled for a special magistrate hearing on July 17.”
“If the pool’s waters were not clean by then, a special master could have ordered the property owner, listed on county property records as U.S. Bank National Association, to clean the pool or face a daily fine. A spokeswoman for US Bancorp, which owns U.S. Bank National Association, said the company is not responsible for maintaining the property because it is acting as a trustee for a group of investors who bought a bundle of mortgages.”
“A woman who answered the phone Thursday at Exit Realty, The Global Group Inc., west of West Palm Beach, said the company sent the cleaners to the home. She declined to comment further.”
“While Bucknam is happy that someone drained his neighbor’s pool in Wellington and scrubbed its walls, he’s upset that it took eight months to get the work done. ‘I think the bottom line is that banks should be in the shoes of the homeowner,’ he said. ‘They should take action without having to be chased down and beat over the head.’”
The News Press. “Riverside Bank of the Gulf Coast has parted ways with longtime president and CEO John Moran, the Cape Coral-based bank’s chairman said Monday. ‘A couple of weeks ago we accepted John’s resignation,’ said the chairman, Elmer Tabor, owner of Wonderland Realty in Cape Coral.”
“Moran, who’d been with Riverside eight years, was asked to leave because although ‘John is a great banker, unfortunately he’d never been through the tough times of banking right now,’ Tabor said.”
“Tabor said the banking industry is in for hard times because of the collapse of residential real estate values in Lee County since the median price of an existing single-family home sold with the assistance of a Realtor reached its all-time high of $322,300 in December 2005. In April 2008, the last month available, it was down 37 percent at $198,900, according to the Florida Association of Realtors.”
“As prices soared during the boom, Tabor said, Riverside made some construction loans that later went bad because the houses, when completed, weren’t worth as much as the loan and the borrowers wouldn’t close the deal.”
“Moran argued in a March 10 opinion piece in The News-Press that the worst of the housing crisis was over as sales were starting to pick up: ‘Spread the upbeat word, Southwest Florida: Things are a changin.’”
“He advised buyers sitting on the fence to act now because a recovery is in sight and prices will be rising soon. ‘Don’t let your snowball of an opportunity melt in the springtime of indecision.’”
“Now, Moran said Monday, he’ll look for another job in the banking field.”
The Kansas City Star. “Some nights Terry and Carrie Madden won’t even step onto their patio in Waldo — the stench and mosquitoes from the abandoned swimming pool next door are overpowering.
Folks, there’s a simple solution: Pour a quart of vegetable oil into the pool. It will stop the mosquitoes. Motor oil works better but is harder to recapture.
But at least they have the joys of home pawn-ership.
BWAHAHAHAHAHAHAHAHHHHHHHHHHHHHHHHH!!!
FPSS,
I love how you’re not shy with your true feelings.
You should see me behave badly in the Bay Area sometime then!
The self righteous smugness just brings out the inner beast.
Man. I want a house with an in-ground pool. I will expect the previous owner to take the loss on the cost of it. I will automate much of the maintenance of the thing with an embedded computer.
And when the bank forecloses but doesn’t take over maintenance the pool computer can adjust and handle that, eventually taking over all of the foreclosures in the neighborhood. Once the whole neighborhood has been “improved” and properly gated, the cybernetic guard dogs will keep watch while the pool makes its move on the city water supply.
This is how skynet starts, people.
Oh please! You can’t even get a toaster that toasts correctly gauging the thickness of the slice, and the moisture content.
Skynet? Don’t make me giggle uncontrollably.
That’s what the computers want you to think.
You’ve obviously never programmed a computer in your life.
I think he was being tongue in cheek.
HAL is that you or The Terminator?
Curse you, Aqua-Scummmm!
Having had a pool before, I’ll note that unless the computer also controls a robot arm or arms to brush the sides and bottom of the pool to dislodge the scum that the swimming automated sweeper can’t handle and also includes capabilities to analyze the water chemistry, periodically add chemicals as necessary to get things back into whack, backflush the filter, replace the filter media, empty the floating debris bins, etc., you’re still going to have to do a lot of work.
Next time I shop for a house, I’ll adjust my offering price down by at least 15% if there’s an existing pool in the backyard. And that’s assuming that everything else about the house is 100% perfect and exactly what I’m looking for. Otherwise, I’ll just move on to another option that doesn’t include a time and money sink that doubles as an attractive nuisance that requires extra insurance.
Gritty - I had one too, as in one only and evermore. It was fun to use when we had kids, because they don’t care how cold the water is. The backflushing was the worst part - you had to exhaust a large amount of water to get all the sediment out. In a drought area, that’s not going to be popular. And a leak always seemed to develop somewhere. Yada, yada, yada. The only positive note I’d add is that the “Lectranator” system was very cool. You just thrown in a big bag of rock salt two or three times a year and that’s it - no chlorine, no other chemicals to add, no testing to speak of.
Like you, I knock major money off the potential offer on a house if there is a pool (unless it’s very small, solar-heated, gets lots of sun and is here in Florida). I’ve thought about going to a pool builder and asking the cost of taking a pool out of service - I know one man who rented a house long-term and had the pool covered with strong boarding, with the LL’s permission.
What amazes me is how many pool-houses there are way north of Florida. Bet that trend now slows down a lot.
I personally liked owning a pool and found it easy to live with in California. Here in SoUtah many are saltwater based. I am told that it’s provides for easier maintenance.
I got a green unkept pool with a short sale house in SoCal. It was much easier to clean and to get up to speed that the dead lawn that surrounded it.
I had the pool guy show me how to keep up with it and I took it from there. The Creepy Crawly (pool cleaner) was $500.00 and my yearly costs for maintaining the pool (I did it myself) was around $80.00 a year including chemicals.
I was told that the pool would be a wash when we put our house up for sale some years later,”some will like it, but many don’t”. However, it was the thing that closed the deal for our own sale.
I didn’t pay any extra insurance costs because of the pool and I still miss it on hot days.
We had a pool when I was growing up (and also as a college student in a “party house”).
Wouldn’t give up that experience for anything in the world. Way too much fun, and used it from April through November, even though it was cold at times.
So Cal, too.
I am hoping to be able to at least read chlorine and Ph levels into the computer, and have T2, the pool terminator, automatically make corrections. Hmmm automated backwash…. now that is interesting! It’d be hot if the pool pump could run from solar panels, but IIRC my parents was 220vac @ 20amps, so that would require a large array.
I can’t fathom why anyone would want a pool. I agree with you, the price drops automatically.
It was a definite NO when it came to a pool for our recent home..I agree..great when the kids are little to keep them busy..but once they get to the teenage stage…especially driving age..pools become a JOB that doesn’t go away…
Sheesh, it really isn’t that hard to take care of. My husband used to hop my neighbor’s fence, stick a hose in the pool and drain it himself. Problem solved.
Yeah, a few extra swipes w/the John Deere rider would probaly help keep those break ins down too. For an extra 10 minutes away from the tv it might be worth it.
He used to weedwhack the other neighbor’s hill. His wife, lord knows why, actually thought her own hubby whacked down the weeds. This guy literally couldn’t get a glass of water for himself. One day he came home from work and asked his kids why his shoes were still on the living room floor where he left them. I bit my tongue, unfortunately the look on my face said it all.
“Moran, who’d been with Riverside eight years, was asked to leave because although ‘John is a great banker, unfortunately he’d never been through the tough times of banking right now,’ Tabor said.”
Much like the loans they’re trying to dump, moving John “The Peter Principle” Moran onto someboby else’s HR file is just good bidnez. If John is a ‘great banker’, it confirms my belief that these guys and real estate agents are the Irish twins of commerce.
In the good times the loan originators, the ones that brought in revenue, were the good guys.
In bad times the originators are tossed out and are replaced by the collectors - hard nosed different breeds of cats than the nice, friendly originators.
“In bad times the originators are tossed out and are replaced by the collectors…”
The true bank loan originators I can feel a little bit sorry for. Those that worked for banks and credit unions with local branches who in many cases actually did good things for their customers. It was the brokers who got into the business to “get rich quick” that helped pump some air into the bubble. A lot of these guys/gals sat in a call center purposely targeting homeowners who had no business taking a loan to ask them to refinance.
In my opinion the worst of the worst in this crisis in order are:
1) Specuvestors.
2) Real estate agents (again the “get rich quick” agents vs. those with years of experience who provided value and service).
3) Bankers/Hedge Fund Operators who combined to make home ownership a reality for those who never should have owned.
4) Mortgage brokers who made loans whether it made sense or not.
5) The Fed, for keeping money too cheap for too long with no oversight over the banks.
“5) The Fed, for keeping money too cheap for too long with no oversight over the banks”
Give the Fed credit for some of the mess too, but it’s the Fed’s job to make people think the economy is on the right track. Do away with the Fed and many issues will go away with him.
“Do away with the Fed…”
I’d vote for that. Make elected (as in un-electable) officials directly responsible for the nation’s currency and money supply.
The first step to recovery is to stop the printing presses. You can’t just make more money to make your economic woes go away.
Make elected (as in un-electable) officials directly responsible for the nation’s currency and money supply
We did that. They decided to outsource the job.
Anyway, it doesn’t really matter who manages. If the elected officials make the same decisions as the appointed ones, has anything really changed?
What, you think people are going to lose an election based on performance or something? Hell, we’ve got a representative from california openly voting herself tax breaks and she is uncontested in the coming election.
The “Federal Reserve Bank” - an apparently Unconstitutional international banking cartel with an official sounding name sanctioned by Congress since 1913 - does not care what we think, or deem to be in the best interests of ourselves, this country, or the world. The Fed is independent and will do whatever it damn pleases.
Don’t like it? Tough. Go howl at the moon and risk prison if you don’t shut up when told to.
That’s the reality
“…an apparently Unconstitutional international banking cartel…”
Not much left that would be considered constitutional by the framers. Everything we were trying to break away from we’ve become.
“But foreclosure lawyers say banks aren’t entirely to blame. Sheriffs can be slow to release the deeds to them, they say, and federal regulations for government-backed mortgages also can tie up paperwork. Speculators often buy at sheriff’s sales in hopes of flipping the properties without ever taking full possession.”
Now I understand why you have to bring the entire amount in cash to a foreclosure auction. I used to think it shouldn’t matter if you brought a mortgage pre-approval or not, but the “limbo factor” makes sense.
“limbo factor”
This factor is popping up across the board. The tax appraiser is taking months to update files for new purchases and other deed transfer information. It used to be that I’d have a client close on Friday and I would be able to show proof that it was a new purchase by the following Friday. Today I’ve got clients that closed in April who still don’t have their information updated. It’s not a problem until the insurance company sends out a bill for no proof of prior insurance!
‘Spread the upbeat word, Southwest Florida: Things are a changin.’”
Hey SDGreg, is the hurricane season over in Florida, or is Mother Nature still got some pruning & rinse water cleaning planned?
‘Spread the upbeat word, Southwest Florida: Things are a changin.’”
They sure are. Moran’s out of his banking job. That’s upbeat, but the bank’s still toast.
A hurricane or two might “clear some inventory”. I’d guess the bank is more worried about honest auditors than hurricanes.
“I’d guess the bank is more worried about honest auditors than hurricanes”
Be careful walking home Greg. “they” know who you are by now, I don’t even think Ben has a clue as to the price we are paying to post our comments on his “Blog”… He probably doesn’t even know about “The O.C young Republicans” … I’ve probably said too much already…
“I’ve been bamboozled by Foghorn Leghorn,… “I’m innocent I tell ya,…I’ve been setup I tell ya… where is that rascally rabbit?…”
“Moran argued in a March 10 opinion piece in The News-Press that the worst of the housing crisis was over as sales were starting to pick up: ‘Spread the upbeat word, Southwest Florida: Things are a changin.’”
In the previous paragraph of Bens post, Moran happens to be the same guy who got shitcanned from his employer because “he’d never been through the tough times of banking right now”. So I’m suppose to believe this greenhorn douchebag when he says the gravy train rolling again yet he isn’t old enough to remember the early 90’s.
And here’s the real kick in the dick–> “Now, Moran said Monday, he’ll look for another job in the banking field.”
Gee wiz, I’m comforted to know that this clueless half-wit will continue his reign of stupidity in the banking biz.
Pools in general are a problem as the economy sours due to the housing mess. People stop paying the professionals to clean them and they don’t maintain them properly themselves. There are green pools all over the place.
I inherited a green water above ground pool once, it took me a week of shocking it, cleaning the filter every few hours, backwashing, replacing the DE every day. What a nightmare, can’t imagine how hard it would be to do an in-ground. We’re talking a LOT of water to be filtered.
“We’re talking a LOT of water to be filtered.”
You have 2 options. Drain it and start over or go through a month long de-tox program as you’ve described. It’s costly to fill, so most will take the month.
Of course, unless the below grade pool was specifically structurally designed to handle the weight of the unbalanced fill (which they aren’t, no one wants to spend the money), they will eventually collapse when drained. Talk about enhancing your property value!
“…they will eventually collapse when drained.”
I’ve seen it happen with big cracks in the pool when finished. It really seems to be the exception rather than the rule though. Most pools are drained to be resurfaced/refinished every 4 years or so. Mine needs it right now, just waiting for the hurricane season to pass. No sense in resurfacing a pool that could end up with 500 tree branches destroying that finish.
I used to use bleach to clean the scum out of horse tanks when I was a kid. Couldn’t you just pour bleach into the pool and then drain it after a day or two? Or is that too environmentally bad? Bleach kills everything, so I don’t know what it would do in the water supply, horse tanks are small and I’d just pour it on the ground in the corral, nothing good there anyway.
This is basically what you do when you “shock” a pool — add a lot of chlorine to jack up the concentration. The pH can mess with the process, though, because the active “disinfectant” ingredient is the non-dissociated acid form of hypochlorous acid (HOCL). If the pH is too high you wind up with OCL- which is not nearly as effective at killing the creepy crawlies. If the water is too hard (lots of divalent ions like calcium and magnesium), the OCL- will precipitate and form scale. Algae are also self-reinforcing from a pH standpoint because they use up carbon dioxide in the water (which tends to raise the pH). Other nasty stuff happens when the pH is too far out of whack — corrosion, etc.
Sorry for the techno-chemical stuff, BTW. I was a chemist and then an environmental engineer before I went to the dark side (law school).
We can tell.
Interesting info.
‘…For HUD to be indifferent as to whether these loans were hurting people or helping them is really an abject failure to regulate,’
Note: Finals are due in November:
HUD = D-
SEC = F+
OCC = F++
FED = D - +
FDA = D
EPA = F
Supreme Court = D
7 years Republican Congress = D+
7 years Cheney - Shrub Executive Branch = F / D+ (Note: Shrub got extra credit for his handling of the pretzel attack)
I don’t think summer school is going to help much with these folks.
History grades on a curve, so they’ll all pass.
lol
Yup. The reincarnation of Karl Marx is going to help immensely. No ups, no downs, no choice.
why are they calling Obama a marxist.. but not Hillary. I’ll never understand politics.
“I’ll never understand politics.”
I’m with you on that sentiment. That’s why I don’t like to discuss politics with folks.
My guess is that regardless of whether their choice is wise or not (and made rationally and not emotionally), people will come up with reasons to support whatever choice they make.
And if you want to draw a parallel, the same thing happened in the housing market. You could tell people ALL the reasons why what was happening was not rational (and back it with facts!) until you were blue in the face, and they would still tell you why they HAD to buy.
Go figure.
BayQT~
he’s beige and doesn’t like killing beige people and spending tons of money doing it.
What do you call: communism + capitalism?
An American home loan provided by Wall Street… sliced, diced & sold to those silly communist Chinese in US Dollars
Come to think of it Marx & Ann Coulter would make a cute couple on the Jerry Springer show.
Especially if they were shtupping in 3/4-ths (waltz) time.
In-out-ooops ooops? in-out ooops-ooops-in? out-ooops-ooops.
Yes, one man is going to transform our entire system of government in 8 years. Soon we will all be wearing black uniforms and addressing each other as comrade.
Not.
Bitter, cynical, angry rhetoric that says expect nothing from your govt…
Ain’t gonna fly.
I thought it was brown uniforms and ill-fitting suits for the Commies.
Whatever. I could never keep totalitarian goons’ costumes straight.
You’re confused with the nationalists circa 1934 Thomas…. Remember those proud, patriotic flag wavers who censored and ultimately murdered those who didn’t align with their ideology?
So what color *was* it that the commissars wore? Maybe I’m color-blind, but it looked brown to me. A little touch of olive drab, perhaps, but mostly brown.
Never confuse nationalism with patriotism, by the way. And keep in mind that it was patriotic flag-wavers that beat the real Nazis.
hwy, you’re being a bit too generous with your grades. Also, consider the recent 8 year crime wave a blip in the 27 year war on wage earners.
Clarence Thomas = Big Fat “F”
Hey but the recent Supreme Court decision (Quark vs. ?) had a damn good decision with Thomas fronting it. Patent extinguishment==sensible thing (and I’m a patent agent!) and luckily the Supreme Court had sufficient horse sense about the decision. Of course, I also liked KSR, so whaddyaknow….
Gee - you could hardly tell from your list that democrats control both the house and senate by significant majorities…
Every single one of those presidential appointees who are doing such a heck of a job are republicans. Every single last one.
Unfortunately, the massive Regulatory State has grown to a point where no matter what ideology a mere elected official or his political appointee brings to the game, the State’s inertia, backed by the self-preservation instinct of thousands of agencies and their career staff, runs right over them.
Isn’t it interesting that the ideologues express a no-hope message when their candidate has no hope of winning. But govt. can be fixed when their candidate takes the lead. lmao.
Isn’t it interesting that left-wing ideologues think sarcasm is an effective substitute for argument.
The regulatory state *does* have a life of its own that has proven beyond the ability of modern Republicans to cope with. Ronald Reagan was the first team, and even he could only slow its growth, not confront its basic assumptions. The two Bushes have been utterly outmatched by the system; for all the ridiculously overheated Huffingtonian rhetoric, the present administration hasn’t done squat to confront the Beast.
Well, I believe the failures on that list (and more) are why the Democrats are NOW in control of congress.
Correct Kay but not in numbers that can sink a presidential veto.
Veto? Que?
The last 8 years of Bush and the Republican and Democratic majorities have been a better advertisement for real libertarianism than the LP ever could have afforded (or could actually have created, given the constant commie-style infighting between the pragmatists, ideologues, Objectivists, etc..)
If you look at what has happened over the last 8 years (or 12, or 16, or all the way back to the Johnson administration at least) and you still think that government is something to trust, you have not been paying attention.
ra ra, go team! lol
Republicans proved without a doubt that if you put people bent on destroying a government agency in charge of said agency, it will fail every time.
They sure wrecked this country good. Just look at the headlines every day. This is 100% GOP made. But much like the Germans during WWII, most Republicans will be believers to the bitter end.
You would think the light bulb might come on one of these days that 7 of the last 10 admins have been Republican, and that even when Clinton was President, Congress was Republican controlled. How can they blame ANYONE else?
This really shows you the power of propaganda. Some people really can be fooled all of the time. Having said that, I think the Democratic Party is friggin pathetic. Not corrupt. Just pathetic.
‘Spread the upbeat word, Southwest Florida: Things are a changin.’”
I’m spreading the word John Moran, I’m letting everyone know that you are out of your job and things will change at the bank you ran into the ground!
Moran’s problem might have been reality-based: people who actually live in southwest Florida, or who have visited lately, knew he was completely full of it. Speaking of “full of it,” where has Hank Fishkind been lately? Cue the seal!
‘Don’t let your snowball of an opportunity melt in the springtime of indecision.’”
Sounds like he could write great Hallmark cards or fortune cookies . . . or something along those lines . . . .
“The loans automatically recast after five years, but many will recast sooner as loan balances hit specific principal caps—typically between 110% and 125% of the initial loan amount. Many of these loans are expected to recast within the next two years, meaning that borrowers’ monthly payments will swell to include both principal and interest.”
The housing market in Marin county, California is going to be a bloodbath once the option ARMs start to recast in 2009 and 2010. The smugness in this area is going to be history.
Keep the popcorn popping,
Red Baron
I wonder how many people will successfully rework their loan, especially now that some mortgage backed assets are going for 20% on the dollar? Maybe the new owners of the toxic waste will cut the tenants a screaming deal.
Some will just cash in other investments (401Ks, stocks, savings) to refinance or sell at a loss so they can afford their “rent”. But with so many “prime” people putting a premium on homeownership, you have to wonder how many will actually walk away compared to the subprime market (which is what most sane people should do).
How long do you think Bernanke will keep rates artificially low? I hope the market will reprice risk appropriately, even with a low Fed Funds rate. This is just another huge bailout for the bank’s sloppiness and bad bets at the expense of savers and taxpayers.
The market has kept loan rates stubbornly high, I only expect them to go higher despite what Bernake does as it becomes finally clear that loaning money is a risky proposition.
You’re right.
I just looked up yield spreads on FNM mortgage backed securities. Bernanke is going to have a tough time justifying the low rate for anyone but banks taking advantage of the Term Auction Facility.
Although, loaning (depositing) money to one of the many high risk deadbeat banks gets you next to nothing.
“…the worst of the housing crisis was over as sales were starting to pick up: ‘Spread the upbeat word, Southwest Florida: Things are a changin.’”
“He advised buyers sitting on the fence to act now because a recovery is in sight and prices will be rising soon. ‘Don’t let your snowball of an opportunity melt in the springtime of indecision.’”
Buy now or be priced out forever! Prices are rising! It’s 2005 all over again! It can only go up from here! Why just buy one?
What kind of world is this ass clown living in?
“What kind of world is this ass clown living in?”
He still hasn’t sobered up from the bubble intoxication. You’d be surprised how many normal, well educated people I talk to in a given day who feel it’s a good time to buy. When the bottom finally hit in the areas hard in in the late 80’s early 90’s, it was a good 3 years before prices started creeping up again. That time there was a whole lot less going against the housing market. This time bottom might not even hit for 3 years, let alone recovery.
I found it repulsive that when figures showed that sales were up but prices were declining as a result of banks beginning to dump some of the foreclosures that keep stacking up, the headline in most cases is “Sale Unexpectedly Up” rather than “Price Declines Accelerating.”
“I found it repulsive…”
The media is walking a fine line right now. They were very quick to report on the up swing and some outlets like the Palm Beach Post were quick to report on the slow down which angered real estate agents. Real estate agents make up a lot of their ad revenue, so they can’t be overly bleak about it. That’s why as a buyer you need to do your homework and not rely on your real estate agent or the media to make your decision.
I’m in the business although not as a real estate agent or banker and clients regularly ask my advice. The advice I’ve been giving is to take a look at homes that sold in 1999 to 2001. Add 2 to 3% yearly to the values. Are you going to pay more than that amount? If so, I wouldn’t do it. I think that before we’re done even that may become bad advice as prices are falling to levels we haven’t seen since the mid-late 90’s with all of the foreclosures on the market.
Example, home sold in 2001 for $139,000. A normal market would have made that home worth right around $160,000 today regardless of whether the home would have sold for $300,000 in 2005. If you’re paying more than $160,000 you’re likely paying too much.
Tim - well said. Exactly my thoughts yesterday. Misleading headlines such as these force to explain the situation anew if we have spouses who are anxious to get back into ownership.
“…if we have spouses who are anxious to get back into ownership.”
Have those spouses look at a particular community and what values have done. Mine is a good example.
Peak price: $375,000
Today’s Value: $200,000 (if you’re lucky)
In 3 years: $150,000?????????
Andy - that illustrates the problem. Some of these bunkmates are willing to eat a future loss of that relative proportion in order to call it their own. There’s a point at which logic just kinda’ goes away.
San Jose Merc says ‘pending sales are up’. Totally ignores the fact the many won’t qualify or that we should be interested in actual sales.
Saw an Alice Rivlin commentary on the PBS Nightly Business Report last night. Says the government should do the lesser of two evils, and bail everyone out.
Why? Because, as citizens, we didn’t demand that the government regulate all these crazy loans. So it’s everyone’s fault.
So everyone should be willing to pay for it.
“If God did not want them sheared, he would not have made them sheep” Calvera.
Isn’t she the hard nosed budgeteer who believes entitlement benefits will just have to be slashed for YOUNGER GENERATIONS?
But there is plenty of room to borrow a few trillion to bail out the fake wealth of HER GENERATION.
Thank God the Clintons aren’t coming back.
Alice Rivlin, the economist? That sounds retarded! I can’t imagine where she thinks the money for this is coming from, or why the needs of the FBs trump the needs of everyone else.
How did she propose propping up unaffordable housing prices over the long term. Should the gov’t start buying up McCrapboxes?
Alice Rivlin is much more than just an economist. She was appointed by Lyndon Johnson to a high-level position in HEW and was Deputy Director of OMB for Clinton. She is far, far from apolitical.
So….. if Obama is elected, expect to see her name on a short list of potential Cabinet appointees. That interview could well be part of the preening exercise. If you see more of her in the next few months, I think then you can be certain of it.
No matter who gets in office, you can expect to see an expensive bailout. Whether it is weighted towards the investment banks or FBs themselves will depend on the political party. IMO, Wall Street is at the root of the bubble economy and I would prefer they take the hit.
Either way, it’s going to be a rough 4 years. I’m leaning towards Obama because I don’t trust the same people who got us into this mess to fix it, and since we are past the point of no return, any misguided effort to bail out the economy isn’t going to really affect the final outcome anyway.
Alice gives commentary on Nightly Business Report. This is the first time I patently disagreed with her. It’s MY fault that we’re in this mess? WE failed to regulate? I think NOT.
I’ll support a tiny bailout for the first-timers who got caught. But any HELOC-er can twist in the wind. Let them eat granite and stainless steel.
I’ll support a tiny bailout for the first-timers who got caught.
Why? If I were to buy, I’d be a first timer, but I didn’t buy because I’m not an idiot. So why should one potential first-timer (me) have to bail out other first-timers?
Note……her whole commentary is available in the transcript from last night’s program on the Nightly Business Report”’s website. Has to read it again, because I couldn’t quite believe that she actually said it.
Includes a new “Buzzword”: “house-seekers”
Inspires visions of the gruff old cowboy and the young tenderfoot, following the trail of the Apaches/Used House Salesmen/Mortgage Brokers/Bankers that kidnapped their equity.
Oxide - I really like that one: “Let them eat granite.”
“well educated people I talk to in a given day who feel it’s a good time to buy”
And that’s the ultimate mindwarp. What is it that makes otherwise normal, rational, intelligent people go off the rails when it comes to housing? This is a new phenomena beginning in 2002. I cannot recall anytime in the past where people engaged in a fetish that is so consuming of ones resources like housing.
The Housing Fetish. What a title. I can see the cover now. A collage of a Mcmansion overlaid with prison cell bars and maybe some stiletto heels.
Or “How to become a Millionaire in 60 Seconds or Less.”
Hi sfbaGal,
Did I miss you at the meetup last night? I didn’t get there just after 10:30. Most were gone except for Big V, her husband and Ben.
BayQT~
Oops! “I didn’t get there until just after 10:30.
I hate when that happens.
BayQT~
You did sfbayqt.
I left around 8:00. Sorry to have missed you.
Hopefully I will see you at another get together.
BayQT~
where was the meet up?
Bronco,
The meet up was at Tornado Pub in the Lower Haight in SF.
auch, too far. i am in the south bay…
RE: I can wait forever if necessary, as renting is still cheaper than owning.
Enormous sums of money are going to have to be raised in order to pay for the pensions and health care benefits, i.e., the town of MIllinocket ME recently gave a number of early teacher retirees 100% paid, lifetime health care benefits for both retiree and their spouses, of hundreds of thousands of public employee retirees.
As the infrastructure of small commerical businesses collapse due to the rapid fall in US standards of living, the only place those sums can be raised is via a massive escalation of residential property taxes and other assorted home ownership fees.
For those with McMansions-abandon hope all ye who enter.
I disagree. The best way to solve these problems are to kick up the retirement age. There’s no reason for healthy able bodied people to be sitting around collecting money while the rest of the economy craters under these tax schemes.
Besides, inflation is already forcing a lot of folks back to work. The benefits are going down one way or another.
“There’s no reason for healthy able bodied people to be sitting around collecting money while the rest of the economy craters under these tax schemes.”
One question: Will there be enough jobs to go around to all the able bodied people?
Sure there are. We all have to retrain ourselves in the medical field…………..:Ha!
Health care is the killer. Maybe they are thinking some kind of national health care system will be around soon to relieve the burden?
I dont agree as far as my line of work. I work in a pressure cooker where accurate answers need to be delivered immediately, and if necessary, you need to stay all night to get a deal closed with a gun to your head. I dont know even many 50 year olds that could take it, and by the time you are 50 you are usually spent. The focus and energy needed to do a successful job rarely exists past 65.
Nothing is keeping them from having second careers. It’s their pride that makes the idea distasteful. I’d rather be a Walmart greeter than live off of the dole.
I guess it depends on what you consider the dole to be. I agree you should work if you can before being given welfare, but as far as pulling out retirement funds without penalty and getting social security, I am not for extending the age limits. I don’t see it as a pride thing. You either contributed and made the right choices or you didnt. Those that didnt make the right choices and those that did should not be lumped together. I for one live on 1/3 of my yearly salary and invest the remaining 2/3. I expect and deserve to retire at 50 and so does everyone in my position, it is not an entitlement from my perspective but I goal i have sacrificed for. It has nothing to do with pride, but with responsible decision making and planning. I realize there are serious problems with available funds, but if we elimated waste those problems would go away. I could go into further details regarding the cost of the war, etc., but I have ruffled enough feathers for the week. I also support national health care.
Agree with everything you said, Tim!
anecdotal opinion. my opinion: people pull it together when they have to.
Calling BS from a 62 year old business owner; quit patting yourself on the back lawyer-boy.
????
What part is BS? Is it that I dont think it is reasonable to expect ppl to work in high pressure jobs after 65? How is such a statement patting myself on the back when I expressly stated that I want to retire by the time I am 50 from my current career and do other things because of the stress? If you are going to insult others, please express the reasoning behind your attacks.
“…kick up the retirement age…”
I dare you to suggest that to a room full of civil servants. It’s twenty/twenty five and you’re out babyeee.
Property taxes may indeed change the houseownership equation for good - unless something real is done to reign in gov’t spending. How many out there want to work until 72 so the dogcatcher can retire at 55?
Climber,
Umm, excuse me. I am at that middle aged stage of life, great education/credentials. I looked for work for NINE MONTHS. I did not refuse the jobs that were ‘beneath me’. I never made the cut. The applicant pool is glutted with tens of thousands of twenty-and-thirty year olds, in line ahead of the tens of thousands of forty and fifty year olds. That’s how the job lottery works, in a long term declining regional market.
Overqualified. The hiring folk mouthing platitudes about how jobs are on the verge of recovery in CT, after a twenty year decline. As as soon as jobs pop, natch, every 40-or-50 something will split for something better. Retrain for something practical? HVAC, electrician’s apprentice, exterminator, drunk counselor? The illegal aliens and ‘underserved minorities’ have that market cornered. In short: over 30? Caucasian? Educated? Experienced? In New England? LEAVE!
Advice from our friendly (tax-paid) unemployment advisor:
“Finding an ‘opportunity’ is challenging once you are five years out of college. Your best likely outcome is to start your own business”.
Now, Climber, don’t hide your light under a barrel! Give us the secret of prosperity between the ages of 45 and (your magic number)!!
I should note that my children, whose tuitions I paid from savings and earnings, do not buy into your knee-jerk solution. That is: if I, a shiftless, able-bodied middle ager, would simply get off my a** and go to work, we would all be prosperous again. Surprisingly, they are not of the opinion that I am a drain on society. Despite knowing that I have little to offer (after all, they don’t need me anymore), they treat me as if I retain some marginal utility. I guess I just raised them dumb.
That being said, none of them went to school in New England, thus are not stuck with the prospect of being thrown in the incincerator once they hit 45. I got out as well. I landed a job — in three months — the likes of which did not exist in a dying region.
So, Climber, please share the secret of prosperity in middle age, during those ‘between’ years — between being ‘right-sized’ at 45, and the magic moment at which we will have your blessing to receive a leg up from the society we have supported.
Preach it, jane!
They can grant all the Juicy pensions and medical benefits they like to placate people now but those programs will be heavily trimmed once the funds run dry in the future. I have freinds who work for the City of San Jose and despite the money problems we already have they are convinced they are set for life once they retire. I’m not going to burst their bubble but there is only so much in property taxes I can afford to pay before I stop paying them.
Rent now or be locked out of renting forever!
“the town of MIllinocket ME recently gave a number of early teacher retirees 100% paid, lifetime health care benefits”
I love Maine, but it is populated by some of the dumbest knuckleheads in existence. Where exactly does Millinocket plan to find the cash to fund this scheme? And if they don’t need any more teachers, there are other states that are hiring…NYC for example is always looking for experienced teachers.
Reagan was right when he said folks have to vote with their feet…are public employees totally exempt from the financial winds that affect the rest of us?
They may be counting on it, but I think not. I’d love to see the funding projections little Millinocket has put together for this little scheme.
No, I bet we hear about some “one time” taxes against 401Ks. That is what will be used for the pensions of those “performing public service.”
Here in the OC my banker/broker friend indicates that foreclosures are being intentionally delayed by the banks as witnessed by the surprisingly small nmber of foreclosures on the market. Apparently it’s cheaper for the bank to let a deadbeat stay in the property for free for a few months than to complete the foreclosure.
However short sales are picking up steam and are driving down those comps!
They are just delaying the inevitable, and trying avoid recognizing the loss now and keeping the false value on their books. This part really scares me as far as the economy because it seems they are fightening more to pretend they are solvent than making sound business choices. That damage and further depreciation that occurs during this limbo period is very expensive to the banks. That indicates how seriously they feel they must be f’ed to take the “let’s do anything, even those things against our finanical best interests long term, to try to stay solvent, at least on the books, for another few months” approach. It seems to me they are already giving up, and trying to keep the doors open week by week.
“They are just delaying the inevitable…”
That’s the truth. I know of a case where the lender is not authorizing a reasonable short sale and at the same time not moving forward with the foreclosure process. This home is 5 months past due with no chance of catching up! The problem is the bank is owed $500,000 and the true market value is $350,000 today and will only drop further in my opinion. Take the $350K short sale and move on!
Banks are holding out for Da Bailout. Once Da Gubmint approves it they’ll dump all their toxic paper onto the taxpayers. That was Da Plan all along.
Thanks as always for your good insights Andy. I suspect they are telling the auditors it is worth $400k, and allowing the short sale to proceed would mean they would have to set aside additional money, which they dont have, for reserves to be in compliance with banking regs. This is going to get real bad.
” I suspect they are telling the auditors it is worth $400k…”
I’d bet at least that. Most bagholders on the real estate hedge fund investment side would rather see these get off the book quickly so they can get the true value of their “investment” and move on.
Maybe they’re doing this to prop up comps for short sales as well?
The banks have a way out if Bernanke trades dollars for garbage on the TAF…provided they can tread water long enough.
True, once that sales price is recorded, their negotiation power with respect to further short sale requests is crippled. Does it really matter, however, if no one would pay more for it? I do agree it would be harder for the auditors to execute certifications as to the validity of their valuations for other holdings if they are not also marked down to match. Reverse leverage is a bytch, that why it should have been controlled when it was going forward.
Their arms should be getting tired by now, and the sharks look so damned hungry. I don’t know enough about Bernanke’s schemes to keep prices up by buying garbage at par (or at least above market value) to comment meaningfully on that subject.
I am noticing a lot of what I believe are delays in this area. IL is a recourse state, and I suppose the lenders were hoping they’d “get it all back” one way or the other. Some are (finally) waking up and allowing more short sales.
Property taxes are outrageously high in this area. The lenders are going to get a big bite out of their balance sheet when it comes time to pay that piper.
I have a similar concern as Tim. Is it really cheaper to let them stay in, or are the banks just trying to keep the regulators at bay because recognizing the losses now would mean the regulators would have to shut them down for inadequate reserves? Thus, no action allows their auditors continue to spin. Pretty frightening.
“Is it really cheaper to let them stay in…?”
It might be if the alternative is a vacant house. With residing FBs at least you get someone to regularly mow the lawn and whose presence will keep the house from being stripped of its copper.
Plus if the bank holds a lot of mortgages for houses in the same neighborhood letting them stay would prevent an eyesore thus would help protect the value of neighboring houses.
“Plus if the bank holds a lot of mortgages for houses in the same neighborhood letting them stay would prevent an eyesore …”
The banks don’t care about the eyesore, but you bet your rear end that they don’t want the value of the neighboring houses to drop. That however is not the reason they’re holding. Typically it’s a matter of reserves.
“Thus, no action allows their auditors continue to spin.”
And senior management to dump more stock.
I agree that the banks are hiding the actual number of foreclosed homes. Here in the Coachella Valley, there are huge numbers of clearly abandoned homes, yet no sane signs or online indications of foreclosure or activity. In one Cathedral City neighborhood, Rio Vista, I counted nine abandoned homes in one block. Only one had a sign. Every block of this neighborhood had at least three abandoned homes per block. Admittedly this area is at the extreme end of the foreclosure crisis, but it seems clear the banks are motivated to delay/hide as many of these houses as they can. OTOH, maybe it’s actually better they delay; seems like there would be a massive heartstopping shock to the economy if all these houses were released at once. Dunno….thoughts? Slow release of the toxins, or sudden amputation?
The other way to look at this is that even though it is clearly obvious that these are abandoned homes, erecting signs would provide a spotlight to the criminals who cruise neighborhoods at night looking for signs. Sure, the crooks can also be trollin’ during the day. I’m just presenting the “other hand”. I am also not saying that this is the banks point of view, but it’s a thought.
BayQT~
I don’t see the purpose of waiting unless they are assuming there’s going to be some kind of recovery. The knife catchers in all segments of the market relying on credit must be getting tapped out soon?
RE: the banks are motivated to delay/hide as many of these houses as they can.
LMAO…it’s not that the banks are hiding anything, it’s a case of the left hand doesn’t know what the right hand is doing because
the work-out department’s are both understaffed and inept.
I did a VA foreclosure once on a 5 year newly constructed home which was completed ruined because mortgage servicing company forgot to notify the property management firm to go and winterize the property.
Since “somebody” at the bank didn’t do their job, the heating pipes in the basement burst, subsequently soaking the basement family room carpets which proceeded to mold. The mold then spread up the walls and into the main living area on the first floor.
By the time I got there, the mold was so thick thru-out the house, I estimated the cost to cure to be the charge for the local fire department to come and burn the place down.
The mortgage originator got paid off, while US taxpayer got stuck with a ruined moldy house.
You can multiple this scenario x hundreds in this current debacle.
Dude, you’re scaring me.
‘I think the bottom line is that banks should be in the shoes of the homeowner,’ he said. ‘They should take action without having to be chased down and beat over the head.’”
Someone has to be the bank chaser/beater. You loan it you own it.
“I’m in the business although not as a real estate agent or banker and clients regularly ask my advice. The advice I’ve been giving is to take a look at homes that sold in 1999 to 2001. Add 2 to 3% yearly to the values. Are you going to pay more than that amount? If so, I wouldn’t do it.”
Andy, don’t you think that an overabundance of supply is making even that analysis too favorable? One year declines in Miami 22% and this doesn’t consider the spikes in foreclosures. I’d want a discount on 2001, and screw inflation. Inflation may be a reality but at some point the FB[uyer] or the FB[ank] are going to throw in the towel, change the unproductive POS into cash and they’re going to be chasing it down for years in a deflationary spiral. 2001 price on the coast on Jupiter Island, maybe..
I agree with you to some extent Fran, especially in the Miami condo market. There is wicked oversupply. Why assume prices should be 2000 plus normal appreciation rates when the oversupply was above normal? I think the Miami condo market needs to fall to 2000 prices flat, and that’s me being in good spirits today. I would also add - no positive cash flow, no deal.
Vallejo… I quote: “If you’re smarter than a 5th grader, you better jump on this one ~ check this price.. . . The bank says git er done.”
03/19/2008: $311,056 *
09/09/2003: $255,000
List Price: $164,900
Vallejo. NIce 1940 colonial. http://tinyurl.com/67b4xo
List Price: $194,900
Sale History
07/28/2005: $405,000
03/04/2003: $214,500 *
09/21/1998: $114,000
I don’t see any reason not to wait until the price is well below the 1998 level. Vallejo, unfortunately, isn’t going to disappear off the map any time soon.
This is a very confusing market. It was weird when going up, and it is now weird going down. How low are the houses gonna go?
Another in Vallejo. Built:1933. Sq. Ft.: 1,383
Sale History
09/28/2004: $307,000
List Price: $149,900
Estimated Monthly Payment: $718
Where do you this kind of information? The county assesor sites?
Its going to cost you more than 718 per month to hold that house. Get a new calculator, you sound like junk mail.
Monthly payment got tagged on. Heh. Yeah, not real.
Anyway, info from ziprealty. Vallejo houses for sale. Sort by price. Link to zillow right on site, so can see what the house that is now asking 200K, for example, sold for. Someone at HBB turned me on to ziprealty. My point is that just amazing how many houses for sale at low prices at implosion central: Vallejo, Elk Grove, Modesto. Why even bother with auctions. Media makes it sound like if you bought a house at the auction 50% off old asking price, it is an amazing discount, when on ziprealty many houses asking price is 1/3 of the actual SALE price couple years back.
I am not buying. Am just to poking the stick in the pond to see how far the bottom. Have not hit anything solid yet.
I guess bankruptcy isn’t good for property values.
Particularly since judges expect to get public employee pensions and unlimited retiree health care.
Property taxes?
“Particularly since judges expect to get public employee pensions and unlimited retiree health care.”
Besides all the other looming battles ahead, the one between private-sector retirees and public-sector retirees is shaping up to be a good one.
“Moran argued in a March 10 opinion piece in The News-Press that the worst of the housing crisis was over as sales were starting to pick up: ‘Spread the upbeat word, Southwest Florida: Things are a changin.’”
“He advised buyers sitting on the fence to act now because a recovery is in sight and prices will be rising soon. ‘Don’t let your snowball of an opportunity melt in the springtime of indecision.’”
“Now, Moran said Monday, he’ll look for another job in the banking field.”
Hahahahaha! Thanks for the giggle, Mr. Moron. And don’t let the BBQ- flavored Pringles potato chip of your credibility be stamped to orangish powder by the wandering elephant of reality.
Dang Olygirl,
I wish I had the colorful language you have.
Dang I wish you had been at Pizza Porters last Saturday!
Ahhh, good one, Oly!
Hear, hear!
updated 9:05 a.m. EDT, Mon June 9, 2008
Renters profit from owners’ pain
NEW YORK (AP) — Renters may be the biggest winners in the current housing slump, especially in places like Florida, Las Vegas and Southern California, that have thousands of vacant for-sale and foreclosed homes and condos on the market.
Home sale signs are stacked in Miami, Florida, where the number of rental properties has increased recently.
Apartment vacancies are edging up in many areas of the country as frustrated sellers instead try to rent out their homes and condos in once red-hot housing markets. And that is making it harder for landlords to raise rents. In the toughest markets, apartment owners are even offering lease incentives to snag renters.
This “shadow market” of investor-owned homes and condos accounts for almost half of the rental stock, and attracts displaced homeowners more often than your typical apartment renter.
“What’s different now is the degree of excess homes and condos being put on the rental market. The sheer volume is creating more competition for traditional rental markets,” said Hessam Nadji, managing director at Marcus & Millichap Real Estate Investment Services, which analyzed the data for The Associated Press.
The power of market forces to overwhelm distortionary government policy is a prettiful thing to behold.
The people renting from the specuvestors largely are people displaced by foreclosure who can’t get a typical apartment.
The typical apartment complex owner is starting to adapt by offering an apartment to a wider range of applicants by either charging more to move in or having a weekly/bi-weekly rent due date or a combination. When more of the standard apartments start to conform you’ll see a new wave of foreclosures from specuvestors who can’t limit the bleeding by having a renter.
I’ve got a couple of acquaintances who are co-owners of apartment complexes. They screen their tenants very carefully, and pay close attention to the credit rating. Which means that people with bad credit don’t get to rent from them.
“They screen their tenants very carefully…”
That’s smart of them if they’re still able to rent to those types of renters.
I’ve actually got someone that I do business with who will run credit and has a tiered program based on the credit criteria. One of the big 3 credit bureaus (or a subsidiary…not sure how that works) helped develop the program for him.
Tier 1: 1st month and $250 security deposit.
Tier 2: 1st month and security deposit equal to 1 month’s rent.
Tier 3: 1st month and 1.5 times rent for security deposit.
Tier 4: 1st month, last month, 1.5 times rent security deposit.
Tier 5: Decline
It gives a list for reasons for the tier placements and Foreclosure/bankruptcy 12-24 months old puts you in tier 4.
They are indeed able to rent to those types of renters. Even in this economy.
Very lucky for them. I hope it continues. No one really wants to rent to people who have a bad housing history. If they’ll screw a bank, you better believe they’ll screw you too.
Tier 4 is illegal in CA. You can ask for first and last or first and a deposit, not both.
Nobody could ever have anticipated this, of course.
Rentals always go up, and why would you throw money away on rent?
BTW with peak energy already here there will be NO recovery this time. Just a race to the bottom as the fossil fuels run out. I’m not even mentioning mass starvation, riots, nuclear wars, etc…
“Just a race to the bottom as the fossil fuels run out.”
You mean like they ran out in the 70’s and 80’s?
We still have proven reserves in the trillions of barrels. As heavy crude becomes the norm, refiners will adapt. Peak oil may or may not be a myth, but we’re decades out. Don’t let these sepeculators mislead you on this front. Some hints that oil is in a bubble:
1) Economists say it’s different this time, supply and demand rules don’t matter.
2) The media is putting out reports from “experts” within oil hedge funds who predict $200 oil.
3) Crude supplies are down because of increased refinery activity and gasoline supplies are WAY up. We’re running out of places to put all of the oil.
Please don’t buy into this sucker’s bubble.
Doesn’t this remind you of the Hunt Brothers and cornering the silver market in the 80’s?
Of course the gov’t stepped in to prevent that from happening again, and I can’t understand why they aren’t now…except that GWB is president and it would hurt too many special interests.
The world was running out of wheat three months ago. The media was full of predictions of global famine and July CBT Wheat sold at $12.50 or so a bushel.
Now the media is mostly quiet about wheat and July CBT Wheat is selling for less than $8.00 a bushel.
or at least ensure you have a stop loss in place
“1) Economists say it’s different this time, supply and demand rules don’t matter.”
I’d rather listen to geologists who know about oil then clueless economists shilling for bubble economics. The geologists say we’re at peak oil right now and the rate of new oil field discovery is almost nil. Sure there’s tar sands and shale but very little is economically recoverable. Basically we’re farked.
“Sure there’s tar sands and shale…”
And there’s geologists who called for peak oil the last time we had a crisis…the only difference is there’s no crisis right now.
Chevron and the other majors are going to boost tar sand production by 250,000 barrels per day by the end of the year. Shell can extract from shale for $30 per barrel…all they need is permitting and incentive.
Go ahead and look at the graphs put out in the late 1970’s regarding peak oil. Do they look familiar to you? We’re not going to run out of oil any time soon, and the alternatives that are readily available can be on-line in 5 years. All we need is a cooperative government and some corporations willing to profit from it.
Shell can extract from shale for $30 per barrel…all they need is permitting and incentive.
They have been saying that since 1950…
Which geologists called peak oil the last time we had a crisis? Which peak oil graphs of the 70’s are you talking about? It’s hard to dispute a statement about what someone said in the 70’s, without knowing who the someone is. I remember concerns about long term oil shortages back in the 70’s, but I don’t remember a lot of talk of imminent peak oil on a global scale.
The geologists currently predicting peak oil do look at other sources, such as tar sands and oil shale and heavy crude. And they are aware of supply and demand, and understand that as prices rise more oil recovery becomes economically viable. This leads to a variety of estimates of when peak oil will occur, but not whether it’s one year or thirty, it’s still a problem. And peak exported oil could come earlier, as producers are starting to keep a larger share of their production for domestic use, often at well below world prices.
After the recent run-up I wouldn’t be surprised to see oil fall, especially if there’s a global economic slowdown, but it’s hard for me to imagine a scenario where oil prices aren’t much higher ten years from now. We may not be at a peak yet in production, but we aren’t at a peak in demand either.
When oil is at $50/bbl., tar sands/oil shale may not be economically viable. When oil is at $125, it absolutely is.
New and re-drilling rampant in the OC, even 2 miles from my house!
How would you explain the finds in Brazil over the past couple of years? Aren’t those destined to shoot Brazil to something like #3 in the world for proven reserves?
Anybody who thinks Peak Oil is a myth can go ahead and buy an Escalade and a 3,000 square foot exurban house thirty miles from anything and bet their lives on oil shale and tar sands and deepwater drilling and technology coming up with a solution. I think I’ll pass. Sure there’s speculation, but the smart money has known for years that we’re f____d.
Amen brother.
I disagree and tend to side with Bad Andy. However, there is a lot of conflicting information out there and this doesn’t seem to be a very productive argument…even the so-called “experts” can’t predict which fields will be discovered as the cost-effectiveness of future drilling, extraction, and refining costs change over time.
Actually I am thankful for the peak oil tin foil hats and the fear they present because it causes things like this.
http://www.xprizecars.com/
If just the people in the warm states and countries switch to what can and will be made, oil will become a non issue. But it will take forcing a change and $$$ at the pump is the only thing that will force it.
10 bucks per gallon, I say bring it on. It will just force the change faster.
One of my favorites: http://dieoff.org/
Yep gloom and doom. Better stockpile your food, build a bomb shelter. Y2K anyone?
Exactly guys. My neighbor spends as much time as possible in Mexico and he said they are paying about $2 a gallon. If it truly were the last flickering of the candle prices would be high every where!
What tees me off the most about this latest bubble is that it totally takes the public’s focus off the housing debacle. Of course the current admin. is all too happy and actually sees this is a welcome relief. Let’s face facts, most people that are going to tough out their underwater home situation have already made that decision. Those that are going to walk, are going to walk. It’s already in the cards and I’ll bet there are a LOT of squatters out there that aren’t even making their house payment and STILL struggling to get by!
So that gives an idea about how long any “recovery” might take.
Of course in Mexico, all of the gas stations are owned by the government(as are the oil wells and oil production company).
The politicians south of the border are trying to figure out why oil revenues are not increasing even though the price of oil has doubled in the past year.
Its almost like Greenspan retired and moved to Mexico to run their oil industry.
“I’m not even mentioning mass starvation, riots, nuclear wars, etc…”
Geez, you’re just a ray of sunshine today aren’t you ? Put down the Mad Max fanzines and step away from the keyboard for a while.
Hey, people LOVE it, it gives them something to obsess on, and this Brittney crap was getting old years ago.
I’ve read a lot about Peak Oil and I believe we’re in for a hard row to hoe if we don’t go to alternative sources, but I also believe people eat up the scare tactics. Their lives must be boring (mine sure as heck ain’t).
“I’ve read a lot about Peak Oil…”
It’s hard to deny the possibility of peak oil, however if you look at a landfill for example…the first thing that happens is methane gas is released. There are probably just as many people who theorize crude oil is potentially renewable as there are those who theorize peak oil.
In the meantime, conserve, conserve, conserve. If we see a 7% global drop in demand as we saw the last time this happened…oil will be cheap again. Maybe this time we’ll learn our lesson, but I doubt it highly.
Lost In Utah,
And we’re treating it with the same level of maturity as we did w/ Ms. Spears. Again this has more to do with our near worthless currency than any structural or exponential increase in demand. I think every thing we’re seeing is a direct relation to the housing/credit bubble and it’s framing the debate in the entirely wrong light.
Want to fix high oil prices? Then shore up our currency by taking painful but necessary action! This is kind of like being unprepared to give your report in school and the fire alarm goes off! Thank GOD! ( Total coincidence of course ) So this is a nice reprieve for the PTB.
How many of us here predicted that we’d pay more for oil etc. as result of our financial irresponsibility? Most? The impact though has gone way beyond any reasonable relationship to market fundamentals.
Agree.
It would be one thing if the price of oil, alone, was going up. Problem is, the price of most commodities has been sky-rocketing over the past few years.
Gold, silver, platinum, copper, wheat, corn, sugar, coffee, oil, etc., etc.
Every bubble has to be backed by a resonable-sounding argument (we’re running out of land & prices have ALWAYS gone up — see the charts — and you’ll be priced out FOREVER if you don’t buy now!!!).
I wonder…what would happen to the price of oil if interest rates were to suddenly and unexpectedly rise, and if long-term inflation expectations were to become anchored or recede?
Maybe bottom’s getting into the bomb shelter business.
The oil and gold nutjobs think they’re sitting on a million dollar lottery ticket.
Dream on.
“The oil and gold nutjobs think they’re sitting on a million dollar lottery ticket.”
Just like the real estate gurus from 2002, 2003, 2004, and 2005.
We can debate peak oil all day and night but when the arguments are so clearly against the typical supply and demand ratio, you know there is a bubble just waiting to pop.
So continue to delude yourself as gas creeps to $5/gallon. Oh, is your cereal now $6/box?
hahahha
“So continue to delude yourself…”
I was deluding myself in 2004 when I said housing was entering a bubble. They told me that they weren’t making any more land and we were going to run out. Baby boomers were going to come in with more money than God.
Does this argument sound familiar there FreedomLover?
wasn’t long ago people feared $2/gal gas.. then it was $3 .. now it’s $4.
But people quickly adapt to rising prices.. Actually they adapt to just about anything, and they’ll easily adapt to a world without petroleum.
“and they’ll easily adapt to a world without petroleum.”
Because it’s all gone….. right Cupcake.
Okay guys and gals, I’ve read this sight consistently for 2+ years, and it is quite notable how so many who nailed the housing and credit bubbles before they popped can be so misinformed when it comes to the global and U.S. energy situation. So I offer an invitation to the likes of Bad Andy, DinOR, joeyincalif, etc., to join in the discussion of energy problems and possible solutions at theoildrum.com - in my opinion the premier internet site for discussing these issues. Let’s see how well you “oil is in a bubble” believers do against an unbelievably informed crowd on this issue. I’m almost certain your screen names have not been taken, so I’ll be watching for your comments during the next few days.
Best of luck, you’re going to need it…..
Thanks for the invite but I think i’ll pass.
I am sure they know everything there is to know about energy, and my participation can serve no constructive purpose.
Why not bring a few of those people over here? It’s an opportunity to learn something about the real estate market (assuming they don’t already know everything about it as well).
“Moran, who’d been with Riverside eight years, was asked to leave because although ‘John is a great banker, unfortunately he’d never been through the tough times of banking right now,’ Tabor said.”
I guess that means that John isn’t a great banker after all. And is it too much to ask “journalists” to spell check their articles before submitting them for print? Moran -> Moron.
“And is it too much to ask “journalists” to spell check their articles before submitting them for print?”
They did…that’s how they got Moron out of it. Spell check would have suggested it.
“unfortunately he’d never been through the tough times of banking right now”
That doesn’t even make sense…how could he have gone through something that’s only happening right now? Do these guys EVER make sense?
“Do these guys EVER make sense?”
When they’re mute.
“I also believe people eat up the scare tactics. Their lives must be boring (mine sure as heck ain’t).”
Well, with cable news 24/7 looking for the next train / plane wreck and those not happening often enough, the press doesn’t have anything else to do but to create hysteria. So, you’ve got my vote. Make them mute. Turn it all off. Cancel the newspaper. Lurk the blogs. You’ll get more incisive analysis / pros & cons on almost any topic and it is more fun to watch!
My husband told me the story of a former co-worker of his (and friend) and it is disturbing. It’s another glimpse into the perils of bringing emotion into the house buying game and not using your noodle.
About a year and half ago, hubby’s friend (we’ll call her Dana) moved to San Francisco because her husband finally accepted another position within United Airlines. They had repeatedly turned United down, due to the high cost of living out in San Fran, but United finally stepped up to the plate and made the compensation worth it.
They put their property here (Illinois) on the market.
For the first 12 months or so, we would receive periodical emails. They had baby prior to moving and were all giddy about that and Dana said she just loved San Fran. They were renting an apartment and all seemed right with the world. It took Dana forever to find a job, but she finally found one, and her husband’s position was eliminated, BUT United put him in another position that was comparable. The emails were really positive and the only sticking issue was they could NOT sell their house here in IL.
Last fall, we received an email that the house had finally sold, and Dana elatedly wrote about the property values in San Fran falling and that “maybe” they’d eventually be able to purchase real property. Her job was okay, somewhat irritating, but okay. Then the emails stopped, but we didn’t think anything about it because she wasn’t a super close friend and we figured life had moved on.
Two days ago, my husband learned via another former co-worker that Dana just doesn’t seem happy. Apparently, these two still keep in touch, and from what we understand, there is a lot of stress in the household. I caught the very end of the conversation, so I wasn’t privy to all that was said. It wasn’t until we left that my husband informed me that Dana and her husband bought a house out there for $ 800,000. Holy crap. I was absolutely shocked, as were my husband and the other co-worker.
Dana and her husband are good peeps. We find it so distressing that they did this, because we’ve been following this blog and the news. I’m sure Dana’s husband makes good money, but Dana flat out said “I can’t quit. We need the money.” To make matters worse, United ain’t doin’ so hot, she hates her job and she doesn’t get to spend enough time with her daughter.
These were people who could not sell their first home, knew prices were falling, but caught the chainsaw anyway. They went from being happy renters, to stressed out, miserable homeowners.
Long story, I know, but it is another example of intelligent people making bad decisions. Though we’re hoping we’re wrong, we have a strong suspicion that this will end very badly for them. I don’t have the specifics about how the home was purchased (what type of loan) and how much money was put down on the place, but I think we all here can pretty much fill in the blanks.
I think you said it all in your second sentence. The *good money* that hubby makes, plus wifey’s salary was not enough to sustain their new lifestyle. And who knows what other enticements they were drawn into. They are embarrassed.
BayQT~
‘Don’t let your snowball of an opportunity melt in the springtime of indecision.’
“Riverside Bank of the Gulf Coast has parted ways with longtime president and CEO John Moran, the Cape Coral-based bank’s chairman said Monday. ‘A couple of weeks ago we accepted John’s resignation,’ said the chairman, Elmer Tabor, owner of Wonderland Realty in Cape Coral.”
Moran’s employer didn’t miss their opportunity to finally boot his a$$ out the door.
What happens when a species find a new stash of food and has unbrindled population increase.
Exhibit A
In 1944, 29 reindeer were introduced to the St-Matthews island by the United States Coast Guard to provide an emergency food source. The coast guard abandoned the island a few years later, leaving the reindeer. Subsequently, the reindeer population rose to about 6,000 by 1963 and then died off in the next two years to 43 animals. A scientific study attributed the population crash to the limited food supply in interaction with climatic factors (the winter of 1963-64 was exceptionally severe in the region)[2]. By the 1980s, the reindeer population had completely died out[3].
Exhibit B:
Human population increased 20 fold in less than 100 years, most of it connected to the discovery of Oil which is unsurpassed as an energy source and has millions of years of accumulated solar power concentrated into a volume less than that of the Geneva Lake.
Nice to compare humans to reindeer. The difference? Humans have logic and reasoning skills and the ability to innovate.
“Humans have logic and reasoning skills and the ability to innovate.”
I don’t know about logic and reasoning skills…many of our fellow citizens seem to be operating without those.
No comments on this?
Wow! Nobody has any idea who actually owns these houses. Amazing. Reminds me of a good film quote:
You’re thinking of this place all wrong. As if I had the money back in a safe. The money’s not here. Your money’s in Joe’s house…right next to yours. And in the Kennedy house, and Mrs. Macklin’s house, and a hundred others.
The bad news is that “our money”, whether it be in pensions, savings, funds, etc. is now all over the country in foreclosed houses whose values are dropping like a rock.
Tango In Uniform,
To be honest most bubble bloggers got their money out of anything even resembling mortgage backed securities by 2005 at the latest. Most of us sold our REIT’s and many did exhuastive studies to make sure they were in funds that had no, or as little possible exposure to what we called “toxic paper”.
In a lot of cases it wasn’t all that easy to determine because the cr@p was like “Ice 9″ and had spread to even money markets! It was especially difficult for those in 401k’s with limited options.
Whomever will come up short ( it won’t be us )
I hear you, DinOR, but my point is that it seems impossible to truly insulate yourself from all this.
Any mutual fund has probably got some toxic paper lurking underneath, even if it isn’t visible in the top few layers. High-yield savings (has FDIC ever really been tested before?), pensions and govt. retirement systems (which often you can’t opt out of), and other seemingly unlikely places are all too often backed by those foreclosed green pools.
Whomever will come up short ( it won’t be us )
Unfortunately I don’t think this is true. Financial stupidity of the past 10 years is now causing the entire economy (i.e., you and me) great suffering. Look at the CalPERS “investments” (land speculation) gone bad on the top thread. Who’s gonna pay to make up for that? Casey Serin, on whom the blame lies? Or the prudent California renters who’ve been saving their money?
Tango,
You are exactly right. This problem goes much deeper than even many HBBers are willing to admit. BIG problems coming, IMHO.
“Wow! Nobody has any idea who actually owns these houses.”
In that case couldn’t the borrower just stay in the house, paying the taxes but not the mortgage? Doesn’t the person foreclosing have to show ownership? If the lender can’t show ownership, couldn’t the borrower live there indefinitely without paying the mortgage?
Hey Lost,
Find yourself a snappy looking security guard outfit, complete with badge , Flashlight & K-9 unit…anyone comes’s a knockin’…Tell ‘em your on duty for the Trustee in Irvine CA, give them an 800 number for the Korean language California Unemployment Office, if they call to verify, no one will answer…guaranteed.
What about the responsibility for “loss mitigation” on the part of the trustee?
That’s what I was thinking. Don’t trustees have some kind of fiduciary duty to protect their clients interests? Can’t see how letting houses decay is protecting their interests…exactly what are they (trustees) being paid for, then?
The scale of magnitude of this proposal is off by at least a factor of 10. This is not surprising — politicians are famous for confusing millions, billions and trillions.
My question: Would the tax credit only apply to current owners, or prospective owners as well?
updated 15 minutes ago
Presidential hopefuls eye the economy
…
On the housing and mortgage crisis, McCain would consider greater intervention by the federal government to limit effects of mortgage crisis if current measures fail. He believes a government bailout should be a last resort.
Obama proposes creating a $10 billion fund to help prevent foreclosures and eliminating some taxes and fees for families who must sell their homes. He would also provide tax credits to 10 million middle class homeowners who struggle with mortgage costs.
With the subprime mortgage crisis already crippling the U.S. economy, some experts are warning that the next wave of foreclosures will begin accelerating in April, 2009. What that means is that hundreds of thousands of borrowers who took out so-called option adjustable-rate mortgages (ARMs) will begin to see their monthly payments skyrocket as they reset. About a million borrowers have option ARMs, but only a fraction have already fallen due.”
Ok…this picture isn’t entirely true..for those with option arms, that are not teaser rate and that are held with a BANK..not a bunch of investors..the loans are being frozen with the hopes the market will improve( anywhere from 5-7 years)…HOWEVER..if your loan is the toxic NEG AM ARM loan…forgetaboutit..no refi for that death trap and no freeze..Same for the dreaded teaser rate ARM..that is another death trap..
So when they are talking about the ARM they need to specific as to which ones will cause the next wave…the amount will still be huge but not ARM’s will be adjusting in 2009-2010.
“option” ARM is an often-used term for negative amortization loans. One of the payment “options” is an amount that doesn’t even cover the true interest rate. The difference between the minimum payment and the true interest rate is added onto the balance.
This home was featured in the local paper last fall. Its price has not been reduced much, I think $10k, from the original list price of $239,900.
The owners were supposed to be moving out of state right after their home was in the paper. Now its for rent for $2100 month. I’m not sure many people in B-ville would shell out that much moola for that price point of a home.
http://syracuse.craigslist.org/apa/710860318.html
It’s been almost a year. What will it take for these people to bite the bullet and cut the price?
Waterboarding?
Interesting vernacular: “5piece bath”
“‘It’s frustrating,’ she said. ‘It’s an eyesore, and it sits right at the entrance to our neighborhood. It’s not only a blight, it’s unsafe.’ Not what you would expect in a neighborhood of homes whose average value is about $280,000.”
Here’s what I’d love to see: Ordinances, passed in every municipality, stating that any neighbor of a vacant property who for a period of 180 consecutive days takes care of the vacant property next door - mowing lawns, draining pools, etc. - gets to automatically assume ownership of that property.
Call it the Suburban Homesteading Act of 2008. A local board would start the clock as soon as the FB walked away, and certify that the neighbor(s) was satisfactorially keeping the place up. You better believe all those absentee lenders and “investors” who are trying to slow-roll the system would suddenly make a point of getting that property in inspection order and off their hands. Oh, and if the absentee owners showed up three months down the line, they would be required to pay the neighbor a minimum of $500 a week for his effort and as an aggravation tax.
Here’s what I’d love to see: Ordinances, passed in every municipality, stating that any neighbor of a vacant property who for a period of 180 consecutive days takes care of the vacant property next door - mowing lawns, draining pools, etc. - gets to automatically assume ownership of that property.
This isn’t such a bad idea! You may get people fighting over it. One little twist will solve that problem: You have to show you’ve taken care of the property, and you have to be the next person to pay the property tax bill!
I think the cities/counties should take over mainentance and charge the banks, along with a nice “administration” fee. The amount owed should take first-lien position, so when the house is sold, the municipality is paid first.
Additionally, letters should be sent to any lender who violates codes that the house will be taken over by the city, and auctioned after [X] number of days. The city will send the balance, after subtracting all fees and costs, to the lender.
Blight problem solved, and “price equilibrium” would be established more quickly.
You can vote for me this November.