Fast-Rising Values Created Opportunities For Mischief
The Kalamazoo Gazette reports from Michigan. “No matter the motivation, many homeowners are finding that despite reasonable interest rates, they’re stuck with the loans they’ve got. The problem? Declining home prices and a slow market have stolen the equity many homeowners thought they had built up in their properties.”
“Lost equity has been especially severe for those who bought homes in 2005 and 2006 using adjustable-rate mortgages and down payments of less than 20 percent, experts say.”
“‘Anybody who got a low-down-payment loan in the last couple years is under water right now,’ said Brian Seibert, president-elect of the Michigan Mortgage Brokers Association.”
“The large number of home foreclosures is driving down prices because when a bank resells a property, it’s usually at a heavily discounted price, Seibert said. Home repossessions after foreclosure in the county are on track to top 1,000 this year, which would be a record.”
“‘Most of the sales in the last six months have been distressed sales,’ Seibert said.”
“Eric Hendrickson, senior VP of mortgage lending in West Michigan for Fifth Third Bancorp, said much of the secondary market has dried up. So Fifth Third is denying risky refinances when borrowers don’t have enough equity built up.”
“‘If they borrowed 100 percent of value two years ago, the equity probably won’t be there,’ he said. ‘Home prices have declined. That’s the issue.’”
The Grand Rapids Press from Michigan. “Propelled by a fast-growing housing market and rapid development, bank profits were soaring in 2006 as dividends were on the rise with little indication of an end in sight.”
“But by 2007, things started to get ugly. Bankers who had been loaning out cash to practically anyone with a pulse found themselves in a pickle. An oversupply of housing left developers with no buyers and unable to pay on loans for huge projects.”
“Banks admitted they didn’t know how bad the situation would get. Turns out, it got really, really bad. So bad that bankers such as Fifth Third Chief Executive Kevin Kabat began to talk about a potential wave of bank failures, without naming names.”
“So bad that hyperbole like ‘uncharted waters’ and ‘the worst I’ve ever seen” became part of the everyday vernacular in an industry that had only a few years ago become accustomed to talking ‘record profits’ and ‘expectations for continued success.’”
“‘We’re in waters as a banking industry that in my 26 years I have never seen,’ said Sean Welsh, regional president for National City.”
The Indystar from Indianapolis. “A national housing activist group is threatening legal action to force Lake County’s sheriff to halt the sale of foreclosed properties. The Lake County Council recently endorsed the group’s proposal for a temporary moratorium on home foreclosures to give homeowners more time to try to save their homes.”
“More than 4,600 foreclosures have taken place in Lake County since October 2006, part of a national trend as adjustable rate mortgage payments start to balloon.”
“Lake County Chief Judge John Pera said that while he is sympathetic, he’d be reluctant to deviate from the prescribed legal response to late mortgage payments.’
“‘There isn’t a judge in this county who is not concerned about the foreclosure situation,’ Pera said. ‘Unfortunately, the judiciary has to follow the law, and the law allows for mortgage foreclosures.’”
The Courier News from Illinois. “Pressed by a wave of foreclosures in South Elgin, the village board approved an ordinance this week cracking down on owners who let vacant properties fall apart.”
“Community Development Director Steve Super said the code enforcement staff estimates between 100 and 180 homes in South Elgin are vacant. Not all are empty because of mortgage foreclosures. But a growing number are, and those probably cause the most problems, Super said, because they often end up owned by some far-away bank or mortgage company that does nothing to keep up the property.”
“Before joining the board’s unanimous ‘yes’ vote, Trustee Scott Richmond said forcing a homeowner who already can’t pay his mortgage to hire a local property manager and go through red tape ’seems like piling on.’”
“But Super said the original resident rarely will be affected by the new rules. ‘The vast majority of the parties involved are banks,’ Super said.”
From WJFW TV 12 in Wisconsin. “Even the Northwoods isn’t immune to the hard times being seen in the housing market. Eric Johnson is a broker and owner at Remax First in Minocqua, he says, ‘We’re being pulled into what’s happening in the rest of the country. Our market is slower.’”
“Mike Mulleady, GM of Coldwell Banker Mulleady Realtors adds, ‘We’ve had such a hot market over the last 5 years that it’s come back down to a normal range.’”
“And for buyers that’s good news. ‘They buyers know it’s a buyer’s market. They are jumping around like butterflys from flower to flower to see what’s there,’ says Mulleady.”
From Kiplinger. “The market shows no signs of reviving anytime soon. In May, Dave and Mary Jo Nelson hired an auctioneer to sell their large, pristine home on Big Sand Lake, near Hertel, Wis., which includes an acre of lakefront land.”
“The Nelsons were angling for $399,000. But the highest bid came in at $355,000, and the Nelsons rejected it. They want to move somewhere ‘where it’s warm and there’s no snow,’ says Mary Jo, but they’re still holding out for a better offer.”
“Two years ago, shells were selling quickly for as much as $85,000. Now Pat Tomanek, a real estate agent in Siren, Wis., can show you a two-story, 1,200-square-foot shell on a generous lot near Crooked Lake for $59,900, down from the original asking price of $75,000.”
“Minnesota’s Cross Lake glistens in the spring sunshine as real estate agents Jeremiah Bicknese and Tricia Erickson inspect waterfront homes listed for sale. One drab, four-bedroom rambler needs paint but is redeemed by a two-level wraparound deck with a lake view and a boat dock.”
“The sellers were asking $335,000 last summer and struck out; over the winter, they cut the price to $290,000. ‘It’s still way overpriced for the condition it’s in,’ confides Bicknese. Would the sellers take $250,000? ‘I bet they would,’ he says. ‘Absolutely.’”
“Just a few hundred feet away sits a smaller but more appealing home, in much better condition. And it’s been on the market for a year, priced first at $249,000, then $229,000 and now $209,000. ‘They’d take $190,000 if you did a cash transaction and closed quickly,’ says Bicknese.”
The Timberjay from Minnesota. “In Minnesota, home foreclosures could exceed 66,000 by the end of 2008, according to a study that compiles data from the state’s 87 counties for the first time.”
“Foreclosures in the Twin Cities area rose from 3,759 in 2005 to 7,039 in 2006 - a jump of 87 percent - and leaped to 12,974 in 2007. The study forecasts that foreclosures in the area could rise to 19,936 in 2008.”
“Leading the pack by sheer numbers is Hennepin County, where foreclosures from 2005 through 2007 reached 10,284 and are projected to grow by another 8,585 in 2008.”
“‘The FBI ranks Minnesota as the fourth highest state in the county for mortgage fraud,’ added Warren Hanson, president of the Greater Minnesota Housing Fund. ‘I don’t know if it’s because we’re considered easy pickings because we’re trusting or if it was because fast-rising property values created opportunities for lots of mischief.’”
The Courier from Iowa. “Southern Cedar Falls neighborhoods Greenhill Village, Greenhill Townhomes and Huntington Ridge were developed primarily by Regency Homes, but construction came to a halt in late April when the Des Moines-based company announced it could no longer cover its financial obligations.”
“Regency subcontractors suspended construction on homes throughout the state, and mechanics’ liens and lender lawsuits piled up against the homebuilder. Several of Regency’s properties in the neighborhoods have been purchased by Weichert Realtors-Inspired Real Estate — the real estate company that previously had been selling the homes for Regency.”
“All involved parties are trying to downplay the neighborhoods’ association with Regency. Signs at the entrances to the neighborhoods have been altered to remove affiliation with the stagnant homebuilder, but within the neighborhood, Regency signs are still present on the properties that the company still owns.”
“‘We’re not trying to put a ribbon on a pig,’ Darryl High of High Development Corp., the underlying developer of the neighborhood, said of the situation. ‘But for those of in the process of trying to move forward, we don’t want to take any additional bumps.’”
The Kansas City Star from Missouri. “Don’t blame Missouri’s subprime mortgage problems on subprime loans, says a researcher for the credit union industry.”
“‘Let’s not overreact. Let’s not do away with subprime lending, because that has helped a lot of people who up until now have not been able to purchase a home,’ said Nancy Pierce, president of Tipton Research Group in Kansas City.”
“Pierce said she found that Missouri’s subprime loan problems had much to do with mismatches between buyers’ income levels and the amount of money they were borrowing, not the kind of loan itself.”
“‘People were buying more house than they could afford,’ she said.”
“Pierce said some lenders improperly qualified buyers based on temporarily low interest rates that held down house payments. Problems compounded when stagnant-to-falling house prices prevented borrowers from refinancing.”
“‘It’s not the subprime loan by itself that’s the culprit here,’ Pierce said. ‘There’s been a lot of greed that has gone on in a lot of different areas that has contributed to the subprime problem.’”
“Pierce said the research also found that subprime mortgage delinquencies in Missouri have been above the national average, though foreclosures have been below the average. Pierce said that the state may yet see a surge in foreclosures.”
“Unfortunately, Pierce said, credit union managers have told her recently that they were beginning to see borrowers miss payments on other types of loans, hoping to keep their mortgages paid up. She said that could suggest more difficulties ahead.”
From KMBC.com in Missouri. “Is there a silver lining to the record number of home foreclosures? A Northland real estate agent said there is if you are willing to take a chance on a Department of House and Urban Development home.”
“KMBC’s Bev Chapman reported that you probably would not think of a $300,000 home in Riss Lake as a HUD home. But the house had a government-backed loan, and when the family who lived there lost it, it went back to the government.”
“Sometimes people who are forced from these homes are not happy. ‘Somebody’s been real rough on this place. I bet somebody rehabbed this and got over-extended. Every door’s been kicked in,’ said Mike Phillips of Century 21.”
“The bank has already been here, and the locks have been changed. Phillips is just here to check out the property and try to sell it. Chapman reported that Phillips is moving as many as 150 homes a month. They are priced to sell as is. Before the mortgage crisis, Phillips said he might sell one a month.”
“‘How we got into this situation was mortgage fraud; people fudging numbers, mortgage brokers fudging your numbers when you don’t know about it,’ Phillips said.”
“‘It’s just average mom and pop … working couples. It’s sad when something like this happens. They were just trying to achieve the American dream. (They) did everything they could to own a home, even though home ownership might not have been right for them at that point in time,’ Phillips said.”
Oh wise posters of the HBB,
Should I pull my money out of National City bank? It’s only a small amount (my parents, however, have a more considerable amount there, and I’ve warned them), but I’d rather not deal with the feds taking it hostage.
Or is the better move to be glad I’m with a bank which could be first to fail while the FDIC still has some money in its coffers?
How badly off is NCC?
learn how the FDIC typically handles bank failures. While ignorance is usually bliss, it’s sometimes cause for unnecessary worry.
Why go through the hassle ? If your concerned about your bank find another one that you like switch your account and watch the second banks stock periodically. Determining a bank is having problems is not hard. I assure you the bank is not going to give you a trophy if you take one for the team. I’m at BofA but plan to flip banks myself in a year or two once they get on the ropes.
I really don’t understand why people today want to leave money in troubled banks and risk loosing it.
What he said.
I think BofA will be “on the ropes” in less than a year once the Countrywide writedowns and judgements from all of the state lawsuits start hitting…. probably will be taken over by the FDIC in the spring of 2009….
I think technically your right but they will delay it for a bit longer simply because of the complexity. They are in no hurry to tell the truth.
But yeah basically the first quarter after they finally announce real combined Countrywide earnings is when I’ll probably pull out.
FYI I’ve been looking at the US arms of some smaller overseas banks a lot of these are just set up to take deposits and manage the accounts of people with accounts at the overseas banks so they don’t do a lot of lending. Practically deposit only and CD’s. And better they a legally different banks from the parents just with the same name.
Those decision makers in BofA who know everything there is to know about Countrywide’s books as well as BofA’s own financial status approved of the purchase.. Why?
Did they know too much? Were they smokin crack? Are they shorting their own stock? Is the deal a long term moneymaker?
Best guess is they got and under the table assurance from the feds. If you think about it they are going down with our without countrywide by taking on countrywide the feds probably made some promises.
Thats my take on it at least. And yeah its probably rewards to the management team etc. I doubt the plan is to save BofA.
I think people are slowly realizing that the game is for management to make its 100 million + bonus and they are still playing that. The companies themselves are toast.
I have been using this link for bank strength.
http://www.thestreet.com/tsc/ratings/screener.html
I noticed that Indymac had a D-
Anyone have any comments on if this is a good way to quickly find possible banks in your area?
If they are a D-, I’d hate to see what an “F” looks like
It depends, how soon would you need the money if National City failed? If the answer is anytime in the next few years, IMO, you should save yourself the potential hassle of dealing with the FDIC and pull it. If not, perhaps do the bank a favor and leave your money there
years? The FDIC minions usually ransack the failed bank on a Friday at closing and has moved the accounts to a new bank by Monday. Meanwhile, checks still clear and ATM cards continue to work normal, etc..
>in the next few years
I think you mean in the next few days. My IndyMac CD was only off-limit to me for 2 days since last Friday and it is available to me today.
“Pierce said she found that Missouri’s subprime loan problems had much to do with mismatches between buyers’ income levels and the amount of money they were borrowing, not the kind of loan itself.”
“‘People were buying more house than they could afford,’ she said.”
This doesn’t seem at all surprising. I think the bigger problem for many people was the amount borrowed relative to income, not the loan type or terms.
Also, when you qualify on a 2% teaser rate, and than same loan goes up to 8% ,you just got adjusted up into a interest rate you can’t afford . In other words, that’s to much of a gap between the starting rate and the real rate you will be paying .
This year, a supply of deerburgers and 3 cords of pine just isn’t gonna make it the as the boomer’s good life when the higher taxes, fuel oil, groceries and energy prices come a’knocking at minus 20 below with a hefty wind chill ?
“‘Anybody who got a low-down-payment loan in the last couple years is under water right now,’
given time, i expect that to be extended to 2005, 2004, 2003, etc..
Wake me up after they hit 1995.
While I don’t think this is an unfair generalization overall, there are people who bought somewhat recently, and even with a low-down loan, who aren’t in any kind of trouble.
I bought my house 3 years ago (May 2005) with 5% down (an 80-15-5). I put little down so that I could have cash on hand to do the major remodeling I wanted up front. In the 3 years that have passed, I’ve paid cash for all the work I’ve had done (about $20k) and should have the 2nd mortgage paid off by the end of this year.
Now I do think I’m the exception to the rule, and my salary has gone up about 50% since I bought the house. However, I’m sure there are plenty of others out there who bought in the last 5 years who won’t be underwater either.
Granted, I don’t think this will save us from the majority of people who bought with low-down-payment loans.
J
hmm.. i get the idea a term needs to be defined. I took “Underwater” to mean the same as “upside down”, where the house is worth less than the mortgage due, and is not related to income or personal financial trouble.
sure.. there are a few pockets of highly desirable metro areas which will continue to resist the downward pricing trend.. and in these areas, people are more willing to spend a larger than average amount of income on shelter in order to be closer to their employment market and other amenities.. so price will be on the high end.
But there will eventually be a universal return to normal levels of affordability, imo.. probaly something near 1999-2000 pricing. If not by direct means like foreclosures, then peripheral economic impacts due to the housing bubble’s deflation and tight credit markets will take their toll.
The plankton theory says even the whales will need to tighten their belts a bit.
“Lake County Chief Judge John Pera said that while he is sympathetic, he’d be reluctant to deviate from the prescribed legal response to late mortgage payments.’
“‘There isn’t a judge in this county who is not concerned about the foreclosure situation,’ Pera said. ‘Unfortunately, the judiciary has to follow the law, and the law allows for mortgage foreclosures.’”
This is the proper course of action and one that is not unduly harsh in its likely impact. While moving can be quite inconvenient, many may end up in better housing at less cost. For most, the risk of being homeless is remote.
SDGrerg,
Further the ‘consumer’ will find much to their delight that there IS a life outside of ridiculous house payments. This is why I think “the market” has it wrong? When your PITI ( or rent ) goes from 3k a month to 1k a month, guess what? You have 2k a month in additional discretionary income!
I’ll never forget ( and I know there are a LOT of other Vets that post here ) but when I was stationed in the Philippines ( for an eternity ) the battle for the G.I’s paycheck started the instant you got out the gate! From guys with a forearm loaded with fake watches to the beer vendors ( and “street-walkers” ) So much so that prices went down with each block you were able to make it through? By the time you got all the way to Rizal Ave. beers were all the way down to 3 pesos.
That’s what this battle has been all about. The “REIC” has all the catbird seats right out of the “main gate”! They get first crack at you ( due to the ridiculously generous TAX CODE ) and by the time it comes to funding your 401K/IRA and health insurance, well sh!t, I already shot my wad! Too bad, maybe on the next port visit ( life ) sh!t-heart!
…..life outside ridiculous house payment…..”
Amen to that…..due to divorce and job loss (within a few months of each other) in 2004, I became a renter again after 20 plus years.
It was amazing how much free time I had, compared to constantly screwing around with stuff on the house.
I would like to own a house again, but won’t, until there is a discount vs. renting an equivalent house
But they are going to:
- lose out on the American Dream
- and they were subject to predatory lending
- and they just had a some financial hardships
- and they only HELOC’d to pay down some credit cards and unusual medical expenses
- and they didn’t know what they were signing at the closing
- and their lender talked them into a risky variable rate
- and all they want is an affordable fixed rate mortgage
…and you are going to foreclose on them? How dare you, it’s not their fault…..
John F,
John, I think it’s more or less happening as we speak? I mean all these foreclosures ‘belong’ to… somebody? NPR even interviewed a young couple in Stockton, CA ( and they know a thing or two about foreclosures down there let me tell ya’ ) and the couple’s comments were absolutely hysterical ( but true )
The young mom said she didn’t know what was going on or how much longer the lender was going to let them be “squatters” but she enjoyed “rediscovering” what it was like to be able to afford a baby-sitter so they could go out to eat once in awhile? Being able to afford new clothes for the kids!
So the ‘consumer’ is being re-molded into something other than a REIC/HELOC-based consumer. Not as sexy… but it’ll do. I have faith that as that pendulum swings and more and more of their co-workers/friends and relatives have the same revelation… they’ll be no stopping it!
Just this past week, our local alternative weekly had an article by a guy who just rediscovered his youthful love of bicycling. And, you guessed it, high gas prices were the motivating factor.
I’ve recently decided that when I buy a home, it will be no more than 1.5x my income. Screw the Joneses…I’m going to live well within my means and invest as much money as I can for my retirement.
I cannot believe how many people are being caught with their financial pants down, especially knowing that social security is probably going to need a bailout too.
Scary, and sad.
Social Security is petty cash. And it’s lack of funding is especially moot on this board as I doubt few here even factor it in to their plans.
The big problem for everyone here is Medicare. Bailing that out will bankrupt this country at a much faster rate than Social Security or anything housing related.
A house across the street and 6 houses done was recently emptied through foreclosure. An asian family with two special needs small kids. Worked multiple jobs, but could not make it work out. They bought the SFH three years ago with a IO loan. Probably paid $350k (same model as mine and 36 years old). I t might now sell for $320k. They took care of it, even mowed the grass on they day that they had to move out. They moved 6 miles to another county with better spec ed. They are now living in a townhouse paying $1000mn less in total house costs.
A very Indiana-like approach I might add.
According to Mike Mulleady of Coldwall Banker, potential buyers are: “Jumping around like butterflys from flower to flower to see what’s out there.” News flash, Jim. Butterflys only live for about 24 hours if they are lucky enough to escape being eaten.
At a time when US presidents, vp’s, congress and department secretaries and so on, have little or absolutely NO CREDIBILITY, who in their right minds would put ANY real Faith in WHAT Realtywhores, Wall St. whores, Media whores or any of the bought and paid for, SO CALLED experts have to SAY ?
This IS the Salesmanship in the New Ownership Society America and YOU, YOUR Money and YOUR Common Sense …are pretty much…ON your OWN
You were always on your own.
Who’s looking naïve now?
“‘How we got into this situation was mortgage fraud; people fudging numbers, mortgage brokers fudging your numbers when you don’t know about it,’ Phillips said.”
I know a woman who just 2 weeks ago got refinanced out of foreclosure ($360K) despite being two years in arrears of property taxes ($10K), having her house on the market (very overpriced at $475K with no offers) while she was refinancing, and getting a straw “co-title holder” to boost her credit score. The amount of equity she had in her property relative to her mortgage debt was maybe 10% (~$400K property value). I’m sure she had no problem finding a crooked appraisal, however.
No doubt her FICO would have been trashed and her credit cards maxed, but these are the kinds of people who are getting bailed out, simply because they are “homeowners”.
NSO,
Disgusting. It’s just a wonder you had access to that kind of information. And of course that’s how it’s going to play out. On the way up all I EVER heard about was what a ‘great rate’ people had, how much “equity” they’re building up, how ridiculously low their payments were, their “upgrades”, big screen TV and how much they were lovin’ life!
And I hadn’t even asked them! They’d just up and told you because they didn’t even have to rudely switch topics to “let’s talk about me!” because THAT’S what everybody was talking/thinking about anyway!
I haven’t been hearing anyone crow too much lately? You? So they quietly sneak off and have a r-e-s-p-o-n-s-i-b-l-e ‘adult’ chime in to save their over-leveraged @ss. Disgusting.
i throw it right back in their faces every chance i get! i have no shame when it comes to the “i told you so” game.
DinOR,
She lives in my neighborhood, and at one time I wanted to purchase her house. I got the information by going on the city website to get her tax info, and by looking at city comps for her property to get the approximate value of the appraisal. I also found out she was in foreclosure on Realty-Trac and sweet-talked her title company into telling me the amount and holders of her mortgages without paying a fee. To wit:
-an $80K balance on her primary mortgage left after purchasing the house for $133K in Jul 2000
-a $280K balance on the second taken in 2005 that defaulted in Sep 07
-both mortgages have since been consolidated to $360K when her HELOC holder bought her first mortgage in Dec ‘07.
Everyone I know is disgusted by it, and I use the story to illustrate that the financial sector still hasn’t learned its lesson because of all the bank bailouts.
“‘We’re not trying to put a ribbon on a pig,’ Darryl High of High Development Corp., the underlying developer of the neighborhood, said of the situation.’
Good, because pigs don’t like that, in my experience. They also hate it when you scream like a girl. This is even if you are a girl, they still don’t like it. Goats, on the other hand, don’t mind being decorated and even seem to become attached to any ornaments placed upon them. Goats would provide a better metaphor, possibly.
–
Bubbles and Fraud go hand-in-hand. Bigger the Bubble, greater and more widespread is the Fraud. Crooks, or schemers, know the script and the general public doesn’t. Regulators, especially the Fed, are trained to overlook.
Jas
Jas,
And you’ve no idea how disappointed I am that MN ranks 4th for in the nation for mortgage fraud? So much for Mid-Western Sensibility huh?
Yet… somehow I’m not surprised. Anyone that has relatives there knows their ‘regional pride’ borders on arrogance. That whole Leif Errricksen thing. My wife is with child. If he is a son I shall name him Thor. My family settled here because this is where the last sled dog died. “Fargo” on steroids.
Yes, well, Utarr ranks no. 5th on that list, yea verily. You know, Utarr, the Land of Zion, Home of the Saints? That place. What WOULD ol’ righteous Joe Smith the Profit say, were he here today? Besides ‘Yea, bring me another 13 year old child-bride’, I mean. He’d be angry at all the unrighteous fraud, maybe! Or, maybe he’d be even more of a Profit? Hmmm.
Olympiagal,
LOL! Well yeah, that is absolutely my point. All of this holier-than-thou attitude amidst rampant fraud perpetrated by people from all walks of life! Kind of like the “Reverse Collection Plate”. Instead of giving, you’re allowed to take a little ( but certainly no more than you can carry? )
Ya know, OG, when I read your posts I imagine you sitting in Relief Society in a Laura Ingalls dress and bonnet, smiling sweetly as you thumb this stuff into your PDA while everyone else thinks you’re looking up a scripture on it. Then at the end of the hour you round up the kids from Primary and get them all into the Suburban with the hubby (unless he has to stay late for another meeting) and go home and serve up a great meal that you lovingly made the day before while thinking about your next alter-ego escapade…if the ladies at home-making meeting knew the truth nobody would ever share their recipes with you :-).
Former fb, you know how we claim to have snorted fluids onto our keyboards when we read something extra funny? Well, I just did this in reality. It was Trader Joe’s extra dark coffee blend, and a fair amount of it was filtered through my nostrils.
I hope it doesn’t short anything out. But if it does, it was worth it, for your post.
A family friend who used to manage my brokerage account once mentioned that he avoided investing in companies that were incorporated in Nevada and Utah…
Oly, Oly, Oly!
How I have warned about tipping stuff into mouth region when reading this blog - coffee through the nose, oh my!
Avert eyes when tipping liquids or solids to face when reading HBB, lest we start a bubble on computer components!
Chortle!
Leigh
Like other states, a contributing factor to the amount of mortgage fraud in Minn. was law enforcement’s refusal to enforce existing laws and take action against the fraudsters. During the course of the bubble, the local papers ran quite a few stories of people conned by mortgage brokers forging documents, illegal flippers, save-your-house-sign-it-over-to-me schemes and the like. The consistent excuse from law enforcement for their failure to get involved in these cases was, “It’s complicated. There’s a lot of paperwork. And it’s very hard to prove intent to commit fraud.”
Now that the bubble has burst and foreclosures are everybody’s problem, state and local enforcement agencies are deciding real estate fraud is a big deal. But they were perfectly happy to sit on the sidelines for years just watching it happen.
Enforcement of existing laws would’ve reduced the amount of fraud, since the risk of being prosecuted would’ve been real. As it was, nobody worried about getting caught. Not when state regulatory agencies were quoted as saying it was too difficult to investigate and prosecute these cases, so buyer beware…
Homoaner,
Absolute agreement.
No deterrent whatsoever. You’d stand a better chance of finding out you were adopted or morphing into a lesbian (males) than getting caught for mortgage fraud. One of the All-Time Biggest “Pffftt’s”… ever. Yeah, right. Big worry.
Flippers lied about everything from their income to their employment to marital status to their intentions for the property without so much as a single question. They were more worried someone would find out they never ‘really’ finished high school. I guess the “Pffftt” is on us?
I hope for his sake your last name isn’t “Wiener”…..:)
This was intended as a comment on “I shall name him Thor…..” Don’t know why it ended up down here.
I don’t know either but it made me laugh like hell.
Yes, I am about 10 years old.
I continue to regress to that age…..
Here’s an even better one. And this one is for real.
Used to know a pilot named “Richard Biggs”. For some reason, none of the receptionists at the FBO’s would ever page him over the PA.
“And for buyers that’s good news. ‘They buyers know it’s a buyer’s market. They are jumping around like butterflys from flower to flower to see what’s there,’ says Mulleady.”
From bottom-feeders to butterflys, looks like buyers are starting to get a little respect.
julie
julie,
Well that and they’re rediscovering the long lost art of negotiating. After years of being spoon fed REIC BS (TM) we’re finally reaching puberty as buyers. Now all we need to do is start employing this new found sense of empowerment in the work place? Dare we?
HBBers: I’d like to solicit some quick banking recommendations for a basic savings/money market type of account (emergency savings).
how many dollars? What are your priorities? Do you want access (occasional withdrawls, write lots of checks on it, etc). Want brick and mortar bank?
For convenience, I’d just go to Wells Fargo and plop it in one of their preferred savings accts.. $25K minimum can get you around 1.75%.
I should have mentioned a bit more. The amount will be 25k. Brick and mortar doesn’t matter to me since I’m fine with doing everything electronically. I don’t need checkwriting or anything, just the ability to transfer assets on zero notice if/when needed.
In the past I’ve done ING and Emigrant, and currently the funds are at HSBC, which is where a bit of concern comes from.
I like Farmers and Merchants of Long Beach Ca. fmb dot com
They have an A + rating on this screener
http://www.thestreet.com/tsc/ratings/screener.html
Also, some have mentioned the 100k limit on FDIC.
I have heard that if you have a trust, and you open your account name in the name of that trust, that the FDIC coverage is increased based on the number of beneficiaries.
Not sure if this is true, but maybe someone on the board acan verify.
FNBOdirect.com
Emigrant Direct is another good one which I’ve been using because they have been offering excellent rates on their savings accounts, however they recently scaled back and are offering less than 3% right now.
I’m looking for a bank that offers good checking accounts (to pay my bills). I currently have Washington Mutual and their service is excellent, however I don’t want to get stuck even for a weekend if they end up getting transferred to federal control.
Are there any banks that offer good checking accounts? I’d be very pleased to find one that doesn’t charge to use other banks’ ATMs.
Schwab Bank checking.. 2.01% variable (it was 3.01 when i got in a few months ago) They are seperate from the brokerage.. 100K FDIC coverage.
No ATM fees (reimbursed worldwide). Their platinum ATM card can make point-of-sale purchases of $15K and cash withdrawls of $2K daily. Free online bill pay, etc.
goto schwab.com and hit the “best checking account” advertisment.. or the banking and lending tab.
“Bob Untch, a Coldwell Banker agent in Barrington, says that moneyed suburb has seen a “surge” in sales of homes priced at $2 million and up.”
“Untch says the pace also is picking up between $1 million and $2 million. ”
“The high end comes back first,” Kinney said. “It’s the last to turn down and the first to pick back up. They go to the sidelines when they feel things are going to tumble. They can afford to buy but don’t want to catch a falling knife.”
Wrong - looks like the high end IS the ones
catching those falling knives buddy.
http://tinyurl.com/5vbxel
“The Nelsons were angling for $399,000. But the highest bid came in at $355,000, and the Nelsons rejected it. They want to move somewhere ‘where it’s warm and there’s no snow,’ says Mary Jo, but they’re still holding out for a better offer.”
Still holding out? Well, Honey, bundle up and enjoy your snow cuz you’re gonna be stuck with it for a looooong time. What greedy idiots.