Suffering For Someone Else’s Problems
The Courier Journal reports from Kentucky. “A large chunk of western Louisville and the Shively area saw a 22 percent drop in median home prices in the first six months of this year, by far the biggest decline of any neighborhood from a year earlier, according to the Greater Louisville Association of Realtors.”
“Housing experts and community leaders blame the drop — to $35,000 from $45,000 in the same period in 2007 — at least in part on a large number of mortgage foreclosures in those areas, along with a tight credit market that makes it tough for buyers to get financing.”
“Kennie Romans, who has worked as a real estate agent in the Shively area for 49 years., said the market is the worst he’s seen.”
“‘I’ve got some houses sitting around for a year or year and a half,’ said Romans, 91, who is a former president of the local real estate association, adding that his sales are ‘almost down to nothing this year.’”
“Becky Roehrig, executive director of River City Housing, said the price decline could have negative consequences. ‘The biggest concern is the existing neighbors, and the value that people have in their existing homes,’ she said. ‘It’s going to greatly impact their ability to take advantage of the value of the asset that they have.’”
The Indy Star from Indiana. “Homeowners across the country, including in the Indianapolis metro area, opened their mailboxes this week to find their home equity credit lines had been cut off. ‘It will panic a lot of people to realize, ‘Hey, my house was appraised in 2006 at $300,000 and now they’re telling me it’s only (worth) $210,000,’ said Paul Ramnarain, president of (an) Indianapolis debt counseling firm. ‘That means theoretically they’ve lost $90,000 in savings.’”
Marketplace reports on Illinois. “Douglass Kim is a homeowner in Steamwood, Illinois. Tess Vigeland: When you purchased your home, could you have gotten a traditional 30-year fixed mortgage? Kim: I actually started out with a 30-year traditional mortgage and the rate was quite high compared to what I thought I would get.”
“Vigeland: And that’s when you refinanced into an interest-only loan? Kim: Yes. Vigeland: What drew you to that option?”
“Kim: The mortgage broker was one of my friends. I actually told him that my first priority was to pay off a high-interest credit card, so I asked him to set up a mortgage that required the minimum amount of payment per month.”
“Vigeland: And how long was the loan designated interest only? Kim: Actually, I am not sure about this because I was kind of ignorant at the time and I wasn’t really well educated as I am now, but I’m thinking it’s five years.”
“Vigeland: Will you be able to afford the payments if you are not able to refinance before you have to start paying principal?”
“Kim: Well, I am hoping that the housing market will get better and my house value will go up to the level where it was, but I am not in a position where I have to foreclose or anything, so I’m not too worried about that, but I just don’t like suffering for someone else’s problems.”
The Detroit Free Press from Michigan. “Metro Detroit still has a glut of homes on the market — a frustrating situation for sellers who have to compete with so many others to unload their homes. And the high number of foreclosed properties adds to the downward spiral of home prices.”
“Dave Richardson, of Havelock, N.C., has had his Waterford Township home on the market for over a year. The 4-bedroom, 3-bathroom home has an asking price of $189,900. The price started at around $225,000 and has steadily decreased.”
“‘I love Michigan, but there is no way to make it up there,’ said Richardson, who was laid off from his job as a design engineer with an automotive supplier and had to find work out of state. ‘I can’t do anything until I sell that place.’”
“Many Realtors and sellers wish more buyers were tempted by the bargains on the market. The average home price fell 13.23% in June to $121,611 in Michigan, according to the Michigan Association of Realtors. And with home prices falling, some buyers expect all homes to be on sale.”
“‘The buyer’s expectation of prices is really low. They are looking in high-price areas and thinking they are going to be much lower,’ said Richardson’s real estate agent, Patricia Shields. ‘But if a house is $200,000, no one is going to come down $100,000, not even a bank. Buyers need to be more realistic.’”
The Capital Times from Wisconsin. “The mailbox was the most visible sign something wasn’t right at the house in Reston Heights early this summer. By late July, the property was obviously neglected. The property was scheduled for its third lawn mowing by the city.”
“The house on Summertown Drive is one of about 20 vacant properties city contractors are mowing this summer in response to complaints, said George Hank, who oversees property inspections for the city. Most of the houses have been abandoned after foreclosure.”
“The rate of foreclosure filings in Dane County has jumped a whopping 53 percent this year. Some owners who are being foreclosed on manage to keep their houses; others sell their homes to new owner-occupants. But RealtyTrac reports that 171 properties in the county are owned by mortgage lenders.”
“And the empty houses dotting Madison’s landscape are an aggravation to neighbors, local real estate agents and assessors.”
“‘I’m not happy with it. I put a lot of work in my yard when we moved in,’ said Mark Dobson, whose property edges up to the back yard of the abandoned corner lot house. Dobson said he mowed the lot twice, but soon ‘decided not to waste my time, money or equipment doing it.’”
“‘It brings us down. If I had my house for sale and someone saw that, it definitely would be a down point,’ he said.”
“Over on the west side, Janice Wexler said an abandoned house on Sunridge Drive has turned into an eyesore and it worries her neighbors. Foreclosure action was brought against the owner of the 2,710-square-foot house last fall. The property is now owned by a Florida bank.”
“It was listed with a Realtor at one point and kept in good shape, but all signs of a listing have long evaporated, Wexler said. ‘Every neighborhood gathering, formal or informal, generates comments about it,’ Wexler wrote in an e-mail. ‘I hate driving or walking by it.’”
The Spokesman Recorder from Minnesota. “Veronica Ezeka has lived at her North Minneapolis home for almost 15 years. However, unless something changes, this week she and her family will become another causality of the current housing crisis.”
“A native of West Africa, Ezeka says her home will be foreclosed August 6. She didn’t have a bad mortgage or get overextended in her lifestyle. ‘Something in my life happened that I needed money,’ Ezeka said, explaining how she fell behind in her mortgage payments as she cared for her then-ailing father back in her native country.”
“‘My father unfortunately has died, but I was traveling back and forth, and that [caused] me [to] fall behind in my mortgage,’ she pointed out. ‘When you are paying $2,000 a month, it is hard to catch up when you have five children to feed and other bills to pay.’”
“‘They [her mortgage company] asked me to come up with $10,000 and I don’t have it,’ Ezeka continued sadly. ‘I wrote letters to them, [but] they already started foreclosure proceedings.’”
“‘Veronica is a nursing assistant,’ said U.S. Congressman Keith Ellison, who knows both her and her husband, Jim Jackson. ‘She puts in a tremendous number of shifts just to make the payments on her house, but it is just too much.’”
“Minnesota U.S. senatorial candidate Al Franken pointed out, ‘Not only people losing their homes are affected - the rising tide of foreclosures is driving down the value of virtually every home in Minnesota…It is affecting every area of the state and everyone who owns a house, not just the people whose homes are foreclosed.’”
“‘I don’t know where to go,’ Ezeka said. ‘I work two jobs and I am still in school [studying nursing]. I’ll just have to rent.’”
The Star Tribune from Minnesota. “A division of ResCap, the embattled mortgage-finance arm of GMAC Financial Services, is fighting back in the home-lending credit crisis.”
“The Bloomington-based investor has filed more than a dozen federal lawsuits in Minnesota against mortgage companies, claiming that they failed to do adequate due diligence on borrowers and provided inaccurate information about the financial wherewithal of loan applicants.”
“In its lawsuits, ResCap alleges that individual mortgage and finance companies made misrepresentations concerning borrowers’ employment, income, occupancy and other ‘undisclosed liabilities.’ The loans at issue range from $21,000 to more than $1 million.”
“John Koneck of Fredrikson & Byron, said lenders typically first pursue the borrower when a loan is in default and then discover that the mortgage was approved on less-than-perfect information from the applicant. Now, lenders are turning their attention to the mortgage brokerages, he said.”
“ResCap has filed 13 lawsuits against mortgage companies in federal court in Minneapolis just this year, up from a handful in previous years. ‘Lenders are saying to brokers: ‘I relied on you guys to get good information on these borrowers,’ said Jim Langdon, a securities attorney. ‘It’s like the big fish eating the smaller fish.’”
“‘I’m reluctant to say all the blame is on the lenders, said Brent Lindahl, a member of the mortgage banking group for (a) Twin Cities law firm. ‘Borrowers were all too willing to take the money when it was available. Everyone thought the price of housing would continue to go up, and that wasn’t the case, and that turned out to be a problem.’”
“The prospect of litigation in the mortgage market prompted Eden Prairie-based Kroll Ontrack to survey the attitudes of potential jurors to the home-lending crisis. Lenders may not like the results. Nine out of 10 who were surveyed said they believe that lenders who issued subprime loans took risks and ignored more-prudent lending practices.”
“‘There aren’t too many people who have a positive view of the lending community,’ said Robert Minick, trial consultant with Kroll Ontrack. ‘From the mortgage/lender point of view, it’s a very frightening situation,’ he added. ‘It’s going to be expensive.’”
“Securities and real estate experts expect more lawsuits to come as the finger-pointing among lenders, brokers and investors gets ugly.”
“‘Was it the brokers who didn’t do the due diligence? Was it the lenders who didn’t investigate? Was it those that pooled the loans as investment securities? Whose fault is it?’ asked Eileen Roberts, who teaches real estate law at William Mitchell College of Law. ‘It was greed,’ she said. ‘Nobody believed the housing bubble would ever burst.’”
The Argus Leader from South Dakota. “Building permits for Sioux Falls are down this year, with single-family housing units leading the decline. Nonresidential, however, is about even with 2007. New single-family homes took the largest drop this year, falling 36 percent with 372 permits issued through July.”
“‘Last year was our all-time record,’ said Mike Cooper, director of city planning and building services. ‘So we’re behind there, but we’re actually ahead of what we were two years ago.’”
“Jim Daniels, owner of Daniels Construction in Tea, builds single-family homes and said his business has been down this year compared to 2007.”
“There’s been ‘too much publicity about how the housing market is,’ he said. ‘It doesn’t apply in Sioux Falls, but does nationally.’”
“Cooper still expects Sioux Falls to have a good construction year. ‘I’m not anticipating 2008 will set another record like 2007 did, but I think that it’s going to be a very strong year overall,’ he said.”
And someday you will realize that this is the best decision you ever made.
“‘I don’t know where to go,’ Ezeka said. ‘I work two jobs and I am still in school [studying nursing]. I’ll just have to rent.’”
OMG poor little supernurse STUDENT
“…the Horror, the Horror “
I expect D.B. Cooper will disappear on us, like all of the other homebuilders…
“Cooper still expects Sioux Falls to have a good construction year. ‘I’m not anticipating 2008 will set another record like 2007 did, but I think that it’s going to be a very strong year overall,’ he said.”
I’m more interested in how the market is in western SD, such as Rapid City, which saw more speculation because of the proximity to touristy areas and the proximity of military bases.
Eastern SD probably didn’t have as much of a bubble and probably won’t have as much of a deflation as the other end of the state, but that’s just a guess.
just sold a guy in SD and he’s boomin
just sayin
got gas & grains
Didn’t you mean to say “I expect D.B. Cooper to bail on us”?
“Kim: Well, I am hoping that the housing market will get better and my house value will go up to the level where it was, but I am not in a position where I have to foreclose or anything, so I’m not too worried about that, but I just don’t like suffering for someone else’s problems.”
The problem with FB psychology: They often don’t see the error of their ways. I think it’s because the creative financing made them feel savy, like they were pulling one over on the banks. Now their egos are attached to the decision, so the FBs break down into two categories. The victims blame the bankers and brokers for tricking them and the deny-ers refuse to admit that they could have made a poor decision, let alone be duped. Ohh to be a sociology grad student right now. I know exactly where my thesis would come from.
“but I just don’t like suffering for someone else’s problems”
Uh… dude, you ARE the problem!
Well said Marcus. I believe what’s at play here is that emotionally it’s all too easy for someone laboring under FB Syndrome to simply displace the DENIAL they felt about what was happening in the market place around them and effortlessly now apply that denial to their own ‘accountability’. From the standpoint of their mental process it’s an easy shift.
An “accountable” FB is almost as rare as a “savvy” GF.
He has a home he can afford, forclosure isn’t going to be a problem, and he got the mortgage he asked for (”lowest possible payments”). How is this “suffering”?
“I just don’t like suffering for someone else’s problems.””
Hold on, I have to ask a coworker to tell me if he can see bleeding from my ears.
they still have so-solligy ?
Paul Ramnarain, president of (an) Indianapolis debt counseling firm. ‘That means theoretically they’ve lost $90,000 in savings.’”
Savings?
Even at my most naive, many years ago, new owner, I never thought of the value of equity as savings. Never.
Boy have things changed
‘It will panic a lot of people to realize, ‘Hey, my house was appraised in 2006 at $300,000 and now they’re telling me it’s only (worth) $210,000,’ said Paul Ramnarain, president of (an) Indianapolis debt counseling firm. ‘That means theoretically they’ve lost $90,000 in savings.’”
ROFLMAO,
Savings, come really you can’t really think that this was called “savings”.
More like a ponzi sceme that finally ended. Don’t insult the real savers of the world that actually took out second jobs to put money away s-l-o-w-l-y over time.
The funnest part, this is coming from someone who works in “debt counseling”.
‘But if a house is $200,000, no one is going to come down $100,000, not even a bank. Buyers need to be more realistic.’
Well, then sellers and banks just have to hold onto their houses until they find someone paying their wishing price. I am sure one day that house will sell for $200K, like in 10 or 20 years. It’s kind of like holding on to GM stock hoping it will go back to $80 per share.
‘But if a house is $200,000, no one is going to come down $100,000, not even a bank. Buyers need to be more realistic.”
It seems it’s almost always REtards of the female gender who make these outlandishly stupid statements or does lunacy cross all lines? Some bank REO is getting slashed greater than 50% of previous sale price.
‘But if a house is $200,000, no one is going to come down $100,000, not even a bank. Buyers need to be more realistic.”
———————————————————————–
dream/wish in one hand and shat in the other and see which one gets full first.
These were the types of statements being made in Naples, FL last year, ie. “you know we aren’t going to give it away”.
A neighbor of mine at the condo I rented had listed their condo at $350k, has now been on market over 18 months and been reduced to $185k and still not selling. Neighbors to other side of me listed theirs at $195k and sold in a very abbreviated period of time.
I’ve seen that too. Someone trying to get a peak price last year, spent several years holding out for the highest price. If they had priced to sell last year, rather than holding out for top price, they could have cut their losses by $50k or more.
that’s sexist- you’ll be arrested in 2009 !
My undergraduate degree was in mathematics. Back in the early 80s, even though my small, private liberal arts college was 51% female, there were NO female math majors. They are incapable of understanding mathematics. It’s like the “ROM” in their brain that should handle math has been removed and replaced with ones for shopping and planning weddings.
DOnt know much about schools here.
In India, most of the toppers in maths/science/engg etc were all females….
The number of females studying in these disciplines is also very large… these days.
I wasn’t aware that a $200,000 home still existed in Michigan. My old neighborhood had values in the $120K range which are today selling between $60K and $80K if they are private sales and as low as $40K for bank owned properties. There’s livable stuff in the city of Detroit (if you would ever live there) for $10,000.
There are free houses in Detroit. I read an article last year which stated there were over 80,000 vacant, abandoned homes and buildings. I’m sure the number has only grown since.
Yes, but the free homes aren’t worth the taxes that are owed on them. You can’t go from a population of 2 million to under 1 million without a few empty homes.
There are plenty of houses in Michigan for $500K and up. Oakland county, our own version of “The O.C.” was/is very bubbilicious. Values have dropped precipitously but many FB’s still hang on to 2002-2005 prices. Our timeline was a little different here. Prices peaked earlier than CA, FL, and AZ. Ben and others keep mentioning that there was indeed a bubble here in the Midwest, and I wholeheartedly agree. New McMansion subdivisions popped up everywhere in suburbs and distant exurbs from the late ’90s to last year. Of course, all the houses were “luxury” and $400K-$800K in areas where the median household income averages $45K. In that respect we were just as bad as California.
My wife and I bought our Dearborn house in 1997 for $132K. It would probably sell for about that amount today, based on the comps in the neighborhood. It’s hard to judge, since almost nothing is selling. A good friend bought a luxury McMansion in 2002(he is a M.D., and can actually afford it) for $420K and foreclosures in his neighborhood have been selling for $320-350K. He says he has been underwater the whole time he has owned the house.
Hey, even places like Fargo, North Dakota were sprouting absurdly overcosted McMansions because “everyone” was going to live in luxury with debt up to their eyeballs. The only places that I saw that didn’t have new “luxury” debt-traps being built were the worst of the worst inner cities.
The Bubble was global and was everywhere.
‘But if a house is $200,000, no one is going to come down $100,000, not even a bank. Buyers need to be more realistic.’
Ahhh… the used house salesperson cry of desperation.
“Homeowners across the country, including in the Indianapolis metro area, opened their mailboxes this week to find their home equity credit lines had been cut off. ‘It will panic a lot of people to realize, ‘Hey, my house was appraised in 2006 at $300,000 and now they’re telling me it’s only (worth) $210,000,’ said Paul Ramnarain, president of (an) Indianapolis debt counseling firm. ‘That means theoretically they’ve lost $90,000 in savings.’”
How is that savings? Americans need to understand the meaning of savings. Putting money in the bank, mattress whatever.
Appraisals is not not savings. For a debt counselor, you should be slapping these FB in the faces to get them back to reality.
Debt counselors are rarely financial gurus. Most are just puppets for the credit card industry trying to save another account from bankruptcy.
Anyone up for some debt counseling?
‘That means theoretically they’ve lost $90,000 in savings.’”
Let me repeat this statement, just to make sure I read it correctly…
‘That means theoretically they’ve lost $90,000 in savings.’”
Is this most insanely stupid quote of the year?
OK one more time - Paul Ramnarain, president of (an) Indianapolis debt counseling firm said with a straight face: ‘That means theoretically they’ve lost $90,000 in savings.’”
OMG
Again…is there blood coming out of my ears?!
Savings are literally a sacred thing to me. Every penny I pinch represents some little sacrifice, even if it’s ordering water with dinner when I’m REALLY craving a Coke. I say no to a lot of things these days, because I want to save. And savings grows painfully slowly. And because of that, it becomes harder and harder to find anything worthy enough of it being spent on. It is a special, hard-earned thing. Don’t you dare compare your water-cooler-chat fabricated fake-quity to “savings.”
If this guy was around, I’d slap his sacreligious face. Where’s my xanax.
SLC
I can root around in my “parent’s only” cabinet on top of the fridg. I may have a couple xanax rolling around there.
SLC, LOL
I agree!!!!
As someone who spent 5 long years living like a frugal, penny pinching, tightwad, I know the true meaning of savings!!!
Where did Mr. Ramnarain go school? I am a 17 year old junior in high school, and I know that a $90,000 lost home equity is not the same as $90,000 lost saving. WTF.
I think he’s a dropout but he may have graduated from Carleton Sheets’ program.
Where did Mr. Ramnarain go school? I am a 17 year old junior in high school, and I know that a $90,000 lost home equity is not the same as $90,000 lost saving. WTF.’
I was going to ask you why you weren’t in school instead of dinking around on blogs, but then I remembered that school is out for the summer. And then I remembered that I am at work and should not be dinking around on blogs, either, come to that. And then I found my flask and half a bag of black licorice Twizzlers in my bottom desk drawer and decided to pay attention to that and not ask any more questions at all. ‘Focus, man!’ That’s my motto.
I vote that
‘That means theoretically they’ve lost $90,000 in savings.’”
should become a new HBB catch-phrase, like “Suzanne researched it”, and “feed the squirrels.”
I’m in favor of ALL snarky suggestions like this one.
Maybe that can be my platform.
Just so that we don’t forget, it’s time for one more hit:
In Miami, Ron Shuffield, president of Esslinger-Wooten-Maxwell Realtors, predicted that a limited supply of land coupled with demand from baby boomers and foreigners would prolong the boom indefinitely.
“South Florida,” he said, “is working off of a totally new economic model than any of us have ever experienced in the past.”
BWAHAHAHAHAHHAHAHHHHHHHHHHHHHH!!!
I am also working off of a totally new economic model than any of us have ever experienced in the past.
I took my theoretical 90,000 in savings and lent it to some theoretical baby-boomers and foreigners here in Western New York. According to Bernanke, I am entitled to an average 25% theoretical return, since they are not making any more land. This should also help me do my part with the whole war on terror thing, since I will now have a whole bunch of money to spend on extended warranties at Best Buy, keeping those Iraqi call centers in business. I’m pretty sure it will work, since Suzanne researched it.
I am curious what others here are doing with their theoretical savings?
Yes, but you have the president of a debt counseling firm who is saying that these people are losing SAVINGS. What can you do when the so called expert has his head up his a**?
..‘But if a house is $200,000, no one is going to come down $100,000, not even a bank. Buyers need to be more realistic.’”..
oh really? Then lets do nothing.. wait and see who starves first.
I think having $100k is better than having $0, but maybe I’m crazy. Buyers dont “need” to do anything. It’s those that have to sell that should be asking what do “I” need to do to survive this big f*up I got myself into.
Tim,
That’s why the whole world wants a new cost basis, YESTERDAY! My goofy ex-neighbor sunk like 150k into his ultra-low 30 yr. FRM and did a TON of work and is now listing the home he worked so hard to build just TWO years ago! ( Well 2 years and 6 mos. ) don’t want to be TOO obvious a flipper?
So I haven’t run into him in town since I saw his “we’re going to raise our children here” home on Craigslist but I have a lot of questions I’d l-o-v-e to ask him! Firstly if the only way you were going to leave your dream “home” why did you bother to get a FRM? If you KNEW you were only going to stay there for 2 years and a day why not just get an ARM? Or did you actually GET and ARM and just feed me some BS lip-service?
Secondly why sell NOW!? There are 29 other listings in your “excluuusive neighborhood” why not wait until some of that inventory clears out and then make your “big move”? Why the sense of urgency of a sudden?
Thirdly (assuming he won’t answer the first two ) is WTF is your plan now..? What are YOU gonna’ do that’s so freakin’ important you’re willing to join the stampede to GTFO now!? You happened to see that lots as nice or nicer than your’s are going for HALF of what they were just in ‘07 and you’re thinking about buying (2) ? Just what IS your next move, assuming someone (that’s qualified) comes along and hands you your wishing price on your “Help-U-Sell” home?
They were speculating even if they claim they weren’t.
Everyone was riding the gravy train and one day the tunnel collapsed. Not only no gravy, no train either.
People don’t believe a house can go to zero, but it EASILY can. Once your block starts having boarded up houses and some high-profile crime/gang wars, etc, it’s all over. You’ll do the math and it won’t be worth even paying the property tax on it, let alone the mortgage, for what you can get. Perhaps you can sell it for a few thousand for someone who will rent it out to section 8-ers.
I saw some statistics on some of the Condo-hotels over the weekend which suggested that for some owners their share of the profits from the rental program didnt even cover taxes, insurance and HOA fees, and that’s before you get to the mortgage. Apparently some of these dogs can sell for zero and still not generate postive cash flow. These are new properties in great areas. As for distressed properties in dangerous neighborhoods, I can think of many of a home that I would refuse to take ownership of for free.
And neighborhoods can become dangerous very quickly! Half empty developments in the middle of nowhere (Sacramento Exurbs, Central Florida, Las Vegas greater area) will go to hell very quickly
No, no - you “NEED” to “buy now, or be priced out forever!”
Oh, wait… nevermind! Hahaha!
Let’s play the waiting game and see how long the f’d sellers can go before yielding to reality.
Ultimately, this is a question of who takes the risk. Buyers are going to come in at a price where they KNOW they can’t lose, which means probably 50% less than actual market. And the buyer has NO risk, where the seller has ALL the risk.
Oooooh… do these FB’s drive me nuts. “Why should I suffer for someone else’s problems?” Huh? When will these people realize that if they have no equity in a property, then they do not “own” anything. Even if they do have equity, the lender is the titular owner.
‘Janesville (WI) resident Margie Krause dodged a financial bullet. Her mortgage company told her in November 2007 that she had defaulted on her mortgage and planned to foreclose on the Janesville home she’d owned for 30 years.’
‘Krause is not alone. Hers was among 801 foreclosures filed in Rock County Court in 2007, which had the most foreclosure filings since at least the 1990s, according to a Janesville Gazette review of court records.’
‘Sgt. John Cowan of the Rock County Sheriff’s Office…and a half-dozen people—mostly attorneys—gather at 10 a.m. each Wednesday in the lobby of the Rock County Courthouse. He reads the bank’s bid and asks if there are any other bidders. Typically, there are none. ‘I’d say 90 to 95 percent of the homes go back to the plaintiff,’ he said.’
This means the foreclosures are piling up, and the likely reason is there is more owed on the houses than they can be sold for
“This means the foreclosures are piling up, and the likely reason is there is more owed on the houses than they can be sold for”
Absolutely right. And homeowners who can afford the mortgage are also throwing in the towel too. I’ve got clients who’ve seen 35% and more taken off from their “value” who had no problem making the payments just walk away. It’s starting to set in that home prices are not going back up anytime soon.
And those are the ones that don’t realize that if you have something to take (i.e., you “had no problems making the payments”), lawyers will be knocking at your door even if it is not tomorrow. Our firm has an affiliate in Michigan called Badger Enterprises that buys distressed paper so banks and creditors can get it off their books and then sues to collect. We do more than badger them if they can, but won’t, pay. Needless to say, business is good in Michigan and likely to get better, with Florida close behind. A nice side benefit is that it makes it easy to snowbird on a tax deductible basis.
Distressed paper purchased for what…10 cents on the dollar? A nickel? A penny?
Don’t want to insult you, but I can’t stand firms who do that. I equally can’t stand an individual who could afford to pay but didn’t. I guess I just can’t stand anyone…
I don’t take it personally Andy especially since you say that you can’t stand the people that are on the other side too. We don’t chase people that can’t pay; there is no benefit to anyone in that. We chase those that can but won’t live up to their commitments. Besides, you should be happy. We help the comps go back to normal (or subnormal) by giving the banks cash to be willing to mark them down and clean up their books.
And I hope that you won’t be offended when I say that I can’t stand a good part of WPB. Even if you can’t stand me, sometime we should get together for a beer to trade war stories of Michgian and Florida.
For sure we could probably trade a few war stories. I’ve been insane enough to post my e-mail here in the past. It’s acdc1a@hotmail.com. Send me a note and we can find a good bar.
A whole lot of the mentality here is my problem. I don’t have a problem with the area and most of the people. The people I do have a problem with are the ones who feel entitled. The ones who filed $80,000 insurance claims for $25,000 in damage who complain about a home insurance policy premium of $2,000 per year.
“I’ve got clients who’ve seen 35% and more taken off from their “value” who had no problem making the payments just walk away. It’s starting to set in that home prices are not going back up anytime soon.”
And for many of these people, it’s a non issue whether or not home prices will be going up. To realize that similar houses can be had for so much less- that they grossly overpaid, is enough for them to call it quits.
“…that they grossly overpaid, is enough for them to call it quits.”
Which is most likely the case. I have a client list of approximately 1,000. When more than 1 case can be taken from such a small sample of the population, it’s a sure sign of a very large problem.
When folks are losing long time residences to foreclosure in a place like Rock County, WI - that’s all the proof anyone should need that this bust is an epic event and that it goes deeper and will last longer than anything most of us have ever seen.
Rock Co. (Beloit, Janesville) is very much the kind of “Heartland” place that the highbrows on the coasts think will help pull this thing out. This is distrurbing.
The Janesville GM Plant hasn’t even closed yet. True there have been a lot of layoffs, but once it actually closes (in 09 I think), things will get much worse for Janseville.
Good post and observation edgewaterjohn.
Some of the smaller Wisconsin good work ethic towns and communities were once the Salt of the Earth when it came to being personally and financially responsible.
“The times, they are a changin” Bob Dylan 1963
…and they’re gonna get much worse
The Powers that Be have been taking their own sweet time to complete forecloses in Wisconsin but the Dam WILL break and sweep away a lot of very surprised spectators as will as a lot of small time speculators.
“‘Last year was our all-time record,’ said Mike Cooper, director of city planning and building services. ‘So we’re behind there, but we’re actually ahead of what we were two years ago.’”
The hits just keep on coming. You may as well Climb up the Empire State Bldg and throw yourself down from the top. Your final words might sound like this: “I’m still higher than I was 15 minutes ago”
Right. Do they ever acknowledge the trend?
LOL
Higher than I was 15 minutes ago… funny! In this context.
“‘The buyer’s expectation of prices is really low. They are looking in high-price areas and thinking they are going to be much lower,’ said Richardson’s real estate agent, Patricia Shields. ‘But if a house is $200,000, no one is going to come down $100,000, not even a bank. Buyers need to be more realistic.’”
Patricia Shields must surly be the Black Knight…. It’s just a flesh wound…
“‘Was it the brokers who didn’t do the due diligence? Was it the lenders who didn’t investigate? Was it those that pooled the loans as investment securities? Whose fault is it?’ asked Eileen Roberts, …. ‘It was greed,’ she said. ‘Nobody believed the housing bubble would ever burst.’”
Look, I hate math. I only will do it when it applies to how many shoes I can buy on sale, how many books a new shelf will hold without taking down the wall, how many bullets I can fit in the gun…valuable life-applicable stuff like that. Otherwise, me and math ignore each other as much as possible. And yet IIIIIIIIIIIIII could very easily believe ‘that the housing bubble WOULD burst’, because there was NO WAY the crazy freakish pretend numbers could continue to work. So if I, math-shunner extraordinaire, could see it coming, then a whole bunch of brokers, lenders, hedge-guys, and assorted pigmen who get paid (and paid a lot) to pay attention to math should CERTAINLY have been able to see it coming.
I have no sympathy for any of these pigpeople. I think it’s funny as blazes.
To quote FPSS:
BWAHAHAHAHAHAHAHA!
Woo hoo. Traction.
I have a catchphrase. I am practically famous now.
I never could figure out what point people are making when they say that prices are only falling because of foreclosures:
“Housing experts and community leaders blame the drop — to $35,000 from $45,000 in the same period in 2007 — at least in part on a large number of mortgage foreclosures in those areas, along with a tight credit market that makes it tough for buyers to get financing.”
House prices are falling because nobody wants to pay high prices anymore (or nobody can convince a bank and an appraiser to make an inflated valuation and lend too much money.)
And the banks aren’t loaning money because of the foreclosures. So you see, it’s a foreclosure problem.
S.P.Q.A.
“‘I’ve got some houses sitting around for a year or year and a half,’ said Romans, 91, who is a former president of the local real estate association, adding that his sales are ‘almost down to nothing this year.’”
The Mortgage Bankers represent a majority portion of the cause of the meltdown
for the housing crisis which has not yet peaked. These lenders with few regulations to control their unethical behavior in the conduct of residential mortgage lending are readily apparent by the number of foreclosures completed and in process. The Bankers protected by the politicians through a lack of mortgage lending legislation has made the “Lynch Mob” solution popular. The Bankers foreclosure the mortgage and hang the homeowner. The homeowner has no redress in the same regulatory system that the bankers lend their money. Let the Mortgage Bankers defend their right to conduct their mortgage lending with absolute impunity at the expense of all homebuyers. The Bankers make the rules, design the mortgage terms and conditions, and set the financial trap which has devastated millions of borrowers and then blame the homeowners for credit crisis. Those that blame the homeowners for this unbelievable catastrophe have yet to educate themselves in the reality of mortgage lending as it is practiced and regulated today.
If the Mortgage Bankers have got the courage to defend their greedy practices ,let them address those issues in this public forum.
Michael LittleBig
Hey
I’d like to present my situation and let the arrows land where they may.
I’m a home builder within weekender distance to NYC. I decided to build a higher end spec home in 2005 with saved funds. A very nice home on 10 acres with great views/no neighbors was built. Land and building costs were 700k, realtor fees would be 50k when sold.I am asking 850k willing to negotiate down to 775k. Then the market collapsed. I can hold the house, waiting for prices to rebound…but having to eat taxes for how ever many years it sits vacant. The other option is to sell at break even price ( while the realtor still makes 50k) Third option is to spend more and furnish for the weekend rental market. As a reader of Peak oil.com and Clusterfuck Nation, I know that the waiting option may not be pretty.
Comments?
If the home is so “nice”, then why don’t you live in it?
Not being snarky, just think this might answer your own questions.
From where I sit the answer is who the hell has the kind of income that can pay those prices? Who ever did?
You keep feeding us your sunk costs. These are irrelevant.
P.S. I’ve owned 4 houses in my life and in each instance the realtor made more money on them than I did.
er