Mortgage Has Become A Dirty Word
The Times Union reports from New York. “Condos are a relatively novel housing type in both Catskill and Greene County, meaning the Tower project was an experiment of sorts. The units were rentals at first, but Tower bought the Marina Drive property in 2003, added 14 townhomes to the site, and last year put them up for sale. It originally marketed the project as single-family townhomes and sold four. Earlier this year, Tower began selling them as condominiums. None sold and 20 units remain.”
“‘They came to feel that buyers were remaining on the sidelines, waiting for the market to bottom out,’ said Bill Anderson, a spokesman for the company.”
“The homes were offered at $279,900 to $479,900. Suggested opening bids at the Nov. 1 auction will be considerably lower: $100,000 to $150,000. And eight of the units will be sold ‘absolutely, regardless of price,’ said Lawrence Samberg, a managing director at the auction company handling the Catskill sales.”
The Jersey City Reporter from New Jersey. “Paul, a teacher in the Irvington school system, is currently trying to unload - albeit unsuccessfully - his $475,000 house for $390,000, so that he can get out of his $4,700-per-month mortgage. Coupled with all his other bills during this recession, Paul is having trouble making the mortgage payments. Adding to the frustration, said Paul, is that a tenant living in the house did not pay rent for seven months.”
“Looking back, he regrets taking out mortgages on the property for $380,000 at 8.9 percent interest and $95,000 at 12.7 percent interest, respectively. It was a lot of interest, but it allowed him to buy without any down payment. ‘I think before I ever decided to buy a house, there should have been a course where you need somebody to tell you that you can’t buy without any down payment,’ Paul said.”
“‘Mortgage’ has become a dirty word recently as millions of unpaid mortgages across the United States have created a crisis amongst homeowners, financial lenders, home builders, and just about anyone else who is impacted by mortgages.”
“In New Jersey last month, there were 6,475 foreclosure filings, according to RealtyTrac. That is a 49 percent increase from August 2007. For Hudson County, as of last week, 2,800 properties going into some stage of foreclosure. Jersey City had the most listings in Hudson County, with 1,383, followed by 378 in North Bergen and 200 in Union City.”
The Press of Atlantic City from New Jersey. “A delayed housing project in a famously vacant Northeast Inlet lot is trying to revive itself, but the city may have run out of patience. William Crane, director of the city’s Planning Department, said he expects the city to…exercise the reverter clause and put the property back out to bid. He noted that the $2 million Kushner Cos. agreed to pay for the property was a discounted price designed to encourage the development of affordable housing. Since then, the city has received housing proposals from several other developers, although most have yet to come to fruition.”
“‘In this market, we won’t get anything for it,’ Crane said of the option of bidding the property again. ‘But in a normal market, say in a few years, the land is worth $10 million, if not more.’”
The Daily Press from Virginia. “The median sales price dropped in Poquoson to $328,500, down from $414,050 last year, and dipped 15.2 percent in York to $313,500. Despite the sales slowdown, sellers are ‘holding up fairly well,’ said Bob Sullivan, president-elect of the Virginia Peninsula Association of Realtors.”
“‘The reason sellers are holding up is because, as you can see from the data, average sales prices are level and in some cases up,’ Sullivan said. Sellers are making concessions, but aren’t feeling compelled to ‘give away the farm,’ Sullivan said.”
“‘That is not to say that buyers are not asking for the farm. They just are not getting it,’ Sullivan said. ‘Many buyers have a false sense of smelling blood in the water and putting in incredibly low offers on homes like they see in other parts of the country.’”
“Virginia in July saw foreclosures increase 193 percent from July 2007 figures, according to RealtyTrac. The Hampton Roads metropolitan statistical area, which includes South Hampton Roads, tended to fare better than other parts of the state, with 1,081 properties filing for foreclosure during the second quarter of 2008. Most of the state’s foreclosures were in Northern Virginia.”
“‘I don’t think we’ll go back to 2005 when people just had to breathe to get a loan,’ Sullivan said.”
The Star Exponent from Virginia. “July was not a good month for local homeowners. 58 houses went into foreclosure in Culpeper County. That’s more than three times as many homes that went into foreclosure last July, and the worst month this year. August was nearly as bad, with 51 homes entering foreclosure in the town and county. ”
“Through Sept. 3, county records show, 297 houses — and another 30 vacant lots — went into foreclosure in Culpeper. Last year’s total was 180, meaning an 82 percent jump, so far, compared to 2007. There were only 33 foreclosures in Culpeper in 2006.”
“‘We are anticipating another flood of foreclosures in the fall,’ said Nancy Heflin, president of the Greater Piedmont Area Association of Realtors.”
“‘If you did 100 percent financing, you’re definitely upside down in your mortgage right now,’ said Dustyn Deal, senior loan officer at Mason Dixon Funding Inc. ‘It means you put no down payment down and you bought high — that’s what the value was — so now that the values have come down there’s no equity.’”
“Many empty homes are saturating Culpeper’s larger subdivisions, most of which went up in just the past five years or so. Lakeview, along Sperryville Pike, leads the way in that regard, with 40 foreclosures this year. Meadows of Culpeper, on the northeast edge of town, is close behind with 38. Redwood Lakes, adjacent to Lakeview, has seen 24; Highpoint on Orange Road has 15.”
The Washington Post. “In Prince George’s County, it can take weeks to schedule an appointment with a counselor certified by the Housing and Urban Development Department. It’s even tough to get a live person to answer the phone at many agencies.”
“Mary Dade, the housing counseling program manager for United Communities Against Poverty in Capitol Heights, said many of the people coming in for help simply have too much debt — of all types — to enable them to keep their homes. ‘We do have a problem with the economy right now,’ she said. ‘Just the amount of debt you see is overwhelming.’”
“She added that she doesn’t tend to get too excited about new programs because in the past they have helped relatively few borrowers. ‘We can’t spend 80 percent of our time on foreclosures,’ she said, noting that each foreclosure-prevention client requires about 20 hours of work.”
“She stressed that she’s ‘not a mean person.’ It’s just that many of the people who come through the door simply don’t have the income to handle the debts, even with help. ‘This is my heart here,’ she said. ‘I want these people to come back into homeownership another time when they know what they are doing. . . . Homeownership is not for beginners.’”
“William Johnson, executive director of Roots of Mankind, a nonprofit agency in Temple Hills, said some lenders are already writing off some of the debt to make mortgages more affordable. But too many are still offering workouts that try to make up for missed payments by raising the amount owed each month. ‘If you can’t pay $1,000, how are you going to pay $1,800? They’re ridiculous,’ he said.”
The Baltimore City Paper from Maryland. “A look at the financial history of 223 S. Madeira, and at more than a dozen other transactions involving George Agelakis and six of his neighbors, reveals another side of the foreclosure crisis now roiling Baltimore and making headlines and government policy across America.”
“This small group of people is involved with at least 11 foreclosures–some completed, others pending–within a half-mile radius of 223 S. Madeira St. At least three of them are investors who borrowed heavily even after the real estate bubble burst and then stopped paying their mortgages. By selling several houses to Agelakis, one man appears to have made about $750,000. Until recently, at least, none of these people were subprime borrowers.”
“We do see it, the rise of investor-owned properties going into foreclosures,’ said Robert Strupp, of the Community Law Center and an expert on real estate.”
“Unlike ’struggling homeowners,’ investors often have little to lose in a foreclosure. Three years ago, The Baltimore Sun reported that more than two-thirds of the home purchases in the first quarter of 2005 were by real estate investors. With home prices so high in many cases that rental income could never cover the mortgage payments, speculators were banking on quick resales in a rapidly appreciating market. When the market began to cool in late 2005, many of them were unable to sell for what they owed.”
“That’s what happened to Janet Praid. She takes credit for 10 rehabs since 1999, mostly in the Butchers Hill and Fells Prospect neighborhoods surrounding her beautifully appointed home a block down from Agelakis’ (former) house. ‘I have actually lost three houses myself in foreclosure,’ Praid explains during a telephone interview.”
“Praid says real estate agents remained unreasonably optimistic in the early months of the downturn. She put her investment properties on the market in late 2005 and early ‘06, not long after the time when nicely refurbished rowhouses on that street might have fetched $300,000. ‘They sat,’ she says. ‘I finally just let them go. After the hurricanes, the New Orleans thing, America just kind of went into a nonspending mode.’”
“But Praid did not just let her homes fall into foreclosure. Land records indicate that Praid borrowed at least $150,000 more than her properties were worth after the market turned against her, including more than $340,000 borrowed on a house that, after foreclosure, sold recently for $219,000.”
“In a bankruptcy filing, Praid claims that she earned no money in 2006 or ‘07. Robert Grossbart, Praid’s bankruptcy lawyer, says he does not know how Praid, with zero income, refinanced her houses for more than she apparently spent rehabbing them. ‘That wouldn’t be part of the bankruptcy,’ he says.”
‘Just around the corner from Praid lives Kenneth J. Koehler, whose real estate empire–he has owned 27 houses, he says, mostly in the Fells Prospect neighborhood–looks secure. Koehler says he bought his first house here for $7,000 in 1999, quickly adding several others, including, in 2004, the $1,000 purchase of the house his mother grew up in.”
“But unlike Praid, Koehler appears to have beaten the odds during the real estate market slump, selling several houses for double or triple their value, clearing a gross profit of more than $700,000. His buyer, George Agelakis, fell into foreclosure for all of his Fells Prospect properties.”
“In the early days of his investing, Ken Koehler was unable to find anyone to help him renovate his houses. He says he even charged the plywood he used to board them up on his credit card. ‘I was always in the hole, I never had any cash, but I just started collecting houses like some people collect coins,’ Koehler explains. ‘My philosophy was, buy a lot of houses on the same block and change the neighborhood–I got a few friends to come in.’”
“Koehler’s living room is appointed like a Victorian parlor, replete with a chandelier hanging under an ornate ceiling medallion, lush custom draperies, oil paintings, Queen Anne-style furniture, and a grand piano. He estimates he spent $325,000 rebuilding the place after paying about $95,000 for it six years ago. ‘I was worried about overpaying,’ he says.”
“Koehler says he expects the market–in his neighborhood, at least–to come back soon. ‘It’s in a lull right now,’ Koehler acknowledges. ‘A lot of the people moving in are not from Baltimore,’ he notes. ‘And some of them want to rent before they buy.’ For all of these people–the doctors down to the janitors–$300,000 rowhouses are good value.”
“‘While that sounds like a lot of money, that’s not a lot of money anymore for a house,’ Koehler says.”
The Baltimore City piece should be required reading for congress. It’s a little long, but look at that and try to explain how these prices can possibly be supported.
It kind of takes me back too. Remember the ‘Cash-Flow Freedom Bus’?
Typical Baltimorgue - all fraud, all the time, and whatever it takes to scam somebody else and make a buck.
I particularly love the part where the woman with no income was able to refinance her houses for more than they were worth, or the one with the guy selling his houses for absurdly inflated prices.
Is it any wonder why the system is crashing and why normal people - ones who aren’t crooks and who refuse to “game the system” - cannot afford a place to live in Maryland and many other Bubble states and nations?
I recall reading some that that it is estimated that 10% of the population are sociopaths (people with no conscience). If this is correct its no small wonder that there are so many crooks out there.
IE Fencesitter had an absolutely beautiful post about that yesterday and explained it well. All of the decent realtors have been run off by pocket listing, appraisal fluffing, straw buying, equity skimming sociopaths.
I took it a step further by adding the few decent ones left had (2) choices, 1) get out, or 2) come over to the “dark side”.
10% huh?
10% are narcissists and a smaller percentage are true sociopaths. Narcissists are among us everywhere and cause untold destruction, but a true sociopath would just as soon kill ya as go fishin’.
Lost in Utah,
Well that is a good point. I suppose the liklihood of having the misfortune of crossing paths with “natural born killers” is slender ( thankfully ) when compared to your garden variety backstabber?
I worked for one branch manager that was living this 300k a year lifestyle ( in 2002 of all years ) and it wasn’t until he’d been… ‘relieved of his duties’ that we found out one of his “best clients” was actually in an asst. care facility and in/out of a coma! ( More “in” than out )
And as usual w/ Ben’s regulars “I” was called in to clean it up. I spoke with the son and he told me “dad” was a diabetic and they were running out of limbs to amputate. The “new” interim mgr. told me to basically “placate” the family as long as possible! I told the guy, make it right and back out all these commissions or I’m calling New York. D!ckwad.
I recall the article classifying them into sub categories, with the worst kind being those would murder with no remorse whatsoever. Most are not as daring (they are afraid of being caught), so they resort to lesser actions.
There was a psychiatrist on CNN or some such recently who said that the one out of every ten persons born on the planet is a sociopath, not a narcissist. From what I observe around me, I believe 10% may be an optimistic number, and that the reality may be far worse.
Sociopaths cannot be cured. It would seem that many are attracted to Wall Street, banking, real estate, drug-dealing, and a host of other less reputable occupations that routinely create misery. Narcissists are repulsive (think Hollywood), but sociopaths are terrifying (think Washington, D.C.). Narcissistic sociopaths are terrifyingly repulsive (think North Korea).
That sounds about right based upon the old theory that 10% of the people cause 90% of the problems.
Or, my own personal experiences (mostly at work) where if you get a dozen or more people of varying levels of power in a room for a meeting, you’re almost certain to have 1 arsehole who’s there to make life hard for others just because he can.
The really scary thing is , even if the sociopaths are only 2% of the population , I would guesstimate 90% are running our country, our banks and Wall Street.
If You’re tired of losing Money on Wall Street You ought to invest in My Million Dollar Scam. Com.
” … it is estimated that 10% of the population are sociopaths (people with no conscience). ”
I can recall a couple ex-girlfriends that would easily qualify.
Great article … the one man mentioned that $300K isn’t a lot for a house. But it IS …. in Maryland and in many places. Even with all that the article discusses, there is still denial here.
In the great Mogambo tradition:
200 THOUSAND DOLLARS IS A LOT OF FREAKIN MONEY FOR A HOUSE …YA MORON!
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$300,000 rowhouses are good value.”
“‘While that sounds like a lot of money, that’s not a lot of money anymore for a house,’ Koehler says.”
‘While that sounds like a lot of money, that’s not a lot of money anymore for a house,’
Of all the attitudes and opinions associated with this boom/bust, this is the most infuriating. It’s also the most dangerous. Why? Because it is simple baldfaced rationalization.
I’ll argue that this passive rationalization, perhaps even more than simple greed, led to this problem. Greed could not have festered had not millions of housebuyers exhibited this passivity towards prices.
edgewaterjohn,
Nor could have HOA’s swollen to $500, $750, $1,000 a month.
I suppose a natural extension of that same defective logic is the “You *don’t have a place at the coast” mentality that even 2nd/vac. homes were “the norm”. Regardless of price.
Stats from Indian Wells,CA (near La Quinta, PGA West etc) the stats are that of all the homes, only 20% are FT residents, and the homes are mostly 3rd/4th homes. Indian Wells is so wealthy it owns the CA fwy 111 through the city.
When have you ever known a city to own a State Fwy?
Well, I digress.
Sorry this was a tad OT.
“‘While that sounds like a lot of money, that’s not a lot of money anymore for a house,’ Koehler says.”
Since when did wages and salaries quadruple, commensurate with sticker prices for housing? This doozy reminds me of the twentysomething dingbat I overheard saying that she (waitress) and her waiter boyfriend we’re going to build a hotel on the island of Tahiti, circa 2005.
I’ll admit I’ve talked like a man with a paper a$$hole on few occasions but never something as outlandish as “building” a hotel in tahiti.
Right, at the height of the boom, ALL things were possible! For everyone. No marketing plan, no business plan, just ‘build’ it and every thing else will take care of itself.
( I’ve always heard it as “Chinese paper lantern for an @$$hole” ) but I get yer’ drift.
Dinor, can you give me a back story on the
‘chinese paper lantern for an asshole’ .
I never heard that one before, and it may come in handy soon. !!!
desertdweller,
Well not to steal exeter’s thunder but I first heard as a kid on the West side of Chicago. Bartenders used to say it to guys as a warning that their “trash talking” was about to get them cut off!
Most specifically applied to drunks that bragged about their ‘money’ or more often their exploits w/ women. ( The b’tender would lean over to you and say, “Yeah, if he had two nickels to rub together like he’d be drinking in a DIVE like this?” )
Never mind “build” it! Merely come up with an artist’s rendering and rent a small sales office.
DebtinNation,
( Oh and I finally “got it” btw, LOL! )
Yes, my point exactly. I think it was Faster Pussycat that gave me a tongue lashing for even exposing myself to that “filth”! Right, do up an “artist’s conception” complete w/ mature landscaping and insert a few slender and attractive people ( some walking their poodles ) and viola!
We are open for business! ( Now ‘taking’ deposits )
This doozy reminds me of the twentysomething dingbat I overheard saying that she (waitress) and her waiter boyfriend we’re going to build a hotel on the island of Tahiti, circa 2005.
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a man will say anything if he wants to get laid.
The correct term is “Artist’s Misconception.” You should see the fantasy they’re marketing as Tampa’s “River Walk,” a ludicrous project that has been on and off for thirty years. “Artists” portray a beautiful, pristine blue Hillsborough River with gorgeous white office and condo buildings (Miami Vice style) one either side winding to a sparkling blue Hillsborough Bay. A tropical paradise.
The reality is that the river is filthy and brown, as is Hillsborough Bay, the buildings are mostly old brown brick junkers or 1970s horrors, the air is polluted, the heat is unbearable, and the humidity rivals that of any steam bath in the world. A subtropical hell.
“since when did wages and salaries quadruple”
I agree price/income way of thinking is approximately the same as price/rent way of thinking, but an added influence (on prices and rents) is related to population and building trends…I want to report that a friend who works at the Boston Fed is finally reporting that Cambridge MA rents are SINKING. How could it be otherwise. MA losing population AND there was a wave of speculative building in Bos area.
Has anyone here actually SEEN a Baltimorgue rowhome?
Imagine endless streets of dingy, old brick buildings, often with many of them boarded up and waiting to burn down (and the fire will spread nicely to your $300,000 rowhouse next door.) Trash lies in the streets, gang tags cover the walls, and there are no trees, no life, and no hope anywhere around. If you’re really lucky, you can live in a neighborhood with the blinking blue police lights that basically say, “Warning - crime is everywhere here!” Your morning paper will be delivered with shell casings or drug needles, and when you get in your car to drive away from your $300,000 “investment” in a city where the median household income is probably only around 1/10 of that, people you’ve never seen before will glare at you from the streets with raw hatred.
Yeah, Baltimore is such a “happenin” place - I wouldn’t live there for $30,000, much less $300,000, and I have no idea why anyone else would - it’s not as if the problems with the city are unknown - they are all over the morning news every day!
Looks like a great market… $300,000 for a rowhouse with unlimited supply of free murders.
http://essentials.baltimoresun.com/micro_sun/homicides/
Well there ARE some nice neighborhoods, but the illusion was that they could ALL be nice neighborhoods. There simply aren’t enough well-paid yuppie urban hipsters to fill up all those rehabbed* rowhouses. Big money can be made if you time your rehab right and the neighborhood gentrifies around you. But you can lose it all, because if the neighborhood doesn’t gentrify around you, you’ll never get your money back. At the end of the day, people won’t pay much to live in a slum, granite countertops or not.
*A big part of the typical rehab is removing the Formstone (fake stone) that was added when the were remodeled mid-century. Of course the reason for the Formstone was the crappy quality brick that used in the first place.
I have to stand up for Baltimore - my home town. There are great neighborhoods here. It’s really a wonderful city with a lot to offer. Yes, there are very bad neighborhoods, as described above, but that’s not all of the city.
But … that is where a lot of fraud happened - which drove up home prices everywhere in the Baltimore area, and now makes this a very expensive place to live.
No, and after that depiction, I don’t think that will be the next place I’m looking to move.
Kind of like my descriptions of living in a “Luxury” condo building in West Palm Beach. Walking out of my “million dollar” condo to kick bums and drug dealers out of my way. Very nice.
I think the original term was “slum” before flippers decided to change it to “luxury townhome.” Tampa is now infested with “luxury townhomes,” but who am I to doubt their elegance?
$300,000 rowhouses are good value.”
——————————————————-
Especially if you are selling.
From the original post:
The Jersey City Reporter from New Jersey. “Paul, a teacher in the Irvington school system, is currently trying to unload - albeit unsuccessfully - his $475,000 house for $390,000, so that he can get out of his $4,700-per-month mortgage. Coupled with all his other bills during this recession, Paul is having trouble making the mortgage payments. Adding to the frustration, said Paul, is that a tenant living in the house did not pay rent for seven months.”
In addition to the whopper of a monthly mortgage payment and the deadbeat tenant, he has another problem. How in the heck can he possibly collect enough rent to be cash flow positive? Answer: He can’t.
Illegal basement apartment? hmmmm and a teacher too boot.
———————————
is that a tenant living in the house did not pay rent for seven months.”
His mortgage is in proximity to my family’s entire budget.
I’m lauging at this!
For $4,700/month I can COMPLETELY cover the carrying expense for my house (property tax / insurance only, minimal utility bill because it’s a small house and there’s solar electric), the rent + insurance on the office for my business (about 800 square feet in Sunnyvale for a small consulting business)….AND have about $2200 left over!
Of course I have to pay for my commute! I walk four blocks from my house to my office.
If times get tough, I can give up the office and work from home again. And save that nasty commute!
(Now back to work.)
Don’t these people ever think before taking on a 15 to 30 year commitment?
Ugh.. What are they paying teachers these days up in JC? 475K home, his income better be >125K/yr.
Somehow, I seriously doubt that it is.
‘I think before I ever decided to buy a house, there should have been a course where you need somebody to tell you that you can’t buy without any down payment,’ Paul said.”
They do have a course like that, Paul. It’s called 6th grade math.
“Joe buys a $350,000 condo for 0% down. He then HELOC’d another $120,000, and his neg-am balance climbs $1,800 a month. How many vacations to the Bahamas will he take?”
One.
On a one-way ticket.
A teacher shouldn’t be living in a near half million dollar house. No apologies for my presumptiveness.
The Baltimore Sun reported that more than two-thirds of the home purchases in the first quarter of 2005 were by real estate investors.
More than two-thirds of the purchases — astonishing.
This is Baltimore we’re talking about, not Miami or one of those other pie-in-the-sky metropolises.
If people are speculating wildly in Baltimore or Cleveland or Manteca, that’s a Burning Bush-Level Sign From Above to run in the other direction. (No offense to those municipalities, two of which I rather like.)
Do this all over the country for a couple of years, and build up an terrible excess.
And then realize that there will be houses that will not be sold regardless of price.
There are simply more houses in this country than people available to occupy them.
“The homes were offered at $279,900 to $479,900. Suggested opening bids at the Nov. 1 auction will be considerably lower: $100,000 to $150,000. And eight of the units will be sold ‘absolutely, regardless of price,’ said Lawrence Samberg, a managing director at the auction company handling the Catskill sales.”
riiiiiiiiight…. $479k in Catskill and Greene counties? And a condo no less? Who thinks up these fantasies?????? Greene county is the rural back-ass south of Albany and Albany is can hardly be described as a thriving metropolis. The natives there barely have two wooden nickels to rub together.
These people have completely descended into psychosis….. madness.
I grew up in the Albany area, and until 3 years ago work would take me down to these parts.
When you can buy a HOUSE for 150k with lots of land, who the hell was their target market for a condo?
Even if the condo is “downtown” in the “urban core” (remember its upstate NY, “urban core” means you’re 2 miles away from farms and cows rather than living right to farms and cows) the sidewalks role up at 6pm.
These developers deserve to lose the whole deal.
The gubmint can always buy it at full price and turn it into Section 8 housing.
I grew up in the Albany area, and until 3 years ago work would take me down to these parts.
When you can buy a HOUSE for 150k with lots of land, who the hell was their target market for a condo?
Even if the condo is “downtown” in the “urban core” (remember its upstate NY, “urban core” means you’re 2 miles away from farms and cows rather than living right next to farms and cows) the sidewalks role up at 6pm.
These developers deserve to lose the whole deal.
All the folks from NYC and LI were going to buy them as second homes with a HELOC on their ever expanding real estate holdings!!! They were “cheap” to them at those low, low Walmart prices. I think they have a really nice prison in that area as the main driver of their economy. Unbelievable. This could be the weekend we visit the Paddock at Saratoga or whatever its called…
BINGO Skeptic. That was foolish talk by nearly everyone. “Everybody from NYC wants to live here and all those everybodies are millionares”. I must admit, many of my friends and a few of my family robbed NYC/NJ/CT folks blind on junk RE in upstate and VT, yet most natives didn’t not profit at all but instead drank massive doses of koolade and proceeded to babble incessantly about how much their house is worth(less). The steady stream of Vulva driving metro fools has since stopped and I forecast they will ultimately sell their vacation “homes” over the coming 5 years…. at a loss of course, just like they did during the last housing bust from 1989-1996.
exeter,
Agreed. In the end it wasn’t even “build it and they will come” it was “price it and they will fork it over”. Seriously.
That’s just how brazen they became. By 2004 I was having realtors look me in the eye and tell me the $8,000 in prop. taxes, $500 mo. HOA’s PLUS maint. fees ( didn’t cover any golf! ) and then go RIGHT back to sitting down and reading their book.
It’s called “selling from a position of strength” and boy they sure did enjoy it. Not working so well ‘now’… but..
Credit is dead. I don’t know how the Feds think they can reinflate housing demand and lending. I think cash will be king going forward.
Short of shipping boxes of free money to everybody, I don’t see how it could work.
Preach it, Lauravella. And I advise you and everyone else to be especially careful of what those credit card companies do in the coming months.
Case in point: I just took a gander at my online banking, and, what’s this? The credit limit on my Visa card has been cut! By $25.00!
I guess that’s the punishment I get for never, ever carrying a balance on that card. I pay it down to zero every month. My bad.
I suspect that this is cut is part of a larger strategy called “Let’s get that limit down to where Slim will start going over so we can charge a fee!”
Sorry, Visa, but you just shot yourself in the foot. I’m not playing your game. In fact, I plan to use that credit card even less than I do now.
“Sorry, Visa, but you just shot yourself in the foot. I’m not playing your game. In fact, I plan to use that credit card even less than I do now.”
Visa is stupid to do this to good customers. Even if they’re not getting interest out of you, they’re getting the vendor fee just because you used their card.
You’d think Visa would have enough customers who are struggling to make payments that they can bleed with penalty fees. Why annoy the rock-steady ones?
Ummmm, people, I’m feeling really stupid, but it’s not Visa being annoying at all.
The real deal is that there’s a charge that I made on the card this morn. Which isn’t showing up on the online banking, but I can see it on PayPal.
So, blame the online banking for not showing the charges in real time. For once, the big evil credit card company is innocent.
I stand corrected.
Slim, there’s no one more respectable than one who admits a mistake with no prodding.
Actually, Visa had nothing to do with cutting your credit line. It was your bank! V and MC just are middlemen as they charge a fee for the retailer and bank to use their networks to process the transaction.
I actually have 2 credit cards that the lenders will close on until I use them because I have never used them for a long time.
“For all of these people–the doctors down to the janitors–$300,000 rowhouses are good value.”
Doctors and janitors living in the same style house? On the same block even? Is this guy thinking of Soviet-era East Berlin or Sesame Street?
Fraud? In Maryland? Where housing starts at about 5 times your income? Tell me it isn’t so! Hahahaha… durr…
Faux “News” was interviewing the E-mortgage Solution weasel this morning, and he “wanted to make it clear” that people with lousy credit can still get mortgages and “the government will give you a mortgage for up to 97% of the proper value.” If this is true, than credit needs to tighten A LOT more before things will straighten out - if people can still buy things they cannot afford, prices will be stupid-high and defaults and foreclosures will be common.
But no matter - I am sure that temporarily raising the FDIC insurance limit to $250,000 will fix everything since the average American probably has at most $5,000 in the bank! Duh!
Makes me want to go back and rewatch Tin Men.
The tenant is robbing Paul, who can’t pay Peter.
“Paul, a teacher in the Irvington school system, is currently trying to unload - albeit unsuccessfully - his $475,000 house for $390,000, so that he can get out of his $4,700-per-month mortgage. Coupled with all his other bills during this recession, Paul is having trouble making the mortgage payments. Adding to the frustration, said Paul, is that a tenant living in the house did not pay rent for seven months.”
O.K… which one of you guys is having fun at FB’s expense!
C’mon… c’mon..
“O.K… which one of you guys is having fun at FB’s expense!”
I live 2,500 miles from Jersey City and had no need for a residence there of any kind, but it was just too good. I used the alias Angelo Toll.
Note to Paul… ever heard of Jingle Mail?
“‘Mortgage’ has become a dirty word recently as millions of unpaid mortgages across the United States have created a crisis amongst homeowners, financial lenders, home builders, and just about anyone else who is impacted by mortgages.”
mortgage = death pledge
Well, on the bright side, at least we should now be able to dispense - once and for all - with the myth that people will do whatever it takes to pay their mortgage.
http://query.nytimes.com/gst/fullpage.html?res=9C0DE7DB153EF933A0575AC0A96F958260&sec=&spon=&partner=permalink&exprod=permalink
“Fannie Mae Eases Credit To Aid Mortgage Lending ”
Published: September 30, 1999
“In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.”
“In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980’s.”
going to be fun when they start up accounting investigations of fnm/fre again
better hide the acorns
The Glass-Steagall Act was repealed on Nov. 12th, 1999 interestingly enough. So now I know which came first.
ROOTS & acorns
Roots of Mankind, a nonprofit agency in Temple Hills, said some lenders are already writing off some of the debt to make mortgages more affordable
this will soon be common…
http://news.yahoo.com/s/ap/20081001/ap_on_fe_st/odd_cheap_home
He noted that the $2 million Kushner Cos. agreed to pay for the property was a discounted price designed to encourage the development of affordable housing. Since then, the city has received housing proposals from several other developers, although most have yet to come to fruition.”
If the politicians in Washington would leave well enough alone - you will HAVE affordable housing…
“I think before I ever decided to buy a house, there should have been a course where you need somebody to tell you that you can’t buy without any down payment” says Paul, himself a teacher and presumably knows about the value (if not the financial rewards) of education.
Yes, but political correctness and the rule of equality prohibit anybody to write or think that financial acumen is sthing you acquire, not something that you are born with as a human being.
Housing prices becoming more reasonable in Saginaw:
National News, Weird NewsPrintShareText SizeAAASAGINAW, Mich. (Oct. 1) -
With a winning bid of just $1.75, a Chicago woman has won an auction for an abandoned home in Saginaw.
Joanne Smith, 30, recently was the top bidder for the home during an auction on eBay, The Saginaw News reported. Her bid was one of eight for the home.
Well, at least the seller didn’t give it away!
Her bid was one of eight for the home.
Wait a second… eight bids and the top one was $1.75?!?
Oh… real tense bidding. I bet she snipped it too.
Got Popcorn?
Neil
If you think “Baltimorgue” is bad, come on down to scenic Detroit. On a more sane note, we don’t have a lot of houses in da hood for $300k.
Right, $300 (three hundred dollars) is more the going price.
Which one do you think is a bigger idiot: Barney Frank or Chris Dodd?
Like my students would ask me, “Is that a trick question?!”
Bush, Frank and Dodd = three stooges
If there was any chance McCain was going to get my vote, he lost it tonight with this bailout vote.
Which McCain action seemed more desperate: Choosing Palin as his running mate, or postponing the debate so he could go to DC until the bailout measure was crafted?
Well, they passed the new and so-called improved Bail-out Bill in the
Senate with a 75 to 25 vote in favor of it .
In my view , the original drafted Paulson Plan ,with minor changes still remained in tack . Other clauses added another 150 billion in tax incentives and general junk that should not of been included in this bill .
But the real kicker is that this new and so-called improved Bill the Senate just passed is actually a massive increase of the bail-out . The fact that they raised the FDIC insurance and kept the Paulson Plan ,instead of doing one or the other, the lawmakers have in effect increased the bail out to be unlimited .This is in addition to the prior bail-outs of F&F , and all the other government assistance that adds up to 900 billion . I add up a potential of over 3 trillion of borrowed funds they really passed . All this money under the discretion of King Henry .No reforms were included ,no clauses with teeth for real protection .
The fat cat lobbyist got their way ,but its even worst than the House
bill that was turned down . I am convinced that the lawmakers think they can sugar coat this bill and maybe the public won’t notice what it really means .
I guess you guys didn’t notice that the Senate passed the Paulson Plan as well as the increase in FDIC . It should of been one or the other ,so effectively the bail-out is unlimited now in amount . You guys didn’t catch
it ,what a fast one .
Lets all vote for Nader….just think if millions voted for him out of protest we can change the world!
I was thinking more along the lines of Ron Paul.
Nader or Ron Paul, either one would be fine with me. Eff McCain and eff O’Bama, eff ‘em both with a Joshua tree.
I was sick to my stomach, watching that vote. Oh, and if you’re uninsured, feel lucky. At least you won’t get diagnosed with some mental illness for being against the bailout bill and targeted for treatment, LMAO! Holeeee Jeebus, they slipped a “mental health parity” clause into a freakin’ Wall Street porkbarrel.
Seig Heil, Henry Paulson!!!
FDIC increase plus Paulson Plan part intact in Senate bill make Bail Out amount unlimited . Should of been one or the other . Think about it .
When hyperinflation sets in, we’ll all be millionaires… but a loaf of bread will cost a couple million dollars.
“Mission Accomplished!”
Baltimorgue!
Well, I loved loved loved living in Baltimore– I still think of it as home– but that was many years ago, when it was both cheap and yuppie-free, a charming and friendly place where I could rent a three-story townhouse in a nice neighborhood and walk to the harbor for half of what my coworkers were paying to live in a roach-infested firetrap studio in a slum in D.C. (or, alternatively, a soulless barracks in the middle of exurbia requiring a two-hour commute to the closest Pizza Hut.) BUT….I moved away for a few years and in that interim the Bubble took over in HEEEEEEDIOUS manner. I remember going back and looking for a rental and laughing–literally laughing–out loud at what the realtor showed me in my price range.
Now, not only is the city unaffordable, it’s unrecognizable. The ugliest new construction you have ever seen or imagined has edged out the quaint, quirky old neighborhoods, the original residents who plugged along just fine for decades now can’t afford to live or shop there. To make matters worse, all the new retail that sprang up to accommodate the yuppie invasion — all failing, because the yuppies don’t shop there, they drive their SUVs out to the exurbs and shop in the big-box stores. The whole downtown is crowded with ugly over-huge hotels, million-dollar townhouses, and a whole new harbor area. It looks awful and feels like a bad Disney imitation. It breaks my heart to see it.