It’s Not As If There Was No Warning
A report from the Washington Independent. “To great fanfare, mortgage giants Fannie Mae and Freddie Mac announced last month they would temporarily halt foreclosures and evictions from Thanksgiving to Jan. 9. But it’s not working out that way for everyone. And certainly not for Julio Angulo of suburban Virginia, another victim of a foreclosure machine that seems to be almost unstoppable. The eviction was officially over, less than a half hour after it began. But Angulo still was allowed to wait a few more hours for his friend to help him move. He said his troubles began last spring, when he told his renters they had to leave because ‘they didn’t have their papers.’”
“At the same time, Angulo’s monthly mortgage payment on an adjustable-rate loan jumped from $1,400 a month to $2,600. He earns about $500 a week as a housepainter. ‘I didn’t know what happened,’ he said. ‘I got charged. I can’t pay that.’”
The Arlington Connection from Virginia. “A few years ago, it would have been unthinkable for any home in Arlington, regardless of size or location, to sell for less than $300,000. In October, 33 Arlington homes, most of them condominiums, sold for $300,000 or less. In the same month, at least 13 homes sold for more than $1,000,000. Which begs the question: Where is the ceiling in the Arlington real estate market and where is the floor?”
“‘The ceiling has not changed that much,’ said Nicholas Lagos, broker in Arlington. ‘We still have a tremendous disparity in pricing in Arlington.’”
“During the housing boom of the first part of this decade, Lagos said that condo constructions and conversions were occurring rapidly. ‘There were a lot of builders who jumped in and started building condos,’ he said. ‘When they were built, a lot of people built them on speculation. There were a lot of investors who went into them as opposed to owner occupants.’”
“There was an ‘overbuilding’ of condos during this period, Lagos said, and now prices in the Arlington condo market have plummeted.”
“‘Right now if you’re listing the home you have to make it show well,’ Lagos said. ‘Just slapping it together and putting a sign up is no longer working.’”
“He also said that Arlington has been fairly immune to the collapse of the Northern Virginia housing market. ‘We’re affected absolutely, but not like the outer areas,’ Lagos said. He did say that the housing market collapse has had an effect on the county’s real estate community. ‘Realty is now a career,’ Lagos said. ‘There’s not a lot of people dabbling in it [anymore].’”
The Falls Church News Press from Virginia. “While the Falls Church area has managed to escape the severity of the foreclosure crisis that plagues much of Northern Virginia today, the foreclosure market in the Greater Falls Church area still remains lucrative.”
“Stacy Hennessey of Long and Foster Realty and Shaun Murphy of Remax Allegiance shared their knowledge of the area market. ‘The owners overpaid in 2005, 2006 for these big homes, and now prices have dropped, so they were foreclosed,’ says Hennessey, who represents buyers looking for homes, including many foreclosures across Fairfax County, where she says the markets are ‘inundated’ with foreclosed homes. ‘I’ve seen houses in the $150,000 - 200,000 range or less. That’s a big drop from $500,000 and up.’”
“For Murphy, the market is even busier, as he doubles his role as a real estate agent for buyers and as a listing agent for IndyMac Bank. ‘There are a lot of foreclosed homes and a lot of buyers purchasing them,’ he says. ‘Two-thirds of the homes I’ve dealt with are bank-owned homes.’”
“Foreclosures remain one of the current economies greatest steals, and if economic conditions continue to deteriorate, Hennessey says, ‘there are going to be more great deals’ for home buyers.”
“Foreclosures may be a sign of hard times in the economy, but as Hennessey and Murphy can attest, it’s a ripe time to snatch a beautiful home at a bargain price. ‘Foreclosures are an awesome investment,’ says Hennessey. Both agents agree it is ‘the best time to buy.’”
“Hennessey adds that the buyers market also translates to a renters opportunity, as well. ‘Buy a home for a little, rent it out: that makes for a great investment,’ she says.”
The Virginian Pilot. “Real estate appraisers in Hampton Roads and across the nation say they have felt intense pressure from lenders, mortgage brokers and real estate agents to deliver inflated valuations - a serious ethical breach that may have played a role in puffing up the real estate bubble and promoting mortgage fraud.”
“The problem has been around for some time, says Woody Fincham, a Chesapeake-based appraiser. For several years in the mid-2000s, Fincham said, his company did steady business with a Virginia Beach mortgage brokerage but faced escalating pressure to deliver inflated appraisals.”
“‘They would get on the phone and scream at me to inflate values,’ he said. ‘They said, ‘If you keep coming in low, we’re not going to work with you anymore.’”
“Finally, the brokerage delivered on the threat, cutting off business with Fincham’s company. ‘They said, ‘You’re not hitting the numbers we need you to hit,’ Fincham said.”
“That brokerage is now out of business, dragged down by the collapse of the subprime mortgage market. One of its former loan officers, Aretha Smiley, has been named in two civil lawsuits alleging mortgage fraud.”
“It’s not as if there was no warning. Back in 2001 the Appraisal Institute, a worldwide association of real estate appraisers, told Congress that members were facing increasing pressure from lenders, brokers and realty agents to inflate property values. Such pressure can enable lenders to make loans larger than the actual value of the house, the institute warned. Moreover, those inflated transactions can later be cited as comparable sales in appraisals of nearby properties, creating a multiplier effect.”
“‘Such a cycle of ever escalating values adds unnecessary risk to our mortgage finance system’ and ‘can contribute to mortgage fraud,’ the institute warned.”
“Since 1999, more than 10,000 appraisers nationwide have signed an online petition urging the federal government to clamp down on lender pressure to inflate values. Such pressure is pervasive, the petition says, and includes blacklisting appraisers who refuse to go along. Some local appraisers were unwilling to discuss the issue on the record, saying they feared losing business.”
“One willing to talk was Suzanne Shannon, an appraiser in Hampton. ‘I’ve been told numerous times, right flat-out in plain English, ‘If you don’t do what I want you to do, you’ll never work for me again,’ Shannon said.”
“The deflation of the housing bubble has prompted some lenders to look more critically at appraisals, Shannon said. Occasionally over the past few months she has been asked to review high valuations turned in by other appraisers. In one instance, a waterfront property in Gloucester County had been appraised at $2.1 million; Shannon’s review put the value at only $1.2 million.”
“A 2007 national study found that 90 percent of appraisers reported being pressured to raise property valuations to enable deals to go through. The prime culprits, according to the survey, were mortgage brokers. Mortgage brokers, on the other hand, put the onus back on appraisers.”
“‘The appraisers have to step up here and take the high ground,’ said Marc Savitt, president of the National Association of Mortgage Brokers. ‘I understand a lot of them have been threatened with loss of business and so forth. I’m not saying it didn’t happen. If they get pressured, they need to report it to the appropriate regulator. That’s the first thing. The second thing is, if they do commit fraud, then they have to understand there’s consequences for that, and just because somebody tried to influence or pressure them, that’s not an excuse for committing fraud.’”
“The trouble is, when coercion occurs, appraisers have little recourse, said Glenn James, a Norfolk appraiser and a member of the Virginia Real Estate Appraiser Board. ‘Mortgage brokers are totally unregulated’ in Virginia, James said, so there’s no one to complain to.”
“Pressure on appraisers to pump up the numbers was particularly intense during the run-up in prices during the early and mid-2000s, said Bill Garber, director of government relations at the Appraisal Institute. ‘Good appraisers said no to it and went about their business and did their jobs professionally,’ Garber said. ‘But there are institutionalized conflicts of interest that exist - pressure points in the lending process - that can allow people with a vested interest in the transaction to control the appraisal process.’”
“Such coercive tactics are a violation of federal banking regulations. Earlier this year, the Federal Reserve Board adopted a rule barring mortgage brokers and lenders from coercing appraisers. The new rule is a positive step, Garber said, but the proof will be in the pudding.”
‘Back in 2001 the Appraisal Institute, a worldwide association of real estate appraisers, told Congress that members were facing increasing pressure from lenders, brokers and realty agents to inflate property values…Since 1999, more than 10,000 appraisers nationwide have signed an online petition urging the federal government to clamp down on lender pressure to inflate values.’
‘Earlier this year, the Federal Reserve Board adopted a rule barring mortgage brokers and lenders from coercing appraisers.’
And the Fed unilaterally passed regs to outlaw some of the crazy mortgages, too. But guess what? It doesn’t even go into effect until 2009. And nobody is making those loans any more.
I remember in 2005, I would post reports about this appraiser petition when congress was trying to decide if they should reform the GSEs. They did nothing. As a matter of fact, when the interim Fannie CEO got the job permanently, at the press conference he boasted that the company was going into subprime with both feet.
And what did Senator Shelby do when presented with another petition asking that the Feds step away from the GSE debt? He shrugged it off. As I said then, Shelby, I’ve got a long memory.
Ben,
Right, and notice the Appraisal Institute noticed there were issues as far back as 1999! Meaning they were -already- fed up w/ being brow beat by commissioned MB’s. For Marc Savitt to say “They have to step up here” is patently ridiculous.
They t-r-i-e-d, remember?
More evidence the “boom” started long before most are willing to acknowledge.
What happens when sheriffs lose their jobs, because the municipalities that they toil for can’t pay them anymore?
Who assumes the task of kicking people out of their homes…
Blackwater, perhaps?
I think you’ll have no problem finding volunteers from this blog. I’ll supply the JTs.
I’ll supply the opera glasses.
nnv, why would anyone even bother? At this point, who even cares anymore? These days it’s more entertaining to see who can live in their house the longest without having to pay.
Wow, the Virginian Pilot is reporting about appraisal fraud. I (Ethan) post on *EVERY* housing article on there, and have for years. I’ve dropped this blog into the comments and they actually let it go through a few times (the new site always lets it go through). It drives me up the wall.
It’s sad. You want to scream, but know no one will listen because almost everyone else is participating, or has an interest in things working out bad for you.
What happens when sheriffs lose their jobs, because the municipalities that they toil for can’t pay them anymore?
They won’t lose their jobs, they’ll just get paid on a piecework basis by the lenders and other parties they do their work for.
“And certainly not for Julio Angulo of suburban Virginia, another victim of a foreclosure machine that seems to be almost unstoppable.”
Victims, victims, everywhere. That “foreclosure machine” sure is a meanie. Won’t it think of the children?
The poor banks!!!!
So lying, cheating and fraud are only bad for those big, bad institutions? Your way of seeing the world is warped. Accountability for some, victimhood for everybody else.
Wrong again. Further, you failed to note that it was in fact the banks that failed to assess the risk in financing all these people. Yes…. the banks have a leadership role.
“the banks have a leadership role.”
So, I guess we can take all laws off the books that don’t deal solely with the banks. Everybody else is free to do what they want, when they want. It is up to the banks to police the entire state.
And many loans were made by your old buddies, Frannie and Freddie. Fraud doesn’t count there, either. Does it? They should have known. Don’t let the fact that guys like old Barney, Schumer, Dodd, Maxine Waters, Charlie Rangel etc. forced them to make loans that were clearly fraudulent. Fraud is okay if it’s genesis is not within a bank.
Accountability for everybody. That is what the rule of law is all about.
Accountability for everybody. That is what the rule of law is all about.
Both of those concepts were sorely neglected for the past eight years — the rule of law was often ridiculed, in fact — yet you cannot stop yammering about The New Guy before he has a chance to take the reins of power.
I have no issue with holding individuals accountable for fraud, but there are far fatter fish to fry first, both within government and within the corporate sector. Or the big fish should be first in the hot seat … in a just world.
“Accountability for everybody. That is what the rule of law is all about.”
Rule of law has what in hell to do with banks???? Banks have a fiduciary duty to their stakeholders and shareholders, not to borrowers. It is precisely this duty that banks failed miserably; their stakeholders and borrowers alike. Conflating their utter failure at this fundamental role with politicians is retarded but go ahead and wave that flag.
ET Chicago,
No offense but had you read Ben’s link you’d know that the Appraisal Institute made their concerns known in 1999. Again, I’m sure even at ‘that’ time, those issues didn’t arise overnight.
It’s a REIC thing.
And many loans were made by your old buddies, Frannie and Freddie.
Actually no loans were made by Fannie and Freddie, because they only purchased them on the secondary market. Not to excuse them, but they were not in charge of the lending itself.
No offense but had you read Ben’s link you’d know that the Appraisal Institute made their concerns known in 1999.
The issue the CityBoy raises is much, much larger than real estate — it extends to commerce, finance, civil rights, the environment and foreign relations.
I don’t dispute the timing of the concerns; do you dispute that a materialistic, deregulated, look-the-other-way culture was promulgated from the top down?
“Rule of law has what in hell to do with banks???? Banks have a fiduciary duty to their stakeholders and shareholders, not to borrowers.”
You are a psychotic. Because they have a fiduciary duty to their shareholders all other laws are thrown out the window?
Wait, I like this. It is a whole new way to look at the world. I can leave bars without paying my tab. It is their responsibility to collect that money. Not mine. I can leave restaurants without paying my check. It’s not my fault they gave me all of that stuff BEFORE I paid for it. Risk management is their responsibility.
I plan to commit massive insurance fraud. The insurance companies are responsible to their shareholders. If I defraud insurance companies, that is their problem. I plan to make a fortune and if I get caught I will just point to The Rule of Exeter. I am just a pawn. They don’t have a responsibility to me, in Exeter’s world, so I am free to do whatever I want.
I can’t wait to go shopping. I will be stealing everything I can find. It is up to the grocery stores and liquor stores to manage risk. I don’t have any responsibility. I won’t ever have to pay for anything again.
I see how great life will be on the psychotic Planet Exeter. Every business is fair game. The laws are completely flexible and everybody is a victim. The Rule of Law was an antiquated concept. Those big bad businesses can eat $hit.
“Actually no loans were made by Fannie and Freddie, because they only purchased them on the secondary market.”
Please. Those loans were made by F&F. Brokers go onto an electronic system to be approved by F&F. To think that F&F didn’t make those loans, directly, is ludicrous. The system is broken.
Rewriting your own rules again? F&F never made a loan and you know it.
You need to lay of the sauce and get ahold of yourself.
F&F never directly made loans. However, the widespread perception that they would buy pretty much *any* loan –no matter how crappy– combined with the political aim of increasing “ownership” at any cost, plus the implicit (and now explicit) taxpayer backstop is a huge reason why the bubble grew to mammoth proportions.
The GSEs were moral hazard on steroids. The sooner we abolish them the better (not holding my breath there).
I want to start a bank
- I like Walmart- I drive a 6 cylinder car-
I’m a bad,bad man
This dude made $500 (underground economy/cash?)week as a house painter and he has a rental?
OT:You know what burns my a**, is that welfare receiptents can’t be discrimainated against for a home loan per federal law.
They cannot be discriminated against on source of income. That is, someone who gets 1K a month on welfare has to be treated the same as someone who gets 1K
(sorry) a month from working.
Let’s point out, one more time, that there was never, ever, any legislation that prevented lenders from requiring proof of income, enforcing maximum debt service ratios, or requiring down payments.
And there were lenders that required all of these all through the madness.
there was never, ever, any legislation that prevented lenders from requiring proof of income, enforcing maximum debt service ratios, or requiring down payments.
Funny how in the midst of throwing around $Trillions to corrupt and incompetently run banks and institutions, neither Congress nor Shrub have never once considered legislation that would actually mandate such common sense lending standards.
Yep, the pathetic whine of a loser. It’s not fair, I am a victim. So this guy was just standing there minding his own business and not paying his mortgage and along came big evil reality! So sad, perhaps the folks in Washington D.C.P. (Dept. of Central Planning) will pass a law that we all must buy an over priced POS.
When can we have senate hearings on inflated appraisals and fraudulent loans. This is so obvious in California so why can’t the greatest minds in washington even pick up on the carnage that has been created by these heinous
realtor whores and their pimps the appraisers and mortgage brokers.
Who cares what they did? According to Exeter, it is only the banks that are bad. Everybody else was a victim.
Maybe BOTH the lenders and borrowers are at fault.
When there is fraud going on everywhere, you have to ask yourself, who has the most power in the situation? Who has the most information? Those who do should get the larger share of the blame.
The banks and their Wall Street enablers must get much more of the blame. That doesn’t mean Joe borrower is blameless; their punishment should just lose their house and equity (if they ever had any). Wall Street and the banks, on the other hand, should cease to exist in their current form and lots of people need to lose money.
..and let’s not forget about the top dog, the Bush administration:
“WASHINGTON (AP) — The Bush administration backed off proposed crackdowns on no-money-down, interest-only mortgages years before the economy collapsed, buckling to pressure from some of the same banks that have now failed. It ignored remarkably prescient warnings that foretold the financial meltdown, according to an Associated Press review of regulatory documents.
….
Bowing to aggressive lobbying — along with assurances from banks that the troubled mortgages were OK — regulators delayed action for nearly one year. By the time new rules were released late in 2006, the toughest of the proposed provisions were gone and the meltdown was under way.
Full article:
http://www.google.com/hostednews/ap/article/ALeqM5hTDPY8hFtJLxsv8i1Q7OvoRrlYrQD94PQ0JO0
Yes. Exeter, the rabid partisan, doesn’t understand holding EVERYBODY accountable that broke the law. That is the only way to protect those that don’t break the law.
But the ones making (or destroying in this case) the rules shoulder the overwhelming responsibility for this mess. If Bush’s cronies had been *smalltime* crooks instead and he declared that breaking and entering to “borrow” money was no longer a crime, we would have had a crime bubble. People’s morals didn’t drastically change over the past 10 years; they did what they did because they COULD. Their behavior was not only sanctioned it was encouraged as being in their best financial interest. It would be nice if everyone were as ethical, prudent and financially savvy as HBB posters, but they’re not..that’s why we have rules and laws.
The poor banks!
“Foreclosures may be a sign of hard times in the economy, but as Hennessey and Murphy can attest, it’s a ripe time to snatch a beautiful home at a bargain price. ‘Foreclosures are an awesome investment,’ says Hennessey. Both agents agree it is ‘the best time to buy.’”
Are they like wind up dolls? Pull the string and I talk!
Mindless drones usually act like mindless drones.
I’m so sick of that “best time to buy” mumbo jumbo I want to scream.
Got a call from an older freind telling me that “this may be my year!” He told me that there were rumors of tons of forclosures in MD this coming year and had I heard that they were going to giving out 4.5% mortgage loans!
I told him I had no intention of buying at an artificially low interest rate since it was a guarantee that the loan would be underwater when interest rates went back to normal, even with a downpayment. Further told him I vastly preferred to buy when interest rates were much higher as that would bother force down prices even more and would make my large down payment more valuable.
Wind out of his sails very, very quickly. Most people just don’t think through the numbers required for a rational choice.
polly,
Well that doesn’t mean 2009 couldn’t be “your year” in many other regards! JTTBP
JTTBP? I might be missing something…
Also, thanks for the glimmer of hope. I would like 2009 to be a good year. A very good year. I have some personal projects - increase my exercise, trim down a bit, better sleep habits, clean up the mess in my apartment, improve the social life, that sort of thing.
I have nearly two weeks of vacation coming to me at the end of the year (use it or lose it, so I’ll use it) and that should go a long way toward cleaning up the mess. A date with the shredder and my pendaflex folders, if you will. Good times.
“A date with the shredder” LOL!
Is ‘that’ what that pile is..?
( Just Trying To Be Positive ) and yes, I realize that acronym will gain zero traction here.
Absolutely! I for one happen to think it will be a great year for me, (looking back on ‘08 from a personal perspective, I certainly hope it can’t get any worse?) But as clients lose track of which firm their account is at “this week” they’ll grow insecure not only w/ their losses but also the uncertainty of having 3 different reps in 18 mos.
Best time to buy a house is with MTG rates very HIGH, not low. You can always re-fi when rates go lower, but MTG rates and home prices are related. As the rates go lower, you re-fi (for a few K) and get the lower rates, but keep the lower sale price of the home you purchased.
People don’t seem to understand that. It’s just like a bond, or a stock that pays dividends. The yield (interest rate) moves higher as the price moves lower. Home’s work the same way, as the interest rates go up, price drop.
This is especially important in areas like FL; where you tax base for the rest of your life is set by the purchase price of the home. If you buy at 100K and sell at 600K, you will have a 10K tax break for the rest of your life. That’s HUGE, that nearly fully funds your 401K, just by buying low and selling high.
We’re not anywhere near the bottom yet. We may get some rallies as the government pulls out all the stops (just let borrowers go directly to the Fed, and borrow at the FFR), but there just aren’t many qualified buyers left (who don’t also have to sell). The homeownership rate is much too high, and there are far too many homes. That kind of problems takes years (or generations) to fix, not a few months.
Now, if they open the borders and start letting millions of immigrants in…. Now that could change things!
Yea, but what if the “artificial” rate at 4.5% is the lowest it will ever get? Remember, we are printing so much money that inflation is around the corner 5-10 yrs away.
When that comes, good luck finding a rate near 4.5%.
We would be in a new cycle, and I would not hold my breath for a lower than 4.5% 30 year fixed rate.
Home prices are already down 30-50% generally speaking.
If ones finances are such that they have 10-20% down cash, and can afford the 4.5% 30 yr rate, with plenty of money left over, then I say YES, find the house that you like and want to live in for at least 15 years and buy it.
If ones finances are such that they have 10-20% down cash, and can afford the 4.5% 30 yr rate, with plenty of money left over, then I say YES, find the house that you like and want to live in for at least 15 years and buy it.
This condition describes about 0.00001% of borrowers in CA today. 2013 is shaping up pretty good, though!
That’s right, Polly - I now remember that you also live in “Bedlam by the Bay” (Maryland), land of $290,000 90-year old farmhouses that need flood insurance, $300,000 condos, etc.
I know you won’t fall for any of it, Polly, and I say “good for you!” This state has such a LONG way to fall - the Bubble was huge here, and so many people are so deeply in denial as they continue to walk around think that 6x income is an “affordable” house.
Pondering,
Yup, I do. See my post below about the county teachers agreeing to give up their contractual pay raises for the year, presumably in return for no teacher lay offs when they try to balance the school budget. They got promised 5% and now, poof, nothing. That is going to hurt the scrap book supply stores something fierce.
We should have coffee/tea/etc. sometime and rant about county real estate and the stupid rent increases. You are also near the Twinbrook metro station, right?
Well, for the realtors its always the best time to buy. We’ve been hearing it for many years.
Think of the investment value and how it generates wealth back in 2001-2002-2003. Lots of studdies showed people that owned homes had more wealth ergo the house was the source of the wealth
Think of the appreciation! 04-05
Buy before its too late! 05-06
Look at the prices! we’re at the bottom! 06-07
These are once in a lifetime deals! 07-08
Anyhow, they are marketers and you should be able to filter it out by now. Look for any potential conflicts of interest.
James,
That’s an excellent point. Since most people ( 69% ? ) own their own home a-n-y-w-a-y is there really a connection between the two?
It’s almost like trying to draw a parallel between “people that own a pair of jeans” and wealth. Take it further, I like where head’s at man!
super bowl 06,07,08
bahhhhhhhhhhh
taxmeupthebooty,
Right, as in “My mother and YOU’RE mother were both mothers!” Everyone that is wealthy has a belly button. The more we explore this NAR-myth the more it looks like an Inquirer headline.
I have a good friend that works for the main VA office in Portland and his dad has lived in an apartment in Vancouver for years ( no state income tax on that side of the river ) and the guy is worth millions! A lot of people may not realize but Fred Meyer, the founder, lived in a 1 b/r apt.
Past Performance is No Guarantee of Future Results. 09-10
Do beautiful homes always come with cement in the toilets?
At least they used “snatch” and not “snap up”.
“it’s a ripe time to snatch a beautiful home at a bargain price”
Here’s to all that ripe “snatch” by the beautiful homes in F-L-A! –Slap Shot
“stick” save, and a beauty?
Dave Ramsey disappoints me. Tells people how to manage their money, get and stay out of debt and to live within their means. Then proceeds to constantly say “Now is a great time to buy a house”. I have lost all respect for the shill. Obviously, his advertising dollars counts on used house salepeople contributing.
Said it before I’ll say it again:
Notice all Loudoun/ PWC sellers!
I am not going to pay 800K for a house you bought in ‘02 for 300K.
Even at 4.5 % interest !!! It’s still OVERPRICED.
I can continue to sit on the sidelines for another 300 days - can you?
Good luck with the heating bill on that empty house this winter too!
And imagine what will happen to your “equity” if rates go up to 9% or even 12% in a few years. Hey, even people who plan to stay in a house forever can have their plans change. Why would you buy at a time when you are guaranteed to loose all your downpayment and possibly be underwater if life, the universe and everything meant you had to move in a few years? Just because you don’t intend to use your house as an ATM doesn’t mean being underwater is a good thing.
Amen brother!
I will never understand the prices in South Riding (purgatory) and Ashburn (Hell).
And I’m not going to pay $800k for a house you bought in ‘02 for $400k in McLean, Vienna, or Oakton.
…oh, and South Riding is pleasant enough, as long as you are one of those rare individuals who doesn’t have to take Rt 50 to work in Fairfax County. Then it sucks beyond all belief. But, if you are one of those rare people, then it’s a much nicer, cleaner, and less congested place to live than most of Fairfax, if not most places inside the beltway (except for the ritzy neighborhoods).
In response to Ben Jones post :
I don’t know why it isn’t brought up how much Congress ignored the pleads of the Appraisers . I bet the Appraisal problem comes under the Finance
Committee . Out with all of them . A 10 thousand signed Petition is not something you ignore .
Also, I don’t understand why coercing or bribing a appraiser is not already a violation of the law . Again I say , Congress and other bodies of the government did not enforce the laws and now they are making new laws as if blackmail ,coercing ,or bribing appraisers ,aren’t against the law
already . Is it any wonder why Congress/Senate was so quick to pass the throw money at the problem and lets investigate later BS . It’s got to be the biggest joke watching the Politicians conduct these Hearings.
And don’t forget the *borrowers*. Nobody is going after them, except for some extreme cases where people purchased dozens of homes with fraudulent applications.
Rule #1 for any bailout or assistance program–including a delay in foreclosure–should be that all parties involved have clean hands. Lied about your income? Sorry, we can’t help you.
reuven,
I have no problem with that! Of course that would tend to make ‘too’ much sense.
I’m not here to in any way exonerate the Appraisers but HW brings up a good point. The crime was already in progress by the time the appraiser was pressured to inflate values!
Whether or not he succumbs to that pressure is a seperate legal issue. ( Honest, decent folk are solicited by prostitutes EVERY day )
“Rule #1 for any bailout or assistance program–including a delay in foreclosure–should be that all parties involved have clean hands. Lied about your income? Sorry, we can’t help you.”
I would like to second this motion. Accountability for everybody is the only way we will clean up this colossal mess.
Ditto
Housing Wizard,
When you stop to think of it, 10,000 signatures ( from ‘within’ an industry group ) certainly carries more weight than the same number collected from the general population say, outside a mall or Home Depot.
It also should be noted that in fact more ‘would’ have sighned but feared retribution from “The Cartel”.
If banks were allowed to take the hit for their own bad decisions, that would have been a great boon to the appraisal market and the ethical standing of the entire profession.
Since Congress doesn’t want housing prices to go down (as if they had a choice), why should they want to see the appraisal industry fixed and policed? As long as they are apparatchiks of the banks, then it helps keep Real Estate a well-oiled machine.
DinOR & reuven . To think that Congress got a big RED FLAG from
the Appraisers on this crime wave and they were ignored, it’s just to much .This is not acceptable . These clowns in Congress/Senate are the lawmakers ,yet they are covering up crimes by these bail-outs .
We all know that eventually the real estate market turned into one big crime wave of faulty appraisals and cash back fraud . Still the
lawmakers want to allow the same players to reek their gaming of the system . The only difference this time will be that the taxpayers will be the screwed bag-holder investors that take on these crime-wave loans .
Since Congress/Senate is taking the position that the fraudulent loans were no fault of anybody (ha ha ) and they won’t admit that a massive ponzi-scheme was in operation , they will just get more foreclosures. Enough with the poor homeowner BS and the poor Home Builders and real estate agent BS . The housing scheme was marketed as a short term investment scheme during the crime wave and
that is why people were willing to commit loan fraud . It reached a point in the latter part of the boom were flakes were contacted to be straw buyers and they were given cash-back for their name .Don’t even try to tell me that the poor homeowners thought they could afford the home when the creep loan agent told them they could afford the loan . Borrowers were sold on the scheme and real estate never goes down and don’t be priced out forever ,and let your house provide the lifestyle you deserve .
Do you really think that a number of these poor homeowners didn’t get cash-back to buy a house ? Obstruction of Justice is a crime in itself ,isn’t it ?
I move for somebody to charge Congress/Senate ,Hank Paulson ,Executive Branch ,
and the Feds with a attempt at Obstruction of Justice by Bail-outs of known crimes ,while exceeding Authority to conduct the Bail Outs . I’m just dreaming of course .Hank Paulson got immunity for anything he does written in the Bill .
Housing Wizard,
To my knowledge, yes it is. You make an important distinction there by properly labeling this as a… COVER UP!
Forget the whole “Bail Out” moniker, it no longer holds water in the light that you’ve shared.
Additionally we need to drop the entire “Housing Bubble” label, grow up and call a spade a spade, it was a CRIME WAVE! A nationwide, coast to coast MF’n CRIME WAVE!
It’s always been my position that this ‘thing of ours’ started WAY sooner than most people seem to want to own up to? The whistle blowing by the Appraisal Institute speaks volumes to that end.
Sorry for another post . Do they let everybody off by the defense that they were brainwashed into committing loan fraud ? The two parties ,the lenders and the borrowers, committed loan fraud ,with no doubt the help of the real estate agents and maybe the appraiser ,(in defense of some appraisers ,at some point a appraiser is not going to know that a prior sale was fraudulent and they will use that comp ).
You can’t bail out a crime wave ,oh excuse me ,I guess you can if you have unlimited funds from the taxpayers . Most of the foreclosures were loan fraud on some level . Certainly a person who lost their job and went into foreclosure was a victim of job loss if they didn’t lie on their
loan application .
Everything they do is failing because it was a investment scheme crime wave . The fact that BB is talking about lowering
the principal balance for these jerks that harmed people already by their greedy crimes is just a outrage . I would rather see a house go vacant and a homeless person live in it than see
any of the gamblers gain at the expense of the taxpayers ,or future generations ,or whoever is harmed by this ,which is all of us actually .
Housing Wizard,
More than just an “outrage” this is your “proof”. Proof positive. When they’re actively talking ‘about’ and advocating ‘for’ loan “cram downs” you need go no further.
Again, why is Dennis Kozlowski doing time and Angelo Mozzillo free as a bird?
Sorry DinOR ,,,I was away all day and I didn’t see your post in response to mine .
Yes ….I feel the Bail Outs should be called the biggest Cover-up in History . All rules were in place as to how to handle
a meltdown of a Bank or a Investment Firm . FDIC covered deposits and other insurance covered other investments . The lawsuits and criminal implications would of taken the culprits to task and the Politicians.
I have watched this whole mess play out before my eyes and
I think the Powers made the decision that it was less costly
to simply bail out the mess, rather than let the rule of law
rule . The course that was chosen will have its consequences .As it stands right now ……Right is wrong and wrong is right .
In part because we had a Global investment market ,we couldn’t really afford to be sued by the rest of the World .
A lot of people think that the scape goat would of been the
Rating Companies ,but its not as simple as that .
“He also said that Arlington has been fairly immune to the collapse of the Northern Virginia housing market. ‘We’re affected absolutely, but not like the outer areas,”
This is the most disappointing thing about the bust. When this started, I expected to see this market crash when the no doc loans went away - I thought for sure this market was fueled by a bunch of unqualified people with junk loans…
It wasnt. The no doc loans are gone - and this has caused a collapse in other high priced areas around DC (the loans went away, the prices did too). In Arlington, the loans went away, but the buyers willing to pay high prices didnt. Damn…
So maybe what we’ll see is a divide between haves and have nots in the housing market?
I think the homes that have the least price drops from their peak will be the ones where the home value actually depends on the materials and workmanship in the home, and not just on their location and perceived scarcity or exclusivity.
As long as there is a historically wide gap between rich and poor, there will be some areas more resistant to price drops in the near term. It would be nice to plot housing prices in “desirable” areas vs. the Gini coefficient in a month-to-month or year-to-year fashion.
Materials and workmanship? Not in Arlington. Sure, there are the occasional nice or historic houses, but much of Arlington is post-war crap. The type of blue-collar post-war crap that would be at the very bottom of the market in much of America — the type of place the Arnolds would live in the old Rosanne Barr show.
Be still my heart:
http://www.franklymls.com/AR6904371
http://www.franklymls.com/AR6904371
http://www.franklymls.com/AR6888805
http://www.franklymls.com/AR6914001
I think the homes that have the least price drops from their peak will be the ones where the home value actually depends on the materials and workmanship in the home
Wrong. All asset valuation depends on income. In the case of houses, rental value. That’s all that matters.
Not necessarily. If the houses in question are desirable and there is a shortage of them, they will carry a greater value than they would ever derive from income.
You see this all the time in the antiques market. Some nut job pays $40,000 for some 19th century Sioux baby cradle - yet the intrinsic value of the item is $4. Further, if it was a fake 19th centrury Sioux baby cradle it would also be worth $4. Rental value of the item is probably about the same too - in sum the thing produces no value, its only value comes on the resale when another nut job comes along and pays 50K for it.
Very very few houses have this ability, but there are a few small (mostly historic) areas around DC that do operate this way.
“All asset valuation depends on income. In the case of houses, rental value. That’s all that matters.”
Huh? All houses will be priced according to the income of the buyer irrespective of size, location, and quality, Komrade?
Sounds like a true worker’s paradise.
Maybe she means the income the house produces or can produce rather than the owner/debtor’s income
Wrong too. The other Big Two variables are Supply and Interest Rates. I guess you could sort of count Unemployment as part of the Income variable, which means incomes are falling as unemployment rises.
In a normal supply and demand market, houses might sell for 3 times income. Now massively increases the supply of houses, and then you are talking 2 times income. HBB is really not accounting enough for this variable, especially with condos, when they talk about prices reverting to the average income ratio. Yeah, maybe if they start broken window fallacy bulldozing neighborhoods, which is exactly what those who praise Obama as FDR II would advocate (cause that’s exactly the kind of thing FDR I did).
And 2 times incomes does NOT take into account overshooting on the downside. 25% of the homes out there might be unoccupied “investments”, and probably at least 50% of the condos.
Prices are still laughable. And they’ll drop far more when interest rates start rising. These $1,000,000 homes can easily drop to $100K.
I’d appreciate some feedback on the over supply number. Do you agree income ratio should now be 2:1 instead of 3:1? 1.5:1? 2.5:1?
how many fed workers got laid off ?
Arlington won’t drop much
How many fed workers do you know that could afford a $900k 3br in Arlington without using windfall move-up money?
Id say about none. But why have they abandoned other areas but keep coming to Arlington?
It is frustrating. Maryland is full of idiots as well who will gladly shell out 50% of their take home pay per month to “own” a poorly built McShack jammed between their equally finacially stupid neighbors. The “creative” ones take to buying “investments” in dangerous parts of Baltimore, or others buy falling-apart “affordable” old properties. It seems that nobody has a wit of common sense or is willing to think about the cost of all this. They may as well hand their checkbook over the Realtor and tell them, “Oh, I don’t know how much I should pay for this house. Just write whatever you think is fair on the check and I’ll pay it.”
So, the decline continues at a glacial pace in many areas around DC.
Snatch blade of foreclosure from my hand, grasshopper…
“Foreclosures may be a sign of hard times in the economy, but as Hennessey and Murphy can attest, it’s a ripe time to snatch a beautiful home at a bargain price. ‘Foreclosures are an awesome investment,’ says Hennessey. Both agents agree it is ‘the best time to buy.’”
Montgomery County Maryland teachers agree to forgo the 5% general pay raise to help balance the school budget. This is just the other side of DC from Arlington and other Northern Virginia areas discussed in the top post. The ones that are eligible for a seniority increase will still get that.
http://www.washingtonpost.com/wp-dyn/content/article/2008/12/03/AR2008120303391.html
Another teacher scam and how they hide their true costs of their contracts.
They get “raises” based on the time they have been on the job (or steps)
And then
They get raises based on how much continuing education they take
And then
And they get general raises that everyone in the rest of the universe (read non-unionized, non government employees) ONLY get…
Reality Bites…
Ben’s got a new advertiser: “You Walk Away”
another VICTIM of a foreclosure machine that seems to be almost unstoppable
“You keep using that word, i do not think it means what you think it means”
Inigo Montoya, Princess Bride
Jasper - loooove that movie!
Coercion is still going on. My largest client of about two years recently returned an appraisal and said I needed to raise my valae. Oh yes, blatant. The statement was, “we only need you to raise it to $116,000.” My value was $95,000. I told them there are 148 active listings within a 1 mile radius and there are no sales other than the ones noted in the report that weren’t foreclosed or bank sales.
I also explained that this was a highly leveraged market composed primarily of speculators and absentee buyers most of whom were walking away.
I refused to raise it and included a letter going on record that I felt I was being pressured which is a violation of FIRREA.
That was the last time I ever heard from them.
Yesterday I received a notice of a pending Federal Court case wherein that particular lender was filing for reorganization.
There is a God.
Dimedropped, you are our real life “folk hero”!
Dimedropped ……You are the man .
DIME,
If only there were more like you! With ‘only’ 148 active listings to draw from, you certainly have the data in your corner.
We’ll just have to imagine during the Crime Wave that MB’s and realtors would have very arrogantly explained to you that you didn’t know what you were talking about b/c ‘this’ property is ’special’. Correct?
Why did you get the notice? Are you going to be asked about their business practices? Any chance you get to rat them out?
polly,
I’m sure if DIME needed a ride to the courthouse we have ample FL posters that would be more than gracious.
What I feel is important where the Appraisal Inst. is concerned is, I DEFY virtually all of the -other- REIC players to show me any document such as they have produced dating back all the way to 1999 ( when the financial world was a VERY different place! )
NAR? No.
NAHB? No.
MBA? No.
GSE’s? No.
Not so much as a peep from the rest of the accomplices. Not (1) iota of concern. Life was too good.
That doesn’t sound like any criminal charges though. How many DBags have we heard of who went bankrupt and came back as a new entity to go bankrupt yet again?
OMG.
From the Washington Post real estate chat (the first is the chatter, the second two are the reporters):
Arlington, Va.: I think it’s outrageous that the businessman would refuse to talk to children. What exactly is wrong with the organizer defending his/her home? You buy a home knowing who is going to be the type of person to live near you. A mixed-income development is a violation of the covenant the local government holds to protect your property value.
Maryann Haggerty: If that’s how you’re going to define the social compact–government has an obligation to support YOUR property values, but no obligation to extend the opportunity to others to put a roof over their heads–well, that’s how you’re going to define it. But why should that businessman have any responsibility whatsoever to do anything to the organizer out? Actually, said organizer should be glad the spesaker didn’t jump at the opportunity to lead the children in a discussion of the topic.
Elizabeth Razzi: By your logic, you should be expected to move out of your neighborhood if your income falls below a certain level — even if you’ve paid off your mortgage already. After all, you wouldn’t be the same type of person anymore and not fit for the neighborhood.
Local governments have a “covenant” to keep up property values? Since when? Long way to go guys, long way to go.
This has been more or less the position of many people in support of zoning laws for a long, long time.
“One willing to talk was Suzanne Shannon, an appraiser in Hampton. ‘I’ve been told numerous times, right flat-out in plain English, ‘If you don’t do what I want you to do, you’ll never work for me again,’ Shannon said.”
So this time Suzanne really did research it?