An Upside To The Economic Downside
It’s Friday desk clearing time for this blogger. “None of the half-dozen bargain-hunters knew for sure how many homes would be auctioned off on the steps of Chesterfield County Courthouse last week. Of the nine that were advertised, only one went to bid — and it went back to the bank. It reflected the dying hopes of one family, the Bangs, who were never told of their home’s reprieve at the auction. Still facing big bills with little work available, they continued to move out of their home of eight years to a small apartment. No one had bothered to tell a defeated-looking Tae Sik Bang that he didn’t actually lose his home at the foreclosure auction. When notified of the development at his home off Huguenot Road, he just kept packing.”
“Bang has a $32,745 federal tax lien hanging over him. He has missed four or five months of payments on his house and doesn’t know what to do other than let the bank take it. Now, he’s resigned to losing a house worth $262,400 because he can’t make payments on a $159,000 loan that he and his wife have been making payments on since 2001. ‘My son, he’s 9, I show him the apartment’ that the family is moving to, Bang said. ‘He doesn’t like it. He says, ‘Why do we have to move?’ I say: ‘No job.’”
“As he sat in Stuart City Hall on Wednesday, Dorran Russell asked a panel of professionals to help him save his home. Russell told the panel that his White City home was foreclosed on in September, and he said he cannot find a rental because of his bad credit. ‘This isn’t the American way, I don’t think,’ Russell said.”
“When Rob and Debra Eyrich moved into their dream home in Elgin three years ago, they thought it would be their family home forever. Both of them have full-time, secure professional jobs. So what could go wrong? As Deb tells it: ‘We were supposed to have a 30-year, fixed-rate mortgage. But the mortgage broker told us that kind of loan was ‘for your grandmother.’ Instead, he gave them an adjustable-rate mortgage, which was fine — for a while.”
“Then the recession hit, reducing Rob’s salary as a residential architect, and eliminating his bonus. It seems their loan had PMI insurance, which would completely repay the lender in case of a foreclosure. So the bank, with nothing to lose, wouldn’t give them a modification!”
“As a realtor in the Phoenix area, Jullisa Kalish rode high on the property boom. But when the market crumbled over the past three years, she wound up her business, went through a divorce and walked away from her five-bedroom home. Her home value peaked at $674,000 but was recently revalued at $395,000. Saddled with hundreds of thousands of dollars in negative equity, she found a two-bedroom apartment to rent for herself and her two daughters.”
“‘It’s heartbreaking to lose $300,000 worth of equity, over $300,000 of my most valuable asset,’ she said. ‘It will be 10 years before it even gets back to its $600,000 value.’”
“In Arizona, Phoenix electrician Alvaro Palacios called it quits on the dream home he bought at the top of the market in late 2006 for $172,000. Palacios stopped making payments after he was laid off in December. He took a part-time job as a supermarket delivery driver to make ends meet and has been waiting for his lender, Countrywide, to foreclose. His two-bedroom home with a large yard recently was revalued at $124,000 by the city.”
“Until he hears from the bank, Palacios is staying put. ‘It is a difficult decision, but I don’t really see any other alternative,’ the father of two said. ‘The house is worth much less than I paid for it, and it is too much of a struggle. It will just take too long to recoup.’”
“The Baton Rouge housing market continued its downward slide in February as sales fell by 28 percent from a year ago. Local home sales have been falling steadily since 2007 as the post-Hurricane Katrina boom ended, followed by a combination of other factors.”
“Sandy Daly, Greater Baton Rouge Association of Realtors president, said that local demand for homes has remained strong. But some potential buyers who might have qualified just a few years ago are being turned down for loans, even if they fall just a few points below minimum credit scores. Like others critics, she blamed Fannie Mae and Freddie Mac. Daly blasted both companies, saying they’ve increased the cost of lending to recoup their own losses.”
“‘I can’t tell you the number of people who want to buy homes … and are being turned down by lenders,’ she said. ‘It’s not for want of a new home or buyers that aren’t well qualified. The requirements are just unreasonable.’”
“A Michigan retirement fund charges in a lawsuit that Thornburg Mortgage Inc. and other financial institutions misled investors into thinking they were buying securities based on high-quality mortgages. The complaint states that ‘Thornburg represented that it concentrated on only prime, high-quality mortgage loans … with features geared toward more sophisticated, affluent buyers.’”
“However, the suit claims that Thornburg used ‘false and misleading statements’ to hide that its mortgages were ‘risky’ so it could sell them to investors such as the Genesee County Employees’ Retirement Fund. ‘Nowhere in the Offering Documents did the Defendants disclose that the Certificates were not supported by high-quality loans, but instead were supported by risky, Alternative-A (’Alt-A’) mortgage loans,’ it says. “Although the borrowers behind these mortgages will typically have clean credit histories, the mortgage itself will generally have some issues that increase its risk profile.’”
“‘According to confidential witnesses with direct knowledge of Thornburg’s loan origination practices, Thornburg frequently originated large amounts of Alt-A loans. By disregarding its underwriting standards for high-quality prime loans, Thornburg was able to close more loans and earn more fees by issuing Alt-A mortgages. Then, by pooling and selling those mortgages to the Issuing Trusts, the Depositor Defendants shifted the undisclosed and increase risk of loss from mortgage defaults to Plaintiff and other unwitting members of the Class.’”
“Thornburg Mortgage common stock sold for nearly $30 a share a year ago before it began a precipitous slide to about 5 cents a share today. In October, the firm laid off 29 employees. In December, when its stock slipped below $1 a share, it was dropped from the New York Stock Exchange.”
“Thomas Dubss of the New York firm said the Genesee fund lost ‘many millions’ on its Thornburg Mortgage investments. ‘It’s typical of the way a lot of these sub-prime mortgages were packaged and then resold,’ he said. ‘It’s esoteric, but, unfortunately, it’s common and has led to the predicament were in, in no small part.’”
“At a recent Marion County Commission meeting, a bow-tie-clad, professorial-looking figure took to the podium. His high-energy, animated style and slick graphics, which unleashed a torrent of information on the board, contained a simple message: growth, particularly through new home construction, is good.”
“Yet Dr. Elliott Eisenberg’s lecture was not purely academic. The research he offered the board is designed to hand local builders a rhetorical hammer to drive home to the public, and to the elected officials who regulate their industry, how vital the construction sector is to Marion County’s economy and to beat back any push for higher impact fees - an issue likely to emerge in the next few months.”
“At that March 3 meeting, Eisenberg, senior economist with the National Association of Home Builders in Washington, D.C., assured commissioners that anti-sprawl forces who maintain growth does not pay for itself are wrong. Marion County can expect to recoup about $1.77 in taxes for each $1 it spends on services on those homes over that time.”
“New ‘homes pay for themselves pretty quickly around here,’ Eisenberg observed.”
“Mark Range is the general manager at famed Bermuda Dunes Country Club, and like managers at other private country clubs in the desert, Range is trying to navigate his club through a maze of shrinking memberships and dwindling revenues. ‘I think breaking even in the country club business right now is a great goal,’ Range said.”
“The Florida-based National Golf Foundation estimates that as many as 15 percent of private country clubs in the country, or about 500, are facing financial or membership crises. Aging membership rolls, a weak economy and high initiation fees and monthly dues are to blame for much of the trouble, the foundation reports. In the Coachella Valley, older clubs such as Bermuda Dunes also face competition from newer private clubs with flashy amenities and public courses that are dropping their own fees.”
“The goal is to keep clubs financially viable while avoiding the fate of Canyon Country Club in Palm Springs. That private club’s financial woes left it so far behind on its lease that it was abandoned as a private club last year and is now a public course. ‘This area gets hit hardest because when the economy is bad, the first thing that goes is people’s second homes, second memberships, things like that,’ said Jeff Davis, president of the Bermuda Dunes club. ‘I was on the board (in 2007) and we lost a lot of money and a lot of members. That’s about $800,000 in revenue. What this board has done is realize, OK, golf is down 10 percent. Clubs are in trouble.’”
“Springfield-area Realtors, like those in other parts of the country, are disappointed in the state of the housing economy, yet they also remain ‘cautiously optimistic’ about what the future holds. The average 2008 home sale price was $139,250, down 5.7 percent from 2007, according to data from the Greater Springfield Board of Realtors, which has a service area concentrated in Greene, Christian and Webster counties. ‘We’re disappointed, but we’re trying as an industry to remain positive and do everything we can (to come out of it),’ said Miles Noennig, president of the Greater Springfield Board of Realtors. ‘Housing is a great investment, and prices right now are very affordable. Credit has tightened, but if you have a good credit record there is money out there to be lent. Our industry is built on optimism, and right now we’re cautiously optimistic.’”
“‘Since five years ago, the (U.S.) market has greatly reduced in activity, but a lot of that was because prices increased to an unrealistic point,’ said Art Maxwell, sales manager for Coldwell Banker Vanguard Realtors. ‘What’s going on here is a normal correction from a super-hot market, which would have happened anyway.’”
“The bargain-basement properties are those that are in foreclosure ‘or other properties that need a lot of work,’ said Mark Berthelsen, an agent with Keller Williams Premier Realty. With them, it is a buyer’s market. They can be sold, but the seller has to be realistic about the price.”
“Travis Peltier, broker in Stillwater, agrees that homes are moving on the market. ‘They are selling at a fair pace,’ he said. ‘Not at the same pace as in 2004, but at a healthy clip. I think the general public is starting to see that real estate is local, and, yes, Minnesota has foreclosures, but nowhere near what California has.’”
“If there’s one thing the current economy has taught us, it’s that perceptions can be damning - even when you’re doing nothing wrong. And the negative perceptions surrounding recent abuses of corporate spending have prompted many companies to cancel meetings, conventions and other special events. The pull-back is hitting home for The Party Goddess, a high-end, Pasadena-based catering and planning company.”
“‘We are totally affected,’ said Marley Majcher, the company’s chief executive officer. ‘Even our clients who have money are prefacing all of our event meetings by saying, ‘We don’t want it to look like we’re spending much money. People are totally craving to get together, but at the same time … so many people are out of jobs and homes are in foreclosure.’”
“‘Why do people call me?’ she asked. ‘They call me because I’ve got 17 years of experience and our events are colorful. And really … my brain works in a crazy way.’”
“Short of putting Prozac in our water supply, I’m trying to think of some ‘upside’ to our ‘down’ economy. After all, no one thought California would survive the dot.com bubble burst years ago, but we proved to be resilient and innovative. In the spirit of not only survival but positive reframing, I offer my top ten reasons for recessionary appreciation.”
“Customer service is back! Gone are the ‘take it or leave it’ attitudes of surly sixteen year-old Circuit City store clerks, or obtuse and obstructive airline ‘reps’ answering in Bangladesh and determined to foul your flight plans. ‘Thank you,’ has re-entered the American dialect.”
“There are bargains galore! Today, you even threaten to cancel a gym membership, cable service, home delivery or day spa and they suddenly have more ‘unadvertised’ specials than Ron Blagojevich had for his Senate seat.”
“There’s less mess in the landfills! People are re-using plastic water bottles and turning over copy paper! This week, I saw a homeless guy wrestling with a City recycle collector over the one or two aluminum cans not already cashed in by the homeowner. Volunteerism is up! Seniors with time of their hands, recently out-of-work professionals, and forty year-old public safety ‘retirees’ with lifetime pensions are all willing to take on a cause.”
“Condoms are ‘2 for 1’ at Planned Parenthood! Actually they’ve always been free, but an economic downturn is the best time not to have an unplanned pregnancy.”
” A slowdown on building projects in Santa Barbara! We find we may not need those urban dweller megaplex condos, stuffed onto tiny plots of downtown, after all. No longer can threats by housing ‘advocates’ blackmail the Planning Department and Council into approving anything with an affordable unit or two. As the market prices fall by a third, rentals become plentiful, Habitat for Humanity continues its good works, and more condos are being converted into apartment buildings.”
“Finally, there’s a renewed appreciation of what is lasting and genuine. The ‘worn’ look is now trendy in clothing, thrift stores are thriving, and the era of septuagenarians getting hair plugs, wax jobs, perky boobs or penile enhancement may finally be behind us. Comedy is back, and reality TV is hopefully on the wane.”
“Maybe there’s an ‘upside’ to the economic ‘downside’ if we ask the growing pack of local political hopefuls to reflect the current mentality of savings and conservation and put a limit on campaign expenditures. A cap on fundraising would cut down on the amount of political advertising we have to suffer through. At best, it might level the playing field; forcing candidates to make more personal appearances where they have to think for themselves and answer tough questions, rather than read prepared speeches and campaign manager scripts.”
“Their ‘downside’ might well be our ‘upside,’ while we sort through the ruins of our local economy without relying on anti-depressants.”
“‘It’s heartbreaking to lose $300,000 worth of equity, over $300,000 of my most valuable asset,’ she said. ‘It will be 10 years before it even gets back to its $600,000 value.’”
Wow, with her uncanny ability to foretell the real estate market, its a wonder she didn’t sell out at the top!
‘It will be 10 years before it even gets back to its $600,000 value.’”
ROTFLMAO! The clueless are really very funny!
‘It will be 10 years before it even gets back to its $600,000 value.’”
The brainwashing these people are under never ceases to amaze me. Maybe she can convince a banker with the same rosy prediction’s to give her a cash-out refi to make her feel better about all that lost equity.
Agreed. Its like 2001 when all those share holders of tech companies like Sun thought their shares will return back to $200-300/share prices. Last I looked SUN hasnt gone past $10 and will soon disappear as IBM buys them out. That too is 10 years later.
The way our Fed keeps printing money it may well be $600K sooner than you think.
“‘It’s heartbreaking to lose $300,000 worth of equity, over $300,000 of my most valuable asset,’ she said. ‘It will be 10 years before it even gets back to its $600,000 value.’”
I just can not get enough of this stuff.
“It’s heartbreaking to lose $300,000 worth of equity, over $300,000 of my most valuable asset,’ she said.”
Working for your money is a bitch. It’s truely is heartbreaking to not be able to spend money you didn’t earn and bill it to the younger generation. Bummer.
It must be especially heartbreaking when someone adopted a lifestyle that reflects the extra $300k they thought they had. Whole lotta thousandaires gettin’ the ol’ heave ho!
http://www.maricopa.gov/Assessor/ParcelApplication/Detail.aspx?ID=215-70-333
Sales price: $329,000
Sales date: 12/2002
Loan: $296,100
Current sales price: $395,000 (according to zillow.com)
Search on http://recorder.maricopa.gov/recdocdata and you can find tons of refinances for her. Had she never had the refinance party they would still have equity and would be ok.
I never understand why the interviewer almost never asks how much the person originally paid for the house, and immediately upon finding out that the crying seller would still make a profit based on the original purchase price if the house sold for the current asking price abruptly stop the interview and walk out (same logic with respect to repeat movers, all gains on prior homes should count against sob stories about current fmv).
Because then they couldn’t tell the story that their boss wants to tell.
Because…when you gamble and lose in America, you have BEEN ABUSED ;
Because if they dug some more and discredited the intended premise of the article, it would take more work to go out and interview someone else.
Can you explain the FCV and LPV terms? If that is the government’s valuation for purposes of assesment, as it appears, she just got a huge reduction. I hear all these stories about ppl not being able to get a deduction anywhere close to actual current FMV. That does not appear to be the case with this person.
“‘It’s heartbreaking to lose $300,000 worth of equity, over $300,000 of my most valuable asset,’ she said. ‘It will be 10 years before it even gets back to its $600,000 value.
WOW, a 300,000 return over 10 years??? WHERE DO I SIGN UP?
Try the S&P500. At its average return over the past century you would double your $300,000 in a decade.
“We were supposed to have a 30-year, fixed-rate mortgage. But the mortgage broker told us that kind of loan was ‘for your grandmother.’”
No ma’am, 10/15/20 year fixed mortgages were for our grandparents. You see, they (or their parents) had just been through what we’re starting to go through now, and they were much the wiser for it.
And, 10/15/20-year fixed-rate mortgages are exactly what my current clientele are getting from me. Most of them ARE grandparents.
And those 10/15/20 year loans were probably repaid with just one spouse working!
An interesting question is, “How much would real estate values crater if the max amortization for a home loan was allowed to be no more than 20 years?”
An even more interesting questions is, “How much did allowing people to go to 30 years over-inflate property values in the last 50 years?”
I would guess that the over-inflation in housing prices due to 30 year mortages is roughy equal to the differences in monthly payments between 15/20 year notes and 30 year notes. That should be the case in a consumption-based economy driven by “how much will my monthly payment be”.
The monthly payments on a 30 year mortgage at 5.5% are about 30% less than an equivalent 15 year mortgage. This gap decreases significantly at higher interest rates, though. So my guess is that probably about 15-20% of the overall average price premium on housing in the past generation (baseline, non-bubble inflation) is caused by the prevalence of 30 year notes.
Get rid of the mortgage interest deduction, and make it revenue-neutral by corresponding tax reductions on fixed-rate savings, and another 10-15% in average prices would come off the baseline.
Or in other words, eliminate the things that the RE industry lobby says are essential to “make housing affordable”, and then housing would once again be affordable. Funny, that.
“Bang has a $32,745 federal tax lien hanging over him.
He may as well leave even if the house didn’t sell. He could come home to find himself locked out by the IRS anyway.
“Their ‘downside’ might well be our ‘upside,’ while we sort through the ruins of our local economy without relying on anti-depressants.”
Missing from the list:
1) Traffic is far better now that an army of Used Home Sellers and flippers no longer clogs the California freeway system.
2) California housing is rapidly approaching affordability, despite the best efforts of top policymakers at the Fed, the zombie GSEs and the Obama administration to squelch this trend.
I cannot BUHLIEVE how light the traffic is these days. It’s freaking me out. It’s down by probably 30-40%. Unemployment is a lot higher than they’re reporting, I can tell that just by the traffic.
Are you in SillyCon Valley? I remember when we lived in the Bay Area and tried to drive down there in the pre-dot-Con bust, we had to allow an extra hour each direction (from Richmond to San Jose) in excess of the driving time at the posted speed limit. After the dot-Con crash, the driving got easier, but not as easy as you describe…
It’s a miracle. Maybe now they’ll stop trying to push through a freeway through the Trestles Beach area of Camp Pendleton. Developers just couldn’t wait until the pristine back country was open to more McMansions. Their traffic projections are no longer tumescent.
“I cannot BUHLIEVE how light the traffic is these days.”
Even the Mission-Sunol pass on the 680 heading into the Bay Area is light these days.
RE: Unemployment is a lot higher than they’re reporting
The Fed stats ignores “independant contractors” who’s jobs or small biz are now kaput.
And don’t forget those who have given up looking.
They are not counted either.
Unemployment numbers are fictionalized by the propaganda machine in Washington.
Joe Gobbels would be proud.
“independent contractors” = Used Home Salespeople? Home construction workers?
Agreed! I can now fly up I-880 at 8am! The last time I could do that was oh, 15-20 years ago!!
The 15-mile drive into San Francisco from 94501 is a lot quicker and less congested these days, by about 20% at the tail end of rush hour.
Correction.. that affordability spewed by CAR and media is based on ARM loans and not fixed rate loans. Actual affordability is far less than is being published.
RE: “Bang has a $32,745 federal tax lien hanging over him.
Geez, why is this some kind of “hanging” onus?
The current US Treasury secretary owed $35k, and it never bothered him a wit.
The difference is that Timmy can afford to pay it.
From the original post:
“The Florida-based National Golf Foundation estimates that as many as 15 percent of private country clubs in the country, or about 500, are facing financial or membership crises. Aging membership rolls, a weak economy and high initiation fees and monthly dues are to blame for much of the trouble, the foundation reports. In the Coachella Valley, older clubs such as Bermuda Dunes also face competition from newer private clubs with flashy amenities and public courses that are dropping their own fees.”
Hmmmm, do I detect a golf bubble in the deflation phase?
RE: do I detect a golf bubble in the deflation phase?
My brother is the pro at an established club in Jersey. He says it’s really bad. Old members are dyin’ off and those with young kids don’t have the interest.
And then you have those clubs with lock in rules whereby a resigning member is contractually obligated until new recruits sign up to take his or her place.
However, I don’t have to worry about this.
My club is the Rt.1A Minature Golf Emporium.You know the one at the former Saugus circle. It’s got that great big 15′ orange paper mache T-REX dinosaur from the 50’s, with the green blinking eyes at the 5th tee!
Pop that ball in the hole on the 18th and your out!
Unless it’s a hole in one…then you get free round.
hd74man, I love your attitude. And your frugal golfing habits. You go, man !
Can anyone comment on whether the Fed and the Treasury are already or will soon start pouring money into this financial black hole? If this has been in the news already, it has been drowned out by news of the ongoing, uncontained subprime meltdown.
Banks warned on commercial property ‘black hole’
By Henny Sender in New York
Published: March 19 2009 21:06 | Last updated: March 19 2009 21:06
A “black hole” in the US commercial property market is set to put further pressure on troubled banks, the head of leading private equity firm Apollo Management has warned.
Leon Black, founder of the firm, said the extra costs of cleaning up the US banking industry could total as much as $2,000bn, putting further strain on the economy. He said the woes of the commercial property had not yet been reflected fully on bank balance sheets.
Just another form of mortgage backed security held on the banks books or subject to tender back on the banks books (assuming the senior piece was reduced to variable weekly paper and sold). I think all the same rules would apply.
Most of the commercial property near my place of employment is vacant, and has been vacant for years. We actually got a tax break in exchange for renting this place. It came replete with snakes and rats and a nonfunctional ventilation system. That’s how long it had been empty.
Yet, despite all this glaringly vacant office and commercial space, they are still building more. Not only are they building it, but they are building it will all-glass outer walls, just to maximize the carnage during the next earthquake. This is a liquification zone over here.
“We actually got a tax break in exchange for renting this place. It came replete with snakes and rats and a nonfunctional ventilation system. That’s how long it had been empty.”
I’m guessing that description applies to lots of future accidental rental housing. Do you think similar tax breaks will be offered for bedding down in your rental home with snakes and rats?
RE: Do you think similar tax breaks will be offered for bedding down in your rental home with snakes and rats?
I’d claim them as dependants on my 1040.
A buddy of mine a few years ago sold what what he called his “glorified crack house” in Hayward for 700k. Seven hundred thousand. Hayward. They have a fault named after some potentially explosive plates down below.
I mean, the abode is right on the top of the fault line.
That’s not for me, thank you very much.
I have zero sympathy for Realtors! They are supposed to be professionals who have every opportunity to assess the true value and cost-benefit of any purchase.
“‘It’s heartbreaking to lose $300,000 worth of equity, over $300,000 of my most valuable asset,’ she said. ‘It will be 10 years before it even gets back to its $600,000 value.’”
She doesn’t saw what she spent for this, so she’s just throwing numbers around, imagining that she lost $300,000 she never had. It makes her feel like a “player” to imagine she lost $300,000. (It’s actually $279,000! I guess basic math skills aren’t part of the Realt-Whore test?)
And her 10 year figure? Turning $395,000 into $674,000 in 10 years is a pretty decent return! That’s 5.49% — higher than the historical return for real estate. So she’s complaining because she expects real estate to have a 5.49% annualized return over the next 10 years? If she believed that, she’d be putting everything she had into real estate!
What’s really heartbreaking is spending a decade watching ignorant, arrogant poseurs make craploads of money borrowing, lying and cheating and acting like they are gods who should be worshipped. It’s even more heartbreaking seeing them bailed out by the hardworking, humble people they screwed over repeatedly and mercilessly for the last decade.
Well said, Jim.
See above. This poor lady paid 329k in 2002, and is devastated she can’t sell it for 674k. This is a real tragedy. Note that trash like this usually puts less than 20% down, most likely 5%. She is really crying about not making 345k on approximately 66k cash down (being nice and assuming the 20%, it would be 16.5k assuming 5%) over a 7 year period.
Thanks for checking that on-line. It’s amazing reporters don’t. They’d have a different perspective on these sob stories if they did. Basically, this Reatwhore once saw a big number on Zillow, and now treats it as if she’s lost money.
Plus she is a serial refi’er. Note that she is just a Realtor, and thus, shouldn’t be held to a standard of understanding fluctuations in real estate prices.
rueven
“Realtors! They are supposed to be professionals who have every opportunity to assess the true value and cost-benefit of any purchase.”
They are marketed that way but in FL a 63 hour online or CD course will give you a license.
Well, you do have to pass a State exam.
The Realtor phase comes afterwards. A Real Estate agent does not have to be a Realtor, but then he/she has no access to the MLS as a member.
Personally, I plan on getting licensed in a Month or so.
It suits my plans.
No need to lie to anybody with what I have in mind.
I had planed on posting on it, but if a get too much flak for it, I wont.
I love your devious darkside. It leaves me intrigued. I was thinking about getting one too, so can I spend weekends looking at properties easily and without the need for a Realtor in 2010 or 2011 and limit commissions when I eventually decide to buy.
Keep thy enemy close! I thought about it, but there are recurring costs. I just want access to the MLS system.
Thank you Natalie.
I’ll post.
VaBeyatch,
Yes.
And for full access to MLS there’s the Realtor’s hefty annual fees.
Re: MLS
No matter what they tell you, Realtorcom is as fast as MLS listing (maybe a 24 lag)
This past Tue I was at a house that an agent was showing and we had both seen it at the same time the previous night.
I caught it “3 hours old” same as her.
Granted, for quick data, comps etc. their system is faster than manually looking up data in county appraiser’s office.
Natalie,
Getting your RE license probably won’t help you with commissions. As you know, you don’t need to have an RE license to buy real estate, so you can already save up to 3 percent by cutting out the “buying” agent (never did understand why someone needed one of those), and then the rest just depends on the listing, FSBO, Redfin, etc.
Not to say you might not learn a little in the process though.
I don’t think people should wear bow ties.
agreed… except for Playboy Bunnies.
Fascist!
Even violinists?
Especially violinists! And none of those tight Star-Treck looking shirts, either.
I imagine you’d outlaw the outfits that Seven of Nine used to wear as well? You just might be pure evil.
I’m talking about shirts for guys. 7 of 9 does not bother me.
Seven of nine? Actually she’s more like an 11 out of 10.
“7 of 9 does not bother me.”
You must be a real hottie, V.
What about PeeWee Herman?
A hyperbolic, yet fantastic article in Rolling Stone:
The Big Takeover
What kind of s_x act is depicted between Uncle Sam and Mr Megabanker in that cartoon?
It reminds me of a defunct blog handle from one of yesteryear’s HBB posters, Luvs_Footsie (which we eventually learned refers to rugby, not bedroom sports).
Erm, I think it was Luvs_Footie, which refers to The Beautiful Game of Soccer (Football to the rest of the world).
IIRC, that was luvs_footie. And I do believe was referring to Australian rules football, which is also called footie.
Dang! Luvs_Footsie seems more apropos to the cartoon, anyway…
Nice article by the way, some stuff I did not know.
RE: Rolling Stone article…
The best way to understand the financial crisis is to understand the meltdown at AIG. AIG is what happens when short, bald managers of otherwise boring financial bureaucracies start seeing Brad Pitt in the mirror. This is a company that built a giant fortune across more than a century by betting on safety-conscious policyholders — people who wear seat belts and build houses on high ground — and then blew it all in a year or two by turning their entire balance sheet over to a guy who acted like making huge bets with other people’s money would make his dick bigger.
I wish the small dick guys had simply asked Nancy Pelosi for
the money to cover the purchase of a couple of cases of Enzyte.
They couldn’t go to Barney.
He’d have wanted before and after pics for his office.
What really bothers me is that AIG employment contracts are sacrosanct, but airline pilot’s retirement contracts are subject to revision. This country has really lost its moral heading.
BTW, I’d like to see Joseph Cassano fed to hungry lions.
“Sandy Daly, Greater Baton Rouge Association of Realtors president- ” I can’t tell you the number of people who want to buy homes … and are being turned down by lenders,’ she said. ‘It’s not for want of a new home or buyers that aren’t well qualified. The requirements are just unreasonable.’”
Well, Sandy, then just MAKE YOUR OWN LOANS WITH YOUR MONEY! It’s so easy to do, you just fork over hundreds of thousands of $$$ now, for a piece of paper and hope somebody pays for 30 years! Who needs requirements anyway? Go for it!
“The requirements are just unreasonable.”
These repugnant idiots just keep right on the same track!
Hey lady! Those days are looooong gone, learn it, embrace it, you may get a head that way.
I am one of the people Sandy is talking about.
I want to buy a $5mm mansion on five acres but the lender is being unreasonable by asking me for a downpayment, proof of income and proof of assets.
When will this madness stop and we can go back to the more reasonable days when these needless requirements were not necessary?
Don’t you people understand? I WANT TO BUY NOW!
The lender is the only thing standing in the way. Maybe I just need a new lender.
Does anyone have the phone number to a SoCal IndyMac branch? I heard they don’t make these unreasonable requests of borrowers….
“Sandy Daly, Greater Baton Rouge Association of Realtors president, said that local demand for homes has remained strong. But some potential buyers who might have qualified just a few years ago are being turned down for loans, even if they fall just a few points below minimum credit scores. Like others critics, she blamed Fannie Mae and Freddie Mac. Daly blasted both companies, saying they’ve increased the cost of lending to recoup their own losses.”
“‘I can’t tell you the number of people who want to buy homes … and are being turned down by lenders,’ she said. ‘It’s not for want of a new home or buyers that aren’t well qualified. The requirements are just unreasonable.’”
Excuse me, “below minimum credit scores” = lousy credit = not well qualified to borrow
Somebody give this dimbulb another swig of KoolAid and another hit off the crack pipe…
Heads the hedge hogs win, tails the Treasury loses. That sounds fair to me.
As to getting those valuations right, doesn’t preannouncing free Treasury-provided downside risk protection tend to distort the price to the high side?
Public seen more at risk in public-private toxic fund
Government guarantees and public financing under consideration in fund
By Ronald D. Orol, MarketWatch
Last update: 10:20 a.m. EDT March 19, 2009
WASHINGTON (MarketWatch) — Details of the Treasury Department’s program to assist and encourage private investors to buy $500 billion of toxic mortgage assets aren’t out yet, but regulatory observers expect it will eventually emerge that there will be more public than private risk at stake.
As part of the program, expected to be released shortly, the government is seeking to encourage hedge funds, buyout shops and other private investors to purchase illiquid mortgage securities by providing the purchasers financing and guarantees.
And while details aren’t out yet, it’s likely that the public risks will outweigh any risks private investors will take.
“The hedge funds and others that are likely to be interested in these types of investments will be disinclined to take much if any market risk,” said Gary Roth, partner at law firm Alston & Bird LLP in New York. “This is why the valuation process, setting a price at the time of the sale, is so important.“
As a private investor, I could say that I’d be interested in taking advantage of this, but won’t for fear of being labled a capitalist pig…
Down with pig men!
You won’t make any money off it, Joey. Cool your jets.
If anybody finds out HOW us Private Investors can participate, I’d like to know. I suspect MY mortgages are better than THEIR mortgages, but what the heck.
Dumb question. Is the stock market currently depressed, and ready to rebound when investors’ mood improves, or is it artificially propped up, and ready to crash farther when the PPT stops propping? Inquiring minds want to know…
I’ll take “crash” for $400, Alex!
It’s going up because of government intervention. That’s why the dollar is down and gold is up, too. If you look at the S%P chart over the last few years, and the usdx chart over the last 200 years, and the gold chart too, then you will see how small these things really are.
Some food for thought.
As of 3/18/09, the S&P 500 index was trading at 52.6 times the trailing 12 months earnings per share and 22.9 times the next 12 months earnings per share.
Does that sound like it’s undervalued or “depressed” to you?
It’s clear that the current price levels still represent Speculation. That is to say, stocks are overpriced on a cash-flow basis. However, this has been true continuously for several decades. The last time stocks were cheap on a cash-flow basis was at the 1974 bottom, and shortly thereafter.
Thus, I cannot say that the present over-pricing won’t persist. Now that J6P owns a lot of stock, and is always being encouraged to do so, or forced to do so (limited choices in his pension plan), there is no certainty that stocks will come down to reasonable prices. But they MIGHT.
My dart-throwing estimate of fair value is based on adjusting the 1974 bottom (Dow 594?) for the inflation of the intervening years. The answer, IMO, is something like Dow 4000.
I did buy 2000 shares of Citi on Wednesday March 11, and sold them on Monday March 16. A quick 33% profit, though I missed the quick 200% that could’ve been got out of this rally. Anyhow, Citi is worth less than a dollar on a cash-flow basis…
I might buy Alcoa if it goes down to $2.50.
There is absolutely nothing holding up the markets, it’s a puff ball of cotton candy. It looks
good, tastes good, but there’s nothing there but air.
We are headed down big time.
There is nothing like teaching a nine-year-old the cold, hard reality of life. I can relate having my own nine-year-old.
‘My son, he’s 9, I show him the apartment’ that the family is moving to, Bang said. ‘He doesn’t like it. He says, ‘Why do we have to move?’ I say: ‘No job.’”
I would have said “because you’re a bad boy Timmy, it’s YOUR fault !”
“Condoms are ‘2 for 1’ at Planned Parenthood! Actually they’ve always been free, but an economic downturn is the best time not to have an unplanned pregnancy.”
Yeah, tell it to the illegals. They’re plopping ‘em out fast as they can. Condoms? We don’t need no stinkin’ condoms.
RE: Condoms? We don’t need no stinkin’ condoms.
40% of US births, now illegitimate.
WE DON”T NEED NO STINKIN’ FATHERS!
+1 Definitely on a roll today, HD. LOL!
Wrong. They’ll always need fathers. For the sperm. And as financial backstops.
But other than that? No. Because fathers don’t contribute anything important or unique to their children’s emotional and psychological growth. To assert otherwise, moreover, is to get in the way of the God-given women to pursue self-actualization. If fathers are necessary, some of women’s individual options might actually be constrained.
You go, girl.
(Sarcasm off)
(Next up, of course, will be Big V wondering why and how men get so angry. She particularly likes to rip hd74man. We’ll tell you, ol’ grrrl; it’s just going to take some time)
er…”God given right of women to pursue”.
My apologies to the grammar Nazis.
and my grammar correction is lost to the ether…..
“God given right of women to pursue”
It’s a coincidence that you brought this up. I was noticing recently that ALL the Indians out here are suddenly really pregnant. Gee, they can’t be worried about their H1-B status, can they?
“Gee, they can’t be worried about their H1-B status, can they?”
It’s disgusting, because it’s basically child exploitation. Plop out an anchor in order to cry victim over being separated from the children. And that’s just for starters. If you’re below a certain income, you make money for each one you spoink, in terms of welfare. I guess it beats the heck out of maiming the kid and setting it out to beg, or selling it into indentured servitude. Less messy and a lot more profitable.
What separation? If the H1-B lapses, isn’t the employer obligated to pay to fly the holder back to their country of origin? Can’t they just take the kid back to India? If the kid’s sole purpose was to exploit the “system”, just stick in a cow’s ass when they get there and call it tithing.
ROTFLMAO!
No, there is no obligation on the part of the employer to fly them back to their country of origin.
H1-Bs are required to self-deport 30 days after the end of company sponorship.
The government of course, does not track them.
That’s a good point. People throw around the term “anchor baby”, but how it could work? The only way it would work would be it the H1-B parents “cry victim” as Palmetto says and then somehow the authorities feel sympathy and let them stay in the country. Does that ever actually happen?
I have a theory, though, that the baby may be a sort long-term insurance plan. An H1-B guy gets his wife pregnant, and when she gives birth, the child is a U.S. citizen on the day it is born. If he loses his job and they all have to go back to India, the kid has the option to return to the U.S. when he is 18 and get whatever sort of job he can. At that point he can start arranging for many of his family members to come over.
Unfortunately, I think that it is the constitution that gives citizenship to any baby born in the country. It is not easy to change the constitution, but it should be done. The H1-B visa is supposed to used for temporary workers. However, because of the constitution that visa effectively gives the temporary worker’s babies the right to citizenship. It doesn’t make sense.
The 14th Amendment has been woefully and deliberately misinterpreted in the matter of birthright citizenship. Its original intent has been twisted. But that should be a shock to no one. The rule of law in the US is a complete joke.
If you read the 14th Amendment, you will find it’s a TWO PART test to determine citizenship. You have to be (1) born or naturalized in the US AND (2) subject to the jurisdiction thereof.
Anchor babies are NOT subject to the jurisdiction thereof.
Let’s take a less-emotional example. If the French ambassador’s wife gives birth in the French embassy in DC, the kid is not a US citizen - the embassy is “French territory” in a legal fiction. If she gives birth in a DC hospital, the kid is still not a US citizen because diplomatic personel and their families are not “subject to the jurisdiction of the US”.
Intriguing, DennisN. If a diplomat runs a red-light and kills a pedestrian in the crosswalk, the diplomat is not subject to the laws of the United States. They can be ordered to leave the country, and may be tried in their home country. Are you suggesting H1-B visa holders (or any kids they have) be extradited (sp?) to be tried in their (or their parents’) home countries if they violate U.S. laws? If not, then they appear to be subject to the laws of the U.S.
I’m no fan of H1-B visas, but the analogy isn’t quite right.
IAT
I don’t agree with your analysis.
Diplomatic personnel are sui generis. Moreover, even diplomats are subject to some of the host country’s laws. Why the new-born baby of a non-diplomat H-1B would not be considered subject to the jurisdiction of the United States escapes me.
Do you have any analysis, or caselaw, to support your conclusion? We both know, by way of analogy, that the most bulletproof basis for a court’s jurisdiction over a dispute is to have personal jurisdiction of the parties, i.e. their physical presence within the jurisdiction, coupled (of course) with their receipt of adequate notice of the proceedings.
I’m not slamming you; I respect your posts and share your profession (even your state of bar admission). So what are you referring to?
My question appears lost in cyberspace, so I’ll try again, in abbreviated form.
What is your analysis here? What caselaw, or statute, supports the notion that a non-diplomat child of an H-1B is not subject to the jurisdiction of the United States? If, by comparison, a Federal court could exercise in personam jurisdiction over such an infant–which should be beyond any doubt–why would that infant not be considered subject to US jurisdiction for 14th Am purposes?
I can no longer log onto the housing bubble blog on my t-mobile dash. I can log onto other web sites with no problem. I get the following message:
HTTP ERROR: $CODE$
$MESSAGE$
RequestURI=/
Does anyone know what I need to do to be able to log onto the blog with my phone?
Maybe it’s a javascript error. Maybe you should Google it.
I also get this all the time on my iPhone using T-Mobile data access, and just for the Housing Bubble Blog.
California Jobless Rate Climbs to Highest Level Since 1983
By Bob Willis
March 20 (Bloomberg) — California’s jobless rate surged to 10.5 percent in February, the highest level since 1983, as slumps in housing, manufacturing and retailing deepened.
Unemployment in the most populous U.S. state climbed from 10.1 percent in January, its Employment Development Department reported today in Sacramento. Neighboring Oregon’s jobless rate rose a full percentage point to 10.8 percent, and Nevada’s increased to 10.1 percent, both breaking into double digits for the first time since the early 1980s.
“The West Coast is more heavily dependent on real estate and the decline there has been more pronounced” than in the rest of the U.S., said Sung Won-Sohn, an economics professor at California State University-Channel Islands in Camarillo, California. “We are not seeing any signs of stabilization in the job market.”
At least 19 states reported individual employment figures today. The national jobless rate rose to 8.1 percent in March, the highest in more than a quarter century, the government reported March 6. The economy has lost 4.4 million jobs since the recession began in December 2007, as companies from General Motors Corp. to Citigroup Inc. have cut payrolls.
California lost an additional 116,000 jobs in February, led by 31,000 job losses in construction, the state’s employment office said. Its jobless rate is up from 6.2 percent in February 2008.
“The West Coast is more heavily dependent on real estate and the decline there has been more pronounced” than in the rest of the U.S.
Yet another wonderful consequence of our pro-globalization, post-industrial FIRE economy.
The DataQuick monthly zip code charts for SoCal for February are out:
http://www.dqnews.com/Charts/Monthly-Charts/LA-Times-Charts/ZIPLAT.aspx
I hadn’t seen this one before (on the DQ sidebar):
San Diego Union Tribune Price per Square Foot Home Sale Chart
for Existing Home Sales Recorded in February 2009
for all sales transactions where a full price and square footage were known
% Change is for the median price per square foot from the same month last year
PPSF is down about 25 pct YOY for most areas of San Diego. This is a better indicator of price change than the median, as square footage correlates with quality. However, to the extent that higher quality homes of the same square footage are purchased with increasing frequency as prices crash, the YOY figure may be misleading. That is, quality-adjusted PPSF may have fallen by more than 25 pct, as the YOY figures reported by DQ don’t control for quality.
Another upside to the downside: It is great sport to watch all the naked Ponzi schemers flopping around on the sandy, waterless beach!
Financial Times
Watchdog fears market ‘Ponzimonium’
By Javier Blas, Commodities Correspondent
Published: March 20 2009 19:35 | Last updated: March 20 2009 19:35
US federal regulators have warned of a “rampant Ponzimonium” as they disclosed they are investigating “hundreds” of possible scams in the aftermath of the $50bn fraud allegedly perpetrated by Bernard Madoff.
Bart Chilton, a commissioner at the Commodities Futures Trading Commission, the US regulator, said the watchdog was “seeing more of these scams than ever before” in commodities and other futures markets.
“At that March 3 meeting, Eisenberg, senior economist with the National Association of Home Builders in Washington, D.C., assured commissioners that anti-sprawl forces who maintain growth does not pay for itself are wrong. Marion County can expect to recoup about $1.77 in taxes for each $1 it spends on services on those homes over that time.”
“New ‘homes pay for themselves pretty quickly around here,’ Eisenberg observed.”
Thats very hard to believe. Where I live (New Jersey) the towns fight housing developments because the cost of schools for the children is so burdensome. A new house with 3 children in the schools will never pay for the school services. It has to be about $50,000/year for 3 children in the public schools.
My brother and his wife were teachers and they are modest, very intelligent people. Any job they do, they do well; I know I’m a lot more lackadaisical. So I respect their opinions and they did not think well of the way schools run. Special education is eating school budgets alive and the money is not well spent. Athletics programs are very expensive and hard to cut because the special interests - local booster clubs - scream bloody murder. For most of the kids, the education thinking is stuck in the past and children are turned off.
I don’t know whether to laugh or to puke.
Stop Trading!
Cramer’s ‘Stop Trading!’: In Bernanke I Trust
03/18/09 - 03:07 PM EDT
“I have never seen a moment [before] where the Federal Reserve is saying ‘Here’s cheap money. Go make this spread. Get back involved,’” said Jim Cramer on Wednesday’s special “Stop Trading!” segment.
He said he is impressed with Fed Chairman Ben Bernanke. “I know he’s a professor, but man, this guy’s good!”
According to Cramer, hedge fund managers should go to the Fed and say, “‘I want to borrow 9 to 1 right now, and I want to buy a big basket of mortgages.’”
“I swear, if you fight this Federal Reserve, you are not going to be in the hedge fund business right now,” said Cramer. “This Federal Reserve will not be denied. In Ben Bernanke I trust.”
Come on, it’s Cramer, you got to laugh.
I laughed and then I puked.
It’s Friday — about time for some more regulatory seizures. Note how the losses were “larger than expected” — pretty unusual, neh?
Wall Street Journal
* BUSINESS
* MARCH 20, 2009, 8:10 P.M. ET
Regulators Seize Control of Two Largest Corporate Credit Unions
By MARK MAREMONT
In the latest dramatic move by federal authorities to prop up the nation’s banking system, regulators late Friday seized control of the two largest wholesale credit unions in the U.S. after finding that their losses on mortgage-related securities were even larger than previously thought.
U.S. Central Corporate Federal Credit Union and Western Corporate Federal Credit Union, which have a total $57 billion in assets, were taken into conservatorship by federal regulators. Under conservatorship, the government will continue to run the institutions.
Michael E. Fryzel, chairman of the National Credit Union Administration, the industry’s federal regulator, said the seizure was necessary to maintain the integrity of the credit union system and the already-strained insurance fund that backs up deposits in thousands of retail credit unions.
Add these onto the list.
Feds shut banks in Georgia, Colorado, Kansas
FirstCity Bank of Stockbridge, Ga., had about $297 million in assets and $278 million in deposits as of March 18. Colorado National Bank of Colorado Springs, Colo., had $123.5 million in assets and total deposits of $82.7 million as of Dec. 31. Paola, Kan.-based Teambank N.A. had assets of $669.8 million and total deposits of $492.8 million as of Dec. 31.
http://biz.yahoo.com/ap/090320/bank_closings.html?sec=topStories&pos=3&asset=TBD&ccode=TBD
Always happens on a Friday, doesn’t it? Sneak in the news while everyone’s out partying.
Wall Street Journal
* MARCH 20, 2009, 8:10 P.M. ET
U.S. Sets Plan for Toxic Assets
By DEBORAH SOLOMON
WASHINGTON-The federal government will announce as soon as Monday a three-pronged plan to rid the financial system of toxic assets, betting that investors will be attracted to the combination of discount prices and government assistance.
But the framework, designed to expand existing programs and create new mechanisms, relies heavily on participation from private-sector investors. They’ve been the target of a virulent anti-Wall Street backlash from Washington in the wake of the American International Group Inc. bonus furor. As a result, many investors have expressed concern about doing business with the government in this climate — potentially casting a cloud over the program’s prospects.Another sticking point: the program is smaller than originally envisioned, raising questions about whether it will be adequate to the task.
The administration’s plan, which has been eagerly awaited by jittery investors, includes creating an entity, backed by the Federal Deposit Insurance Corp., to purchase and hold loans.
In addition, the Treasury Department intends to expand a Federal Reserve facility to include older — so-called “legacy” — assets. Currently, it’s only set up to buy newly issued securities backing all manner of consumer loans. But some of the most toxic assets are securities created in 2005 and 2006.
Finally, the government is moving ahead with plans, sketched out by Treasury Secretary Timothy Geithner last month, to establish public-private investment funds to purchase mortgage-backed and other securities. These funds would be run by private investment managers but be financed with a combination of private money and capital from the government, which would share in any profit or loss.
All told, the three efforts are designed to unglue markets that have seized up as investors have stood on the sidelines. One big problem is that many of these assets no longer trade, which means it’s very hard to put a price on them. Banks are unwilling to sell at too low a price, and investors are unwilling to take the risk.
Just look at how well their TALF program worked out and thats for current loans. I really don’t see too many hedge funds jumping up and down wanting to get in on this.
I watched Bloomberg today and they had Charles Biderman from Trimtabs on and he said this latest bear market rally was mostly buying from individual investors. He said the institutional investors are still sitting on the sidelines hoarding cash. Alot of sheep are going to get sheared on the next leg down.
Palmetto:
I haven’t had sex in so long I wouldn’t need a condom. Instead, I would need an Accident Reconstructionist.