Following The Herd In Florida
The Sun Sentinel reports from Florida. “In Fort Lauderdale, Miles and Laura Brannan are raffling their six-bedroom waterfront estate in Coral Ridge Country Club. The plan is to draw the winning name after 300,000 tickets are sold, at $10 apiece. Part of the proceeds will benefit St. Simeon Church in Miami, which is conducting the raffle. The couple bought the home for $2.35 million in 2005. ‘My income’s been cut in half,’ Miles Brannan, a real estate investor, said Friday. ‘We need to sell the house. It’s a means to an end.’”
The Palm Beach Post. “Jimmy Diamond says he was flying high back in 2005. He and his wife had good jobs. They had just purchased a two-story, $600,000 home in an upscale Boynton Beach neighborhood. The Diamonds, who had lined up a buyer for their home, discovered that the development they live in, Cobblestone Creek, has houses with tainted Chinese drywall.”
“‘We had to tell the buyer,’ Diamond said. ‘They backed out the next day. We have no plan. All I know is I’m screwed because I can’t sell my house.’”
“Thursday night, a group of about 150 Boynton Beach homeowners gathered outside the Cobblestone Creek community’s clubhouse to hear a presentation from a group of lawyers. ‘We put our life savings in this house,’ said Tonya Radi, a resident in Cobblestone Creek who moved in about eight months ago. ‘This is the house we thought we’d live in for the next 20 years. What if it’s not healthy? I’m pregnant right now. Or what if people move out, what will that do to my (homeowners association) fees?’”
The News Press. “The expensive tile on the walkways outside the abandoned Paradise Preserve sales center is littered with leaves and balled-up newspapers. So, too, is Lee County littered with the victims of yesterday’s ambitious construction projects that now sit silently.”
“The big foreclosures that are coming fast and furious these days are leaving in their wake a host of people who lost money or quality of life as the developers’ visions were scuttled by an unforgiving market after the housing boom collapsed three years ago. Among those who lost out is Barbara Foster, who’s lived for seven years next to Paradise Preserve — a residential development that will be auctioned off on the Lee County Courthouse steps on April 14 for more than $91 million in debt.”
“‘You can see for yourself, it’s not pretty,’ said Foster, whose home now fronts not on the lush Lochmoor Country Club golf course but the overgrown scrub wasteland that replaced it when Paradise Cove’s developers bought the property but failed to develop it as planned in 2005. ‘This was one of the beautiful courses in North Fort Myers,’ she said. ‘It was a shame what they did.’”
The East Orlando Sun. “Ron Randolph first got wind of Stoneybrook’s financial troubles last fall when he was the only one of 2,600 non-boardmember residents in attendance at an HOA budget workshop. It was there that he heard of an impending shortfall in revenue due to the rapidly increasing number of foreclosures in his community. As a real estate agent, Randolph already was well aware of the housing plague that is sweeping across East Orlando, and the entire country.”
“‘The forecast is that by the middle of March, [the HOA board] would run out of money. Some people were extremely upset, but running an HOA is almost a no-win situation,’ he said.”
“Although these vacant properties are still bank-owned, the HOA is investigating if it can rent the homes to tenants and use the money to pay the lender. ‘This is kind of an experiment,’ said Hobie Fisher, former HOA president.. ‘We’re not trying to take over people’s houses, but we’ve got to protect the rest of the people in the community.’”
The Orlando Sentinel. “The image is surreal, oddly compelling and a spot-on barometer of how badly Florida’s construction industry is struggling: more than 2,000 green, molded plastic portable toilets lined up like boxy soldiers on a storage lot in south Orlando. That they are standing here and not on a job site — providing relief and revenue — is enough to elicit a scrap of dark humor from John Sharp Jr., whose company owns the porta-potties.”
“‘Right now,’ says Sharp, vice president of Comfort House Inc., ‘business is stinky. We were having builders just walk off [their job sites]. That gave us an idea of how crazy things were getting.’”
“The company moved here from Winter Park in 2001 to give itself more room. Sharp said that at the height of the building boom — 2004 to 2005 — it grew its operation by 100 percent in 11 months. Back then, units were in such demand, the company would call contractors asking when they would be done with a job so it could retrieve a toilet and move it to a new site. No more. ‘It’s like a ghost town out there,’ Sharp said. ‘Just tumbleweeds blowing around.’”
The Miami Herald. “Here at the epicenter of the nation’s housing crisis, an ebullient Marc Joseph bounces off a pontoon boat onto a dock behind a lovely waterfront home — it was recently vacated when its former inhabitants couldn’t pay the mortgage. ”The tiki hut comes with the house, guys!’ the slim 41-year-old real estate agent says as a dozen or so potential buyers disembark from two boats and start poking around the 2,600-square-foot house. It’s being offered by a bank for $574,000.”
“Considering this particular home — situated on a wide canal leading to the Gulf of Mexico — sold for $776,000 in 2005, it’s going to be steal for someone.”
“Pedro and Karin Weber are Germans who recently moved to Florida from Venezuela and hope to set up some sort of retail business so they can stay. They did their homework and deliberately chose to relocate to Cape Coral. They hopped onto the boat hoping to find a place in the $350,000 range. ‘It’s tough at the moment in the whole world, so why not go to the States?’ says Karin Weber, a 53-year-old blonde wearing a pink Hard Rock Cafe T-shirt and big Dior sunglasses.”
”’We’re not rich. We have money [put] back for buying a house,’ she says. ‘So maybe we can buy a house for $300,000 what’s worth $500,000 or $600,000. Maybe we can make a good deal.’”
“Jay Martin came to Cape Coral do a little speculating of his own. He got on the boat looking for good buys for the international clients of his San Diego-based investment house. ‘This is going to be kind of our Ground Zero,’ Martin says. ‘The inventory levels are starting to level out, so it’s pretty much go-time.”’
The Daily Business Review. “When the remaining 93 condos at Heron Pond in Pembroke Pines finally sell — almost certainly to a single buyer — should the investor also get a break on taxes? Yes, say investors, brokers and developers. They note the units will probably be rented out and that tax assessments will reduce cash flow and income if they are calculated as if the condos were individually owned.”
“No, according to county tax assessors, who say bulk buyers shouldn’t get tax breaks not available to individual buyers who paid a market rate for their units. ‘Why should an individual buyer be penalized if they bought one unit but a bulk-sale buyer be rewarded with a lower tax assessment?’ asked Joe Zdanowicz, residential property director in the Broward County property appraiser’s office.”
“Tax consultant Christopher Bates of Christopher Bates Inc. won a 20 percent tax reduction in late 2007 for the buyer of 123 units in the Villas of Emerald Dunes in Palm Beach Gardens by documenting developer-paid incentives and perks for county tax assessors. The buyer paid $18.2 million, or about $147,000 per unit, according to Palm Beach County public records. The county’s original tax assessment was $26.64 million, or almost $217,000 per unit.”
“Bates pointed out concessions and incentives are paid by the developer but not recorded, said Pam Lamb, manager of the condo department for the Palm Beach County property appraiser’s office. ‘So the developers are paying more on these units than we know,’ she said. ‘We’re finding they may give away free association fees for three years, or free garages and carports. That was the basis of his evidence.’”
From Reuters. “In the financial world’s version of night of the living dead, Corus Bankshares Inc. zombie-walks near the front of the pack. According to the bank’s 2008 results, Corus has over $400 million in foreclosed property, most of which occurred in the fourth quarter of last year. An additional $1.5 billion of loans, or some 36% of its loan portfolio, is non-accrual, with little chance of performing again.”
“So, while Corus continues to operate, only the terminally optimistic believe it can survive. ‘The consent order is a death order,’ says a workout specialist with detailed knowledge of Corus. ‘It’s a precursor to the inevitable.’”
“Corus built its $4 billion loan book on the back of condominium construction. Not only did management bet the bank on this most speculative and cyclical of activities, it focused on condo projects primarily in southern Florida, as well as in Arizona, Nevada and southern California. According to Brad Hunter, director for housing market research firm Metrostudy, the inventory in South Florida of finished and vacant or under-construction condos totals 28,464, of which Miami-Dade County has 22,652.”
“They’re not exactly flying off the shelves. Lucas Lechuga, a Miami realtor, says of four newly completed projects, none have topped 5%. The most ambitious is the 1,640-unit Icon Brickell, part of a $1 billion residential, hotel and retail complex. Its closing rate stands at 0.84%. ‘This is indicative of what’s going on,’ he says. ‘Nobody’s able to close. It pretty much has to be cash buyers.’”
“Joseph Altschul, a Fort Lauderdale attorney, represents purchasers of preconstruction condo units trying to get their 20% deposit back. A looming issue, Altschul says, is ongoing maintenance, which Florida law limits to six months for developers. He cites Tao Sawgrass, a 396-unit project, in which exactly five units have closed.”
“Holding a $126 million construction loan and a $20 million mezzanine note, the lender foreclosed on the Sunrise, Fla., development and took over in November, promising to market the condos itself. The lender: Corus.”
“The once-booming real estate market that made Jorge Perez a billionaire is crumbling around Miami’s ‘condo king’ in what may be the biggest U.S. condo glut. The chief executive of the privately held Related Group is South Florida’s most prolific developer, a driving force behind a string of high-rises and mixed-use developments from Miami to West Palm Beach who championed the frenetic construction well after the market peaked in late 2005.”
“Today, Perez is trying to ride out a huge inventory buildup and falloff in property values across Florida. ‘I think he just kind of went overboard,’ said Lucas Lechuga, a Miami realtor.”
“Two other Perez condo projects, including one just across the street from Icon Brickell, were already struggling with poor sales before the newer development opened. Only 18 of Icon’s pricey condo units had closed as of March 12, according to Peter Zalewski, whose Florida-based firm represents investors. The first closing on residential units in the complex, where condos have gone for an average of $760,317 or $566 per square foot, occurred on Dec. 5.”
“That glacial sales pace could spell disaster for Perez, who faces what some experts say is the biggest supply and demand imbalance in a condo market anywhere in the United States. ‘Not only is this market unprofitable, but at the same time it’s money losing,’ Zalewski said.”
The News Herald. “The real estate market crash that has ravaged the national economy also has pummeled banks in Northwest Florida. Just one of the six community banks headquartered in Panama City turned a profit, a News Herald analysis found. The losses, according to bank officials, are largely…all tied to the real estate downturn.”
“‘This is unprecedented,” said C. Daniel DeLawder, chairman of Park National Corporation, an Ohio-based bank holding company that bought locally chartered Vision Bank of Panama City in 2007. Vision Bank, with more than $900 million in assets, posted a net loss of $81 million in 2008.”
“‘We have never seen a market adjustment like we’ve seen in the past year-and-a-half,’ said DeLawder. ‘We can be critical of ourselves, but we really didn’t anticipate Armageddon.’”
“Bay County’s real estate market was blazing in 2004 and 2005, particularly on the Beach. The average price for Beach-area property increased more than 200 percent between 2002 and 2006, from $107,874 in 2002 to $333,999 in 2006, county property records show.”
“Experts say that with so much money to be made, many banks loosened their purse strings. ‘While they were aware of the potential risks of the housing bubble, (banks) pretty much ignored it,’ said Jeffrey Clark, a professor of finance at Florida State University. ‘They saw potentially strong returns from construction, commercial and residential real estate lending. They pursued, maybe overly aggressively, lending in this area.’”
“In an e-mail, Bay County Property Appraiser Dan Sowell listed several reasons for the real estate boom, including: an increase in the number of baby boomers reaching retirement; the discovery of underdeveloped sections of the Panhandle; low interest rates; and liberal lending practices. The bust, Sowell wrote, occurred because of ‘the inability of the beneficiaries of liberal lending policies to pay their notes’ and ‘the general downturn in the economy.’”
“‘There was tremendous liquidity everywhere, and this was part of the fuel for the housing bubble,’ said Philip van Doorn, senior banking analyst for the financial Web site TheStreet.com. Subprime lending wasn’t the only practice contributing to the boom. Van Doorn said local banks aren’t entirely blameless for their struggles. ‘Banks didn’t want to get left behind. Everybody lowered their underwriting standards, no matter who they are,’ he said. ‘As bankers that’s who we are; we follow the herd.’”
“‘In the short run, it has been a miserable financial decision,’ Park Chairman DeLawder said of the Vision purchase.”
“There was tremendous liquidity everywhere …”
And then, suddenly, there wasn’t.
There was tremendous liquidity everywhere …”
Kind of like when you pee the bed.
“The Diamonds, who had lined up a buyer for their home, discovered that the development they live in, Cobblestone Creek, has houses with tainted Chinese drywall.”
“‘We had to tell the buyer,’ Diamond said. ‘They backed out the next day. We have no plan. All I know is I’m screwed because I can’t sell my house.’”
What recourse do these people have? Must be an incredible nightmare. I’d be asking for a full refund from the builder. Of course, good luck with that.
I’m really starting to wonder about this Chinese drywall issue. Does it actually say on the back that it’s made in China? Has anybody done a chemical analysis and found evidence that its contents can corrode metal?
This whole thing sure sounds a lot like the “mold is gold” baloney here in Texas a few years ago. In fact, if you want to go even farther back in history, the Chinese drywall phenomenon very closely resembles the Seattle windshield pitting hysteria of 1954:
http://www.historylink.org/index.cfm?DisplayPage=output.cfm&File_Id=5136
You have to disclose known issues with YOUR house if you are selling it; I don’t believe you have to disclose defects in OTHER houses down the street. Unless that is considered a defect in the neighborhood maybe???
Prime - yes, in FL you have to disclose known defects in your house. I’m not aware of any requirement beyond that, which is why a wise buyer asks around. To the consternation of my wife, I roll down the window and talk to anyone who will engage me, in any neighborhood we are looking at. I ask (hopefully) all the right questions and usually get great, honest answers. If you don’t ask, you don’t learn, in all likelihood. I’ve found that neighbors’ opinions are way better than those of bankers, brokers, real estate agents or tax assessors - not perfect, but the best you’re likely to get.
”’We’re not rich. We have money [put] back for buying a house,’ she says. ‘So maybe we can buy a house for $300,000 what’s worth $500,000 or $600,000. Maybe we can make a good deal.’”
You better be rich looking at a waterfront home in that price range. In fact, if you’re not making at least 250K/yr, you should even consider buying a home in Miami at that price. The upkeep on waterfront homes is much higher, and insurance (of course) is also through the roof.
The whole idea of people who “aren’t rich” buying 1/2M dollar homes has got to stop. 1/2M dollar homes are for the rich, not for the middle class. Even using normal lending standards, you shouldn’t consider 500K without at least 125K in income. That puts you in the top 5% of the entire country; in other words, rich.
And, just because I can’t STAND it when people say something stupid, I will once again hop on my soapbox. You CAN’T buy a house that’s worth 600K for 300K on the open market!!! The only way to do that is through a closed transaction (buying it from a friend/family/etc). If you are buying it on the open market, that home, is, by definition WORTH WHAT YOU PAY FOR IT.
I can’t stand it when people say “It was worth 500K, but I got it for 250K”. No, it was worth 250K, and you set the value by buying it!
125K = rich?? Maybe in backwater Kentucky it makes you rich but in most urban areas it barely makes you upper middle class. And it most certainly does not put you in the top 5%. I also don’t believe anyone making $125k should be looking at $500k houses unless they are putting $200k down. A $500k house is for someone making closer to $200k and that would put you in the top 5%. However in places like Southern California, the Bay area, or most major metropolitan area that still does not make you close to rich.
http://en.wikipedia.org/wiki/Household_income_in_the_United_States
100K (household) puts you in the top 15%. 150K top 5%. And that’s household, not personal; over 100K personal income, IIRC, is also top 5%.
200K would put you (household) in the top 3%. Using your rules (which I agree with), only 3 in 100 people could should even consider a home costing 500K. During the boom in S. FL, 50 out of 100 buyers were looking at 400K+ homes (the median was >400K); that shows you how messed up the number were for our area.
The only reason that 125K doesn’t make you rich in the urban areas (or SoCal/Bay Area, etc) is because RE is SO grossly overpriced. As prices continue to fall, once again, making 125K in just about any area of the country will put you in such a high percentage that, yes, by almost any normal person’s definition, you’d be rich.
I’m depressed now. If $125k makes one upper middle class,
then obviously I must be low class, income wise.
It is just that I think we all consider ourselves, educated and middle class or upper middle class, regardless of the income level.
But it sure makes a difference, doesn’t it.
125K is well above middle class. The problem is that the home prices made 125K feel like 60K, which actually is middle class. I just don’t accept the idea that people making 200K+/yr are anything but “rich” or “upper class”. There are SO few people in that income range (percentage wise); if you’re making that much money and don’t feel wealthy the ONLY option is that either live in a grossly overpriced area (or paid WAY too much for your home in a “normal” area). There’s almost no other way to go through that much income, you can have expensive cars, lots of toys (boats/jet skis/etc) and still not come anywhere near tapping out that income stream. It’s the 600K home (that’s really worth about 200K) that makes 125-200K feel “middle class”.
Total twisting of perspective, and we are all guilty of it.
Michael - it’s all comin’ home to roost, very soon and to a theater near us, so to speak. I’m not rich. What’s more important, I believe, is that an awful lot of people who thought they were rich, aren’t.
“There’s almost no other way to go through that much income”
– you forgot child support.
Just because $125K is in the top 10% doesn’t mean it is “rich”. Just means 90% of the population is poorer than you.
The standard by which “middle class” is defined has been substantially erroded over the years, while the numbers which define it get left behind. I have earned around $120K for several years now and find it far from caviar dreams, first class travel etc. Hell we cannot even afford a basic house in San Diego yet! At $25 / hr I would be very poor indeed around here!
It is just that I think we all consider ourselves, educated and middle class or upper middle class, regardless of the income level.
Don’t feel bad that’s the whole intent of trickledown economics. Get the middle class and upper middle class to believe that tax cuts for the top 0.1% really benefit everyone.
So when my snotty coworker sold his retirement assets at Dow 6000, they were really “worth” 12000?
He sold and then rebought thinking “bottom was in”. Wash sales illegal and it’s tax deferred anyway. classic buy high sell low … forget exact timing on the rebuy, but it was really bad.
of course, I was being dumb and tried to ‘fade’ the market last friday/monday, couldn’t leave well enough alone. smell slaughter next week, though. thought I’d already learned my lesson about fiddling with my account b/c I wanted to “do something”!!! (at least I have a lot of dry powder this time)
“Pedro and Karin Weber are Germans who recently moved to Florida from Venezuela and hope to set up some sort of retail business so they can stay. ”
Experienced, well-funded, long time established retail businesses in the area are going under, but Pedro and Karin will light the way! Maybe their differentiation is their laid back approach in mission statement: “some sort of retail business”.
But it doesn’t work the other way around:
If I see a house listed for $250K and decide to pay $500K for it, it’s not suddenly “worth” $500K, is it?
The home is not “by definition”, worth what I decide to pay for it. I might be insane.
“Today, Perez is trying to ride out a huge inventory buildup and falloff in property values across Florida. ‘I think he just kind of went overboard,’ said Lucas Lechuga, a Miami realtor.”
Ya think?
Maybe the Easter Island motif wasn’t enough of a giveaway? Perhaps they could have gone with a Titanic or Hindenberg theme?
Lucas Lechuga, a Miami realtor?
AKA “Mr. Lettuce”?
Once again, the real estate industry comes close to the funny-naming skills of the Pynchons and Vonneguts and other Funny Naming Titans of Fiction … only this is reality.
Luke Lettuce. And I just remembered that “lettuce” used to be slang for “green”.
Now that’s funny.
He kicked me out of his blog because I was really nasty to a broker that posted that there were great deals in Cape Coral.
(another badge of honor)
Dang, Muir, Palmy’s right proud of you. If I wuz down there, I’d stand you a cafecita on Calle Ocho.
Yeah, me too!
(What’s a cafecita, anyhow? Do you have to keep clothes on for it?)
“‘You can see for yourself, it’s not pretty,’ said Foster, whose home now fronts not on the lush Lochmoor Country Club golf course but the overgrown scrub wasteland that replaced it when Paradise Cove’s developers bought the property but failed to develop it as planned in 2005. ‘This was one of the beautiful courses in North Fort Myers,’ she said. ‘It was a shame what they did.’”
This is the kind of crap that really makes me angry. Developers have taken nice pieces of land and formerly decent areas and turned them into wastelands. I was driving down 301 today and the dust blowing across the roadway was incredible. These builders and developers will succeed in turning Florida into a desert. We don’t have the infrastructure or the resources to support these crapshack developments, nor the people (if any) who occupy them.
Actually, the scrub “wasteland” is probably better for the environment than that neon green golf course. Maybe in a few years some hardwoods, then a fire, then the pine and palmettos and saw palmettos and sawgrass will take over.
Agree about the desertification. This is the silent environmental distaster in Florida. In a few short years I’ve seen the weather change drastically. GNV was “tree city”, but a hurricane called Frances followed by a hurricane called developers have turned it into a sere, UV-soaked, dusty disaster zone. The city was aggressive about planting trees, but a) clear channel got some healthy ones cut down for blocking their billboards, and b) many, many street trees ill or dead. (Also, many “replacement” trees planted by developers are dead. There are fines, but how to collect on the broke?)
Florida is in a multi-year drought, water levels down, all sorts of illnesses/problems from that. Foreign invaders are also all over the wayside, plants that idjits in So Fla put in their lawns because they looked “kewl”. Also choking the waterways (from outdoor ponds). I like to drive the old byways with live oaks over the road, shading it. Lots of old florida, then you come across destruction in mass form–Pulte, Toll Bros, their friends. Few living there. Horrific.
PS: entropy. energy. ’nuff said.
Oh, testify, palmy. It’s such a waste, such a pity, what has been done. And just so much of it! And EVERYWHERE!
Although I still get mad, each and every time I drive by Mud Bay and see that wretched chancre known as ‘College Station’. DRWhoreton clear-cut a really lovely little forest, giant trees, so beautiful; they got crappy plans permitted, they got the permit to punch through the glacial til that capped a fookin’ drinking water aquifer, just utterly heinous plans through on the backs of very costly lawyers/consultants (aka prostitutes), and how it’s going?
Well, lessee…3+ years and it’s a 63 acre mud puddle with some weeds and Scotch Broom on it. Oh, and a couple paved roads and some pipes sticking out of the ground.
Oly, one of the most unbelievable recent kerfluffles was over a proposed landfill for the county to the north of Tampa’s Hillsborough County. That landfill would have been sited over ancient sinkholes that, had the ground above collapsed, would have allowed leachate into areas of the Green Swamp leading to the Hillsborough River, an environmental disaster that could never have been remedied. Fortunately, the landfill plan was scuttled in short order, since the Hillsborough River supplies Tampa’s drinking water and that was just too much risk even for the politicians, who like to take clean showers and imbibe uncontaminated H20 on occasion. But the fact that the proposal was even considered was scary.
LOL, these turdly landfill folks claimed they were going to put some sort of liner in place to protect the groundwater and sinkholes. However, the local water authority is already dealing with the potential disaster caused by the cracking of the concrete “liner” of a recently built reservoir. I think the water authority’s miscalculation on the reservoir saved our butts. Of course, here we’re having the water shortage, and the reservoir has to be drained to fix the cracked concrete. LMAO!
I think the water authority’s miscalculation on the reservoir saved our butts.
Hmmm. Is this one of those ‘irony’ thingies I usually enjoy? I can’t quite tell.
Hahaha, that reminds me—I submitted a proposed friendly amendment to a bill at last years legislative session here in WA state, it was a bill that wanted to strip off various protections from groundwater supplies, supported by, of course, the builders, developers and associated who*res. Anyway, to the primary sponsors of the bill I proposed that additional languange be adopted; the water downslope of any such development(s) be bottled up and become the required drinking water for the developer’s kids. And if it turned out that they and their families didn’t like drinking their neighbors urine, that pretty pink bows be tied decoratively around the bottles, so as to cheer everyone up and help them forget that they were drinking their neighbors urine. Curiously, my proposed amendment did not become part of the language.
(Now, for you literalists, I wasn’t seriously suggesting that kids be made to drink contaminated water—I believe that even the children of developers deserve clean drinking water*—I was just grouchy and making a point. Anyway, the bill didn’t get out of committee. But still, they tried.
And they KEEP trying…
You sit there and you look and listen in horrified wonder, and I mean, who ARE these wretched greed-consumed people? A plague from Satan? A horde of locusts who mutated to look like humans? What?? )
*I’m considered a total bleeding-heart by several of my friends for progressive and candy-a*ss views such as this one. But see, I think that those little kids could grow up and not become worthless evil fookers, just perhaps.
“Oh, and a couple paved roads and some pipes sticking out of the ground.”
PVC farms? We have one of those near here. Replaced an orange grove.
PVC farms? We have one of those near here. Replaced an orange grove.
Jeeze.
Say, how do you make a ‘crying face’ emoticon?
I’m with you Oly, nothing should replace the orange groves, which I grew up surrounded by, but they do. They let them die, see Redlands etc, and it is a crime. My dwarf Meyer lemon trees in pots made me think this past 2 months of how much fun I had growing up in the orchards. The blossoms were so fragrant, I almost swooned each time I went onto my patio.
But see, I have to go to a patio to smell in all that headiness of natures blossoms, not a grove nearby. Just a crime.
Do this: colon cry colon with no spaces
Love Myer lemons. Those suckers can be huge, if treated right.
Silicon Valley in the early to mid 60s was nothing but fruit orchards. I miss the smells, the colors and the fruit stands along the old highway 101. Now it’s nothing but orchards of stucco, butt ugly houses.
I remember that in SoCal too, the IE to be exact. We’d drive out to our family “cabin” on the desert and each time my grandmother would see all the new developments and dead orchard trees piled up, and she’d say oh dear look how it’s changed, oh my *tut tut tut* etc. and I enbibed her distress and started doing noticing changes and doing the same thing. I recall that the younger generation (my parents, uncles et al) didn’t give a rip. It was progress and all that. Old women and little girls didn’t understand chit like that.
come to think of it, orchards and vineyards were probably the optimum use of that gawdawful Inland Empire. It was almost purty back then.
Montana, you are right. The entire Ontario region was vineyards. Neat to see.
Chicken farms, Vineyards, orchards, dairy farms.
Pungent but neat.
In the winter, the guys from HS would work late through the nights when the temps went way down, in order to light the smudge pots. Smudge pots were iron pots filled with oil to burn and warm the orchards, then they started installing orchard fans. But still the boys would eventually come to school in the late am with soot around themselves. And your windowsills covered with soot. Nonetheless, so totally cool to be surrounded by orchards.
And as I recall, Orange County used to actually have. . . oranges!
Nonetheless, so totally cool to be surrounded by orchards.
Yar. I growed up with apple orchards all around. Old ones, many not even harvested or sprayed anymore. I loved those old apple trees.
The best part of Santa Clara county were the apricots. Unlike citrus, apricots don’t travel well. You either pick them green and ship them or you have to go to the tree to get them ripe.
I’m sort of a rare guy in that both sets of grandparents spent their lives in SC county. I have old copies of the SJ Merc. that put news of my grandfather having the flu on the front page. It was such a small town then.
Here in Idaho the area between Nampa and Marsing is heavily planted with fruit trees: apples, apricots, cherries, almonds, you name it. Old-fashioned roadside fruit stands are still here. In many ways the Boise metro area recalls Santa Clara county of my boyhood in the 1950’s.
I have a backyard planted in cab and merlot, and a young apricot tree. A Blenheim apricot - named for my family’s ancestral home.
Jeez, are you serious, Dennis?
Read an interesting essay about Blenheim once, alleging that the family house shaped the family destiny.
Also read that the lady of the house who wanted it built had the builders take down a beautiful older structure. The architect was so outraged that he had them put it back together when she wasn’t looking … unfortunately, she prevailed and the structure is gone. It wasn’t in the way of the house but I guess she wanted an unobstructed view.
hasn’t that been going on for awhile? I remember all the Vietnamese with donut shops in SoCal back in the 1980s. I figured it had to be some kind of immigration deal.
It’s cambodians. They have ‘figured out’ donut shops and help their countrymen open them. I read something about it awhile back.
Palm,
It’s not just the developers it’s the local governments that allowed this to happen also.
Amen, SanFrangal.
“Pedro and Karin Weber are Germans who recently moved to Florida from Venezuela and hope to set up some sort of retail business so they can stay. They did their homework and deliberately chose to relocate to Cape Coral. They hopped onto the boat hoping to find a place in the $350,000 range. ‘It’s tough at the moment in the whole world, so why not go to the States?’ says Karin Weber, a 53-year-old blonde wearing a pink Hard Rock Cafe T-shirt and big Dior sunglasses.”
Everyone got a good visual on that one?
They did their homework. Cape Coral. Bwahahahahaha! They should have spoken to the Germans who couldn’t keep their long time German bakery going in St. Pete, a much more populous and business oriented area.
But, this is an interesting little blurb here, because I recently read something about the US setting up a special immigration deal for people who will establish a business.
“Pedro and Karin Weber are Germans who recently moved to Florida from Venezuela and hope to set up some sort of retail business so they can stay. They did their homework and deliberately chose to relocate to Cape Coral. They hopped onto the boat hoping to find a place in the $350,000 range. ‘It’s tough at the moment in the whole world, so why not go to the States?’ says Karin Weber, a 53-year-old blonde wearing a pink Hard Rock Cafe T-shirt and big Dior sunglasses.”
Herr Joseph, ihrer Boot Reise ist ausgezeichnet! Und diesen Hausenplotten sind sehr, sehr schön, Herr Joseph. Oooh! — meine Nipplen pöken durch meine Trailertrash Tshirt, Herr Bootmeister. Oops — wo ist meine grössen Dior Sonneglassen? In die Wasser? Helfen Sie mir fund meine Sonneglassen, bitte.
Liebe,
Jen
If you call everyone with a Hard Rock T-shirt trailertrash, you probably don’t have a lot of friends, do you. I certainly don’t see the connection between Hard Rock T-shirt and wet T-shirt. The latter is an invention of the US, by the way, not found in Europe, they are not so juvenile as to have the see the Nipplen (?) poeken (poking) out.
C’mon Sagesse, I agree with Jen in that a Hard Rock T-Shirt is not exactly classy.
My brother bought me one from Vegas 10 years or so ago. I was too embarrassed to wear it. It think I eventually tore it up for cleaning rags.
Second story on HR is going to Singapore on work and one of my collegues wanted to go to the HR to eat. I flat off f’ing refused with all the better food options (Chinese Singapore, Malay, Indian, you name it) there: We ended up eating spicy pepper crab near financial district and he thanked me for it as he would never have though he would have liked it since he never tried different things. However, he still wanted to go the HR cafe to get a T-shirt.
Lordy.
Hey, I’ve eaten at the Hard Rock in Singapore. It’s not great, but it wasn’t bad either. It was the only place open late near my hotel (Traders). And, I didn’t feel like hiking all the way down Orchard road.
There was a fad of wearing those t-shirts when I was in primary school, one which has mercifully faded.
There was a HR Cafe in a slightly sketchy corner of Boston once, but I think they also, mercifully, went out of business.
I did go to the one in Baltimore (was there for a convention, with friends). It was pretty underwhelming.
Jen, LOL
Das war sehr gut.
Es war sehr comisch.
HAHA ( in german)
“Pedro and Karin Weber are Germans who recently moved to Florida from Venezuela… They did their homework and deliberately chose to relocate to Cape Coral.”
“They did their homework. Cape Coral. Bwahahahahaha!”
I wonder if they did similar homework prior to choosing to live in Chavezville.
Poke fun if you will about their decision to move to Cape Coral (although at least they’re bringing money to the local economy), but IMO, it’s just kinda poor taste to rip on their circumstances in Venezuela. Chavez has f’d up Venezuela for a lot of people, but not by their choice, and outside of their control or ability to foresee. Come to think about it, it seems we could face a similar situation in our country.
“it’s just kinda poor taste to rip on their circumstances in Venezuela.”
Agreed. I know a couple of folks living here in Florida whose lives were destabilized by Chavez and love their country and would like to go back under different political circumstances.
Right, because Obama and Chavez are brothers under the skin. Pfleh.
Ted Kennedy supports Obama
Ted Kennedy supports Chavez (winter heating oil program for the poor a few years back, look it up)
Coincidence?
~_^
PS: Chavez actually reminds me of Blago… rallies the demos as his power base, unwilling to give up power, basically, nuts.
That was quite a puff piece in the Herald. Pedro Weber is a German? This sudden appearance in Lee County of a pair of greater fools begging to be ripped off is tantamount to the approach of a mammal to a mosquito population at dusk. It would not surprise me if ten thousand people now are trying to contact that couple.
“Pedro Weber is a German?”
There was an exodus of Germans to South America after WW2.
Some were Nazis in hiding, some were just regular folk trying to find a safe haven.
Yeh, it does sound a bit suspicious though I think it was more like Argentina that the Nazis flocked to.
If German, why isn’t he plain old Peter Weber?
That whole “southern cone” region is full of German folks. Argentina, Paraguay, Uruguay… Paraguay has a thriving German Mennonite colony with successful dairy operations. They’d come into the capitol wearing black overalls, straw hats, plain dresses, like the Amish. And Bill is right. Some of the most beautiful girls you’ve ever seen (leggy blondes) are at the beach in Punta del Este resorts outside Montevideo.
I remember back in 1993 I was in some small town near Manzanillo. I walked past a curio shop. The clerk was a beautiful young blond with white skin. She did not understand one word of English. Probably the granddaughter of one of the Germans who moved to South or Central America. I have a picture of that gal somewhere…
And some are Jews. Jews especially are fleeing Venezuela right now. Please, everyone, keep this in mind before you instantly label Hispanic Germans Nazi spawn.
The Palm Beach Post. “Jimmy Diamond says he was flying high back in 2005. He and his wife had good jobs. They had just purchased a two-story, $600,000 home in an upscale Boynton Beach neighborhood. The Diamonds, who had lined up a buyer for their home, discovered that the development they live in, Cobblestone Creek, has houses with tainted Chinese drywall.”
“‘We had to tell the buyer,’ Diamond said. ‘They backed out the next day. We have no plan. All I know is I’m screwed because I can’t sell my house.’”
“Thursday night, a group of about 150 Boynton Beach homeowners gathered outside the Cobblestone Creek community’s clubhouse to hear a presentation from a group of lawyers. ‘We put our life savings in this house,’ said Tonya Radi, a resident in Cobblestone Creek who moved in about eight months ago. ‘This is the house we thought we’d live in for the next 20 years. What if it’s not healthy? I’m pregnant right now. Or what if people move out, what will that do to my (homeowners association) fees?’”
What a bunch of whiners. My dad set drywall (actually put in a whole non-load-bearing wall, studs and all) back in the 1990’s, and you can pay some out-of-work American $9/hr to set it, plus domestic supply quite available at much cheaper prices than 2005, so just replace the d*** drywall and repaint yourselves on the weekends!! Yeesh!
Hell, you can get drywall for FREE (check craigslist) or for “make an offer” from contractors here in GNV, FL, which is not nearly as depressed as the rest of the state. Min wage is $7.15/hr now (I think), you could hire a legal to do this work. Just advo on CL. Storage unit for one month probably $200 tops for nicest they have. You can do this, whiners!
Oh, and the outgassing allegedly not harmful to human life at all… but it IS harmful to your copper. A/C units failing, is what I read. The black mold WILL get you, so I guess there is something to panic about if you like panicking. (Wouldn’t that give you a colicky baby? *evil laugh*)
Have to agree, if you really want that house sold it wold take maybe two weeks tops to tear out all the old drywall and re-rock it. Heck, you could have the whole house down to interior studs in one day if you tried. Cost 7-10K.
Drywall is really not that hard to install.
We should call James Bond.
Afterall, Diamonds are forever.
“‘We have never seen a market adjustment like we’ve seen in the past year-and-a-half,’ said DeLawder. ‘We can be critical of ourselves, but we really didn’t anticipate Armageddon.’”
We can’t be critical of ourselves … that would hurt our self-esteem and challenge our worldview … no, better to remain ignorant, only read that which confirms our biases, and keep figuring that mental stagnation is a completely ordinary, even desireable state of affairs.
Pleasures of the philosopher or the pig … bah, humbug! Who needs the pleasures of the philosopher (they cause dyspepsia) when you can eat, drink, and be merry … enjoying it all the more knowing how many little people’s neck’s you’ve crushed to get there. Oysters and alky taste so much better knowing that your Benz was paid for by tenants at 60%++ realized income, $30 NSF fees, and sucker Yankees buying under-code termite collectors, er, houses.
“Experts say that with so much money to be made, many banks loosened their purse strings. ‘While they were aware of the potential risks of the housing bubble, (banks) pretty much ignored it,’ said Jeffrey Clark, a professor of finance at Florida State University. ‘They saw potentially strong returns from construction, commercial and residential real estate lending. They pursued, maybe overly aggressively, lending in this area.’”
Everyone but the bankers knew what a stupid investment these commercial buildings and new developments were. They also knew the environmental and community cost of destroying nature areas and kicking out long-time trailer park lessees. Banks walked hand-in-hand with compliant city/county gov’t. I don’t know why they let developers and local pols (who are pretty much developers themselves) put that gun to their heads. Maybe they thought they would get bailout bucks too.
Looked into shorting local banks but they were too thinly traded or private. It’s good to know that my fellow bears made good money shorting Cali banks, though.
All the more reason to gut these banks and fire (arrest in many cases) the bank management from these defunct organizations.
Words like incompetence, stupidity, inexperience and greed come to mind. Not who should be running things, but the current and previous administration both believe keeping these yahoos is the right move for out country?
Obama has learned from Clinton’s first term that you don’t roust the powers that be … what do you suppose we end up in a real Depression from this “don’t tinker, just give ‘em a loan” idiocy … and then a REAL demogogue comes to power?
“Not only is this market unprofitable, but at the same time it’s money losing.”
Now when putting my underoos on, is it brown in the front, and yellow in the back, or vice versa?
Natalie,
That was an interesting comment.
Talk about spoilers. Blech.
Someone’s channeling ol’ Yogi with that quote. Come to think of it, spring training is on at the moment…
Commando works too.
ewww
He means it works for hot young gals, not old farts like himself.
Er … not so fast … she better be wearing a skirt, because I don’t enjoy spitting out jeans lint when I … you know…
No skidding.
The Sun Sentinel reports from Florida. “In Fort Lauderdale, Miles and Laura Brannan are raffling their six-bedroom waterfront estate in Coral Ridge Country Club. The plan is to draw the winning name after 300,000 tickets are sold, at $10 apiece. Part of the proceeds will benefit St. Simeon Church in Miami, which is conducting the raffle. The couple bought the home for $2.35 million in 2005. ‘My income’s been cut in half,’ Miles Brannan, a real estate investor, said Friday. ‘We need to sell the house. It’s a means to an end.’”
Does anyone in their right mind think there are 300,000 people who are stupid enough to gamble away $10 for the chance to hang this albatross around their necks?
I was going to comment /post on that too.
300,000 people? really?
I don’t think so.
The property taxes on this white elephant are going to be between $45,000 and $65,000 a year, unless the assessor quickly lowers the appraisal to current market value.
Stooooopid!!!
A little OT, but just saw a story on TV about the Spellings selling their 56K sf super structure for $150 million. What would be the taxes on this albatross? The interior rooms are rather hideous. Why do filthy rich folks often have such horrible taste? http://gawker.com/5187235/buy-candy-spellings-150-million-house-please
For some reason, it reminded me of the Schoenbrunn palace in Vienna. This was Emperor’s summer hang out. I am a shocked that nobody replaced the wood kitchen with Granite and simply doubled the price.
Btw: Vienna had a property boom at peak of the Empire. After that, no major building. It explains why the city pretty much looks unchanged until recently.
Whoever buys it will face a reappraisal under Proposition 13. If appraised at $150 million, taxes would be about $1.5 million (~1%) plus costs of voter-approved bond issues, so my guess would be around $1.8 million.
I always thought raffles were better suited for altruistic things like sending a high school language club to Europe, or raising money for a child’s surgical procedure. Now they’re being used by people like the Brannans. Disgusting. And the church should know better.
Um, doesn’t this fly in the face of all kinds of tax and gambling laws, or should I just assume that they’re doing everything on the up-and-up?
It’s for the church, move along lawwoman and taxman.
Non profits should pay a statutory 25% of regular commercial prop tax rate. So nobody can cry that their historic building is going to the taxing authorities (heck, don’t the masons have to pay taxes on their historic buildings?) but it will mean less abuse by powerful entities like Harvard University (long story there) and by little tin-pot scamsters like Southern two-bit preachers who run off with the “building fund” since they are always buying land cheap and holding it for years for free instead of just renting a storefront like an honest operation.
It would also allow many communities to lower the millage rate.
Scammers go where the money is. And L. Ron Hubbard & his scifi buddies (who all had more ethics than him, in the end) were absolutely right about the money to be made in religion.
I’m not sure there is a way to do this “on the up and up”. Courts in various states have been ruling this sort of thing illegal for a while now.
What happens when they can’t sell all 300K tickets? Will they refund everyone’s $10? Or will they just accept whatever the total turns out to be?
The Miami Herald. “Here at the epicenter of the nation’s housing crisis, an ebullient Marc Joseph bounces off a pontoon boat onto a dock behind a lovely waterfront home — it was recently vacated when its former inhabitants couldn’t pay the mortgage. ”The tiki hut comes with the house, guys!’ the slim 41-year-old real estate agent says as a dozen or so potential buyers disembark from two boats and start poking around the 2,600-square-foot house. It’s being offered by a bank for $574,000.”
“Considering this particular home — situated on a wide canal leading to the Gulf of Mexico — sold for $776,000 in 2005, it’s going to be steal for someone.”
If the bank can find a sucker, er, buyer, to pay $574,000 for the property, the bank is the one doing the stealing. It might be a buy at around $156,000 ($60/sf), but even that is doubtful.
Oh boy, a frickin’ tiki hut! Let’s see how many hurricane seasons that it comes through.
I didn’t think that $ 200K off of the original selling price of $775,000 was much of a discount, either. Wait till it’s 60 percent off at least. Lakefront properties in Mich. are that much off or more. Wait a couple of years longer, people.
Yeah, but then again, you freeze your ass off in lakefront properties in Mich.
“‘We have never seen a market adjustment like we’ve seen in the past year-and-a-half,’ said DeLawder. ‘We can be critical of ourselves, but we really didn’t anticipate Armageddon.’”
I’m quite familiar with this attitude. I’ve been souting off since at least 06 with the big picture. All I got was : ‘I cant hear you! LA lala, la la la la…’ So now, we face Armageddon. It sucks, but prices here in metro NY have just started the crash, so I have to wait at least another year to buy. That is, if I can keep my income up! Hell, I like renting better anyway, and rents are coming down pretty fast these days, I notice.
I feel honored.
[wipes away tears of pride]
I live in Miami.
(I told ya guys, Miami would triumph in the end)
In the Coral Gables farmers’ market today, I heard a couple of people asking each other, “where do we put our money now?”
Don’t tell me they got their money back from Bernie Madoff…
LOL!!!
“I heard a couple of people asking each other, “where do we put our money now?”
And oddly, this dilemma is what’s driving some money back into the real estate market in this area, as I found out in my search for new rental digs. Some of the retired folks started watching their paper investments evaporate and figured, what the hey, prices on RE have come down, might as well invest in a couple of concrete shacks in the retirement communities and rent them out year round, or to snowbirds. At least the money’s in bricks and mortar. Hopefully by the time they pass on, there will be a little something for the kids to sell off. If they’re lucky enough to get stable tenants, they at least get some return on the money, although they may not get the full return OF investment.
Yes, Palmy, but do you feel the PRIDE as I do?
[Come'on Palmy don't be modest]
Hah! Many claimed the title. Pretenders all!
Floridians knew.
We knew.
[more tears of pride]
For graft, ponzi schemes, embezzlement, greed, and just plain vanilla larceny and smuggling, Florida would out shine all others.
“Yes, Palmy, but do you feel the PRIDE as I do?”
LMAO! In one of my posts early on this blog, I expounded on the virtues and vices of Florida. It’s a pretty state, but has been used like a whore over and over. However, Florida always gets even and manages to give her johns a little STD to remember her by.
I doesn’t matter that it’s late [wipes away more tears]
It doesn’t matter few will read post.
Others claimed that there’s was the Mother of all Real Estate bubbles.
[flush with pride] Muir knew better.
[tears really rolling now]
[hugs Mac]
Oly,
There’s an area in Miami that you would LOVE!!!!
[Oly scratches head incredulously]
It’s a tropical forrest, the houses are nested throughout the forest. It’s illegal to cut the trees. Wild peacocks run wild.
Think about it like a tropical forrest version of one of your forrests.
(I’ve never posted on it)
Ooooohhhh…tell us more!
(Wolfgirl would also love it, saw a post of hers on bits and her hippie past)
True bohemian culture.
I went to Coral Gables HS and had friends in Coconut Grove.
From up high:
Google Earth
W 80 15’ 27”
N25 42’47
or
Google Earth “Coconut Grove, FL” and look for the really green stuff.
(I’ll post links but takes time to show up)
No sidewalks, the canopy is so thick that at noon you can walk and not see sunshine.
(2nd post)
Best way to describe it, a beautiful jungle.
(Sorry Oly, have a hard time describing it, maybe cause’ I did so many illegal drugs there as a teenager, flashback issues)
Look up “Coconut Grove, FL” on Google Earth.
It’s the greenest stuff all the way to the Bay.
Trees and peacocks are protected.
They were trying to feed the Peacocks birth control laden food, there’s a lot of them. No, I’m not making it up.
They are truly beautiful, I’ve stopped the car many a time.
The Bay is also breathtaking vista to take in.
(3rd post)
So, whatya think Oly?
Unexpected ahh?
Oh, Coral Gables is nice and all but is a throwback to the affluent 20s 30s.
This is area is more true to South Florida’s humble origins: smuggling.
By the way, close by, those canals, that’s where the CIA sent it’s boats from during the 60s early 70s against Cuba.
Is that where the Kampong Gardens are located? We took a day trip there this past November, very very surreal. After exiting the busy interstate and passing some seedy neighborhoods suddenly you enter this green, lush tropical forest, with all the hanging Tarzan vines. The Kampong estate apparently is where the first avocado trees were cultivated in the US, about 80 years ago.
Yeap!
If you leave your car in the forest and walk around you’ll see a true jewel mostly unknown except by locals.
It’s a big forrest.
Some houses are gorgeous. (even some Modern)
But a lot of the houses are just plain old houses.
(We never enter the way you did. Except on Sunday Morning.
That seedy neighborhood close by really helps keep the area hidden)
Thank you for the tip.
2.bp.blogspot.com/_rWY3qGfe6gc/Sc3AOY7BYFI/AAAAAAAAB0U/Ed6q_nez72A/s1600-h/stuckporcupine.jpg
“Pedro and Karin Weber are Germans who recently moved to Florida from Venezuela”
Bummer. They leave a country run by Communist despot, just to end up with one in their new country.
Some people have the worst luck.
Let me know when the jackboots knock on your door in the middle of the night Rush.
First you have to find me…and good luck at that.
Ah, the nice thing about living among 300,000,000 others. The jackboot types will be hard pressed to find my gold bullion.
Government is full of amateurs and bunglers. They fail at most of what they do. They will fail to control freedom fighters.
Tea Party April 15.
Hope you’re planning to cheat on your taxes rather than just refuse to pay them, unless you’re planning to hightail it out of the country … remember, they check your 1099, W2’s against your 1040. A lot easier to hide income if you run your own business…
And if you’re going to cheat, don’t brag too much … audit is no fun, Sam.
test
But you passed . . .
but we really didn’t anticipate Armageddon
We did.
Thanks Ben. There is a new website in Dayton Ohio sponsored by Park National Bank, which is a Cheerleading Site for Dayton. Mr.Esrati discusses it here.. I thank you for the link and I give your site kudos for the data.
Park National Bank as one of it’s classic quotes of the day. Mr. DeLawder is the CEO of Park a holding company who seemed to have a great little Ohio based business as he served all of the outside the metro areas. Then he went to FLA Panhandle and bet the Ohio Farm at absolutely the worst time
by purchasing Vision Bank. The paper does provide a link to the FDIC information on Vision Bank and I do not know what all that crap means but if you compare the numbers from one year to the another I would say they are in trouble which means as a taxpayer, we are in trouble. Now Vision is spinning hard because they have a spin page on the damage.
Anybody with eyes could have seen the housing bubble in 2007 as it was way evident in 2005. I was down in Gulf Shores in 2007, watching in awe as Condo after Condo obliterated the Panhandle with price tags I could not fathom. Since all of you are Taxpayers, head on down to Orange Beach and pick out a condo to squat in, besides it yours and make sure to tilt a few back at the Florabama, a great high energy watering hole.
Freddie Mac loan contractor, Ocwen Financial, has spotty record
By ALEXANDRA ANDREWS
Sunday, March 29, 2009
Last month, Freddie Mac introduced a pilot program designed to guide 5,000 homeowners with high-risk mortgages through the loan-modification process, but it outsourced the job to a subprime loan servicer with a history of customer dissatisfaction and run-ins with the federal government.
The West Palm Beach-based company, Ocwen Financial Corp., is a publicly traded financial services company specializing in subprime loan servicing. When asked why it tapped Ocwen for the job, Freddie Mac spokesman Brad German pointed to recent coverage in the New York Times and Time about “the good job that [Ocwen is] doing on the job we’re looking for them to do for us.” He declined to say whether there had been a bidding process or how much the contract was worth, citing the information as “propriety” and referring further questions to the Federal Housing Finance Authority, which acts as Freddie Mac’s conservator.
An FHFA spokeswoman declined to give ProPublica the contract details. She said that Freddie Mac, which was seized by the federal government in September, is still run as a private-sector firm and not subject to federal procurement rules. Freddie Mac will decide later this year whether to expand the program, and it may hire additional servicers for the job.
Ocwen has, in fact, had an impressive success rate with its recent loan modifications; it said in December that its delinquency rate for borrowers with modified loans was 25 percent, far below the national average of 53 percent. But its business practices have also drawn a wide array of criticism from customers, consumer advocates and the federal government itself.
Trouble With the Feds
Ocwen got a lucrative contract in 2003 to manage and sell thousands of foreclosed properties owned by the Department of Veterans Affairs, but a report [8] from the Government Accountability Office in 2007 panned Ocwen’s performance and said the “VA also has not been satisfied with Ocwen’s performance”: Ocwen racked up $1.3 million in penalties from the VA in the last three quarters of 2005 (at the height of the housing boom) for failing to meet sales targets.
There were other problems too: Ocwen charged the VA for home-upkeep repairs that were never made, the GAO reported. Houses fell into disrepair and were covered in “trash and debris,” which the GAO suspects might have lowered property values.
Chairman of House Veterans Affairs Committee Bob Filner, D-Calif. 0 told The Palm Beach Post last January that he would recommend the VA not renew Ocwen’s contract. “They obviously didn’t do the job,” he said. The VA transferred the job to Countrywide when Ocwen’s contract expired last year.
Obviously, the problem here is the GAO. Somebody muzzle those negative nellies–they’re getting in the way of an all-American profit.