We’ve Never Been Down This Road Before
It’s Friday desk clearing time for this blogger. “Brisk home sales have made Sacramento the envy of real estate agents in 45 other states where sales are still declining. Yet analysts remain stubbornly cautious. They say there are still too many conflicting signals to accurately forecast a bottoming out of the real estate cycle. The year’s worth of increases, after all, follow 37 straight months of year-over-year declines. ‘Usually, after 12 months, you start looking for prices to stabilize,’ said Andrew LePage, an analyst with researcher MDA DataQuick. ‘But we’ve never been down this road before, and historical road maps haven’t done a good job of showing where we’re headed.’”
“Notices of default have spiked. Banks are holding a ’shadow inventory’ of repossessed homes off the market. The economy is still shedding jobs, a key contributor to people falling behind on mortgage payments. February unemployment hit 10.8 percent in El Dorado, Placer, Sacramento and Yolo counties, and is expected to get worse.”
“Still waiting to buy is Vince Maffeo. He and his family moved to the Serrano community in El Dorado Hills from Bradenton, Fla., in early 2008. They’ve been carefully following the market from a rental house. Maffeo said he can see three new ‘for sale’ signs from a window at home.”
“‘I continue to get e-mails from a Realtor who said there’s tremendous drops,’ Maffeo said. ‘I just don’t see an incentive right now. You just don’t know where the bottom is going to be. We don’t want to pay too much.’”
“The Legal Aid Society of Orange County – as well as the Public Law Center – report that more and more individuals like have spiraled into poverty and are now coming to their clinics seeking help. Dozens of other legal nonprofits statewide also attest to increased demand. ‘We have more foreclosures, we have more everything,’ said Bob Cohen, executive director of the Legal Aid Society. ‘We’ve never seen this need. Families are falling apart because they have no money.’”
“Haejung Hong of Fullerton turned to Legal Aid for help modifying her home loan so she could avoid foreclosure. Before the housing market collapse, the real estate agent was the family’s breadwinner, regularly earning more than six figures in commission. Now, she has not had a sale since last May. She and her husband, a high school teacher, struggle to make ends meet including supporting their three teen-age children.”
“‘I never thought this would be happening to me,’ Hong said. ‘All my sales just stopped.’”
“Foreclosure numbers are hitting record highs, up 24 percent in just three months. Multiple foreclosures on the same street can wreck property values for neighboring homes, and many homeowners are tracking housing costs in their neighborhoods. ‘I try not to look, but I still am aware that it’s going down,’ said Ed Vardiman, of Fort Thomas. ‘It’s gone down about 20 percent from when I bought the house about two years ago.’”
“‘Everyone’s struggling,’ Vardiman said. ‘I see more for sale signs and more properties on the market longer here in Fort Thomas than what I’ve seen before.’”
“A few forward-thinking financial experts began issuing dire warnings five, even 10 years ago about the growing threat from subprime mortgages. And nobody listened. The housing bubble eventually burst, and those toxic loans helped propel the country into the worst recession since the Great Depression.”
“Now, some experts warn of a new and growing danger: Federal Housing Administration mortgages, government-insured loans for people with shaky credit histories or little money for a down payment. ‘”I’m concerned,’ said Bill Faith, executive director of the Coalition on Homelessness and Housing in Ohio. ‘(FHA-approved lenders) are squeezing some people into loans they probably shouldn’t be in.’”
“In the end, said Brian Chappelle, a former FHA official, the performance of FHA-insured loans is tied to the economy’s overall state. ‘It all comes down to how bad the economy gets,’ he said. ‘And if home values decrease another 10 (percent) to 20 percent, (defaults) could get a lot worse than the FHA estimates. That’s the wild card.’”
“A $300 billion federal program that was supposed to help keep people in their homes, isn’t helping much at all. It was supposed to help 400,000 people keep their homes. So far, it’s helped one. Experts like Rick Harper say the program has been too confusing and too few lenders are willing to participate. ‘The Hope for Homeowners was not very helpful because there were just a handful of loans that had actually gone through that process. It was confusing it was difficult for us as counselors to try to figure out what’s up,’ said Harper.”
“‘There’s a lot of paperwork. I’ve got a couple more tubs in that room right there,’ said Nadine Scott, a homeowner.”
“Foreclosures ‘came back with a vengeance’ last month and are likely to keep rising, said Rick Sharga, RealtyTrac senior vice president. Efforts by the Obama administration to keep people in their homes with bolstered modification programs is having less of an effect in California, experts said. Borrowers here generally owe too much on their homes to have their loans modified, economists and Realtors said.”
“The increase in foreclosures in recent months reflects that last batch of borrowers who got adjustable mortgages, said John Husing, a regional economist who specializes in the Inland Empire. And unemployment, or the threat of losing a job, doesn’t help. ‘You can’t modify a loan for someone who doesn’t have a job,’ said Marty Rodriguez, a Realtor in Glendora.”
“Countrywide Financial stopped foreclosure proceedings last year in hopes of modifying the loan for a small Escondido condominium after a national settlement with several states’ attorneys general. But there’s one problem: The condo has been vacant for eight months.”
“The homeowner, Elba Coronado, received a notice of default in June last year and moved out in August because she didn’t want to go through the embarrassment of eviction. Since then, she has been renting a Vista apartment. At some point, Countrywide halted the foreclosure process. Coronado said Countrywide never told her she would be eligible for a modification of her loan. A Countrywide spokesman says Coronado never told them she had given up on the loan.”
“‘I don’t know, maybe they don’t have my number,’ said Coronado, who added that she would like to move back into the condo but didn’t think it was possible after being laid off from her second job in advertising sales.”
“Since she holds just one job, Coronado said the mortgage payment would need to come close to her rent payment of $845 per month. That’s a tall order. Even if Countrywide reduced the interest rate on her mortgage, which initially carried a balance of $275,000, to 2.5 percent —- the lowest level mentioned in the attorney general’s settlement —- Coronado’s payment would exceed $1,000 per month.”
“Plus, Coronado said she is late on her property taxes. ‘It would be great if we could work something out between the taxes and the house payment, but I don’t know how that can happen,’ she said.”
“Even more mystifying is why Coronado’s loan was selected for the modification process in the first place. Coronado’s modification has not reaped any benefits for her. Furthermore, it’s part of a settlement for predatory lending by Countrywide, but the lender in no way preyed on Coronado.”
“Coronado has worked with San Marcos real estate agent Donna Steward to try and save the home. Steward said she was told by Countrywide to sell the property. Such confusion and breakdown in communication is not the rarity, but the norm, said Steward, who regularly assists in loan modification requests for her clients.”
“‘It doesn’t surprise me because (the modifications) are all that way,’ Steward said. ‘They’re all so buried with no help that the communication sucks.’”
“When Jamie Welton sued First Magnus and its former directors and officers for a billion dollars back in February, he didn’t hold back. Not only did he allege that First Magnus’ officers and directors knowingly stripped the company of hundreds of millions of dollars in the form of bonuses and redemptions, but he laid the global financial crisis at their feet.”
“‘First Magnus was not the victim of the ‘credit crisis’ or ‘collapse of the secondary market’ … it was a significant cause,’ says the suit, which he filed on behalf of the trustee for First Magnus creditors.”
“Welton hammered First Magnus’ executives for alleged corporate excesses: private jets, fancy cars, an air-conditioned parking garage and a fountain featuring three flat screen TVs at the entrance of First Magnus’ former corporate headquarters on Tucson’s East Side. ‘They were paying themselves like the Phoenix Suns,’ Welton said in February when the complaint was filed.”
“It was absolutely ludicrous how easy it was for even third-rate scam artists to make money during the real estate boom. Buy a couple run-down triple deckers in Dorchester, do a quick paint job and then recruit a few dopes to act as straw buyers. With a little help from a crooked mortgage broker, make up some jobs and income, find a more than willing sucker among the herd of subprime mortgage companies eager to keep loans flowing.”
“It’s certainly interesting what state and federal investigators are turning up in other part of the country. For starters, there is a $50 million mortgage fraud scheme tied to a sex fetish studio on Manhattan. The owners of an S&M establishment recruited clients to act as straw buyers on phony sales, prosecutors contend. In San Diego, authorities have just busted up a $100 million fraud ring involving 220 properties led by a gang member.”
“And in New Jersey, a real estate developer just plead guilty to bilking $80 million from lenders and hapless investors in a spree of phony home sales and deals that stretched across dozens of states.”
“Don’t think for a minute this stuff wasn’t happening here in the Boston area as well.”
“Michael Tringali, a Manatee County developer who partnered with Neil Mohammad Husani and John Yanchek to pull off one of the largest mortgage fraud scams in Florida history, was sentenced Thursday to 41 months in prison and three years’ probation. Tringali was ordered to forfeit nearly $7 million and faces a restitution hearing within the next 30 days that is likely to result in his owing millions more to six banks for tricking them into making multimillion-dollar loans during the real estate boom.”
“Federal Judge James D. Whittemore denied the defense attorney’s request for Tringali to stay home until after Sept. 1 so that he could drive two of his children to their colleges. ‘The sooner you go down this road, the sooner you will be back with your family,’ Whittemore said.”
“If Whittemore had used more recent appraisals, the defendant would have been unjustly punished by the market decline. In one extreme case, a property that sold for $5 million during the boom is now on a lender’s books at $500,000.”
“For his part, Tringali apologized to the community and to his family. His voice trembling at times, he told Whittemore he had been overcome by his own desire to succeed. ‘All these things were caused by greed and my selfishness.’”
“Former Silverado Banking executive Michael Wise jumped from the ninth floor of a parking garage at the Tampa International Airport last week, ending his life. Wise rose from humble beginnings in Emporia, Kan., to run Silverado, one of Colorado’s largest financial institutions in the 1980s. Silverado’s collapse in 1988 saddled taxpayers with a $1 billion tab and tarnished the state’s reputation because of the attention drawn by high-profile board member Neil Bush, son of then-Vice President George H.W. Bush.”
“Wise misled investors, using their proceeds to pay off earlier investors and support his lifestyle, said Gary Schwartz, a principal with (a) bank-consulting firm in Denver. ‘We helped put the pieces together to show it was a Ponzi scheme,’ Schwartz said. ‘He did a lot of bad things that hurt a lot of good people.’”
“Wise pleaded guilty and served 3 1/2 years in prison, where he made connections that put him in the center of the mortgage-lending boom in Florida until 2007. ‘Colorado moved on from Michael Wise, but Michael Wise could never move on from that easy money of a hot real-estate market,’ said Henry Dubroff, a former Denver Post business editor who covered Silverado.”
“Some Las Vegas homebuilders, especially small private ones, are going the way of the dodo. And if they have not gone away forever, many have shuttered their operations until the housing market turns around. The numbers are telling. Home Builders Research reports only 38 builders pulled permits in 2008, down from 112 in 2004. Many of those 112 were smaller builders.”
“Pageantry finished its last homes at the end of 2008 and now has none under construction and has no sales office. Pageantry built 473 homes in 2005, but that declined to 273 in 2006, 154 in 2007 and 61 in 2008 — 12 percent of the business it had three years earlier.”
“Pageantry dropped condominium prices to $165,000 to $170,000 that two years ago sold for $235,000. Town houses that recently sold for $200,000 sold for $275,000 two years ago, said Bill Hoover, president of Southern Nevada Home Builders Association and the southwest region president of Pageantry Homes.”
“‘The construction loans have dried up completely,’ Hoover said. ‘Banks are simply not lending money. We all had good lender relations. It wasn’t like anybody made horrific mistakes. It was that our industry is one that doesn’t function right now.’”
“It’s going to take land owners and lenders who have foreclosed on property to realize that it is overpriced and must be revalued if they want to sell it, Hoover said. That will make it affordable for builders to start constructing homes again because they can sell them at prices that can compete with existing homes.”
“SalesTraq reported the median price of new homes in February was $216,334. That’s $60,000 more than the median price of existing homes sold in February.”
“Long term, builders know there will be a housing shortage because of the limited amount of land and expected population growth in the valley, but the question is can they hold out until then. ‘Who know how long that is going to take,’ Hoover said. ‘We have not seen the end of it yet, but it has been frustrating.’”
“Naples-Marco Island is moving up in the national rankings for its foreclosure activity. In February, Naples-Marco Island stood at No. 15 in the nation. There were a total of 1,834 filings, or one for every 105 households, in March. That was up more than 48 percent from 1,237 in February and up more than 145 percent from 748 a year ago.”
“‘I have definitely seen an increase in folks coming in for assistance,’ said Brandon Anthony Sciuto, a mortgage broker, legal assistant and real estate agent in Naples who specializes in the sale of distressed properties facing foreclosure.”
“He said the uptick could be the beginning of a second wave of foreclosures in Collier County. Many have tried to hold on to their homes, but can’t do it anymore after borrowing from their 401Ks and maxing out their credit cards, Sciuto said. ‘They’ve dug themselves a real deep hole,’ he said.”
“For those mortgage holders, foreclosure is the only option left. ‘I think a lot of people have come to realize that this market is not going to be turning around any time soon and that if it does it’s going to be a gradual thing,’ Sciuto said.”
“Owning your own roof, walls and fireplace, it is thought, is good for householders because it helps them accumulate wealth. It is good for the economy because it encourages people to save. And it is good for society because homeowners invest more in their neighbourhoods, engage more in civic activities and encourage their children to do better at school than do renters. Home ownership, in short, benefits everyone—not just the homeowner—and the more there is of it, the better. Which is why it is usually encouraged by the government.”
“Yet the worldwide crash was bound up in this supposed miracle of social policy. Attempts to expand home ownership have contributed to the wider economic crisis without succeeding in their own terms. How does that affect the arguments for supporting home ownership? Should it still be deemed a public good?”
“No, say several economists and commentators. ‘Given the way US policy favours owning over renting,’ writes Paul Krugman, 2008’s Nobel laureate in economics, ‘you can make a good case that America already has too many homeowners.’”
“Edward Glaeser, an economist at Harvard University, talks about ‘the madness of encouraging Americans to bet everything on housing.”
“So far, policymakers are unmoved. In mid-February Barack Obama proposed a $275 billion plan to support America’s housing market. Outside the Anglo-Saxon world Nicolas Sarkozy, who campaigned for the presidency to turn France into a property-owning democracy, has expanded zero-interest housing loans for the poor. ”
“The main economic argument for home ownership is that, in the words of Thomas Shapiro of Brandeis University, ‘it is by far the single most important way families accumulate wealth.’ This argument now looks as weak as house prices.”
“If owning were such a boon, you would expect neighbourhoods with lots of owners to have done better than those with lots of renters during the boom years. That does not seem to have happened. What has happened, though, is that above a certain level, foreclosures have done a lot of damage during the bad years.Ownership can sometimes be worse for a neighbourhood than renting.”
“Policymakers…efforts in the past few years seem to have weakened, though not destroyed, the best arguments for treating home ownership as something to be encouraged: that it increases people’s savings and creates better neighbourhoods for everyone. But perhaps you should not be surprised by that. As Adam Smith wrote in ‘The Wealth of Nations’ two centuries ago, ‘a dwelling-house, as such, contributes nothing to the revenue of its inhabitants.’”
‘He said the uptick could be the beginning of a second wave of foreclosures in Collier County. Many have tried to hold on to their homes, but can’t do it anymore after borrowing from their 401Ks and maxing out their credit cards, Sciuto said. ‘They’ve dug themselves a real deep hole,’ he said.’
There you go, DC and the media; all this fuss is only encouraging people to lose more money and these companies will only receive less for the houses they walk away from. And the longer prices are too high, the worse the overbuilding will be.
Anyhoo, another busy and exciting week! My thanks to those who support this blog. Please chack back this weekend.
“Many have tried to hold on to their homes, but can’t do it anymore after borrowing from their 401Ks and maxing out their credit cards, Sciuto said. ‘They’ve dug themselves a real deep hole,’ he said.”
It’s disgusting the financial advice some people are getting. Instead of just taking a credit hit and starting over financially, some people are going to be ruined financially for the rest of their lives.
Exactly, that’s why I always chime in (twice today, actually) on posts like this. Using your 401K and maxing your CCs to pay for an overpriced house (when you are underwater) is NUTS. It’s like taking a payday loan to pay down a credit card at the default interest rate. You should just light the money on fire, you’ll get more enjoyment from it.
The right financial advice is pretty simple. If your deeply underwater on your home, try to work something out with the bank (principal reductions). If they are unwilling to do it (and they probably will be), stop paying and start saving money to find a place to rent. If you’re wealthy, you may want to buy another home before you stop paying on the one your currently underwater on; most other people should plan to damage their credit and rent for 2+ years while it heals.
The idea that these financial planners are putting in people’s heads are, frankly, just crazy. If you bought a home for 400K (and you make 100K a year, not even that bad a situation) and it’s now worth 200K, let me be the first to tell you. You NEED to walk. You CANNOT afford to take a 200K loss, especially when it’s a borrowed 200K (really more like 350K).
Middle class America cannot afford losses in the 100’s of K. And they have an “out” handed to them; spelled out in their contracts. Would you rather lose 200K or just hand the keys back to the bank? It’s pretty much that simple.
All these “gurus” out there that recommend something else are either on the payrolls of the lenders, or are making their recommendations on a false sense of morality. There’s no morality in this decision; do you think that the bank would NOT foreclose on you if you stopped paying because you were truly sick/injured and could not work for a period of time? Of COURSE they would foreclose, even though the “morally right” thing to do is let you stay and work it out. You are dealing with an institution that is beyond “morally bankrupt”; trying to apply the morally “right” decision is horribly misguided. Make the right business decision, that’s the way the banks look at it, and if you (the borrower) doesn’t look at it the same way, you are a patsy.
“Using your 401K and maxing your CCs to pay for an overpriced house (when you are underwater) is NUTS.”
Amen and +100 for that.
The next big “crisis” in this country will be a half-decent retirement for its citizens. Everyone from boomers on down to 20-somethings are blowing the retirement wad to stay afloat.
Not EVERYBODY. But many.
Michael,
I remember many moons ago -
You advised folks to decide finacial vs moral decision.
The deciding factor (IIRC) is what is best for one and their family.
No judgement, no morality.
Thank you for an honest opinion.
Best,
Leigh
“You should just light the money on fire, you’ll get more enjoyment from it.”
Why not just cast the money into the sea, then demand your bailout just like Megabank, Inc’s?
“All these “gurus” out there that recommend something else are either on the payrolls of the lenders, or are making their recommendations on a false sense of morality.”
Morality my A**, they’re shills for the banks and brokers. They have NO interest in you or morality beyond that. Anyone who listens to them is headed for disaster…
“It’s disgusting the financial advice some people are getting.”
Folks in our office tend to seek the kind of advice they want to hear; it likely works like this everywhere.
RE: “It’s disgusting the financial advice some people are getting.”
Boo-hoo, cry me a river for the sheeple, now that all their greed and ignorance has blown up in their face.
I remember this same crowd going completely nuclear when they’d find out they were overpaying $50k for a property when the appraisal report came thru the lender’s door.
And instead of saying, thank God that appraiser’s was doing his job he -sure saved me a lot of aggravation…they’d scream for his head and demand the lender do a re-assignment by an appraiser more accommodative to punching the number deemed appropriate by Realtwhores (trademark) acting in the interests of the seller.
These FB,s can collectively kiss my zz
“‘I never thought this would be happening to me,’ Hong said. ‘All my sales just stopped.’”
“I was almost home. I was home. What happened? WHAT THE HELL HAPPENED?”
Once again, our famous Steve McQueen quote as Jake Holman, just before he dies in the movie the Sand Pebbles.
You have good taste in movies.
Thxs Olygal.
It was a teriffic, well filmed action movie with a great cast, beautiful locations in Tiawan and Hong Kong with a basicallly simple plot that tried to make big statements on everything from small-time1920’s US/Asian culture and life to US gunboat diplomacy.
Okay … truthfully, guys just LOVE the guns, boats and brothel stories when the expendable hero gets wacked in the end
Speak for yourself Mikey.
While it might be good financial advice to tell people to walk on their obligations ,still, if the person cannot afford the loan it was most likely because they were speculating in the first place ,or they submitted a liar loan . The fact that millions of people are walking from their obligations is what is creating the problems . While it is true that Wall Street and the Bankers promoted this real estate loan scheme ,both the lenders and the borrowers created this crisis for everyone else who didn’t take on more obligations than they could afford ,or ended up renting because they were priced out .
While I believe the crooked Banks should adjust their loans,
at the same time I’m pissed at these borrowers that were irresponsible with their gambling and some walk and buy another property after they did commit fraud to begin with .
Do all the game players get off the hook
and actually rewarded for their folly and fraud just because it was
a mania? People who can afford their payment who walk
really get my goat . It use to be that people got a break if they suffered a misfortune ,not if their liar loan application
ended up not getting them the profit they expected .
So if anyone thinks it’s just wonderful that all the bankers and borrowers get a bail-out rather than foreclosure and
going out of business ,than your forgetting where all the trillions and trillions of dollars are going . You had a lot of fraud with this mania and the borrowers willingly engaged in it along with the Lenders .Again we go back to the moral hazard of inccorrect punishment and reward and how that will create unintended consequences . The only borrowers that are really victims are the ones that could afford their payments and were victimized by the market that was based on fraudulent appraisals and loan applications of the gamblers during this greedy mania .
Yes, borrowers can walk on a no recourse loan ,but it use to be you would take a tax hit for it (that Congress took away )
and you would take a credit hit . How about the people who took out all those equity loans to buy luxury item that get to keep that stuff resulting in our tax dollars going to fund people who wish for a free lifestyle of upscale goods .
Yes, the lenders pushed all this faulty lending and breached their duty to prevent fraud ,but is that any reason to reward the borrowers that took a gamble because some real estate
agent told the borrower that they cold get them financed
through the local crook loan agent by inflating their income ?
This fake mania has taken the concept of the “Contract “and thrown it out the window and that is the most upsetting aspect of what this fake price and loan applications mania did .
So, it wll continue that the corrupt systems will not be corrected and people who game the system will continue to get rewarded and the demise of a great Nation will be the end result . I guess we have a new rule in America and that is that people who engage in Ponzi Schemes are rewarded and the honest people and their children pay for it .
The two people that I know of who walked in my neighborhood were uneithical speculators and greedy creeps if the truth be known . Big Business failed the American
people for the last decade ,but you don’t fight evil by commiting evil yourself . Just my 2 cents and I know I opened myself up for attacks by my comments .
HW, I feel the same as you about people who get to walk away without any punishment for their actions. Meanwhile the ones who sat out on the sidelines get to suffer the consequenses of other peoples actions! And it is not fair!
I am sure many are choosing to walk. I began the ‘walking’ process about 6 months ago due to a potential job loss on the horizon along with the continuing fall in prices.
I am finally just about to close a short sale and coincidentally just lost my job of 9 years this month. I put over 100k+ down and was originally paying principal at an accelerated rate. House sold for 250k less than I paid.
About 3 years ago I had about 500K. This does not include the opportunity cost of saving A LOT more by renting for less than half the nearly 6K housing nut. Today I still have about 250k, which I refused to burn in this misadventure.
It’s an interesting moral issue actually. You have a contract that gives you an “out” to walk away should you be unable to continue making payments. If both parties agree to a contract with such terms, then walking away isn’t the part that is morally reprehensible in my opinion. In fact, they are abiding by the terms of the contract!
The morally reprehensible part is that the foundations of what the contract is built on is a complete lie. Most of the people who are getting foreclosed on or walking away could never have afforded these homes in the first place based on even the loose lending standards that we had leading up to this mess. They tried to take advantage of the system, they lied about their income, lied about their savings in order to qualify and were trying to make a quick buck, or to attain the american dream of owning a home.
So just because the contract states that there is an “out”, doesn’t mean that these people shouldn’t be ashamed of their conduct, publicly ridiculed, and financially punished for their actions. At least those who are trying to pay and are losing everything in the process are trying to take some responsibility for their actions.
This concept of, do whatever is best for you and your family is great, but can also be used to justify lying about your income to get a loan to join in on the ponzi scheme. If you get out soon enough, you just did something great for your family financially…but you sacrificed your morality in the process. I think some of the people who participated in this fraud have guilty conciences that are driving their financial decisions now…and that is a good thing in my opinion.
Ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha.
I hope you are not serious. Contracts have been unilateral in favor of the PTB for decades. Heads they win, Tails you go to Arbitration.
Morality? These are not the loans of “It’s a wonderful life…”, you know that, right?
I think you are painting this with broad strokes, HW. Yes, there were many buyers who bought homes above their means, but as a small business owner I can tell you there are plenty of us who bought homes we could afford who are suffering due to significant drops in business income.
When we bought our home in 2006, my husband had years and years of consistent income to back up our loan. And we put 30% down, made our payments which were well within our means, but then had our business income cut in half due to the recession.
We are doing all we can to keep the business going, without laying off too many people. We have a short sale offer on the house (if the bank approves it - still in process). And if they don’t approve the SS, we are going into foreclosure - so b/c I’m in Florida we’ll likely have a nice fat deficiency that I can worry about for the next 20 years - (10 years to collect the judgment, then it can be renewed for another 10 years). If I were in California or Arizona, I could walk away and not look back - but that’s not the case in Florida.
So I do take issue with the statement that people are “walking away from their obligations” I cannot walk away from mine for potentially 20 years. All because the housing market decreased my home’s value at the time I bought it by 67% with a corresponding 50% hit on my husband’s business income?
RE: Do all the game players get off the hook
O’Bama has implemented a new diversion for any sort of moral hazard clean-up.
The FBI’s is now spending it’s time investigating whether returning war veterans are fodder for “right wing” extremist groups, as opposed to runnin’ the loan fraudsters to ground.
Meanwhile, the mortgage scam crooks are all laughing over their G&T’s in some Cayman or Mediterranean hideaway along with their stolen millions.
Whatta great country!
“Former Silverado Banking executive Michael Wise jumped from the ninth floor of a parking garage at the Tampa International Airport last week, ending his life.”
The old S & L gang’s saga continues although it does appear that at least ONE of the Silverado Fraudsters finally hit bottom. He had a long criminal run and was flying high on OPM.
IMHO, Wise is not the only one of that bunch that should take a final dive. Before anyone says something, I have absolutely NO sympathy for habitual and non repentant criminals, even when their teeth bite the pavement, so save it.
Or was he pushed—?
California’s Unemployment Rate Increases To 11.2 Percent
http://www.edd.ca.gov/About_EDD/pdf/urate200904.pdf
March 2008 unemployment was at 6.4 pct. So it has nearly doubled in 12 months time. Ouch!
From the UCLA Anderson forecast of March 2008:
http://www.uclaforecast.com/contents/archive/media_3_08_1.asp
“LOS ANGELES, March 11, 2008 - In its first quarterly report of 2008, released March 11, the UCLA Anderson Forecast remains confident that the national economy was not in a recession through January 2008 and continues to forecast weak growth but no official recession in 2008.”
Regarding California:
“There are some negative signs, such as job loss in real estate-related sectors, but it is unlikely that these sectors can create enough job loss to generate the 2 to 3 percent declines in non-farm payroll employment that have characterized past recessions.”
“The current state of the California economy and our forecast fall short of the weakness in previous historical episodes that we’ve chosen to label recessions,” Ratcliff and Nickelsburg write. “Based on comparing the current economy to past recession episodes, we once again conclude that real estate weakness will remain a significant drag on the economy, leaving us treading water in 2008 — but not slipping under the waves into recession.”
Nice calls. Not.
“Nice calls. Not.”
ROTFLMAO
Let’s not be subtle, their calls have been cheer leading at best.
It amazes me how everyone sees the market recovering. I’m getting renewed pressure on ‘why haven’t you bought’ and ‘now is the time to buy, you cannot *KNOW* it will get much better’ and other variations.
I’ll wait. This newest wave of foreclosures will really help clear a lot of pig out of the python. But its going to take a long time.
Got Popcorn?
Neil
“‘The construction loans have dried up completely,’ Hoover said. ‘Banks are simply not lending money. We all had good lender relations. It wasn’t like anybody made horrific mistakes. It was that our industry is one that doesn’t function right now.’”
Really? Well, I know I’m super-dooper happy to hear this. See, I’ve been laboring under the misapprehension that ‘horrific mistakes’ were made and that was makin’ me all grouchy and high-strung and critical.
Now I can just relax, secure in the knowledge that this terrifying mess was alllll one big accident that no one could have seen coming…
“It’s going to take land owners and lenders who have foreclosed on property to realize that it is overpriced and must be revalued if they want to sell it, Hoover said. That will make it affordable for builders to start constructing homes again because they can sell them at prices that can compete with existing homes.”
How did these land values become overpriced and how did the banks lend on them if nobody made any huge mistakes?
How did these land values become overpriced and how did the banks lend on them if nobody made any huge mistakes?
Silence, man! You’re harshing my mellow! Didn’t you hear?
‘IT WASN’T LIKE ANYONE MADE ANY HORRIFIC MISTAKES!’
He said so.
Jeeze, I’m not even gonna listen to your annoying common sense stuff anymore.
*puts fingers in ears and starts to loudly sing ‘la la la la la’… *
They aren’t making any more land, and they sure as hell are making and printing lots of money. Makes sense to me that land prices can only go up to infinity.
“and that was makin’ me all grouchy and high-strung and critical.”
Dean Vernon Wormer: Zero point two… grouchy, high strung and critical is no way to go through life, Olygal!
Minus the fluff, best comment you’ve ever made IMHO!
Hey! I am composed of fluff! You can have both, you know—percipience plus fluff.
So I don’t know what you mean, but I’m gonna flounce out of here now. Fluffily.
“It was absolutely ludicrous how easy it was for even third-rate scam artists to make money during the real estate boom.”
It takes at least a second rate scam artist to make money during the bust.
http://www.bloomberg.com/apps/news?pid=20601070&sid=a0QoxZDsHWuE&refer=home
“Bank-regulating lawmakers in swing districts are reaping increased campaign contributions from firms most affected by their actions, government filings show.”
“Committees that govern Wall Street and banking are considered cash-cow committees,” said Sheila Krumholz, director of the Center for Responsive Politics, a nonpartisan Washington research group. “Landing a seat on this committee provides a way to secure easy re-election fundraising.”
And all those people out there who don’t even know the name of their representatives in Congress thought electing Obama (or McCain) would solve the problem.
We have the best CONgress money can buy.
If the opposite of PRO is CON, does that mean the opposite of PROgress is CONgress?
Did you make that up, OCBear? You did, didn’t you?
Nope, I’m not that clever.
“Notices of default have spiked. Banks are holding a ’shadow inventory’ of repossessed homes off the market.”
How can they afford to do this? Wouldn’t it be cheaper for banks to unload shadow inventory sooner, rather than riding falling knives all the way down to the ground?
I am unclear whether banks are hanging on to shadow inventory as a business strategy, or if they are just so overwhelmed by the glut of REO that they are incapacitated to quickly unload it?
How are people able to tell how much shadow inventory banks have? Earnings statements? I know that most of the REO I’ve seen locally is pushed through Realtors to be sold.
I can’t speak for the aggregate numbers, but I know there is shadow inventory here because a few foreclosures I’ve followed (which in IL is a whole 6-24 month dragged out process) went back to the banks months ago and are still not for sale. In the past I was observing 4-6 week “turnaround” times on such inventory.
Or are they waiting for a government entity or someone using government guarantees to take them off their books for an elevated price?
My son works for a major bank…they are overwhelmed.
Tell him to put all the shadow inventory on eBay. Starting bid, $0.99
Good. In that case, I advise financially prudent households to keep watching and waiting until the flood of hundreds of thousands of foreclosure homes comes on line in the used home market.
PB:
I know the upper end housing market here is in hibernation. And, despite reports to the contrary, the banks are paralyzed with presumed short sales, most of which do not occur.
Another note: I saw on a San Diego web site that banks were accepting, on average, around 75 percent of the amount due on first mortgages at foreclosure sales, preferring to mark the value down then instead of taking possession and maybe wrestling with eviction or property upkeep. Is that consistent with anything you have seen? As far as I know, that trend has not developed around here, though I haven’t ventured to the courthouse steps (yet) to confirm. But I can see a gap developing on RealtyTrac between what a bank pays at auction and what an eventual REO sales price is.
Also, fwiw, NODs, as I mentioned yesterday, are running 100 percent higher than a few months ago. This isn’t North Dakota, so it’s not one before and two now. And, while better deals may be emerging at auction, I am a little green in making absolutely sure I know about second notes or other encumbrances, which makes REOs look more sensible as prospects, since that problem is clarified.
“Is that consistent with anything you have seen?”
I have to confess to a certain amount of lazy ennui to the happenings in the local market. Until the massive elephant hidden beneath the living room rug has smelled up the room so badly that anyone who ignores it will be pilloried, I plan to remain casually disinterested.
The banks were bailed out AGAIN two weeks ago. They can hold the ghost inventory on their books at what they have in them. No mark to market. No need for more capital.
The larger banks are responding to a “request” by Obama for a foreclosure moratorium. Of course, since the feds own so much of the banks these days, it’s a pretty forceful “request”. However, the timeframe of the original “request” is running out and foreclosures are starting to pick up again.
“As Adam Smith wrote in ‘The Wealth of Nations’ two centuries ago, ‘a dwelling-house, as such, contributes nothing to the revenue of its inhabitants.’”
You would think all the housing boosters on Obama’s economics team might have read a little Adam Smith over the years, no?
They fight Invisible Hand with Keynesian Kung Fu.
The Fed can do nothing to prevent economic disasters (according to Ayn Rand acolyte Greenspin), but it can certainly fix ‘em.
In the long run, the market will defeat any and all efforts to tame it, much as the Mississippi River will eventually flow down the Atchafalaya River channel despite the best efforts of the Corps of Engineer to keep it running through the Big Easy.
If they had given the BLM a crack at Big Muddy, that somb!tch would have been impounded near Cairo, Ill., decades ago. And not. one. drop. would spill into the Gulf.
Don’t mess with Mother Earth -
In the long run.
Leigh
I personally take the appearance of this article in The Economist, which questions the entire basis for the Anglo-Saxon fixation on housing, as an early harbinger of the bubble trough. Economystics at Fannie and Freddie, The Board and The Treasury will now be forced to question the philosophical foundation of U.S. housing policy. Over the period of the next year or two, the insanity of the policies which gave rise to the bubble will diffuse to Joe the Plumber and friends. Soon many Americans will be heard saying housing is the worst possible investment. After that point, it might be worth it for end users to start thinking about getting back into the owner-occupied housing market.
RE: Soon many Americans will be heard saying housing is the worst possible investment.
Hey PB-
Go check out Peggy Noonan’s editorial in today’s (Sat./Sun.) issue of the WSJ called, “Goodbye Bland Affluence”
Pretty good read.
“A $300 billion federal program that was supposed to help keep people in their homes, isn’t helping much at all. It was supposed to help 400,000 people keep their homes. So far, it’s helped one.”
Speaking Fwankly, I would say that program is not working very well.
Makes me wonder if the “one” was a congress critter from California.
I’m pretty sure it was Barney Frank.
Fwankly, I was trying to make a humorous reference to Barney in my post above.
hate crime !
roflow the banking queen
Sounds like somebody has a crush.
Let’s correct a misconception: That program was never designed to keep FBs in their homes. It was designed to to bail out the banksters who contribute to the political campaigns of the politicians who “crafted” this legistlation - which in reality was almost certainly presented to them by lobbyists for the reckless lenders.
“‘I never thought this would be happening to me,’ Hong said. ‘All my sales just stopped.’”
“I never thought it would happen to me” seems to be the opening line to all those breathless made-up letters to certain laddie mags. Or so I’m told.
I doubt that Hong would acknowledge that most of her sales should never have been made in the first place, if you looked at what her clients could actually afford and how insanely overpriced houses were during the bubble years.
Yep, she thought that she would bring in 100K+ in commissions into perpetuity. It must be hard to suddenly realize that her skill set can only get her a menial job, if she can find one. From what I hear not even Disneyland is hiring in OC these days.
My guess is that an unemployed ex-realtard is not even qualified to serve burgers at Mickey Dee’s…
“From what I hear not even Disneyland is hiring in OC these days”
From what I hear, Disney has been laying people off.
Or so I’m told.
Riiiight…
Hey Oly, You know those Lawyer’s dolls were really detailed, eyes, hair, finger nails, dresses…real fancy stuff. I did take a peek at one to see if they were anatomically correct, you know…maybe a nicely painted triangle, or maybe even some wool,
but they were lacking. And to answer your question, no…I didn’t have any tea with ‘em. In fact, the disposition of the dolls was the first question when she called our office.
Dear Housing Bubble Forum,
I never thought this would happen to me, but I took a trip to Vegas recently and…
Bink, I’m surprised at you. SDJen thought you would never tell ;0
Whatever happens in Vegas…………
needs to be shared here.
“I took a trip to Vegas recently and…”
Next thing you know you’re on German television?
Make way for the foreclosure tsunami! Note that this is coming in to shore on top of the onset of peak Alt-A and prime ARM resets scheduled for 2009-10. This is like a tsunami rolling in to shore on an area that just experienced a magnitude 8.0+ earthquake. Funny, isn’t it, how little issue was somehow missed in the ‘green shoots’ discussion?
U.S. FORECLOSURE INDEX: Foreclosures Soar in March, Up 44 Percent Over February’s High
Lenders End Moratoria, Opening Flood of Foreclosures; Re-Defaults and Job Losses Also Take Their Toll …
(April 15, 2009) SACRAMENTO, Calif., BUSINESS WIRE –
Completed foreclosures hit another monthly record in March as 175,199 homes were lost to foreclosure, up 44 percent from February’s record high, according to the latest U.S. Foreclosure Index released today by ForeclosureS.com, a leading real estate information provider.
The number of foreclosed properties was up dramatically from 121,756 in February. Nearly 370,000 properties have been repossessed by lenders so far this year ‘ 18.3 of every 1,000 households ‘ up more than 38 percent from 266,986 in the fourth quarter of 2008, the U.S. Foreclosure Index shows, and up 76 percent from 210,280 in the first quarter of 2008.
The first-quarter 2009 total is the highest quarterly total of completed foreclosures since the foreclosure crisis began. Pre-foreclosure filings ‘ filings that could lead up to a completed foreclosure ‘ also reached their highest quarterly level, topping 600,000 for the first time since the foreclosure crisis began.
While February and March headlines boasted of government efforts to stop foreclosures, in fact March was the first month when major government-backed lenders ‘ including Fannie Mae and Freddie Mac ‘ lifted moratoria on many properties in the first week of March. Only properties eligible for modification under the Obama administration’s plan were covered by continuing foreclosure moratoria, according to statements by the two agencies.
‘The floodgates of foreclosure opened with the expiration of these foreclosure freezes,’ says Alexis McGee, foreclosure expert, educator, and author. ‘With rising unemployment, a backlog of delayed foreclosures and increasing abandonment of properties, foreclosures soared in March to levels we have not seen in this crisis.’
Does anyone have opinions on when top US policymakers and MSM commentators will leave the denial phase of the housing bubble stages of grief and start looking economic reality squarely in the eye?
“Does anyone have opinions on when top US policymakers and MSM commentators will leave the denial phase of the housing bubble stages of grief and start looking economic reality squarely in the eye?”
First they’ll have to acknowledge that lower housing prices is the solution, not the problem. Too many have a vested interest in housing prices staying higher to ever acknowledge that. Regardless, housing prices will continue to fall for quite some time. While I think some in the MSM realize the old economy is dead and that efforts at moving toward a different economy are far too slow and will entail a painful transition, I don’t expect to hear that any time soon.
The prevailing sentiment is that you have to stabilize housing and that will stabilize the economy. That won’t work as you can’t stabilize housing at current prices and even if you could the problems with the economy run deeper than housing. There will have to be more evidence the current approach isn’t working. That will take another 6 to 12 months. The denial is deep and the pain not yet deep and broad enough.
“Pre-foreclosure filings ‘ filings that could lead up to a completed foreclosure ‘ also reached their highest quarterly level, topping 600,000 for the first time since the foreclosure crisis began.”
In case anyone is interested, this means the annualized rate of pre-foreclosure filings has topped the 2.4 million rate for the first time since the foreclosure crisis begin. That ought to provide a nice offset to the dearth of new home construction for the next little while.
Notices of default, as a percentage of the labor force, are now running at 2.5 times the peak of the early 90s downturn.
http://www.voiceofsandiego.org/toscano/
Also, unemployment for San Diego County is already higher than the peak of the early 90s downturn, but has gotten there much faster and is still rising sharply.
Obvious conclusion: San Diego real estate always goes up.
I like that part about homeowners having better kids than renters. Classic.
I explained towards the end of yesterday’s bits buckets why this reasoning calls The Economist writers’ econometrics credentials into question.
“Colorado moved on from Mi chael Wise, but Michael Wise could never move on from that easy money of a hot real-estate market,” said Henry Dubroff, a former Denver Post business editor who covered Silverado and is now editor of the Pacific Coast Business Times in Santa Barbara, Calif.
The Florida attorney general reported no pending investigations or actions against Wise at the time of his death.”
LMAO! I really don’t know what the Florida AG does. Anybody? Anybody? Once in a while he gets up on his hind legs about price gouging after a hurricane, but that’s about it.
With that said, how did Palmy miss a story about a local leaper? I must have been snoozing with the Florida AG.
Palmy!
Trivia question.
For the pink pie.
Charlie Crist held what position prior to Governer of Florida.
Leigh
P.s. Bill McCollums’ current position - HAR!
Full disclosure: former resident
Wise pleaded guilty and served 3 1/2 years in prison, where he made connections that put him in the center of the mortgage-lending boom in Florida until 2007.
This is the oddest statement of this whole story. How do you “make connections” while in prison? Does this mean that the typical mortgage lender has done time in stir?
llking
Thank you for this excellent article on the Las Vegas commercial foreclosure tsunami a’comin:
http://www.lasvegassun.com/news/2009/apr/17/lv-braces-commercial-foreclosures/
(Bits Bucket AM)
The prices in Sacramento no longer look irrational. Sacramento county median sales price was $160K in Feb, which is roughly in line with incomes. That doesn’t mean prices are at the bottom–I don’t think they are, with the rising unemployment and the foreclosures–but they’re not lunatic any more.
So. buy something!
Nope, I live in Sacramento and prices are still $300/sq ft in good neighborhoods. Tons of $50,000 houses in the hood drag the median down. Still necessary to lowball. Most of the action is “investors” buying foreclosures as rentals. Keep eating your popcorn a little longer.
So what does $160k buy ‘ya in Davis?
A garage.
San Francisco Area Home Prices Fall Record 46 Percent (Update2)
By Dan Levy
April 16 (Bloomberg) — San Francisco Bay Area home prices fell a record 46 percent in March from a year earlier as foreclosures drove more than half the sales in the region.
The median home price fell to $290,000, 56 percent below its mid-2007 peak, San Diego-based MDA DataQuick said today. A total of 6,325 new and existing houses and condominiums sold in the nine-county area, 29 percent more than in March 2008.
Prices have fallen for 16 straight months and March’s drop tied with January and February as the biggest year-over-year decline in MDA records dating to 1988. The scarce availability of jumbo loans, which aren’t sold to home loan buyers Fannie Mae and Freddie Mac, reduced sales in the most expensive area including San Francisco and San Mateo counties, MDA said.
“Many of those areas are essentially in hibernation, with scant sales,” John Walsh, MDA DataQuick’s president, said in a statement.
In the final analysis ,all the people that paid the higher prices will either walk or need a loan modification that reduces the montly nut
to the lower prices . This will result in a massive amount of taxpayer dollars to aid the banks who are the final bagholders for
loan modifications and people walking . So ,add to the cheap prices that your income taxes and other taxes will be higher in the future ,not to mention the inflation that will ensue . If you add all this up ,the cheaper prices of real estate will carry a future price tag .
It doesn’t mean that one does not benefit from getting real estate cheap ,but one is going to need it to be cheap to offset the ways in which the folly of the gamblers will be charged to the Majority in the near run and long run . Why do I care if the lenders lower my mortgage payment by 300 a month when I know I will pay 500 a month more in the future in being taxed to death or greater inflation gets me.
“This will result in a massive amount of taxpayer dollars to aid the banks who are the final bagholders for loan modifications and people walking.”
This is what the Fed’s policy gets down to when the SHTF: bailing out it’s key constituency, banks, plus the FBs to whom mortgage lenders loaned amounts that could never conceivably be repaid, at the expense of everyone else.
I keep thinking about the sign I saw one of the Boston Tea Party protesters carrying around on Wednesday evening:
HONK IF YOU ARE PAYING MY MORTGAGE
“[Home ownership] is good for the economy because it encourages people to save.”
I’ve always heard that spending was better for the economy. Isn’t that why Bush gave us that “tax rebate” last year?
“And it is good for society because homeowners … encourage their children to do better at school than do renters.”
Really? I’d like to know why that is.
test comment
I give you a C-
You just lowered the curve. Thanks!
Would it be possible to merge Goldman Sachs and the Fed into the Executive Branch of government and start over with a new, independent central bank?
Treasuries Gain After Federal Reserve Buys Government Debt
By Dakin Campbell
April 13 (Bloomberg) — Treasuries rose after the Federal Reserve completed the first of three buybacks of government debt slated for this week in an effort to lower borrowing costs and revive the world’s largest economy.
Yields on 10-year notes fell the most since March 18, when policy makers announced the $300 billion program, as the central bank bought $7.37 billion in two- and three-year securities. The Fed has acquired $43.9 billion of Treasuries since beginning the purchases on March 25.
“The U.S. government is the 800-pound gorilla in the bond market,” Andrew Brenner, co-head of structured products and emerging markets in New York at MF Global Inc., the world’s largest broker of exchange-traded futures and options contracts, wrote in a note to clients. “Bond markets acted in accordance with the liquidity provided and traded up.”
The yield on the 10-year note fell seven basis points, or 0.07 percentage point, to 2.86 percent at 4:47 p.m. in New York, according to BGCantor Market Data. The price of the 2.75 percent security due February 2019 rose 18/32, or $5.63 per $1,000 face amount, to 99 2/32.
Ten-year yields have traded in a range between 2.45 percent and 3.05 percent since late January as concerns about record Treasury supply were offset by the Fed’s purchase program.
$2.09 Trillion
If 10-year yields rise above 3.05 percent, “the Fed will step up its purchase operations, so we look for good support below the market,” said Martin Mitchell, head of government bond trading at the Baltimore unit of Stifel Nicolaus & Co. “On the other hand, the price action will continue to struggle under the weight of the supply.”
The U.S. needs to borrow $3.25 trillion this fiscal year, according to Goldman Sachs Group Inc. President Barack Obama is asking Congress to approve a $3.55 trillion budget for 2010. The nonpartisan Congressional Budget Office estimated the deficit at $1.38 trillion, higher than the White House’s $1.17 trillion projection.
Fannie Mae CEO Allison Nominated to Run Treasury’s TARP Office
Bloomberg article.
I can say Oligarchy, it just always looks like it’s spelled incorrectly, in other words, it just feels wrong.
“Hair of the dog” analogy trickles down to Altoona
Take the money and run
Downturn may squeeze region before long
By William Kibler, bkibler at altoonamirror dot com
POSTED: April 5, 2009
Crews continue construction on PennDOT’s Park Avenue widening project at Stillwood Street near Blair County Ballpark. The work is being funded in part by economic stimulus money.
It’s been amazing.
Every other day recently, it seemed, the Mirror received notice of hundreds of thousands of dollars - sometimes millions - being funneled into an area program or agency from the federal stimulus package, or the Omnibus Appropriations Bill.
The stimulus alone funded PennDOT road projects, Altoona Housing Authority capital programs, community health centers, police equipment, weatherization, Veterans Hospital maintenance, community needs, homeless prevention and green energy.
We’re not exceptional: The money is going all over the country for similar, costly projects.
In central Pennsylvania, however, we may wonder more than most about the amounts because we haven’t seen the gravity of the economic downturn like those in California and Michigan - where a collapse in housing construction and auto sales are devastating local economies, said David Yerger, economics professor at Indiana University of Pennsylvania.
We’re likely to see clearer indications soon, he said.
For now, the situation here is nothing like it was in the early 1980s, when Johnstown had an unemployment rate of 25 percent, highest in the nation, he said.
“Folks look around and say, ‘It’s not great, but it’s not bad,’” he said.
It could get bad soon enough, he said, because current trends nationally mean it is likely that we will have 10 percent employment by the end of this year.
If the gross domestic product doesn’t turn around by midsummer and the banking system doesn’t stabilize, we may have 12 percent unemployment nationally by the end of 2010, Yerger said.
Each percentage point nationally means about 1.5 million workers, he said.
Virtually all the families of workers counted in such statistics are dependent on labor earnings to make ends meet, he said.
How bad could things get?
While Yerger said he doesn’t see any likelihood things will get as bad as the Great Depression of the 1930s, we may get something like Japan experienced in the 1990s, when the nation had 10 years of no growth, he said.
Consumers and businesses need to be confident things have reached bottom so they’ll start buying on credit again and borrowing to invest, Yerger said.
“I hope this stuff all works,” he said.
“This stuff” is highly counterintuitive: an attempt to solve a problem caused by massive unpaid debt by incurring still more massive debt.
It’s a little like “hair of the dog that bit you” - the alcoholic waking from a bender to slug warm beer, said Juniata College Provost and former economics professor Jim Lakso.
RE: “Now, some experts warn of a new and growing danger: Federal Housing Administration mortgages, government-insured loans for people with shaky credit histories or little money for a down payment. ‘”I’m concerned,’ said Bill Faith, executive director of the Coalition on Homelessness and Housing in Ohio. ‘(FHA-approved lenders) are squeezing some people into loans they probably shouldn’t be in.’”
Duh…FHA/HUD-the ONLY CHOICE sub-prime lenders.