The Unnatural Things Done Years Ago
It’s Friday desk clearing time for this blogger. “The Maricopa County treasurer began sending out tax bills last week and will continue through the end of the month. Much of the increase is due to the state equalization tax, which is back after a three-year hiatus. The tax, which helps fund education in Arizona, adds $58 this year for a homeowner with a property assessed at $176,000, according to an Arizona Republic analysis. Since 2007, Valley home prices have plummeted 50 percent, but it will take two more years of tax bills before property owners see that overall decline affect their property taxes.”
“‘I can’t afford any increase in my bills now,” said Arlene Morales, who lost her job with a home builder late last year and has been working temporary jobs to pay her mortgage. She has been working with her lender for the past five months, trying to get her loan modified and payment lowered. ‘How can my property taxes go up when I can’t even sell my home for half of what, when it was new, I paid in 2004?’”
“Capping a week that highlighted the one-year anniversary of the financial collapse, a panel aimed at getting to the bottom of its cause is just now getting on its feet. The Financial Crisis Inquiry Commission’s members want to ’shed light’ on why the collapse happened and make recommendations to avoid future crises. Several Republican appointees, including former White House official Keith Hennessey, talked about the need to examine the housing crisis and ‘politically popular laws passed by Congress that exacerbated’ the problems.”
“Hennessey, an economic adviser under President George W. Bush, wants to delve into the ‘relaxation of lending standards to people who couldn’t really afford new homes,’ a topic often repeated by Republican lawmakers as the cause of the financial crisis.”
“By contrast, former Sen. Bob Graham, a Florida Democrat, said the commission needs to explore how consumer protections went awry because that’s high on the congressional agenda.”
“Already tainted by scandal because of illegal practices used in its voter registration drives last year, the nation’s largest grass roots community organizing group now appears to be littered with even more employees engaging in possibly criminal behavior. At issue are a series of secretly filmed videos at ACORN offices in Baltimore, Washington, D.C., and New York City showing employees answering questions from a pair of 20-somethings posing as a prostitute and pimp (actually they’re an amateur filmmaker/MBA student and a college journalism student). The duo sought advice on how to get help buying a home in which to run a sex ring for underage girls from El Salvador, all while dodging taxes on the whole illicit endeavor.’
“You’re not a hooker, but a ‘freelance performing artist’ on loan documents, the girl is told in Baltimore.”
“California Attorney General Jerry Brown Thursday issued subpoenas to three leading credit rating agencies as part of the initial stage of a probe into their role in the financial crisis. Brown announced at a news conference in San Francisco that he has subpoenaed Standard & Poor’s, Moody’s Investors Service and Fitch Ratings.”
“He said the agencies ‘gave their seal of approval, the highest rating’ to securities backed by high-risk subprime mortgages ‘that were highly dangerous and in fact, wrecked the lives of millions of people.’ Brown called it “one of the real dark sagas of American financial history,” citing figures of 4.9 million foreclosures nationwide, a nearly 5 percent unemployment rate increase. Brown said the credit rating agencies earned billions in revenue and worked behind the scenes with the same Wall Street firms that created the securities.”
“‘We believe that there’s been a wrong, and there must be a remedy,’ Brown said.”
“The White House is considering extending an $8,000 tax credit for first-time home buyers, which has helped to boost sales by more than 1 million this year. Real estate agents, bankers, and homebuilders launched a campaign encouraging Congress to continue the program for another year, with the slogan: ‘Don’t Let America’s Real Estate Recovery Expire.’ Executives - including Fannie Mae’s Michael Williams…have attributed improvements in home sales and prices to the credit.”
“Gary Dwyer, owner of Buyers Agents of Boston, said one client recently found himself among 40 buyers bidding on a foreclosed property in Dorchester that was listed for $194,000. His client offered almost $20,000 over the asking price, Dwyer said, but lost out.”
“Aaron Gornstein, executive director of Citizens’ Housing and Planning Association, a Massachusetts affordable housing organization, said he hopes the White House will support an extension. ‘We’ve heard from home buyer counselors as well as real estate brokers who say it has been an important factor for getting people off the sidelines so they could purchase their first home,’ Gornstein said.”
“For the first time since January, both the number of homes sold in Santa Clara County and their median price fell from the previous month, a surprising reversal in a housing market that had been steadily climbing out of the burst real estate bubble.”
“Quincy Virgilio, president of the Santa Clara Association of Realtors, said decreasing inventory — especially of bank-owned foreclosure homes — and longer escrow times are additional reasons August sales were significantly less robust than July’s. Whatever the reasons for August’s dip in sales, real estate agents said demand for bank-owned foreclosures remains very high.”
“‘It’s not unusual to get 10 offers’ on ‘reasonably’ priced foreclosure properties, said Judi Seip, an agent with Coldwell Banker in Cupertino.”
“Some are intentionally underpriced, other agents said, which sometimes means 20 or 30 bidders make offers. One of Seip’s clients recently offered about $16,000 more than the asking price on a home priced about $440,000, and had a 50 percent down payment, but still lost the house to another bidder. Seip said she’s working with several buyers who hope to find homes and close escrow by Nov. 30, which is the deadline to purchase a home and receive a credit of as much as $8,000 on federal taxes, an element of the economic stimulus plan. ‘What happens in December is anybody’s guess,’ she said.”
“The median price paid for all new and resale houses and condos in the nine-county Bay Area for August stood at $360,000, down 8.9 percent from July and 19.5 percent lower than a year ago. Fewer foreclosure sales help explain the month-to-month sales drop, said the DataQuick report.”
“Saraya Motley, a Realtor in the Oakland office of Red Oak Realty, said the smaller inventory of foreclosures in the Bay Area is the result of earlier foreclosure moratoriums that began last September and ended in May. ‘All the inventory on the market was drying up,’ she said. ‘There are now properties that are starting to trickle into the market but it’s happening in a controlled way.’”
“There is a widely shared concern on Capitol Hill that without the tax credit, home prices will begin falling again because job losses will continue to curb demand and reverse this year’s gains. ‘The bidding wars that are out there, the tax credit is a part of that,’ said Brian Marquette, owner of American Family Financial in Sarasota. ‘I have never had so many people buying houses in my 18 years of lending and a tremendous number of them are being motivated by the first-time buyers tax credit. ‘If they eliminate the tax credit it would cause a big slowdown. I’m worried about that.’”
“Dean Baker, co-director of the Center for Economic and Policy Research, argues the money behind the tax credit could be used for more pressing matters — like unemployment insurance, food stamps and aid to state and local governments. ‘It’s really bad policy. You’re throwing a lot of money, in my mind, in the garbage,’ said Baker, who actually took advantage of the $8,000 credit this year.”
“As the housing market began booming in mid-2000, Wells Fargo & Co. teamed up with prominent African American commentator and PBS talk show host Tavis Smiley and financial author Kelvin Boston, the host of ‘Moneywise,’ a multicultural financial affairs show, to host something called ‘Wealth Building’ seminars in black neighborhoods.”
“Smiley was the keynote speaker, and the big draw, according to Boston and Keith Corbett, executive vice president of the Center for Responsible Lending, who attended two of the seminars. Smiley would charge up the audience — and rattle the Wells Fargo executives in attendance — by launching into a story about how he hated banks, and how they used to refuse to lend him money for his real estate projects in Compton, Calif., and elsewhere. After Hurricane Katrina, Smiley also emphasized the importance of building assets and wealth, saying those who had done so were able to leave New Orleans, while people with nothing had to stay behind, Boston said.’
“In hindsight and with the collapse of the subprime mortgage market, Boston said he has second thoughts about participating in the seminars. ‘Were we probably used? We probably were,’ he said. ‘If I had the chance to do it over again, would I do it in a different manner? Probably. You look back now and you feel for the homeowner who could have qualified for a better mortgage and got the costly type of mortgage. That concerns me a lot, not just for Wells Fargo, but for everybody out there, Citigroup, Countrywide … they were all doing the same events.’”
“But at the time, Boston said, having a major bank doing outreach in the black community was considered an encouraging development, after so many years of redlining and restricted access to credit. ‘We all thought at the time that we were doing a positive thing,’ he said.”
“A Chicago developer who sought to convert several Miami Beach hotels into condos used nearly $9 million in investor money to fund a luxurious personal lifestyle and finance other real estate projects, according to a civil action filed by the Securities and Exchange Commission.”
“Falor arrived in South Florida in 2004 and soon became a high-profile player in the region’s real estate boom. He frequently appeared at real estate industry events extolling the investment virtues of hotel condos. When the real estate and financial markets imploded in 2007, they took down many of Falor’s projects. The entity that owned the Edison and Breakwater hotels on South Beach’s Ocean Drive filed for Chapter 11 bankruptcy protection in 2007.”
“The properties were sold at a public auction in June 2008.”
“There’s a pool at Stonemark condominiums in Fresno, but no one swims. For-sale signs dot the complex. Dozens of padlocks signal a ghost town. Lenders are busy at this 106-unit complex in east-central Fresno. All but 10 are bank-owned or going through foreclosure, and property values have dropped by 90% or more.”
“A Fresno doctor…testified that James McConville had told him that using middlemen to receive loans is a common financing method. McConville said he would make all mortgage payments, but he didn’t. And the Fresno physician — who had met McConville through a relative and attended a promotional session with other investors — started getting default notices.”
“‘I trusted these people,’ the physician said during the deposition. ‘I got snowed.’”
“The housing bubble led the way for the recession and nowhere was the drop worse than here in Nevada. So, as signs of recovery emerge, where does our housing market stand today?”
“‘The sales volume is up from last year substantially, more than 40 percent, approaching 50 percent,’ says Ken Amundson, the president elect of the Reno/Sparks Association of Realtors. ‘So, the number of transactions is up. The difference is the pricing has gone down.’”
“We still have homes to sell and we still have more to go. We need jobs and income for individuals to soak up that market,” says Amundson who figures that turn around is still several months off.
In the meantime he advises caution. it all depends on your motivation. ‘The buyer buying for the right reason, ‘I want a home. I want a nice place to live and raise a family,’ this is a good time for that because there are both incentives and pricing that’s affordable and sustainable in a market that’s rational as opposed to some of the unnatural things we might have done years ago.’”
‘a panel aimed at getting to the bottom of its cause is just now getting on its feet. The Financial Crisis Inquiry Commission’s members want to ’shed light’ on why the collapse happened and make recommendations to avoid future crises.’
I’ll bet the words housing bubble never come up, and the various special interests use it to attack this group or that. Meanwhile, there are things that need to be fixed, but Washington works at creating more FBs as fast as possible.
All this is why I don’t focus on trying to influence the political “debate” or whatever they call it. There are things we can do as individuals that are more worthy of our time. Like this afternoon, I’ve got replace a handrail on a foreclosed mobile so it’s safe and can be sold.
My thanks to those who support this blog. Please check back this weekend.
more worthy of our time..
yup.. i gotta find a couple 8 foot fluorescent fixtures and get them up. Roaming around in the dark is hazardous. Solving the world’s problems will just have to wait.
Speaking of being worthy of time, I have a question about posting links.
I recall you once saying you need to go and visit and approve any links before allowing them to be posted on the blog. That takes time and effort and delays some comments showing up.
So my reason for deliberately corrupting a link (no http included, etc) before submitting the comment has been to avoid you the trouble.
What’s the real situation?
‘What’s the real situation?’
I think I was referring to tinyurls. If I can’t see what the link is to, I open it first, and that may take a while. If I can see it directly or mouse over the code and see it, that’s the easiest.
‘a panel aimed at getting to the bottom of its cause is just now getting on its feet. The Financial Crisis Inquiry Commission’s members want to ’shed light’ on why the collapse happened and make recommendations to avoid future crises.’
Any member who accepted campaign contributions from REIC or banking industry lobbyists should be barred from the panel for conflict of interest.
Oh, wait. That would eliminate just about every Congress critter except for Ron Paul.
Here’s a way to fix part of the problem. We need to flush Barney Frank, Cris Dodd, and Maxine Waters for a few out of the congress as they were instrumental in the bubble. ‘Fog a mirror and get a loan’. Oh yes, stop the credit for buying a house. It’s keeping the prices up. Flush the foreclosures out. The only way for Mr. Market to correct.
Brown announced at a news conference in San Francisco that he has subpoenaed Standard & Poor’s, Moody’s Investors Service and Fitch Ratings.
If I understand correctly, none of these firms are California based. Why is Brown as CA AG doing the investigation? Why not the US AG, or the AGs from these firms’ headquarter’s states?
Oh yeah, Brown is running for Governor again.
Read the story; other states are doing something like this. For whatever reason, targeting the credit raters is getting closer to the real problem, IMO.
It’s about time. These ratings agency clowns are going to sweating like a priest at a cub scout meeting once they’re called to testify under oath.
Good for him that he is taking on the FIRE sector. I would probably vote for him as governor for that reason alone.
Especially when you consider how badly FIRE has burned us.
“Why not the US AG”
Good question. Where has the US AG been during this whole fraud-ridden credit bubble collapse? Is the guy’s name Rip Van Winkle?
Where has the US AG been during this whole fraud-ridden credit bubble collapse? Is the guy’s name Rip Van Winkle?
Our actual federal lawmaker, regulators & prosecutors are dedicated to covering the mess up & prolonging the credit bubble. Their last major contribution to the collapse was legalizing credit default swaps (and voiding state laws against them) in 2000.
Jerry Brown has a moonbat reputation, probably deserved. But unlike the vast majority of politicians of either party, he at least seems to have a genuine passion for serving the public interest (as he sees it).
Back when California had a budget surplus, then-Governor, Jerry Brown, suggested investing in something he called a “communications” satellite. Once it was in orbit, he said, California could sell air time to the DOD and/or any commercial entity that wanted to bounce signals back down to a receiver on Earth.
For this vision he was reviled by those who would shortly bring Ronald Reagan in to gut the surplus, and labeled “Governor Moonbeam” by a complicit press. One year later France took the technology and ran with it, and the result was ComSat.
The State of California was not so fortunate.
‘Don’t Let America’s Real Estate Recovery Expire.’ Executives - including Fannie Mae’s Michael Williams…have attributed improvements in home sales and prices to the credit.”
I do not think there is any doubt that the ‘tax credit’ will be extended. Spoke with a developer this morning that has a friend with the HBA they believe there is a very good possibility that it will be increased. They are working night and day to get it increased to $15,000.00.
May not happen, but the current $8000.00 is all but guaranteed.
“improvements in…prices”
Making Home Unaffordable — isn’t that part of Fannie Mae’s mission?
Making Home Unaffordable — isn’t that part of Fannie Mae’s mission?
Must be, that’s what they are doing.
I’m trying to have a positive attitude about this tax credit thingee. Even though it’s probably already goosed up prices a bit, could it be possible that once this thing has run its course that it’ll have been like a good enema for the market?
When I say “run its course”, I don’t mean when it expires (because I also believe they’ll extend it), but when it’s flushed out those who couldn’t wait long enough and/or save enough, thus the bottom drops out precipitously after that demand is sapped?
Or is it just wishful thinking on my part?
“improvements in…prices”
We have become a basket-case. We have collectively lost our minds…
“We have become a basket-case. We have collectively lost our minds…”
Exeter, is that you?
Took the words right out of my skull.
What you mean “we”, paleface? (Tonto to Lone Ranger)
I agree…They will extend it…Taking it to $15,000 though would be obscene…
“Dean Baker, co-director of the Center for Economic and Policy Research, argues the money behind the tax credit could be used for more pressing matters — like unemployment insurance, food stamps and aid to state and local governments. ‘It’s really bad policy. You’re throwing a lot of money, in my mind, in the garbage,’ said Baker, who actually took advantage of the $8,000 credit this year.”
Will Dean buy another house when the credit goes to the $15k level? Y’know, as an in-VEST-ment?
“Taking it to $15,000 though would be obscene”…
It would be, and the next thing you know the ones that went for the $8000.00 would be screaming for a do over.
This whole scheme is really out of control.
“$8000.00 is all but guaranteed.”
As I have maintained all along. The only reason I can even think of to have an official termination date of the program is to create the double psychological whammy of a rush by fence sitters to take advantage of the program before its expiration date, followed by a free temporary boost in housing market stimulus due to the ’surprise’ announcement that the program will be extended and possibly expanded.
I think they’ll find this stimulous package like any other stimulant; it works well at first but steadily loses effectiveness unless you up the dose. I’m betting the REIC will be crying in a few months that the 8K isn’t enough and it isn’t working. Well, anyway, I’m off for my 8th cup of coffee.
I hope they raise it to 15k which is the amount that I need to have for the heritage bottle of McCallum which is going to be released as we blog!!!
You are correct…
Over and over the goal is to create a sense of urgency. It has nothing to do with making good monetary decisions in ones life, buy now, worry about it later. We’ve been on this road for what seems like forever.
“Over and over the goal is to create a sense of urgency.”
One in a lifetime opportunity, NAR’s consistent message screams sense of urgency.
All you guys are on a roll today. Bullseyes everywhere.
Should I jump on today’s once in a lifetime opportunity, or tomorrows? What about next week’s once in a lifetime opportunity? So many once in a lifetime opportunities to choose from, it boggles the mind.
‘the current $8000.00 is all but guaranteed’
This just creates more FBs, which make the bust worse, not better or more stabilized. Is this any bigger a problem than the mortgage interest tax deduction, etc? I’ve been saying for a while that the governments are making a bad situation worse, and that appears to continue.
How about this little slip?
‘Saraya Motley, a Realtor in…Oakland…said the smaller inventory of foreclosures in the Bay Area is the result of earlier foreclosure moratoriums that began last September and ended in May. ‘All the inventory on the market was drying up,’ she said. ‘There are now properties that are starting to trickle into the market but it’s happening in a controlled way.’
“I’ve been saying for a while that the governments are making a bad situation worse, and that appears to continue”.
That is 100% correct, this ‘intervention’ will create a much worse situation.The problem with temporary fixes, as you know is that the core problem is not addressed, so it festers.
It is a sincere shame that the natural course of events is being so severely disrupted. This burst could be behind us much,much faster if only the government and company would let it correct.
Chanting my eternal refrain: they want to keep the decline very slow so that all the people who are NOT underwater, or who are only a LITTLE underwater, will keep paying their mortgages down. Keep the depreciation as slow as the amortization. That’s what the banks need. (And so do I.)
Plus it helps the state and local governments by keeping tax receipts from plunging quite as quickly. Reps especially need state and local government officials since they are up for election every two years.
“This just creates more FBs, which make the bust worse, not better or more stabilized.”
Why don’t they refer to the program by a good descriptive name? $8000 first-time homebuyer tax credit is so unsexy.
I suggest Knifecatcher Encouragement Program.
How about:
Credit Reinvesting America Program
or
Saving Housing In Trouble
Community Re-investment Assistance Program
““The median price paid for all new and resale houses and condos in the nine-county Bay Area for August stood at $360,000, down 8.9 percent from July and 19.5 percent lower than a year ago. Fewer foreclosure sales help explain the month-to-month sales drop, said the DataQuick report.”
The other elephant in the room for the Bay Area is the fact that unemployment is higher here than for California as a whole. No signs that this is about to change. I should imagine when Oracle completes their buy of Sun Micro, that # is going to increase quite significantly.
“…it’s happening in a controlled way.’
Controlled by whom and how? And is collusion legal these days?
There are now properties that are starting to trickle into the market but it’s happening in a controlled way.’
Um, yeah. Kinda like rivulets of water from the first cracks in the dam.
Good to see you here again Sammy. It’s been a while, hasn’t it?
Thanks, DebtinNation. Yes, it’s been awhile. I’m staying pretty busy these days, but still need to pop in for my HBB fix now and again.
Am sending Ben a check this weekend. Hope others follow suit. These blog has been an incredible resource, and Ben deserves our active support.
Why stop at $15K? They need to get some sack, and make it $30K.
It’s only money.
I’ve realized what I like about this blog……..
Instead of getting P.O.’d as I hear these stories, I come to the blog, read them all at one time, and I only get P.O.’d once.
That would buy a few houses in Detroit.
http://www.100abandonedhouses.com/
I’m guessing that would buy quite a few houses in Detroit. Nothing sadder than seeing the blight in these once-grand neighborhoods.
TRULY in need of the
Community
Re-investment
Assistance
Program
mentioned above. . .
The pictures with snow double the misery, IMHO.
For sure.
Bush just went and loaded up those USAF C-130’s with 7 billion dollars in shrink-wapped pallets of 100 bills and just flew them into the night and rigth on into Iraq. After which, it disappeared into those contractor’s fat duffle bags and them guys are just as bad as them thar Foreigners. But Bush knew HOW to take care of his friends.
This Obama guy, could at the very least, stuff 50-100k in fresh new $100’s into MY Xmas stocking so I could do a little Capitalist Run Amuck RE Speculating, stock market gambling or Flipping !
No wonder the good GOP folks are calling this guy a communist socialist, and a fascist. He’s worse, he’s a cheapsake!
IT’S MY MONEY, I’m entitled to it and that tall black guy in Washington is KEEPING it ALL.
Did I MENTION, he’s tall, BLACK and a Foreigner ?
+100
“Why stop at $15K? They need to get some sack, and make it $30K.
It’s only money.”
It’s becoming obvious the government should just fork over $500K to anybody who thinks they need it, whenever they think they need it. Anything less is discriminatory and mean-spirited. If not racist, sexist, homophobic, or just plain G”NO”P. After all, we are the greatest country in the world. We should aim higher.
It’s not just that “It’s only money”. It’s OUR money. Didn’t we vote in Democrats for this very reason????
And where was your anger when the Repubs were in power blue?
Just curious
At the risk of sounding redundant, Democrats and Republicans are like two hairy ass cheeks around the same stinky bunghole: predatory capitalism. Both parties are bought and paid for by the same financial interests. So please stop the partisan sniping - it’s pointless. There’s not a dime’s worth of difference between the major parties - both are beholden to entities who do not have the public interest in mind.
I could not agree with you more. A pox on both their Mccrapshacks IMO
“It’s becoming obvious the government should just fork over $500K to anybody who thinks they need it, whenever they think they need it. Anything less is discriminatory and mean-spirited.”
I think the big players are in panic mode, desperately working behind the scene to avoid sidewalk garbage can fires and soup kitchen lines. The general public is quickly losing faith in these bail-out programs, and the Alt-A and Option-ARM reset storm has barely begun, and when the CRE defaults are included this true scale of this debt crisis is going to hit home. If they don’t create a few million family supporting jobs real soon, the music will stop.
Well that should guarantee lots of overbidding. Just that many more people to walk away from their obligations during the next downturn.
How about this scenario…
They let the program expire as scheduled November 30, 2009.
Next, take advantage of the seasonal low and let the sales fall through December into mid February….
Then bring back the stimulus, possibly at $8,000 for everyone, but boost it to a $15,000 credit for purchasing a house in foreclosure.
If they bring out a $15,000 credit for everyone, then that would create a lot of transactions in the lower cost markets.
“In the meantime he advises caution. it all depends on your motivation. ‘The buyer buying for the right reason, ‘I want a home. I want a nice place to live and raise a family,’ this is a good time for that because there are both incentives and pricing that’s affordable and sustainable in a market that’s rational as opposed to some of the unnatural things we might have done years ago.’”
I want a housing investment, because real estate always goes up!
“a market that’s rational” …not hardly, when you can rent for half.
“Since 2007, Valley home prices have plummeted 50 percent, but it will take two more years of tax bills before property owners see that overall decline affect their property taxes.”
Oh man does this ring true, Maricopa county assumed that anyone buying a house was rich and jacked property taxes on average 12% A YEAR for several years. That kind of out of control taxation has forced even honest home buyers to the brink who had never budgeted for those kinds of hikes and made rental properties negative cash flow. Reducing the tax vampire would go a long way to helping the market recover.
Same tax vampire’s prowling down here in Pima County.
Reducing the tax vampire? Good luck. The parasitic voting bloc has never been as large and well-organized in our history as it is right now. Not to mention the costs of our imperial hubris abroad. Somebody has to pay the bills, and it’s going to be us, the productive citizenry.
“A Fresno doctor…testified that James McConville had told him that using middlemen to receive loans is a common financing method.”
McConville? You can’t make stuff like this up, can you?
I’m picturing a village of abandoned McMansions.
“As the housing market began booming in mid-2000, Wells Fargo & Co. teamed up with prominent African American commentator and PBS talk show host Tavis Smiley and financial author Kelvin Boston, the host of ‘Moneywise,’ a multicultural financial affairs show, to host something called ‘Wealth Building’ seminars in black neighborhoods.”
Is it fair to say that Wells Fargo & Co. was one of the subprime mortgage lending kingpins, who helped mire black neighborhoods in the worst foreclosure crisis since the 1930s? Heckuva job, Megabank, Inc!
I live in a neighborhood which, for many years, was predominantly black. I’ve heard more than a few of my black neighbors saying things which tell me that they’ve bought into the messages delivered at these seminars.
I really have to hold my tongue sometimes. These people mean well, but they’re believing things that will not do good things for them or their families.
Recently, I’ve had a discussion with one neighbor, who’s been troubled by all the ruckus being raised at the rental house across the street. This house was bought by another neighbor, one of those in-VEST-or types, back in 2005. He tried (and failed) to flip in 2007.
After the failed flip, this in-VEST-or has been renting to some pretty crummy tenants. Gotta keep feeding that alligator, doncha know.
Ever so slowly, with the neighbor across the street, I’m discussing the negative effects of real estate speculation, with emphasis on what it does to neighborhoods.
They made the mistake of assuming the ‘Wealth Building’ was for the attendees and not the banks.
They made the mistake of assuming the ‘Wealth Building’ was for the attendees and not the banks.
Wells Fargo bought Wachovia who had bought Golden West and AG Edwards. There may have been other subprimes beside Golden West that they took over. HBBers help me here.
“Dean Baker, co-director of the Center for Economic and Policy Research, argues the money behind the tax credit could be used for more pressing matters — like unemployment insurance, food stamps and aid to state and local governments. ‘It’s really bad policy. You’re throwing a lot of money, in my mind, in the garbage,’ said Baker, who actually took advantage of the $8,000 credit this year.”
Isn’t Dean pretty much saying the government’s free money injection into his own home purchase was garbage?
Sure he is. But don’t a lot of folks decry taxes while taking “their” SS, Medicare, VA, subsidized roads, etc… from the government? Sure they do. It makes financial sense and everybody else is doing it so it’s ok.
How can you blame the guy? He’s absolutely right, it’s terrible policy, but standing on principle and refusing it isn’t something any sane person would do.
I agree with J. Jazz that there’s nothing unethical about taking public benefits one would like to abolish categorically.
I disagree with the assertion that “no sane person” would refuse the $8K tax credit…MOST sane people are simply NOT BUYING HOUSES right now! (Yeah yeah, I know what you meant.)
SOCIALISM AT ITS BEST:
” The Obama administration is engaged in high-level talks about providing financial assistance to homeowners who’ve lost their jobs and can’t afford their mortgage payments.”
http://www.usatoday.com/money/economy/housing/2009-09-17-homeowner-aid-unemployed-obama_N.htm
Stats came out in my area. The *BEST* paying segment of the jobs are gov’t related. Above management of private companies even. It gets old seeing people with gov’t retirement whine about socialism, or people that work for gov’t contractors.
You remind me that there was an asinine piece on Yahoo news a few days ago about how young professionals are choosing Washington DC because it’s trendy and “popular.” What? I thought they were choosing Wash DC because it’s the only place hiring.
And I’ll confess to something:
For a long time, I’ve disdained going the Mibby-Wibby route. That’s the Minority Owned/Women Owned business route. Well, I’m here to tell you that I’m about to start climbing that paperwork mountain so I, too, can do business with The Feds.
After all, they sure do have money to spend.
I’m hoping that when I become a minority that I’ll be able to get special status.
SOCIALISM AT ITS BEST:
WASHINGTON — The Obama administration is engaged in high-level talks about providing financial assistance to homeowners who’ve lost their jobs and can’t afford their mortgage payments.
The Treasury Department held meetings on the subject as recently as Thursday with key stakeholders, according to Laura Armstrong, a spokeswoman for Hope Now, an alliance of non-profits and mortgage servicers, and more discussions are planned.
Proposals include getting servicers to let jobless homeowners skip some monthly payments, according to Faith Schwartz, executive director of Hope Now.
Another possibility that has been discussed includes grants or loans to temporarily cover part of the mortgage costs for homeowners who become unemployed, says Paul Willen, a Federal Reserve Bank of Boston economist.
“Treasury has now brought us all together,” says Jack Shackett, Bank of America’s head of credit-loss prevention, who is involved in the discussions.
“Even if it takes Treasury awhile to get some guidance out, the talking itself is great,” Shackett says.
Treasury officials declined to comment. No time line for any new government initiative has been set, says Schwartz, who is also involved in the talks.
The meetings have included major lenders, economists and government officials from Treasury, the Department of Labor, Hope Now and the Federal Reserve.
The discussions come after a $75 billion plan announced in March by the administration. That plan seeks to prevent foreclosures and get homeowners into more affordable mortgages but has been criticized for getting off to a slow start.
But now, with unemployment nearing double digits, some economists say efforts to prevent foreclosures must also involve financial help to homeowners who lose jobs. Otherwise, they say the housing recovery could stall.
“We’re seeing interest at high levels,” Willen says. “At this point, the idea that unemployment is the real problem (in the housing crisis) is the conventional wisdom on Capitol Hill.”
Some real estate groups applauded the talks, saying mounting joblessness will haunt any housing recovery.
“I’ve not been a part of the discussions, but we are aware of them,” says Lawrence Yun, chief economist at the National Association of Realtors.
“If we want to prevent foreclosures, something needs to be done, and it’s not mortgage modification,” says Morris Davis, an assistant professor of real estate and urban land economics at the University of Wisconsin-Madison, and one of the authors of a relief plan that would provide housing vouchers attached to unemployment insurance.
http://www.usatoday.com/money/economy/housing/2009-09-17-homeowner-aid-unemployed-obama_N.htm
Socialism for toxic MBS owners is more like it…
But who is going to help the unemployed renters?
The Lawd helps best those who help themselves.
“Seip said she’s working with several buyers who hope to find homes and close escrow by Nov. 30, which is the deadline to purchase a home and receive a credit of as much as $8,000 on federal taxes, an element of the economic stimulus plan. ‘What happens in December is anybody’s guess,’ she said.”
My guess: The $8K free money for home purchase will be extended and potentially expanded. And the MSM will pretend to be completely surprised when it happens.
And house builder stocks will soar 8% that day on all of the good news, including Troll Brothers that builds houses that are generally $500,000 or more.
2 + 2 = 97
It’s the OLD math of Wall Street and Congress. There is nothing new about any of these games. Same criminal activities, different names.
I might just throw a couple of G’s on that prediction.
“And the MSM will pretend to be completely surprised when it happens.”
PB, I think they WILL be completely surprised when it happens! Since when have they figured out anything less than 2 years after it’s already been parsed on the HBB?
“Gary Dwyer, owner of Buyers Agents of Boston, said one client recently found himself among 40 buyers bidding on a foreclosed property in Dorchester that was listed for $194,000. His client offered almost $20,000 over the asking price, Dwyer said, but lost out.”
So people were willing to pay more than $20,000 extra to get an $8,000 subsidy paid for by futuer generations?
That is exactly the problem with joining the herd of fence sitters rushing to take advantage of the $8K credit. The confederacy of greater fools trying to outbid one another while the credit lasts is highly likely to drive a temporary bubbling of prices in excess of $8K.
Like I pined this morning in the Bit’s Bucket, isn’t this 8K already baked into the prices? But hey, it’s a rebate, so I can get a bunch of crap from Ikea and Best Buy.
40 buyers bidding on one house…
houses sell for well over list…
agents working with multiple buyers…
inventory tricking into the market in an ordinary fashion…
10+ offers on reasonably priced forclosure properties…
these sure doesn’t make convincing arguments in favor of extending the tax breaks.
Try not to catch yourself a fallen knife.
Sept. 18, 2009, 12:41 p.m. EDT
Moody’s bearish on housing recovery
Analysts say it will take more than 10 years to recapture peak home prices
By John Spence, MarketWatch
BOSTON (MarketWatch) — Moody’s Investors Service threw cold water on optimistic projections of a V-shaped recovery in the battered U.S. housing market, predicting it could take more than 10 years to get back to boom-level prices.
“For many reasons, the rebound will be disproportionately small compared to the decline,” Moody’s said this week in its latest outlook on the residential market. “It will take more than a decade to completely recover from the 40% peak-to-trough decline in national home prices.”
…
“it could take more than 10 years to get back to boom-level prices.”
Yeah…. ok…. in 2019 the spoon fed, braindead, koolaid-drinking housing is an investment believers will declare, ‘See! I told you housing is an investment. I got my 2005 price of $500k!’
Yup…. you sure did dumba$$.
And minimum wage is $19.95 hr.
———————————
I got my 2005 price of $500k!
Why do I keep on having this recurring dream of the movie “Back to the Future” where Biff runs the seedy alternate-universe version of Hill Valley?
The ACORN thing is kind of irrelevant - The filmmakers had to go to like four ACORN offices (where they were thrown out and police were called) before they found two employees who were willing to even talk to them. The employees who did speak to them have since been fired, but they have also stated they could tell right away what was going on, and that they were playing a sort of Borat game of “yes, let’s see how ridiculous we can talk to these guys and have them believe us.” Big mistake, but not a scandal.
You must get your news from the MSM. So far there are 5 tapes from 5 different offices, each worse than before. In the final tape released, the ACORN guy solicits the fake “hooker”, and offers to help with the human trafficking. The left are not always the good guys. I can’t believe people are still trying to defend this.
“yes, let’s see how ridiculous we can talk to these guys and have them believe us.”
I call BS on this story. How about a teensy-weensie bit of evidence to support it?
Actually, there was one office where the filmmakers were definitely thrown out. Possibly another.
Which leads down to the absolutely hilarious defense impliedly offered by ACORN: “Hey! You’re not counting the times when we didn’t break the law!”
Also: “How about all the people I didn’t gun down!” S. Gravano
“How about all the little girls I didn’t kidnap!” P. Garrido
“How about all the clients I didn’t steal from!” Disbarred attorney
“Hey! You’re not counting the times when we didn’t break the law!”
Now that I’ve done a bit of reading on the issue, I am going to have to revise my opinion of ACORN.
I think the best thing that could be said about them is that they might have been operating under the rationale that rich people get what they want through abuse, so why not help some poor people do the same?
I am inclined to believe the “Borat” defense mentioned here, but even so, I cannot imagine someone at a public agency joking with people who are proposing under-age prostitution. That speaks of a fundamental lack of oversight on the part of management.
All of these “social service” agencies are not the taxpayer’s friend……
I’ve related this story before, but there was a show on PBS a year or so ago, about Somali immigrants near Boston somewhere. (to me, crazy-a$$ Somali immigrants are the LAST thing we need here, but I digress……..)
Anyhoo, this guy has the whole tribe on public assistance. He’s meeting with the welfare guy, to explains to him that his assistance is going to be cut, unless his wife gets a job. Guy has a hissy fit; back in Somalia, the wifes don’t have to work.
At this point, you and I would have replied, “Then drag your dead a$$, and the rest of you losers, back to Mogadishu……”, but noooooo, Mr. Helpful-Welfare-Guy starts listing his options.
Tells him that she wouldn’t have to go to work, if she was pregnant. You could literally see the lightbulb go off over the guy’s head. I was surprised that they didn’t start going at right there on the guy’s desk.
Unless there are some radical changes, this country is too FUBAR to save.
“I think the best thing that could be said about them is that they might have been operating under the rationale that rich people get what they want through abuse, so why not help some poor people do the same?”
I realize you’re not defending this rationale, but it is frequently asserted. The conceptual problem is that, ethically, it reduces the person claiming it to the same level as the “bad” person. If this is a defense, it is a Pyrrhic one.
If this is a defense, it is a Pyrrhic one.
Totally agree.
‘Pyrrhic’.
Hooray! I been waiting to see this one for forever! All the patient stalking, and lurking in the undergrowth…
*makes a bold check-mark in my ‘Word-watching’ journal *
(it’s like a bird-watching journal, except better. )
PS.
Perfesser B said ‘desuetude’ once. Boy, that was a fabulous day for me. I about fainted.
Oh brother. Can we not at least all agree that there are plenty of d-bags to go around, rich or poor, black or white, repub or demmie?
Why, thank’ee, Olygal. The way you spin out them fancy words like is right purdy, too. I like “wood nymph”. Also, “heuristics” and “ratiocination”.
ACORN’s credibility isn’t exactly very good. They claimed the pair were thrown out of LA and San Diego, and the tapes show they weren’t–in fact, in San Diego the ACORN guy was offering to help them smuggle 13 year-olds across the border for the purposes of sex slavery, and has since been fired. The ACORN head is claiming the pair went to “dozens” of sites, which is clearly preposterous; the two did the whole thing on a $1,300 budget.
ACORN has been shown to be lying at every step of the way.
Andrew Briertbart:
–
But, predictably, and why we rolled the videos out one by one by one by one, we set traps for ACORN to lie; each and every time they lied. They went to the mainstream media, continued to tell those lies. The next day, the previous day’s lies were exposed. And CNN in particular has kept going back to ACORN and taking their line.
–
Why is the ACORN thing “irrelevant”? This corrupt, sleazy outfit takes gets millions in taxpayer dollars to get out the vote for corrupt, sleazy Democratic candidates. Two kids with a camcorder did what the MSM has long ceased to do: investigative journalism. I applaud them for their gumption, though I don’t know how ANYONE could seriously mistake them for a pimp and a Ho.
Seriously. Although I really didn’t watch the videos, I would think it’s pretty difficult to make fake track marks.
That’s one of the most ridiculous things about it. O’Keefe was wearing a fur throw from his grandmother over a coat and tie and carrying a $1 walking stick and cheap sunglasses. He looked like Snoop Thurston Howell III. And the ACORN employees still advised them on tax and mortgage fraud.
Its official. Jobless rate in Silicon Valley is 12%
Everytime I throw this at a friend that just moved back from there, he mentions that he knows of a number of good positions open, if they could just find someone with real skills.
he knows of a number of good positions open, if they could just find someone with real skills who’s willing to work for minimum wage and no benefits. Lotsa luck.
If by “Good Positions” you mean slinging coffee at Peets…….
and I’m serious too, at least Peets has Bene’s and a 401K plan while most office jobs around here offer nothing. The ones hiring for engineering jobs are asking for Einstein on a Barney Rubble payscale.
But their coffee is still only one step above Starsucks.
“The ones hiring for engineering jobs are asking for Einstein on a Barney Rubble payscale.”
Or maybe Los Alamos on a Hyderabad payscale. (BTW, no ethnic offense intended here, lest someone accuse me. I think Indians are great people).
By good positions I mean 6 figure jobs. Database architects and software engineers/developers.
Home prices aren’t the Nasdaq — YET!
MarketWatch First Take
Sept. 18, 2009, 2:13 p.m. EDT
Peak recoil
Commentary: At least home prices aren’t the Nasdaq
By MarketWatch
CHICAGO (MarketWatch) — In March of 2000, the Nasdaq Composite Index closed at 5,048, its highest level ever. It’s 9 1/2 years later, and the Nasdaq is at 2,310, not even half of its peak. But 14 years ago, at the end of 1995, the index was at only about 750, meaning it has tripled since then. You can see how comparing things with the peak of a bubble can get dodgy.
So maybe you won’t be that alarmed to learn that housing prices, which hit their peak in 2006 in what most now consider to have been another bubble, will not return to that peak any time soon, according to data from the Case-Shiller home-price index analyzed by the folks at Moody’s Investor Services. Read more about the Moody’s home-price analysis.
A few states — you know who you are, California, Nevada, Arizona and Florida — may not come all the way back until after 2023, perhaps not until 2030.
Only a handful of states, most of which never participated in the bubble in the first place — the Dakotas, Iowa, Montana, Wyoming, Nebraska, Kansas, Alaska, Alabama, Pennsylvania, Maine and Vermont — will be back at the home-price peaks before 2014. The bulk of the country won’t see those 2006 home prices again until 2014-17.
And a few states — you know who you are, California, Nevada, Arizona and Florida, you who became the poster children for unscrupulous speculation, rampant overbuilding and callously lax mortgage underwriting — won’t come all the way back to the top until after 2023, perhaps not until 2030.
The actual Case-Shiller index number — the national average, not the state-specific data — for the second quarter of 2009 is 132.64. The record high was 189.93 in the second quarter of 2006. That’s a drop of about 30%.
But if you go back just three years from there, to the second quarter of 2003, the index was at 134.20, almost where it is today. And just three years earlier, in the second quarter of 2000 — just as the Nasdaq had peaked — the home-price index stood at 103.77.
…
The NASDAQ is not at 2,310. It’s at 2,132 having gone up 6 points today.
The thing that never seems to be mentioned is that, in inflation adjusted terms, those who bought during the boom will NEVER break even. They won’t even come close (in the really bubbly states); it’s just inflation that will ease their pain (but cause more pain in different ways).
Agree. Tulips.
“…….never participated in the bubble in the first place………”
Hey they may have been late to the party, but it was around here too.
My first clue to the bubble was when I had to fight over a house appraisal during my divorce. Real Estate agent was telling the ex- that our house would sell for 40% more than we had paid for it in late 1999………never mind that there was no growth in the community, no decent paying jobs, no economic reason whatsoever for a house/property to become more valuable.
I told my soon to be x if her RE wh-re thought that the house was worth 50% more (than it really was) she could have it. I would take other assets to balance. She called me six months later crying. I held the phone away from my mouth so she wouldn’t hear me laughing.
…have attributed improvements in home sales and prices to the credit.”
“‘We’ve heard from home buyer counselors as well as real estate brokers who say it has been an important factor for getting people off the sidelines so they could purchase their first home,’ Gornstein said.”
This is infuriating.
This also made me mad beyond belief.
He’s “executive director of Citizens’ Housing and Planning Association, a Massachusetts affordable housing organization”!
How does the tax credit even play into his organizations plan?
“But at the time, Boston said, having a major bank doing outreach in the black community was considered an encouraging development, after so many years of redlining and restricted access to credit. ‘We all thought at the time that we were doing a positive thing,’ he said.”
Gee, I thought it was just ACORN doing all that crazy-ass, low-income lending.
Let’s see; all of these predictions of the recovery of housing? This is the same crowd that couldn’t see it coming so how did they get to be so prescient now?
This housing thing is just a part of the overall mess in the economy. So without becoming afflicted with tunnel vision how about the CRE? It is starting to crater now, and other items of credit (debt) like derivatives and the credit default swaps (same thing more or less) so other little bombs that are set to go off soon. Think this will impact housing prices or is housing a separate entity that will not be affected by all this paper storm of losing investments? Sounds to me like this housing is another distraction to the american public. Oh well, it seems to be working so far they must be “smart” or something.
It’s Friday desk clearing time for this blogger. “The Maricopa County treasurer began sending out tax bills last week and will continue through the end of the month. Much of the increase is due to the state equalization tax, which is back after a three-year hiatus. The tax, which helps fund education in Arizona, adds $58 this year for a homeowner with a property assessed at $176,000, according to an Arizona Republic analysis. Since 2007, Valley home prices have plummeted 50 percent, but it will take two more years of tax bills before property owners see that overall decline affect their property taxes.”
In Washington State, the property tax assessment is just a method of allocating the property tax among all of the properties in the taxing district. By that I mean, the total budget for the taxing district is divided by the total assessed value of all properties in the taxing district, and that number is multiplied by the assessed value of the individual properties to determine the tax on that individual property. So, as a general rule, it doesn’t matter if the assessments are moving up, down or sideways, so long as they are moving generally the same direction and magnititude, a property’s tax liability generally only changes to the extent of the % change in the taxing authority’s annual budget.
In reading posts on the HBB, it appears that Washington State is somewhat unique in this methodology, and from my perspective, this is a reasonalbe way to deal with property tax. It avoid huge increases in tax during boom times, and huge losses of property tax revenue during downturns.
“A Chicago developer who sought to convert several Miami Beach hotels into condos used nearly $9 million in investor money to fund a luxurious personal lifestyle and finance other real estate projects, according to a civil action filed by the Securities and Exchange Commission.”
“Falor arrived in South Florida in 2004 and soon became a high-profile player in the region’s real estate boom. He frequently appeared at real estate industry events extolling the investment virtues of hotel condos. When the real estate and financial markets imploded in 2007, they took down many of Falor’s projects. The entity that owned the Edison and Breakwater hotels on South Beach’s Ocean Drive filed for Chapter 11 bankruptcy protection in 2007.”
Ha!
The firm I used to work for made several websites and print materials for this guy’s various companies circa 2002-2003.
They never paid for a bunch of the work we did; took them to court but not much was recovered — I can’t remember why, exactly, but I think they liquidated at least one company. They owned a bunch of hotels, some restaurants, and a restaurant supply company at the time, and I remember hearing they were getting into the whole condo hotel game.
Good riddance, Falor boys! I hope your clocks get cleaned in court.
A few years ago, I got a call from some promoter of condo hotels. The guy was looking to have me design marketing materials. But there was just something about his venture — and the way he presented it — that smelled like…
…skunk.
So, I passed on doing business with him.
Since then, we’ve heard a lot about condo hotels. Specifically, how lousy they turned out as investments.
‘how lousy they turned out as investments’
Yes, condo-tels may have been the most absurd moment in the housing bubble. (Even Centex got in on that disaster). No wait, it was the floating casino-condos on the Mississippi. Or the car-garage-condos in Florida. Hell, they are still trying to sell boat and office-condos in Bullhead City AZ (”we finance!”).
A relative of mine does some construction mgmt consulting for a lot of the big-time resorts, and he tells me that Hard Rock hotel is chumping their vendors big-time. Sign of the times.
‘How can my property taxes go up when I can’t even sell my home for half of what, when it was new, I paid in 2004?’”
B…b…but aren’t you happy you didn’t throw your money away on rent?!
BWHAHAHAHAHAAHAHAHAHAAA!
The more you think about it, the better it gets. She’s been paying these taxes and interest and maintenance for 5 years now, and lost her ass every step of the way. She probably even got an “employee discount” from the builder who canned her later. (Tiny violins warming up).
Here’s a little tip on finding FB quotes; if you see an Arizona Republic story on property taxes or HOAs, etc, they’ll probably have some FB whining about that AND how much money they’ve lost on the purchase.
That was funny…
I had this conversation about the shameful joy thing the other day. I related how it was impossible to not see the humor in the stories. As someone here used to say, you’d have to have a heart of stone to not laugh at some of these people.
I’m convinced that if there is ever a movie made about the housing bubble, it will be a comedy. And if it’s done right, it will be the got-dam funniest film ever.
How bout a mockumentary?