A Matter Of What’s Fair And Reasonable In Florida
The Miami Herald reports from Florida. “If you think the torrent of foreclosures affecting every city and nearly every neighborhood and street in South Florida is as bad as it can get, here is a harsh new reality: There’s a new wave of foreclosures making its way through the courts that has nothing to do with exotic subprime loans, real-estate flippers out to make a quick buck or people who bought way more house than they could afford. Now, double-digit unemployment, sagging home prices and a lingering recession are to blame.”
“The numbers already are staggering. During the second quarter of the year, nearly one in four Florida home loans were past due or in foreclosure, making Florida the most delinquent state in the nation, according to the Mortgage Bankers Association. In neighborhoods such as Malibu Bay, a gated community in Homestead…a two-bedroom, two-bath home that sold for $242,000 in August 2006, for example, is now listed for $70,000, said Karen Klores, a Realtor at The Keyes Company.”
“Leslee Ramos doesn’t often visit her three-bedroom townhome in Malibu Bay, which was built by Lennar Corp. during the housing boom, but she checked in last week. Ramos moved to Northeast 11th Drive in October 2006, paying $255,490. The home is now worth $121,800, according to property records.”
“After losing her job about two years ago, she started eating into her savings to make payments but still couldn’t afford the mortgage. Her home went into foreclosure earlier this year, and in May she moved back to Kendall to live with her mother. Now Ramos’ house is empty, and she expects the bank to sell it in February.”
“‘It feels horrible to go through foreclosure,’ said Ramos. ‘I can’t apply for anything. I have no credit.”’
“The Treasury Department announced last week that lenders have modified almost 500,000 mortgages in the eight months since the federal government announced its Making Home Affordable program, a plan to encourage — even pay — for loan modifications. Lenders hit that number a month earlier than expected. Still, only 16 percent of eligible home loans have been modified, out of 3.1 million delinquent mortgages in September.”
“Weston attorney Kraig Weiss and his wife, Ana, are living what they call a ‘loan modification horror story.’ Earlier this year, the Weisses agreed to a loan modification with Bank of America, only to have the bank rescind the offer. The Weisses sued. Now the bank is moving toward foreclosure, even though the Weisses are making mortgage payments.”
“‘The truth is, they don’t care. They feel they are above it all and they don’t have to answer to us,’ Kraig Weiss said.”
“A common misperception, said Ertha Brathwaite, manager of the Chase Homeownership Center in Aventur,, is that borrowers expect to get a loan modification because they are ‘underwater.’ Almost a third of all mortgages in South Florida were underwater as of June.”
“‘It’s what you borrowed,’ Brathwaite said. ‘You wouldn’t share in the gain [if you sold your home at a profit]. Why should the bank share in the loss?”’
The Star Banner. “Seven years of renting was enough for Joanna Jones. If she had to write a check each month for a roof over her family’s head, the 28-year-old veterinary technician, who got married two years ago, wanted it to be toward a mortgage and not a landlord. Jones wants a house now, while prices are down and interest rates are as low as they’ve been for decades. And she is in a race where crossing the finish line before Nov. 30 could net her $8,000.”
“‘It would be great getting that extra money. And now is the best time to buy … with home prices the way they are and interest rates. I was hoping we would find a house before the tax credit expires,’ Jones said. ‘We’ve got to find something or we won’t get the money.’”
“The National Association of Realtors reported that the tax credit coaxed 1.2 million new buyers into the market and that about a third would not have bought their home without the credit. A similar trend was seen in Florida. ‘The first-time homebuyer process could come to a screeching halt without the tax credit,’ said Bert Meadows, president of the Marion County Association of Realtors.”
“But it isn’t only first-time buyers who benefit from the tax credit. So do sellers having a tough time unloading properties amid a housing glut, and people afraid to buy because of rising unemployment. That has led many buyers to look for the best deals and turn to foreclosed properties to save money, knowing banks are eager to shed the properties off their books.”
“‘We had a few people look at our house, but they’re looking for spectacular deals. They’re looking for foreclosures,’ said James Jay Clark, while standing by a for-sale-by-owner sign in his yard. ‘They’ve made these offers on the house that are completely ridiculous; $60,000 less than the asking prices.’”
The Sun Sentinel. “Even after years of sinking real estate prices, thousands of South Florida property owners are fighting to further deflate the values of their homes and businesses. Appeals jumped a record 40 percent in Palm Beach County, where 18,325 taxpayers filed to challenge their 2009 assessments. In Broward County, the appeals increased 9 percent to 32,411.”
“Miami-Dade County, which usually leads the pack, has yet to finish counting how many appeals were filed by last month’s deadline. About 69,000 petitions have been entered into Miami-Dade’s appeals system. At that pace, the appeals are expected to far exceed the 70,000 filed last year, Value Adjustment Board Manager Robert Alfaro said.”
“Sherman Lein said he decided to appeal the tax assessment for his home west of Boca Raton. The Palm Beach County property appraiser decreased his home value by about $100,000, but his tax bill was still higher than last year.”
“‘It’s ridiculous,’ said Lein, 79, who owes about $6,000 in property taxes. ‘This house is not worth what they are saying it is. … It is just a matter of what is fair and reasonable.’”
The Orlando Sentinel. “The Dutch lender that initiated foreclosure on 55 West last year repossessed the property following a no-bid auction Friday. Grosse Pointe Development Co., of Fort Myers, has been successful at transition the units from condominiums to apartments, said Jeff Sweeney, commercial specialist with Grubb & Ellis Commercial Florida Inc., which is marketing part of the multi-use downtown Orlando highrise.”
“The bank is now moving forward aggressively with renting the units, as opposed to selling them as condominiums and that leasing effort has been very successful, he added. Zom Residential Services has been leasing studio lofts and other units, with rents starting at $1,100 and concessions of 1.5 months of free rent prorated over a 13-month lease.”
The Palm Beach Post. “The Promenade, Boynton Beach’s newest condo, boasts a luxurious lobby decorated in tones of cream and mahogany. Its two pools are filled, and the gym is stuffed with equipment. But nearly two months after receiving a certificate of occupancy from the city of Boynton Beach, the downtown property has not closed any sales of its 395 units.”
“‘My clients have not heard one thing - not one thing - from the developer. It’s a big building sitting there doing nothing,’ said June Dunlea of Tauriello & Co. Real Estate in Delray Beach. Dunlea represents several buyers with contracts in the Promenade.”
“The developer is trying to get buyers with contracts in the south tower to move their contracts to the north tower, so that at least one tower can be filled and opened, according to Lisa Bright, president of Boynton Beach’s Community Redevelopment Agency. The reason for the change: To comply with Fannie Mae requirements that 51 percent of a condo be pre-sold before Fannie Mae will buy mortgages made to that condo.”
“Without Fannie Mae certification, most mortgage lenders, who resell their loans, would not make a loan on the condo. In fact, the only people who would be able to buy Promenade condos are those paying cash or using a private lender, experts say. But even those buyers aren’t a sure bet. Given the depressed state of the condo market, Promenade buyers could walk away from their contracts. ‘No one wants to close anywhere,’ said Robert Cooper, a Miami attorney who specializes in representing condo buyers who are trying to undo their pre-construction contracts.”
“That goes for Dunlea’s clients, too. ‘The majority of my people are not going to close,’ Dunlea said. And anyway, ‘Who’s going to give them a mortgage?’ she asked.”
“The Promenade’s 77 condo-hotel suites also have uncertain future. Just ask Pamela Sherman. In 2006, Sherman put $57,000 down on a $285,000 condo hotel suite, with the understanding that it would be ‘professionally managed,’ she claims in a lawsuit. The professional management was important to Sherman, who lives in New Jersey.”
‘But in the lawsuit, which seeks a return of her deposit, Sherman accuses Boynton Waterways of fraud. That’s because Boynton Waterways told her in January, the suit says, that she would be in charge of renting out her own hotel suite.”
The Pensacola News Journal. “For the first time, more than 1 million Floridians are out of work. With unemployment hitting 11 percent for September, the chief economist of the state’s jobs agency said Friday that high jobless rates will probably persist despite any recovery. Because the population and size of the work force have grown in 34 years, the number of idled workers set a record last month.”
“‘It’s a continuing reminder that the recession began in the housing sector and it’s not going to end until we see some improvement in the housing sector,’ said Rick Harper, director of the Haas Center for Business Research and Economic Development at the University of West Florida. ‘We’re suffering disproportionately from the bursting of the housing bubble.’”
The St Petersburg Times. “Have you popped the bubbly to welcome some of the newest Floridians to our shores? Florida, hammered by the recession, also saw its overall population shrink for the first time since World War II. But there’s at least one subset still eyeing a move to Florida, arguably more so than in years past: the megarich.”
“The uberwealthy have long been drawn to income-tax-free havens like Florida. University of Florida economist David Denslow says any influx won’t save Florida from its $2.5 billion budget deficit, ‘but it has a noticeable, positive impact’ on bolstering property tax and sales tax receipts. ‘We’re delighted to have them,’ he says.”
“But demographer Peter Francese said it’s a bit soon for Florida to celebrate an influx of wealthy residents boosting tax coffers. ‘There are very, very few of them,’ he said. ‘The best you’re going to get is anecdotes.’”
“For one, he said, many of the multi-multimillionaires are still reluctant to move far away from family or give up the cultural lifestyle of a New York, Chicago or Los Angeles. Moreover, there are few signs the rest of the general population lower down the financial food chain will follow suit any time soon. In fact, Francese forecasts that net migration state-to-state will be close to zero this year as housing sales remain sluggish.”
“Once home prices do pick up, he said, don’t count on Florida returning to its old ways of drawing up to 10 percent of retirees to its borders. ‘Florida is going to have to get used to the fact that fewer and fewer people from the rest of the country will move to Florida when they retire,’ Francese said. ‘Going there to retire is a trend that in my view has reversed and is not likely to come back any time soon.’”
The St Augustine Record. “Two years ago, the Wall Street Journal startled the nation with the headline, ‘Is Florida over?’ Leaders of private industry and government did a double take over their coffee that September morning. They asked, ‘Over what?’”
“The story said people were moving out of the state at a faster rate than they were moving in, housing values were falling, hurricanes were doing greater damage thus escalating property insurance rates. On Tuesday, news reports out of Orlando quoted Florida Chamber President Mark Wilson saying, ‘the Florida we have known forever is over.’”
“To back up his claim, he cited 10.7 percent unemployment, 600,000 lost jobs in two years and one in five homes in foreclosure. But he added, ‘Don’t get caught up in that being a bad thing. (The question is) how quickly can we get to the next economy?’”
“Weston attorney Kraig Weiss and his wife, Ana, are living what they call a ‘loan modification horror story.’ Earlier this year, the Weisses agreed to a loan modification with Bank of America, only to have the bank rescind the offer. The Weisses sued. Now the bank is moving toward foreclosure, even though the Weisses are making mortgage payments.”
“‘The truth is, they don’t care. They feel they are above it all and they don’t have to answer to us,’ Kraig Weiss said.”
See — this is where the Fed’s lending discrimination matters. Megabank of America gets loans at zero percent interest rate, which gives them infinite staying power. The Weiss family has to pay market rates and probably cannot even qualify for a loan because their household balance sheet is underwater (another underwriting criteria that does not apparently apply when the Fed loans to Megabank, Inc).
The Fed’s lending discrimination policy has the effect of taking away wealth from America’s households and handing it over to Megabank, Inc. Is it legal for a private bank to do this?
Bank of America is just pissing folks off left and right… lots of vitriol out there. They featured prominently in a negative light on Suze Orman this Saturday. It isn’t just deadbeats talking, but folks who never missed & never late on payments.
I sure hope BOA pays back the TARP money soon… while they still have customers left.
Has anyone ever sued the Federal Reserve? Is it a “bank” that is chartered in the same manner as say B of A, and thus subject to the same laws?
I would think some hedge funds who are getting the short end of real estate price support measures might want to explore the lawsuit avenue, as regards Sherman Antitrust Act violations. Surely someone with deep pockets is getting hosed by the extraordinary degree to which the Fed is choosing winners and losers.
“A common misperception, said Ertha Brathwaite, manager of the Chase Homeownership Center in Aventur,, is that borrowers expect to get a loan modification because they are ‘underwater.’ Almost a third of all mortgages in South Florida were underwater as of June.”
“‘It’s what you borrowed,’ Brathwaite said. ‘You wouldn’t share in the gain [if you sold your home at a profit]. Why should the bank share in the loss?”’
And here you have it. The bank will just try to bleed you dry for the full amount of these loans. Just walk away. Declare bankruptcy and salavage what you can if there is a recourse option. Then negotiate away what you can.
Of course get a lawyer. Not a HBBer to help.
Why does anybody expect anything different from banks? OF COURSE they want you to repay the money that you borrowed from them.
The bank should not have to share in the loss. Walk away. Let them have the loss to themselves.
I would say it in different way:
The bank should not have to share in the loss. Walk away. Let them eat their own sh1t.
PB .
“Is it legal for private banks to do this ?”
Good luck in getting any of these laws and discrimination practices tested in the highest Court in the land . From day one all the give-a-ways and new laws were designed to help the Mega Banks and Wall Street . You just had to know it was going to go this way when they allowed any entity but regulated banks to go to the discount window when the meltdown first started . The Feds/Treasury knowingly gave short terms loans to entities they knew that the paper was junk and worth a fraction of the book value . The guy/gal on the street is getting
hosed so Mega Banks ,Investment Firms ,Insurance Companies and the unregulated world of investment can get bailed out .
When you watch the Politicians at work ,(who are the lawmakers ),it’s clear who they give to .I object to them changing laws after the fact and applying them retroactive .The Government just set itself up for being the only lender in town while these corrupt originations
keep fleecing the public .Oh, they throw Main Street a bone every now and than ,but its Big Business that gets it way these days . I read that overall Stock market companies actually had a 20% increase in profits since the beginning of this year ,while Main Street goes down the tubes . Yes,I think you could call this the biggest discrimination
suit in history that nobody is going to bring to the High Court ever .
Housing Wizard,
According to Ben, those of us that ( in theory… ) advocate the use of cramdowns, live in a fantasy world! ( With all due respect to MR. Jones ) so much conventional wisdom and long-standing business practices have -already- been shown the underside of a bus, why get bent out of shape over retroactive changes in Contract Law ‘now’?
Thank you Sir! May I have another?!?
‘why get bent out of shape over retroactive changes in Contract Law ‘now’
Because without contract law, everything, and I mean everything in our economy ceases to function. It’s as simple as that. It isn’t happening, it can’t happen and as one who works with foreclosed houses everyday, I can tell you that although the securitization mess has complicated things, the industry is reclaiming these houses faster than at any time in history. Just look at the numbers; hundreds of thousands of houses, commercial projects, etc, being taken back. Are the banks playing games with the inventory? Why probably so and I was one of the first to point this out.
Here’s a way you can test your “theory”. Buy a house today and make no payments. When the time comes, just tell the sheriffs deputy you want a cram down, and let us know how it turns out.
Ben,
LOL! No I’ll not ‘test’ that if it’s all the same to you? And I share your frustration over this. The entire situation from the moment of the fraudulent fluffed up loan ‘application’ (read Free Money ) to the securitization process to the 1st payment default to the N.O.D up to ( and through ) the eviction process stinks to high heaven!
Some years back I openly asked ( given we were getting NO justice from the Mortgage Banker’s Association ), ( read enablers ) if we couldn’t get the Uniform Commercial Code ( ‘anything’! ) to apply! All we were given was pat answers about *not giving the $750,000 loan to fruit pickers being ‘discrimination’.
Trust, in the business community is absolutely GONE and ethically we’re being shaken right down to our foundation. I imagine many of the people you’re bidding against for REO properties are the very UHS’s that SOLD the proerty to the loanowners! Every time I bring ‘that’ up all “I” get is rolled eyeballs. ( Like, given everything that’s gone on.., why don’t you just grow UP!? ) That and I’m “just jealous”.
For the record, I am not buying any RE. I clean up the messes, try to limit the damages and make these properties as safe as possible within a very limited budget. I have zero interaction with the lenders (that’s how this business works) and I prefer it that way.
“Trust, in the business community is absolutely GONE and ethically we’re being shaken right down to our foundation.”
Is the Fed whatsoever aware of the role of trust in the banking business? Or do they think printing money at just the right rate and bailing out the right players at the right time while telling stories about green shoots is enough to save the system?
Professor Bear,
Amen. And I uh… tried to point that out while lighting fires behind our local failed bank when interfacing with our Dept. of Finance & Corporate Securities!
I said, “Firstly, what we had here was a “bank” formed by start-up capital from the ‘local’ community to make loans to ‘local’ people! ( By the time they were shut down, they were doing ADC loans as far as the Oregon Coast and Medford! ) Hmm? Not-what-the-shareholders-signed-UP-for.”
So you have a butcher, a baker and candlestick maker putting together a ‘bank’ ( read Specuvestment Private Kitty ) and not surprisingly, they’ve utterly failed! I said, Look, when people throw money at a BIO-TECH/Start-Up, they -expect- there’s significant RISK! But these guys offered up their IPO as a BANK fer’ chrissakes! Well, they’re barred from the industry for life but I guess there’s no law against being stupid?
The people taking the hit here aren’t the caliber of investors that can just walk away from flubbed start-up. It’ll crater this town for at least a generation. Bank, huh.
The lawmakers did toss the bone of not taxing loan default
monies for homeowners ,but really ,again it supplements the
Banks because they get to still write off their loss .
When you add up all the different supplements Mega Banks and Investment Firms and even Insurance Companies and BIg Business in general get from the
lawmakers ,especially in the last 2 years ,its really alarming .I
am generally a Republican who likes to see Business flourish ,but not like this ,not this sort of stacked deck against the working class . How can trust be there when it’s a stacked deck ?
“Because without contract law, everything, and I mean everything in our economy ceases to function. It’s as simple as that. It isn’t happening, it can’t happen and as one who works with foreclosed houses everyday, I can tell you that although the securitization mess has complicated things, the industry is reclaiming these houses faster than at any time in history.”
Which is why ultimately, our economy just might cease to function, at least as it stands currently. Any law is only as good as its observance and enforcement. I’ve no doubt houses are being reclaimed, but by who? And do these entities really have legal rights to the houses they’re reclaiming? It’s kind of muddy, at best.
Not just contract law, but the basic rule of law has become a capricious, arbitrary thing in the US. Did “law” apply to Goldman, Morgan Stanley, et al? How about Hank Paulson’s “law”, where he received a waiver to bail out Goldman Sachs? What good is a law anyway when you can get a waiver to override it? How about government tax cheats who have a “contract” to pay taxes? Doesn’t apply to them.
Sorry, Ben, contract law has become a complete joke. Nader has often spoken about a contract as being, by definition, a meeting of the minds. But that is NOT the way US business is run. Terms are all one sided. That’s not a contract. Terms of doing business, maybe. But not a contract.
I refuse to write a contract or I’m avoiding it these days . I’m a rule of law person and I won’t play if the game can be changed on me …….or maybe only a short term play at best I might play these days . My analysis these days is what cockeyed
trick is the government going to pull next ,or what law is going to be changed retroactive. I can understand changing a law for future application ,but retroactive ….no way …I won’t play a game like that .
Palmy,
The recent interview w/ Elizabeth Warren for Michael Moore was kind of telling. In her estimation, ever since the 70’s, the American worker has basically had a target painted on his back.
Between ever rising comfort levels ( amidst ever rising personal DEBT ) and taxes to accompany..? A couple of years ago when the world was a different place, I became very interested in getting out of debt completely.
At the time, there just wasn’t a lot of interest in well, not paying interest! Everyone evidently felt just fine with their $3,500 PITI, a grand a month in SUV payments and putting $50 a month into their ret. account at work! What do mean… I’m not doing ‘anything’ for my retirement!? And this is what makes it so frustrating. For most of us, our paycheck is WELL spoken for before they ever see it and we need to make sure MegaBank survives to collect all that interest from a “coalition of the debtor willing”.
Well the contracts in question DO have procedures for non-payment by the borrower: foreclosure. The real question is whether there is an amount of principle reduction that will result in smaller losses for them than foreclosure. This is nowhere near as easy as many think because of the chance that prices will continue to fall and the borrower will re-default, leading to greater losses than if the bank foreclosed and sold today.
But in a larger sense, the contracts always operate within the bounds of bankruptcy law. Arguably, when they changed the bankruptcy law several years ago, making it much more difficult obtain bankruptcy forgiveness, they “changed the contracts,” of everybody who had outstanding debts. In general, it’s a bad public policy in either case to change the conditions that surround existing contracts to the advantage of one party over the other. But neither case is likely to lead to the end of a functioning economy.
“I’m a rule of law person and I won’t play if the game can be changed on me …”
If all the rule-of-law people refuse to sign contracts, who will be left to sign them?
All these guys grew up in the same kinds of neighborhoods, went to the same schools, followed a similar career path that stressed the big bucks and were rewarded every time they figured out how to work around the rules, and are totally convinced that the world will stop spinning if they get thrown to the curb. And since they all seem to be graduates of the Goldman-Sachs Industrial Complex, the regulators and politicians believe the same thing…….those that aren’t their paid-for “man-whores”.
The typical Main Street/J6P/average working stiff might as well be a different species…….the group they hang with sets the communal rules for proper behavior. If they are all a bunch of crooks, they don’t have to feel guilty about it, if they think about it at all.
Nobody’s ever seen a shark feel guilty about anything.
When I hear some politician bloviate about “the rule of law”, I just want to sneer and puke. CONgress and successive administrations, not to mention MegaBank and GovernmentSacs, have made a complete mockery of the rule of law. Judges, too. We’re supposed to have a government of, by and for the people. Yet what happened in CA when a judge decided to override the people who didn’t want to turn their state into a third world hole.
When I hear some politician bloviate about “the rule of law”, I just want to sneer and puke.
“Yet what happened in CA when a judge decided to override the people who didn’t want to turn their state into a third world hole.”
OR when the majority of the CA voters voted unanimously to roll back insurance rates and the INS corps have it all tied up in the courts. Many years later, our vote means NOTHING.
It’s not just financial contracts that are being changed! All sorts of contracts dealing with private property:
For example, CC&Rs. I purposely selected a Florida property with no HOA, no CC&R because I wanted to be free to fly an American flag, or put up solar PV panels–two things that were commonly outlawed in CC&R/HOA communities.
So what did then-governor Crist do? He outlawed these provisions in the CC&Rs!
This pissed me off. If someone hates America and wants to live in a community where everyone signed a contract not to fly a flag outside, that’s their business.
Governor Crist devalued the “added value” of my non-restricted property. That’s un-American!
The problem with cramdows is the tax free income! That’s completely unjust. If someone takes a 100K cramdown, they should pay 35K to the feds and whatever to the state. If they can’t pay that, they can rot in hell, for all I care.
(From Beijing until Wednesday. In many ways, I think the government here is better than ours.)
“…In many ways, I think the government here is better than ours.)”
Scary, huh Reuven?
Enjoy your duck!
People here are a lot freer! You can smoke anywhere you like, you can pee and spit, too. Parents can spank their kids in public without being arrested.
And sometimes, less regulation gets the job done better: An example–
In California where I live most of the time, bicycle terrorists are always lobbying for bike lanes, buses that can carry bicycles, bicycle cars on the trains, etc. Here in China there are no such things, yet there are more trips made here on bicycle than in any city in the USA.
You can see my photos here; more added each day http://www.flickr.com/photos/tppllc/sets/72157622464701383/
making Florida the most delinquent state in the nation
At least they are #1 in something!
We’re also #1 in medicaid and mortgage fraud, and in percentage of public officials currently under indictment. Go Florida!
“Sherman Lein said he decided to appeal the tax assessment for his home west of Boca Raton. The Palm Beach County property appraiser decreased his home value by about $100,000, but his tax bill was still higher than last year.”
“‘It’s ridiculous,’ said Lein, 79, who owes about $6,000 in property taxes. ‘This house is not worth what they are saying it is. … It is just a matter of what is fair and reasonable.’”
Sherm..Sherm…You’re old enough to know life’s always a bitch when you wake up after the big party and see the cold light of dawn.
Oh we don’t see as many of those “silver lining” stories as we used to, do we?
Remember in 2007-8 when so many were seeing the bright side of reduced property tax assessments? Story after story of the “silver lining” for CA and FL especially. It’s laughable that people actually though their tax bills would go down. Shoot, look at the revenue situation facing most states today - as if they could even begin to contemplate granting property tax relief of any sort!
Just got my property tax bill in California for $6000, which is $1000 less than 2008 and $1000 less than 2007. They’re lowering the assessments automatically, without my having to ask. It’s a nice silver lining. Of course, if I hadn’t bought my house in 2006, I’d be paying $3000 in my old house. Too bad it was in a flood zone . . . .
Just got my property tax bill here in California, too.
Now less per year than when I bought the house new in 1991. Don’t know whether to laugh or cry.
No wonder California is going bankrupt. Eventually, someones got to make some hard decisions.
“making Florida the most delinquent state in the nation
At least they are #1 in something”
Yeah, a Friday Night Massacre…that never ends.
a specialization for the times:
…Robert Cooper, a Miami attorney who specializes in representing condo buyers who are trying to undo their pre-construction contracts
“‘It’s what you borrowed,’ Brathwaite said. ‘You wouldn’t share in the gain [if you sold your home at a profit]. Why should the bank share in the loss?”’
That’s why if I were in the situation of my house being as upside down as some folks are, I’d rent a place, pitch them the keys to the house, and rebuild my credit.
Most of these places will never, ever see the numbers they were selling for again.
I often wonder whether “profit sharing” terms will arise in future mortgages. The bank could take, say, 20% of any capital gains on the sale of the house. This could offset the losses which they get from short-sales. I’m surprised nobody is talking about this.
I believe this is covered in the clauses requiring payment if the property is refinanced in x number of years.
DennisN,
There was a post on Patrick.net some years ago ( as cracks in the seams were starting to show? ) for a firm in the BA that would lend you the money to buy or refinance your home ‘with’ the condition stipulated that the hedge fund participate in the upside after a 5 or… 8 year period.
So it’s already been tossed about. My question is.., will they participate in the down…side?
“Florida is going to have to get used to the fact that fewer and fewer people from the rest of the country will move to Florida when they retire,” Francese said. “Going there to retire is a trend that in my view has reversed and is not likely to come back any time soon.”
And today’s Acknowledgment of Reality Award goes to … Peter Francese. Honorable Mention to the President of the Florida Chamber of Commerce for saying that “the Florida we have known forever is over.” I honestly am impressed. Of course consensus opinion remains otherwise.
Don’t forget that population growth is also quite stagnant. Your economy won’t grow without new people getting into it.
Oh, but we ARE getting new people into it, except not by people moving here. It’s by people being birthed here, many of them anchor babies. You’d have to walk in my shoes and be out among the public and see the illegal immigrant mothers with three children in tow and another bun in the oven. It really is mind-boggling.
The old biddies chucking the anchor babies under the chin and going “cootchie-coo” will have to realize that government cheese is being shifted to the younger generation in the form of welfare payments. Wonder if they’ll think those kids are so cute when Medicare Advantage goes poof. Think the geezers will riot?
True story from the Slim family:
In the 1960s, my mother’s mother retired to Florida. The plan was for Grandma to crash with her sister, Louise, until she found a place of her own.
Well, Grandma just didn’t find anything that measured up to her lofty standards. And Louise and her hubby grew tired of having Grandma underfoot. (I can attest to the fact that Grandma was great to have around — if you liked whining hypochondriacs as company.)
Well, Grandma got the heave-ho from Louise’s place, and up to Pennsylvania she came. My mother was less than thrilled. Last thing she wanted was her mother moving in with us.
My mother’s approach to any sort of ache, pain, or any other sort of hardship was to grit your teeth and tough it out. Complaining was very much against the rules. So, you can imagine how well she and Grandma would have lived together.
Mom rented Grandma an apartment in a nearby complex, and that’s where she lived until she broke her hip and could no longer live alone.
What I’ve just shared is a common ending to the “retire to Florida” story. Florida doesn’t work out, so the old man or woman goes back up north.
But But But…
Like they said in 1925, Florida’s population is always increasing!
Oh, long term, it will be a retirement heaven again. Once prices drop back down to what mid-Western retirees can afford that is.
Got Popcorn?
Neil
See, my thoughts are that retirement is a phenomenon largely limited to Western industrialized democracies during the second half of the 20th century. In the future, there will be no such thing as retirement. Almost every person will work until the day he or she dies. And this state will not be the ideal place for such work.
My great uncle worked until the morning of his death. And his brother-in-law (my paternal grandfather) worked until a few weeks before his terminal cancer prevented him from going to work.
My father is continuing in the fine family tradition of keeping at it in the work world. He’s in his mid-80s and still conducting engineering research. And one of his collaborators will turn 90 next year.
What I noticed when I was young and traveling through Japan was that senior citizens might not have a JOB, but they all participated in their country/ neighborhoods-clean up and what not. Nobody was a throw away senior citizen. I don’t know when they actually retire, but their surrounding neighborhoods require everyones diligence in keeping it clean.
That’s my pet peeve about seniors, like my mom. They don’t want to work without being paid. Volunteering is anathema to them.
The good thing about concessions is that if you don’t fulfill the lease, they can sue you for the concession money back or take it out of your deposit.
And that means even being late 1 day with the rent means you violated the lease….and you have to pay up.
————————-
, with rents starting at $1,100 and concessions of 1.5 months of free rent prorated over a 13-month lease.”
“The numbers already are staggering. During the second quarter of the year, nearly one in four Florida home loans were past due or in foreclosure, making Florida the most delinquent state in the nation, according to the Mortgage Bankers Association.”
Would that make Florida ground zero for the foreclosure crisis?
Quite likely it is ground zero.
Been a while since Ben had a Florida thread. And a day without a Florida HBB thread is like a day without sunshine.
I loves me a good Florida thread. Hey, for all the doom saying, we’re still hanging in there. Musta been that cigarette tax that saved us. Shag-em-up, boyz’n'girlz.
Bought some Florida’s Natural orange juice over the weekend.
Tremendous.
No Brazilian solids or pulp wash, either.
“Would that make Florida ground zero for the foreclosure crisis?”
Naaa… they just became nastalgic for 1926.
Got Popcorn?
Neil
Well because of the loan amounts involved, if FL was the A-Bomb, than CA was the H-bomb.
I wonder if Nevada will end up worse. IMHO it has a lot less going for it than Florida or California. Water problems in both places are nothing compared to Vegas.
And I like visiting Vegas every once in a while. Might go there for thanksgiving. Catch some shows and what not.
However, it’s one great big desert out there.
Another thing I’d like answered is what happened to all that BLM money from all those land sales. How the hey did we blow all of that?
Just read that NCs unemployment rate is 10.8%, even higher than Florida’s. If Florida doesn’t watch out, NC is going to surpass it on the misery scale!
Ah yes the misery scale. Wasn’t it the sum of the inflation rate and the unemployment rate? It was bandied about during the 1970’s IIRC.
“‘It feels horrible to go through foreclosure,’ said Ramos. ‘I can’t apply for anything. I have no credit.”
I see the dynamic where the abused returns to the abuser for more abuse really is true.
The people of the world have gone mad.
‘I can’t apply for anything. I have no credit.”
um, C-A-S-H and until you have that, you do the list.
Needs vs Wants.
Yup Needs vs Wants works really, really good. You find out about 99% is a want.
She’s apparently not interested in obtaining a library card.
“‘We had a few people look at our house, but they’re looking for spectacular deals. They’re looking for foreclosures,’ said James Jay Clark, while standing by a for-sale-by-owner sign in his yard. ‘They’ve made these offers on the house that are completely ridiculous; $60,000 less than the asking prices.’”
I got a bulletin for you sellers….. Lose the self-righteousness and do it quickly.
Nah..JJ will just continue to feed his alligator. Then he can sell it for 100K below asking price. He is a real estate genious.
He is a real estate genius.
FIFY
“Seven years of renting was enough for Joanna Jones. If she had to write a check each month for a roof over her family’s head, the 28-year-old veterinary technician, who got married two years ago, wanted it to be toward a mortgage and not a landlord. Jones wants a house now, while prices are down and interest rates are as low as they’ve been for decades. And she is in a race where crossing the finish line before Nov. 30 could net her $8,000.”
I’m confused here… Vet tech’s make between $12-$18/hr. How exactly are they going to afford this?
http://www.payscale.com/research/US/Job=Veterinary_Technologist_/_Technician/Salary
Vinnie,
Come on, she has been renting for 7 years.
She DESERVES a house. Get with the program!(sarcasm off)
“To back up his claim, he cited 10.7 percent unemployment, 600,000 lost jobs in two years and one in five homes in foreclosure. But he added, ‘Don’t get caught up in that being a bad thing. (The question is) how quickly can we get to the next economy?’”
Ah yes, that magical next economy. Okay, so why would somebody start making profitable widgets anywhere in Florida when they could make them in Shanghai?
“Now, double-digit unemployment, sagging home prices and a lingering recession are to blame”
Rally? Boffoh-boffoh point there ‘Chad’. How many of you folks out there have spent any time of late wondering what the world would be like if it hadn’t been for the Housing Boom?
I mean seriously. That lived in the house that Jack… built.
I know it’s difficult, but it is the root of our dilemma. When the oil market fell apart in Texas in the 80’s, our RE bubble popped hard. For a while people hoped it would come back. Eventually it sunk in that it wouldn’t, and people started finding new ways to make a living. Sure, we grasped for straws, like the hope that the government could paper things over. (Remember the super-conducting super collider? That was a feel good public bucks project meant to give Texans hope. Of course, it went away and wouldn’t have done much in the long run anyway.)
Slowly, painfully, we started finding a life without oil/bubble money flowing everywhere. Two things became apparent; we were humbled, and life does go on.
When I listen to the news these days and speaker after speaker goes on about getting the consumer spending again, it makes me sad. The people in power don’t seem to understand that the housing bubble and the stock bubble before it aren’t coming back. And all this effort to “stabilize” housing prices is simply a waste. We have one, glaring challenge, IMO; living in the post-bubble world and building an economy around something other than buying and selling each other houses. Like I said, I know it ain’t easy, but there it is. And Florida will eventually do it because there is NO OPTION. The longer we focus on anything else, the longer that will take.
We grew our economy during the industrial revolution. It continued with the “oil revolution”, and all the technologies that oil enabled (faster ships, then the automobile, then the airplane…….faster/more efficient transportation).
Then the transistor and integrated circuit came into being, and started a technological revolution, which seems to be reaching a plateau.
Now we are at a point where the only “revolution” on the horizon is “green”……..which (at this time) only promises (at best) marginal improvements in efficiency, at significant extra cost.
And even if someone pulled a rabbit out of a hat, it would get exported to Chindia faster than you can say “Hey dude, where’s my economy?”
There’s that and there’s the fact that any new economy will require much new investment.
Sure, we can do it, but that means less money available for the hallmarks of the recent past boom - houses, cars, iphones, Vegas vacays, etc.
The consumer economy of the past few decades is just not compatible with the challenges of the future. In a word: SAVE.
Yah. At this point all we can do is continue writing bad checks to China while they work for free.
Eventually the money flow will reverse and we’ll feel the effects of all that money flowing back.
I’d guess at that point wages/employment will have found a new happy medium.
Also hopeful that green technology will help wean us from oil.
Anyhow, some less consumptive choices wouldn’t hurt us at all.
Stuff we might ought to get rid of.
We don’t need to have 50″ flat screen TVs
We don’t need 10M pixle camerra phone ipods with 1000 songs
We don’t need 2000 sq ft houses
We don’t need every plastic toy that comes out
We don’t need to watch 3hrs of tv per day
We don’t need to have bouncers for our kids birthday parties
We don’t need 150 choices of fast food
We don’t need to eat out
We don’t need and xbox or wii with 20 games
We don’t need fancy gym memberships
We don’t need 8 passenger SUVs. Heck we don’t need SUVs.
We don’t need fancy golf courses
We don’t need to drug our kids with Ritalin
We don’t need to take fancy supliments
Go through all the crapola our lives have become filled with.
I am struggling to take my own advice here. Still. There it is. So much junk we could just live without.
Honestly think if my wife and I decided to become a one car family, we’d cut expenses to the bone.
No transportation means minimal shopping.
biking and walking means we don’t need liposuction
biking and walking means
Lots of sunscreen. Hats, gloves.
Yes we do….and when will apple come out with a solar panel on the back to charge the battery?
We don’t need 10M pixle camerra phone ipods with 1000 songs
YES we do as long as we keep forcing ghetto gangsta rap down out kids throat!
————————-
We don’t need to have bouncers for our kids birthday parties
‘Now we are at a point where the only “revolution” on the horizon is “green”…’
So far, the main accomplishment of the “green revolution” (the one driven by enviro wackos, not the one in ag productivity) has been to outsource dirty jobs to places like China with relatively weak environmental regulations compared to the USA. Maybe this will change, now that China is a rich country? But my guess is the main change will be to send production on to the next developing country with an industrious labor force and lax environment law. At any rate, the dirty jobs that supported US growth into a post-WWII superpower appear to have permanently vanished. At least the air is lots easier on the lungs now than when I was a kid. I can recall seeing what looked like snow falling from the sky; turns out it was solid air pollution from our friendly neighborhood cement plant
.
I saw an eye-opening 60 Minutes episode a few weeks ago. A supposedly “green” recycling company on the west coast holds recycling drives for computer monitors from well-meaning Americans,and then ships them to China, where residents of a small town dismantle them by hand, thereby completely polluting their town and exposing their water supply, themselves, and their children to poisonous toxins. It was sickening. The answer is to not buy so much stuff to begin with, not to “recycle.”
The local PBS (West Central Florida) Friday night punditry show took a shot at addressing this issue. Amazingly, some official in Tallahassee is calling for Florida to change its economy. The panel had a good laugh over it, asking why this wasn’t being called for during the “good times”?
There’s a lot of things Florida can do to change its economy and it needs to lay off the hackneyed “high tech” mantra. Fahgeddaboudit. The state should play to its strengths: geriatrics, biological R&D, agri and aqua R&D, solar energy, etc.
But what do I know? Sean Snaith is the real genius.
I’d like to see us focus on agriculture, and expand our ports. I’d also like to see the embargo with Cuba lifted.
Not yet! I want to visit there first! Give me, say, until….2013?
But in the end they’re all thinking “once people get jobs doing one of these new things, they’ll have to buy a house or condo”. It always comes back to that, build, build, build. I saw an article once that showed if a builder spends $200,000 to build a house in Florida, $60,000 of it will be fees and taxes to the government. That seems high, but if it’s true there’s no way they’ll ever get that kind of revenue somewhere else.
In our city, a $200k home has $43k in city fees.
Here is where one can get creative. First, if the property is grandfathered in, the fees are much cheaper. If you leave the slab and 1 wall you are grandfathered in. So, instead of building all new, renovate existing properties, downtowns etc. Not everything has to be massive, spread/sprawl.
If you want to expand (in this town) you can add 400′ and not pay extra school tax fees. And if you go up, it is less also.
Instead of ruining farmland, forests etc and disturbing Oly’s habitat, the inner cities could be the retrenchment of our business etc.
Ben,
Thanks for taking the time to share that. Anyone asserting The Boom was anything more than a way to “paper over” as you put it, our lack of a legitimate growth engine has lost his/her mind.
I for one am confident we’ll find ‘it’, whatever ‘it’ is! And yes, this -has- been a humbling lesson and yes, life will go on.
I have found it DinOr ……….bring back jobs to America . Bring back manufacturing to America ……..Bring back outsourced jobs, and bring back proper tariffs and trade balances between Countries . If someone could just compute how many jobs have been lost to other Countries ,that should be providing jobs for their own ,I think it would be a staggering number .
What other answer is there …….Pay high taxes to have a 25%
unemployment rate long standing just so Corporations can get the cheap labor they want and a bigger gross profit ? I thought the government was suppose to break up monopolies . The American manufacturing base can not compete with the WORLD
labor market ,it’s as simple as that .
Housing Wizard,
And contrary to conventional wisdom, once housing prices fall in line w/ traditional norms, the jobs WILL come back!
When you have to pay some guy who’s first priority is his sports/p*rn addiction $50k for so-so performance ( as this is what he ‘needs’ to keep his Neg. Am loan afloat ) then yes, it IS difficult to compete. ( Stands by for blast )
When PITI is more in line w/ DTI and we get some some “standards” back in underwriting standards, everything can fall in place. But… we’ll prop up home ‘values’ as best we can and keep MegaBank on life support! There, fixed!
Also,from the standpoint of security and independence ,it’s stupid to rely on other Countries to manufacture everything . You put yourself in the position of forgoing your own Constitution in order to do business with the rest of the World .
I never thought that I would see the day when China told us they didn’t like our policies . Oh, so now America has to make policies that please a Country with a billion and 1/2 people . Lovely .
DinOr ….A Country can become toast while their waiting for everything to come into line .
Housing Wizard,
So true. And that’s what we’re fighting right now! Our “burn rate” is rapidly reaching the point of no return. We’re -also- fighting The Echo Bubble in… just about everything.
Case in point:
http://portland.craigslist.org/wsc/msg/1428283239.html
Here we have an abortion of a 1963 Fender JazzMaster ( rancid body -only- ) going for $1,500! Such a deal! These “collectible” instruments are being bid up by people that weren’t even ALIVE when they were made! Yet these days, everbody’s a damned afficiando on the sorry @$$ subject! My guess is the reason it’s being sold as a ‘body’ is that the neck is so warped and twisted you can’t play (1) chord on it. The seller ain’t lacking for confidence I can tell you that.
The big dirty secret about outsourcing to China, is that most of the savings in labor is pocketed by the producer/importer, rather than passed on as lower prices to the customer.
As I recall, it only takes about 20 man-hours to assemble a car or truck (either cheapo econobox, or top of the line luxury car)……even if labor is $100/hr, the actual assembly labor isn’t that much.
The OEMs have been outsourcing engineering and subassembly to Chindia for 10-15 years. So instead of paying $50-60-70/hr for labor, they are paying about $10 a day.
You would think that cars would cost about half of what they did 20 years ago. Not in my neighborhood.
The big dirty secret about outsourcing to China, is that most of the savings in labor is pocketed by the producer/importer, rather than passed on as lower prices to the customer.
1976 Seoul. Bought a pair of new “high” end NIkes. $5.00
Fancy 3 pc custom ski suit. $10.00, Cashmere coat-lined silk Saks label $15.00. Nikes? 5.00 sorry had to repeat that. Blew me away even then.
There is now a theory that the Super Collider, like the Large Hadron Collider was sabotaged from the future.
Tell us more. (Do we need to don special headgear?)
A pair of otherwise distinguished physicists have suggested that the hypothesized Higgs boson, which physicists hope to produce with the collider, might be so abhorrent to nature that its creation would ripple backward through time and stop the collider before it could make one, like a time traveler who goes back in time to kill his grandfather.
-snip-
This malign influence from the future, they argue, could explain why the United States Superconducting Supercollider, also designed to find the Higgs, was canceled in 1993 after billions of dollars had already been spent, an event so unlikely that Dr. Nielsen calls it an “anti-miracle.”
http://www.nytimes.com/2009/10/13/science/space/13lhc.html?bl
interesting
I believe it.
I got my Reynolds hat firmly affixed.
I smell summer blockbuster….
I think this sci fi story was already written, made into a movie and also a television show.
Thanks for this link, Skip.
The vaporized connector on the LHC is intriguing….
“‘We had a few people look at our house, but they’re looking for spectacular deals. They’re looking for foreclosures,’ said James Jay Clark, while standing by a for-sale-by-owner sign in his yard. ‘They’ve made these offers on the house that are completely ridiculous; $60,000 less than the asking prices.’”
Sounds like the greedheads of 2006/2007 with their “We’re not giving it away” mantra. About six out of seven of these FSOB sellers are completely delusional with their pricing - even NARsters won’t touch their listings. Note to greedhead Clark: Those “completely ridiculous” offers reflect the current market value, and it’s only going down from here.
Remember that client I asked y’all about a few weeks back? The one who’s trying to sell a house that she and her husband fixed up?
She contacted me in order to have a promo flyer designed so they could include it in their FSBO info package.
I suggested that they hire a professional architectural photographer to get some really good images of the house. That would go a long way toward making a good impression. And I recommended a fellow I know. He’s been in architectural photography for decades.
Haven’t heard back from said client. I can’t help thinking that she and hubby are realizing that house selling in this market won’t be easy. Especially when one considers how important the price is to buyers.
I was so disappointed yesterday to see that a FSBO little 1000 sq ft house in a nice part of Sacramento sold for $380,000 last month. She had it on the market for $399,000. I thought she’d be lucky to get $280,000 for it. There’s a long way to fall in the better neighborhoods.
Bulk Sale of 38 properties for 10K! That’s $263 per property!! One of them has to be a winner!
http://cleveland.craigslist.org/reo/1428232301.html
How much back taxes?
Wow! Great find Chris!! I did a title search on several and they appear to be “owned” by many small investors (LLCs) all around the US including Irving, TX; Ft Worth, TX; Beaverton, OR; and Santa Ana, CA.
Each one listed a different owner. I wonder if this is part of some coordinated hedge fund of LLCs of Trump-wannabes? Perhaps the fund is now in charge of liquidating parts of the portfolio? Very strange.
My other post may show up one day…
other owners in Salt Lake; Irmo, SC; Reno; Rapid City, SD.
My favorite owner though: Bear Stearns Trust
“But demographer Peter Francese said it’s a bit soon for Florida to celebrate an influx of wealthy residents boosting tax coffers. ‘There are very, very few of them,’ he said. ‘The best you’re going to get is anecdotes.’”
“For one, he said, many of the multi-multimillionaires are still reluctant to move far away from family or give up the cultural lifestyle of a New York, Chicago or Los Angeles.”
I can give a few anecdotes here. Last week, I spoke to a guy up in New England who owns a condo here. He came right out and told me he planned on keeping it, because he and the wife declare it as their main residence. Years ago, when I was in the architectural supply biz, we had a client who, as soon as Connecticut went with a state income tax, declared residency here. So those are two anecdotes. However, I can tell you these folks don’t spend much time here. Nope. They stay in New England as much as they can. It’s just a tax shelter for them, really. They’re not buying stuff here, or contributing to the local enconomy or working here. They pay taxes (homesteaded) on their residence and maybe condo and maintenance fees. That’s it.
I’m pretty sure this is illegal, to some degree. I don’t know what the residency requirements are. But I imagine this sort of thing is more rampant than we know and probably pretty hard to enforce.
Nope, the “wealthy” really don’t like FLA that much to stay here. But it’s the “Tax Shelter State” for some of them.
Very true and a good post, i know man in Chicago who bought a house without his wife and he told me i want to move to this house but my wife doesn’t want to so it sits empty 10 months out of the year and he contributes nothing to the local economy either.
Speaking of mtg. work outs with the bank. Someone I know who decided to walk away from a house in a small town along the hwy 5 corridor in northern CA got the following offer from the bank:
He owes $168,000
The bank says if he gives them $45,000 the house is his and the mtg. paid off.
WArenter,
Wow! If that ‘is’ true ( and I’ve no reason to doubt you? ) then I’d be looking for a way for him to raise the lousy 45k. ( Even if he “walked away” from a kidney! )
Hope it works out for him.
Ditto. However, someone walking away from $168k is unlikely to have $45k lying around.
I’m floored… $45k is less than the median car in many neighborhoods of LA…
Got Popcorn?
Neil
1st get good re attny.
2nd sell kidney
3rd move back in.
Question? Did it have granite counter tops?
hehehe
I’d probably sell the proverbial left nut.
It’s not like I’ve been using them lately, anyway………
X-GS,
( I’m laughing ‘with’ you, not ‘at’ you! ) Too funny!
Yeah, I ran into a guy over the weekend that has about as steady a gov. job you can possibly have and while he’s transferring to S. OR, he’s… basically letting his house up in WA go back to the bank.
Oh sure, he’s all uptight about it and worries about his credit affecting his sec. clearance ( but back to the bank it goes nonetheless ) He had a great “housing option” when he bought in PDX in ‘02, but now that he’s underwater on his ‘07 upgrade, he’s walking.
Well what can I DO!? I surely can’t afford BOTH! Dude, did it ever occur to you to rent the old one out to cover most of the nut? Well.., they’re just not willing to ‘work’ with me!
Is it me or should 25 y.o’s -not- be thinking like this? Shouldn’t young guys be oh-so-greedy about protecting their FICO score, after all, they have a lifetime to take advantage of it? Oh, evidently NOT.
This may sound very callus (i wish i didn’t have to post this) but why should anybody get bailed out of a mortgage or auto loan they can’t afford?
A bank loans you money to buy a home or car you don’t own that piece of property or merchandise till you pay it off in full. You lose your job is that the lender’s fault, you paid to much for a home or leased car did the bank force you to buy to much house or car?
I keep hearing that the appraiser told us that it would be worth so much more but people have eyes, they saw that their home was never really worth the assumed future value they took a chance they lost sorry about that.
My wife and i can afford a much more expensive home then we live in, know why we never moved up, because of lost of job or health issues can always arise you live within your income and money behind you.
We have many relatives and friends so called underwater and i can very clearly remember telling these folks what if something goes wrong in your life can you cover the mortgage or fancy car payment they always said I’m a worry wart, i will just sell it for a profit there is no problem thus lies the problem little common sense and a whole lot of trying to keep up with the Jones who also are underwater?
In conclusion, there always some people who have horrible luck in life and a safety net should be thrown to them of course, but millions of people made bad choices and to them the boat sailed the day they signed on the dotted line, in life you suck it up and move on, nobody is going to make another bad loan to you nor should they.
Again sorry for the post, but i drive by million dollar homes everyday empty and short sales or lender owned, i wonder what were these folks thinking.
This may sound very callus (i wish i didn’t have to post this) but why should anybody get bailed out of a mortgage or auto loan they can’t afford?
Largely, to discourage banks from making loans to people that can’t really afford to pay them back. That’s why we have bankruptcy. To aid the unlucky and punish those who would take advantage of the imprudent. What I can’t get behind is those who feel that they somehow deserve debt forgiveness WITHOUT being branded with the “Scarlett B”
Both the individual and the bank were speculating that the price of the property would increase and that the individual would have the wherewithal and desire to make the payments.
The bank has lots of attorneys and finance types to make a decision with minimal risk. The bank chose not to use those resources and made a risky decision. That’s why we have the foreclosure process. Now the bank gets the house. It’s a business process that’s well understood.
I don’t see any individuals getting “bailed out”.
Where is Lil’ Joey in Ca when you need him most (to respond in outrage to your post, for instance)?
Some people might say the reason why borrowers should get bailed out was because Wall Street/Mega Bank resorted to faulty lending out of greed ,
with a ponzi scheme ,and the general public was harmed by how they set people up for a big fall . Because the faulty lending/appraising was done on such a
massive scale ,it’s to big to bail out everyone ,so the government is just picking and choosing where to bail out . But if you just looked at contract law ,the banks and the borrowers would both go down . But,they do have a concept in law about a contract being voidable if any fraud took place in the conception of the contract . The people that bought into the real estate market would have a reasonable expectation that the other borrowers were properly approved for the home purchase and they were competing with real qualified borrowers ,rather than fraudulent borrowers .
““‘It feels horrible to go through foreclosure,’ said Ramos. ‘I can’t apply for anything. I have no credit.”’
Good, at least now you cannot run up any more debt for me and the rest of the sucker taxpayers to pay off. Its obvious you had no concept of what it takes to pay a mortgage.
You were just looking for an easy profit. You gambled and lost.
“Shatter’d & sunder’d.
Then they rode back, but not
Not the six hundred” — Tennyson
Something you might find interesting.
Lenders’ actions show they think properties are not worth pursuing.
Nobody is sure exactly how many bank walkaways are occurring. For various reasons, they can’t be identified in searches of public real estate and court data without individually pulling case files, experts say.
But nobody questions that they are on the increase. David Rothstein, a researcher with Policy Matters Ohio, summarized the way they occur like this:
• The lender files a foreclosure, gets the foreclosure judgment in court, takes the property to sheriff’s auction but doesn’t bid on it if no one else does.
• The lender files as above, gets the judgment, sets the sheriff’s auction, then cancels the sale at the last minute.
• The lender files as above but then never requests a sheriff’s auction.
• The lender doesn’t even bother to file foreclosure. All of these actions leave the foreclosed property in the hands of the original owner who, in many cases, has moved out and is unaware the lender hasn’t taken it. One indicator of the trend in walkaways is the gap between the number of foreclosure filings by lenders and the number of properties actually sold at sheriff’s auction.
A Dayton Daily News analysis of Montgomery County records found that, through September, foreclosure filings are on a pace this year to decrease by 8 percent. Meanwhile, foreclosed properties sold at sheriff’s sale will be down more than 21 percent. Over the three years an average of 2,500 foreclosure filings have not made it to sale at auction.
A foreclosure filing may not make it to auction for a number of reasons, including owners coming up with the money or lenders working out deals with them. But, Rothstein said, the growing difference between filings and sales suggests walkaways are playing an increasing role. “When we look at the numbers, it’s not like thousands of people are getting loan modifications that would lift them out of the foreclosure process,” he said. “So what’s happening to those other properties?”
Another indicator is the falling number of properties that banks are repossessing, said Daren Blomquist, a spokesman for RealtyTrac, Inc. Data from RealtyTrac shows that bank repossessions, called REOs, have been steadily declining in Montgomery County over the last three years. The 2009 monthly average for repossessions is only 43 percent of what it was in 2007, a newspaper analysis of the data show.
“There’s something happening once the properties enter foreclosure that is at the very least slowing down the process,” Blomquist said. “Maybe not to that (Montgomery County’s) extreme, but we’re seeing a similar pattern nationwide.”
Another indicator is the number of canceled sheriff’s sales, said Chuck Rodersheimer, a Dayton attorney who specializes in bankruptcy and foreclosure cases. ZIP codes like 45405 and 45406 northwest of downtown Dayton illustrate the problem, he said.
A newspaper analysis of sheriff’s sale data found that 45406 had 721 cancellations since 2006, by far the most of any county ZIP code. The 45405 ZIP was second with 594 cancellations.
Some of those neighborhoods have a lot of old, deteriorating housing stock, many of which are for sale or vacant, and accumulating unpaid taxes. The cost to the bank for taking responsibility for those properties, he said, is going to far outstrip anything they could hope to get out of selling the homes. The sheriff’s sale cancellations in those neighborhoods, Rodersheimer said, are unlikely to be a result of negotiations between the owner and lender. “It’s going to be the fact that the bank didn’t want the property any more.” In some instances, lenders don’t even bother to file a foreclosure. Figures by RealtyTrac released this week show foreclosure filings in the greater Dayton area are down almost 21 percent. John Carter, housing inspector with the city of Dayton, finds the decline in foreclosures “very scary,” because houses are continuing to go vacant. For every 100 houses that he orders boarded up, he said, 40 to 50 properties have a mortgage but no foreclosure filed. When he contacts the banks, they sometimes tell him they have no plans to foreclose. “That makes it look like the foreclosure numbers are going down, but in actuality the banks are not even starting foreclosure,” Carter said. “So there’s no number to track now.”
“Lenders’ actions show they think properties are not worth pursuing.”
I am pretty sure the payoff to creative investment of bailout funds generally dwarfs the return to REO repossession and sales operations.
Wow ….the Lenders aren’t foreclosing . So ….you got property that isn’t insured by anyone and you got property that the taxes are
mounting ,so eventually the property will go to tax sale .
My question is what happens since in the contract it usually states that the borrower agrees to insure the property ? The lenders are walking .
Lets have a National Walk Day ?
Spent a few minutes on trul ia looking at property around the 92263
92264, 92270 zips. Seeing more and some lower.
Lots of manufactured homes at super cheap prices. Some houses coming down. More short sales being listed. Just not nearly as much as I actually SEE.
““Sherman Lein said he decided to appeal the tax assessment for his home west of Boca Raton. The Palm Beach County property appraiser decreased his home value by about $100,000, but his tax bill was still higher than last year.”
Welcome to SOH!!
W00t!
I will never tire of hearing these idjits b1tch about this.
“‘It’s what you borrowed,’ Brathwaite said. ‘You wouldn’t share in the gain [if you sold your home at a profit]. Why should the bank share in the loss?”’
Because they wrote the loan against the collateral value of the house.
“But it isn’t only first-time buyers who benefit from the tax credit. So do sellers having a tough time unloading properties amid a housing glut, and people afraid to buy because of rising unemployment. That has led many buyers to look for the best deals and turn to foreclosed properties to save money, knowing banks are eager to shed the properties off their books.”
Is somebody keeping track of how many first-time buyers lured into buying by the $8K tax credit will eventually lose their home due to job loss over the next several years? My hunch is that many folks will end up wishing they had kept on renting, rather than taking the fool’s bait of a tax credit enticement to join the Ownership Society.
It looks like lots and lots of tax cheats may be able to continue cashing in on renewal of the $8K first-time home buyer credit.
* The Wall Street Journal
* U.S. NEWS
* OCTOBER 20, 2009
Home-Buyer Credit Is Focus of Inquiry
By JOHN D. MCKINNON
WASHINGTON — The Internal Revenue Service is examining more than 100,000 suspicious claims for the first-time home-buyer tax break, another sign of potential trouble for the soon-to-expire program.
The measure, adopted in February as part of the economic-stimulus bill, gives first-time buyers an $8,000 tax credit in an effort to boost sales and stimulate the moribund housing market. The program is set to end Nov. 30, but housing-industry leaders are lobbying Congress to extend it.
More than a million claims for the credit have been received so far, and housing-industry experts estimated that the credit has helped generate about 350,000 home sales that wouldn’t otherwise have occurred. But some lawmakers and tax experts now say there is evidence that a significant number of the claims might prove to be unjustified, or even fraudulent.
“I am concerned about recent reports that there have been fraudulent schemes involving the credit,” Rep. John Lewis (D., Ga.), chairman of a House Ways and Means oversight subcommittee, said in a statement. The subcommittee is planning a hearing on the problems on Thursday.
The IRS said it was investigating 167 “criminal schemes” involving the credit, according to the subcommittee. IRS officials on Monday declined to describe the suspected schemes or provide additional details.
At a recent hearing of a White House tax advisory panel, Bonnie Speedy, national director of AARP Tax-Aide, a volunteer service for low-income people, suggested that abuse of the home-purchase credit appeared to be widespread, in part because of relatively loose standards for claiming the credit.
The credit “has some fraud issues because it’s not being done at the time of the sale,” said Ms. Speedy. “People are filing for the home credit who don’t have a right to file for it.” Taxpayers don’t have to file their claims as part of a real-estate transaction and instead can file or amend their income-tax returns to claim the credit.
…
What kind of kickbacks will be paid into Congress critter campaign coffers in exchange for supporting renewal of the first-time buyer tax credit scam? I almost hope it passes, as it will make the next leg down of the housing price crash all the more convincing if the renewal of the credit proves insufficient to stop it.
* The Wall Street Journal
* OCTOBER 19, 2009, 1:17 P.M. ET
Housing Trade Groups Urge Obama Administration to Back Tax Credit
By JESSICA HOLZER
WASHINGTON — Three major U.S. trade groups are urging the Obama administration to back an extension of the $8,000 first-time home-buyer tax credit set to expire Nov. 30.
“Our fragile economy is just beginning to show signs of recovery. We should not jeopardize that recovery by letting the tax credit expire,” the Mortgage Bankers Association, the National Association of Home Builders and the National Association of Realtors wrote in a letter Monday to senior administration officials.
The letter was sent to Treasury Secretary Timothy Geithner, National Economic Council Chairman Lawrence Summers and Department of Housing and Urban Development Secretary Shaun Donovan.
Lawmakers from both parties, including Senate Majority Leader Harry Reid (D., Nev.), are pushing for an extension of the tax credit. House and Senate panels will hold hearings addressing the tax credit this week. The White House, however, so far has been silent on whether it supports an extension.
…
Open your nostrils and smell the caffeinated Trader Joe’s French roast coffee, dude. Global finance has already self-destructed. It is now time for perestroika.
* The Wall Street Journal
* OPINION
* OCTOBER 19, 2009, 10:36 P.M. ET
In the World of Banks, Bigger Can Be Better
We can solve the too-big-to-fail problem without losing the benefits of a global financial system.
By CHARLES CALOMIRIS
Legitimate concern about the risks to taxpayers and the economy posed by banks that are “too-big-to-fail” has prompted some observers, among them Simon Johnson, former chief economist of the International Monetary Fund, to favor draconian limits on financial institution size. This is misguided. There are sizable gains from retaining large, complex, global financial institutions—and other ways to credibly protect taxpayers from the cost of government bailouts.
…
At the end of the day, it is the low-income households who were supposed to be helped who are most likely to be buried at the bottom of the foreclosure avalanche. And I will be sure to utter a vociferous HBB “I told you so” to all the government leaders who continued to support demand-side affordable housing policies long after it was obvious they were an utter failure and a devastating pox on all the houses they encouraged low-income families to purchase.
Special Report
The Rescue
Yet another housing bailout on the way
Obama administration unveils plan to prop up state and local agencies that provide mortgages to first-time and lower-income homebuyers.
By Tami Luhby, CNNMoney dot com senior writer
Last Updated: October 19, 2009: 6:03 PM ET
NEW YORK (CNNMoney.com) — Just as federal officials seek to wind down many bailout programs, the Obama administration announced Monday yet another initiative to prop up the housing market.
Administration officials unveiled a plan to aid state and local housing finance agencies, which provide mortgages to first-time and lower-income homebuyers and enable the development or rehabilitation of rental properties. Officials declined to put a pricetag on the program, but said there would be no cost to taxpayers.
“This initiative is critical to helping working families maintain access to affordable rental housing and homeownership in tough economic times,” said Treasury Secretary Tim Geithner.
Under the initiative, the Treasury Department, along with Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500), will purchase housing bonds issued by the finance agencies. This will give the groups the funding needed to make new loans. Also, the government will provide a temporary credit program to allow the agencies to refinance their existing bonds to more favorable terms.
…
It’s a balloon boy market rally
Is the market rally a hoax?
Stocks have soared thanks to ’strong’ earnings reports. But some worry that the Dow’s move above 10,000 has been fueled by hot air.
By Paul R. La Monica, CNNMoney dot com editor at large
Last Updated: October 19, 2009: 12:34 PM ET
Stocks continue to surge on the back of decent earnings reports. But has the rally from the March lows come too far too fast?
NEW YORK (CNNMoney.com) — Powered by a gush of strong earnings reports, the Dow has finally ballooned above 10,000 again. But could this most recent leg of the market rally turn out to be a cruel hoax?
…
Rents are up … but the employment numbers are the wild card for that too. Thanks for a very thorough post!
“‘It’s what you borrowed,’ Brathwaite said. ‘You wouldn’t share in the gain [if you sold your home at a profit]. Why should the bank share in the loss?”’
When my wife lost her job and it became apparent we were headed down the rabbit hole, I offered to share any future gain on the house with the bank if they would make it affordable for me to carry until such time. Their reply: “We don’t play those games.”
F***ers.