The Risks Just Were Not There
It’s Friday desk clearing time for this blogger. “They won’t be home for Christmas, but a Roslindale family who lost their house to foreclosure, just miles from where Bank of America’s CEO lives, still hopes to have a happy new year. ‘If we can do anything to get our home back, we’re willing to work with (the bank),’ said Joseph Coyne, who attempted to resume living in his former home on Wednesday ahead of Christmas.”
“Coyne and activists from the group City Life entered the vacant home and were working to get the utilities back on when police arrived and asked them to leave. They complied, but hope to convince Bank of America to let Coyne, his wife and seven children return and rent or repurchase the house at current market prices.”
“The Coynes admit they cashed out some $200,000 during the housing boom, but claim a slick mortgage broker pushed them to refinance over and over again. The couple says most of the money went to paying parochial school tuitions for their kids, who range in age from 4 to 19. ‘Even though we signed the papers, we had no idea - no idea - that things would go like this,’ Margaret Coyne said. ‘It took five minutes to sign our lives away and not realize what we had done.’”
“Like many middle-class Americans, Greg Staffa of Farmington quickly spiraled from joblessness into foreclosure. This Christmas, home will be a late-model Ford. One of the last Minnesotans to lose his home in what has been a tough year for foreclosures, Staffa drove away from his Farmington townhouse at daybreak Saturday, joining more than 26,000 others closing the door behind them for the last time.”
“Job loss, a bad economy, foreclosure, impending bankruptcy — all of this year’s headlines seem to have converged on Staffa, a formerly homeless man who thought he was doing everything right in 2005 when he worked a $20-an-hour job and bought a modest townhouse on a cul-de-sac.”
“It cost him $154,000 — well within his means at the time. ‘I didn’t buy more than I could afford,’ he said.”
“The real estate woes of Virginia Beach developer L.M. Sandler & Sons Inc. have strangled any hope – at least for now – that two of its projects near North Carolina’s coast will be built out with the lavish features that were promised. Building at the Sandlers’ San Rio Ocean & River Club in Shallotte, has come to a standstill as bankers and lawyers bicker. At issue are who will be responsible for the project moving forward and whether the owners of more than 60 sold lots have any recourse in recouping their investments.”
“Until 2008, when the housing crisis was reaching its peak, it seemed that any project touched by brothers Art Sandler and Steve Sandler turned to gold. They made millions of dollars developing master-planned communities in Florida, North Carolina, Virginia and elsewhere along the East Coast.”
“In 2007, Wakefield turned its eye toward the coast by opening a division to develop projects there. ‘They promised all these great big, wonderful things and never followed through,’ says Bruce Kertcher of Calabash, who was among the first lot buyers at San Rio. He and his wife, Sandra, paid $199,000 for Lot 3 in the first phase of San Rio in June 2007 after being treated to helicopter rides to view the property, a tour of Holden Beach, where they would have access to a beach clubhouse, and a stack of glossy marketing materials.”
“The Kertchers had retired to Calabash in 2006 and investigated several coastal projects before buying the lot in San Rio. They planned to build a home where family could gather or that they could later sell or rent. ‘We still have a piece of property, but it’s not marketable or ‘buildable’ right now,’ Kertcher says.”
“Kertcher is one of 25 lot owners in San Rio who have filed a lawsuit against the owners of San Rio alleging breach of contract, misrepresentation, fraud and deceptive trade practices.”
“The best thing to say about 2009 is that it’s almost over. And here’s hoping that 2010 brings better days to the Dallas-Fort Worth real estate business. A few years ago, flocks of building cranes roosted on almost every corner of the Dallas skyline. Now the credit crunch and national recession have pushed this noble bird to the brink of extinction. But for a few public sector projects, almost all the cranes have flown the coop.”
“If you build it, they may not come. That’s what developers of Dallas’ Victory Park project learned the hard way. The ambitious project tried to light up the northwest side of downtown with new shops, restaurants, residences and offices. But the stalled economy and credit woes were too much for parts of the development to overcome. In July, Victory Park’s developer, Hillwood, handed over its ownership in the buildings to the German banking groups that financed the deals.”
“A map inside the sales office of KB Home’s Riverbend development in north Stockton is marked by magnets indicating which lots have been sold, which are built on, and which are still available. An indication of how times have changed for home builders, only a quarter of the lot spaces on the map are filled.”
“There has been a 180-degree spin for the housing construction industry, which blew into a massive bubble at the beginning of the decade but eventually popped, creating financial turmoil that may take years to clean up. The beginning of the housing boom in San Joaquin County was a result of supply and demand, University of the Pacific Business Forecasting Center Director Jeffrey Michael said.”
“‘You have to go back to the late 1990s and the (tech industry) boom in the Silicon Valley spilling over across the (Altamont) pass,’ Michael said. ‘Population growth really picked up in this area after what was a pretty weak decade for new housing in the ’90s.’”
‘Thousands of building permits were issued each year in the early 2000s in the county’s largest growing cities - Lathrop, Manteca, Stockton and Tracy. Pockets of new home developments sprouted in each location, luring buyers by offering more and more luxurious amenities. By 2005, San Joaquin County’s median home prices hit an all-time high of $400,000, despite only 11 percent of county residents able to afford such a mortgage, according to the California Association of Realtors.”
“It was not uncommon to see new homes advertised at $500,000 or more. Some neighborhoods would sell at triple the county’s current $170,000 median sales price. As housing prices increased, so did consumer confidence. The early 2000s was a period of low unemployment, fast and easy credit, and a strong stock market that helped fatten many portfolios.”
“‘And people have a lot of confidence in buying real estate in a growing region,’ Michael said. ‘Banks were confident, buyers were confident, and when you could get a loan with little or no money down, the risks just were not there.’”
“One indication of the state of the economy was revealed when Wells Fargo held its annual Economic Outlook not in an expensive resort convention center, but instead via teleconference. Four economists with Wells Fargo Securities generally shared one point of view — the economy will rebound, but will take years to return to levels seen a few years ago.”
“Foreign investments helped drive the economic boom in the early half of the decade, but have declined significantly. ‘The U.S. is not alone with the credit bubble,’ said Jay Bryson, global economist. There is little worry that China will see a credit crisis similar to the one in this country, however. ‘It’s not something that keeps me up at night.’”
“Real estate foreclosures, which have been prevalent among mortgages secured with no documentation or other marginal means, are now rising in the traditional lending market, said Mark Vitner, senior economist. Often even modified loans do not work out. More than 75 percent of modified loans are delinquent again after 90 days, he said.”
“‘It doesn’t matter if they are restructured if the homeowner doesn’t have the available income,’ he said.”
“There is a fine balance between what is good for consumers and what is good for banks, said John Silvia, chief economist and moderator of the discussion, with 75 percent of the economy based on consumer spending. ‘They want everything but can’t afford anything,’ he said. ‘If credit is extended and they can’t sustain the payments, the fundamental challenge is in (servicing the debt). How many do we expect to own houses. How many do we expect to own fancy automobiles. How many do we expect to own big-screen TVs.’”
“Since the phrase ‘A Diamond is Forever’ first appeared in advertisements in the late 1940s, the retail diamond industry has maintained a long, happy partnership with fairy-tale romance. The bridal business continues to be the lifeline for many Southwest Florida jewelers, even if other sales decline. For example, buying jewelry as fashionable gifts declined during the recent recession.”
“It may seem that diamonds have always been one of America’s most popular symbols of love. But it was not always so. De Beers and its subsidiary, the world’s largest diamond mining and selling operation, leveraged the timeless human emotion after sales fell off during The Great Depression. The company hired an ad agency to combine romantic images with the nowubiquitous catchphrase, and the twinkly gem captivated a starry-eyed public.”
“For many hopeful husbands, spending two or three months’ income on a diamond engagement ring became par for the course.”
“In Southwest Florida, the recession created a glut of diamonds that drove down prices on the street, even though diamonds have held their long-term value well. The market was flooded with people trying to get rid of their old diamonds. ‘People are selling diamonds to try to pay their mortgage or medical bills,’ said Mark Loren (of) Mark Loren Designs in Fort Myers,. ‘The supply is much greater than demand at the moment. It’s kind of like the housing market. You’re starting to see the best deals disappear quickly.’”
“‘What we are (also) seeing is people who took money out of real estate or other markets and put it into a big diamond, because it’s going to hold its value. We’ve had some clients that purchased big stones from us when things were really busy in the construction industry. And we’ve now helped them resell those big stones.’”
‘Even though we signed the papers, we had no idea - no idea - that things would go like this,’ Margaret Coyne said. ‘It took five minutes to sign our lives away and not realize what we had done.’”
Naturally these imbecilic “victims” have seven kids to further propagate their mentally defective genes. IDIOCRACY at it’s purest.
Be that as it may, Merry Christmas, everyone!
“Coyne and activists from the group City Life entered the vacant home . . . The Coynes admit they cashed out some $200,000 during the housing boom.”
I guess the punchline is that they were only able to steal $200,000 from the economy before they were shut down. What a sad story. Good thing we have activists to support the rights of such people to get 100s of thousands of dollars for nothing while responsible renters trying to live within their means were pushed further down the chain. How could anyone that supports unaffordable housing, easy credit, and repeat refinancings be called an “activist.” I have a different name for them that begins with the letter A.
does it rhyme with “glass bowl”?
Not just renters.
A lot of us who owned homes at the time didn’t take out money against the house, so my kids didn’t get private/parochial school, trips to Disneyland (or any kind of vacation at all, for that matter), stuff from the Gap, etc.
Neighborhoods all over America had this type. I was constantly trying to explain to the kids why we couldn’t afford to do some of the things their friends were able to do.
If these people get bailed out, it kinda defeats the purpose of sending out the “prudence” and “financial restraint” message.
That sucks, GS-fixer.
And the lesson your kids learned? Crime/fraud/irresponsibility always pays. Only suckers try to stay out of debt and live within their means.
The only people who won took the money and bought property in cheaper areas for cash. For the rest, it was a big honey trap, where millions were drawn into the alure of cheap easy credit, then the door was slammed. Many of us could easily see this trap developing, and steered clear, but for many the temptation was just too easy.
In truth though, the last bubble delayed the big fall by a few years, and the whole thing would have collapsed years ago without it. A whole economy - albeit a fake one was driven by the housing bubble for the better part of a decade. We would have seen 25% unemployment by 2005 had it not occurred, and banks would still be going bust.
The point? We have an economy where credit and debt equate to wealth, and incomes are driven down by cheaper international labor, leaving millions of westerners high and dry, regardless of economic fads… I don’t see this improving any time soon, or any time at all.
For the rest, it was a big honey trap
I agree with that. I think a lot of people like to look at those that took the “free money” and say that they beat the system. That is not what I see. The people that took that free money did not realize the true rules of the game. They indeed thought the money was free.
These people are not turning cartwheels. Yes, they may think they are victims. Of course we know they are not. From what I see most of their lives are now filled with stress and uncertainty. One couple we know that took the “free money” and lived large is not holding parades to celebrate their victory. They are realizing that their finances are screwed. They think, and speak, about divorce and family dissolution. They continue to pour money down a hole with their new, higher, mortgage payments. Time is working against them.
I think many of these people hope for a bailout. Most will not be bailed out. Most are just bobbing up and down in the ocean, knowing that their arms cannot hold out.
My wife and I did not take the “free money”. We actually studied what was going on and understood what was driving the lifestyles of the people around us. We are secure enough in ourselves that we know the Joneses are f—ed (except Ben, of course). The Joneses can keep up with themselves. I feel no need to go along.
Of the people we know that took the free money I think almost all of them would gladly swap places with my wife and I. They would not only wish to have our more secure financial position but they would also like to possess our restraint and self-esteem that is not based on “stuff”.
Living with integrity is a hard path to choose, with many moments of doubt, but it is the best long-term investment you can ever make in yourself.
Well said.
In truth though, the last bubble delayed the big fall by a few years, and the whole thing would have collapsed years ago without it. A whole economy - albeit a fake one was driven by the housing bubble for the better part of a decade. We would have seen 25% unemployment by 2005 had it not occurred, and banks would still be going bust.
The point? We have an economy where credit and debt equate to wealth, and incomes are driven down by cheaper international labor, leaving millions of westerners high and dry, regardless of economic fads… I don’t see this improving any time soon, or any time at all.
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Totally agree with this, 100%.
Don’t mention ACORN here. One of the Obama Tzars or Emanuel will put out a contract on you ‘Chicago Style’.
I had an ACORN post that got swallowed yesterday. Main point:
According to Rush and the AM radio gang, ACORN has supposedly destroyed democracy, threatened our freedom, and brainwashed Rahm and Barack into initiating some huge socialist conspiracy. And, theye did it on only $54 million in federal money since 1994. If only Cheney had been that efficient, we might not be in so much debt.
What is shockingly annoying is that they took out $200,000 tax free!!
Un-f*cking believable, and now they bitch and moan about being victims of a mortgage broker.
Bring back the debtors prisons for these twats.
SEVEN kids!!!! Jesus Christ (topical, huh?). And somehow it’s all Bank of America’s fault.
Listen pal, Bank of America may be responsible for a lot of things, but not any of your problems. Those are all completely self-inflicted.
Why doesn’t sonebody tell them this?
The Catholic Church has some built-in contradictions. They want all acts of intercourse to produce children. Yet they generally limit the number of children a family can place in parochial school to 4 at a time. The family must put up the cash if they want the entire big brood in parochial school.
Yeah like being against monogamy for gay people, it’s ok if they get aids but not ok to marry.
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The Catholic Church has some built-in contradictions
Actually the Catholic Church is quite consistent. They’re anti-abortion, anti-death penalty and anti-war. More than I can say for creepazoids like freaky pharisees of Dobson/Robertson and other assorted confederacy apologists.
Who are you and what did you do to Exeter? I would agree with you. The Catholic church takes a lot of heat, and deservedly in some cases, but they will still take a principled stand. You can’t say that about many “religions”.
It’s still me NYCB. Like anything else, perspective eludes most people, no different than housing. For example, the real estate crime syndicate have been cheering the supposed good news of increasing sales. But don’t sales increase when prices fall? Of course the average Joe doesn’t hear that and if he does, wouldn’t understand even if you explained to him. I clarify technical resolutions that come from our home office for the construction trades all day long but I can’t think for these guys.
I didn’t mean to write all that but the truth is the truth about the official Catholic position on those issues I mentioned.
” the Catholic Church is quite consistent. They’re anti-abortion, anti-death penalty and anti-war”
I don’t get it…why was John Kerry refused communion because of his support of the right to ‘choice’ about abortion, but Nino Scalia embraced despite his support of the ‘choice’ for others to apply the death penalty.
Ratzinger gave a speech about “the Catholic Church must not become prey to modern moral relativism or ideological trends,”…yet also said “There may be a legitimate diversity of opinion even among Catholics about waging war and applying the death penalty, but not however with regard to abortion and euthanasia.”
I’m not sure any logical thinker would call this “being consistent” or not applying moral relativism.
Quite clearly Scalia and Kerry aren’t the established Catholic church.
It seems Ratzinger indicated that dissent among Catholics is acceptable but the official church position is what I mentioned above.
No one claims that either Kerry or Scalia represent the Church, but clearly the decision to refuse communion to high ranking politicians comes directly from the Vatican. The Pope can’t claim to be free of moral relativism when he ignores politicians who violate the sanctity of life in some cases while subjecting others to the equivalent of public rebuke.
The Vatican can obviously run their church as they see fit. But when the Church meddles (or chooses not to meddle) in secular politics they will abandon their “principled stands” for the sake of political expediency no less often than any other religion. This kind of jawboning has occurred from the time of Constantine to the present day.
There are better words for it, but it’s more polite to just refer to them as ‘inconsistencies’.
I agree and you’re quite correct on Constantine’s successful effort at establishing state religion thus distorting Christianity completely since. Read Pagan Christianity by Frank Viola and George Barna. You will never view religion in the same way ever again. And if you’re a believer and adhere to North American styled Christianity, I highly suggest everyone to think twice about reading this book. Note that the authors are pastors.
Everybody knows “real” Catholics homeschool. Those liberals putting their kids in parochial school got what they deserved.
??
since when?
i’m an only child, and i went to parochial school. the (relatively small) fee my parents paid was exactly the same as paid per child by a friend’s family who had nine kids, close enough in age that they definitely had more than four at a time in the school.
The parochial school I went to in the 60’s let a family send any number of children if the family tithed 10% of their income.
+1 Englishman…I agree…Particularly regarding the 7 kids…
What is the point of this story? The author admits they cashed out 200k of stolen money. Is it intended to be a satirical piece welcoming the end of the housing boom, or was the author brain dead. I lived within my means and got nothing. Where in the hell are my group of activists.
“What is the point of this story?”
To inform: P.T. Barnum underestimated the time factor.
To entertain: A healthy dose of schaddnfreude on Christmas morning.
To be thankful: I could have been born as one of their seven children.
Sarah, this rendition of the oft-repeated story at least includes the fact that they cashed out $200,000. A couple of years ago they would leave out that important piece of information. Only the most soft-hearted could feel sorry for these clowns. Are we supposed to feel bad that they think they’re too good for public schools?
I went to public school and always lived below my means, saving to make sure I could easily survive in case something bad happened - as a result I missed out on most of the boom. Maybe if I went to private school, mingling with the childen of financial geniuses, I would have learned all about debt leverage and con games - and perhaps I’d be sitting on a beach retired right now.
But…think of the CHILDREN!!!
.
Notice that the story says that “some of the $200,000 cash-out refi” went to pay for private school.
Oh yeah???? EXACTLY how much did you actually spend on school?
How much did you spend on TVs, vacations, cars, & bling??
These people are my neighbors! I wondered what happened to them. I also guessed they must have refinanced and took money out of the home as they appeared to have lived in the neighborhood for many, many years. It is a rough neighborhood, no wonder the kids went to parochial school.
They don’t have a lot of bling, as if that makes a difference. One car, a normal house. The youngest kid runs around unsupervised.
The MSM and liberalism in general have promoted such a culture of pathological victimization that they seem genuinely incapable of recognizing that most “victims” made the poor choices that landed them in their current plight. I’ve noticed that on stories like this you get far more substance out of caustic reader comments (below the online versions) than from the vapid scribblers who wrote the articles.
As always, you hit the nail right on the head, Sammy!
I meant to add, in my travels, I have seen genuine human suffering in many places, including our own inner cities, and these ass-clown stories are a farce in comparison.
What the h*** are you talking about Sammy? The liberals and Mainstream Media are to blame for these folks? I don’t see politics here, just stupdity and self-indulgence. That is revoltingly common in folks of all political stripes.
Back when we had a maintream media that everyone listened to and corrected, people were accountable to the same set of facts; they couldn’t scapegoat make believe boogymen for their own stupidity.
Although greed and stupidity are certainly not owned by any political party, I think Sammy’s correct about liberal “victim” mentality giving these people comfort if nothing else. Nobody wants to take responsibility for anything in this country now; everything is someone else’s fault.
Now, I would be remiss if I didn’t point out that there are plenty of greedy and stupid bastards on the conservative side as well, and I am just as against banks receiving bailouts as these d-bags that stole 200K.
As I posted above, I have seen plenty of real victims in the world, and the difference between them and sob-story Sally who HELOC-ed herself out of a house is that the real victims of this world are there through no fault of their own. Greed, unfortunately is a part of human nature.
+1, DIN.
This particular pair of self-entitled pukes still seem to think the house they rented from the bank is somehow theirs?
Clearly our culture hasn’t made any progress getting past the lie that paying a bank $3 in exchange for $1 is a good idea.
To bad we don’t teach basic math or reading anymore. Teachers with union propection have little incentive, accountability and we wonder why things go wrong.
I think you’re just jealous.
Well, it would be nice if we all had jobs from which we couldn’t be fired, and which would give us all get the same raise whether we performed well or just frucked off all day.
How do such union pukes look themselves in the mirror each day?
from all the PBS coverage this weeks it looks like Michelle Rhee is sure kicking teacher a$$ in DC!
Yes 1 school administrator in all of America…how sad is that????
I love unions.
My so-called union puke SIL sleeps just fine once he gets a chance. He puts in extensive extra hours at no pay.
The problem with DC schools isn’t the teachers. It’s the students and the (lack of) parents.
Oxide:
The first thing I would do ask King of the School system, is make English the official language, not ghetto.
Add an extra hour each day of English classes. Eliminate all forms of rap and hip hop. And graduating to the next grade, you must be able to communicate and argue without swearing or using the N word, or it’s summer school for you. Tough Standards these days.
All I can say on this Christmas Day is Boo-Freakin-Hoo to those people. They cashed out $200K but want us to feel like B of A is cutting off Tiny Tim’s legs for giving them the boot?
We had one of these in the news lately, and I started a thread on Piggington’s (local SD bubble blog). At least we got the message to the reporter.
http://piggington.com/turko_files_mortgage_quotvictimquot
Hilarious! Good one!
The Coynes sound like typical American yuppies. Yes, we signed the papers and yes we spent $200k on our kids’ tuition, but it’s no OUR fault and we DESERVE to have OUR home at current valuations.
Yea, right. These folks deserve to live in a 3br apt. in Lancaster.
The Financial Times
Faith and finance: Of greed and creed
By Patrick Jenkins
Published: December 23 2009 20:02 | Last updated: December 23 2009 20:02
St Andrews Church and Swiss RE building
To the majestic clang of its bells, hundreds of sober-suited people scurried through the portals of St Paul’s Cathedral last week to take part in a carol service, hear the familiar story of Jesus’s birth and generally get into the Christmas spirit.
Yet this was no ordinary festive occasion. Instead, assembled beneath the dome of Christopher Wren’s City of London masterpiece was a private congregation made up of staff from Lloyds Banking Group. They were there to sing their hearts out after a year in which their employer veered from rescuer (of the rival HBOS) to rescued (by the state, after the takeover beset it with troubles).
Nor was it an isolated event. Vicars in the capital’s financial district have been reporting steadily swelling numbers of worshippers for months now – anecdotal proof, seemingly, that some of the bankers who contributed to the crisis of the past two years are seeking salvation or at least an understanding of their place in the world. “Most people want to do a good job,” says the Rev Oliver Ross, dean of the City of London and vicar at St Olave’s, one of the capital’s few remaining mediaeval churches. “The church is growing. There is an increased desire among a lot of City workers to look at the ethics of what they do. People want to talk about it, to question it.”
Some of those questions are purely personal – with hundreds of thousands already made redundant over the past two years, how secure is anyone’s job and will praying help to keep it? Other questions are more profound – why did financial capitalism become synonymous with crazy risk-taking, with the passing off of toxic investments to unwitting counterparties and the earning of multi-million pound bonuses, regardless of merit?
Amid all the doubt, one thing is clear: the fragility of financial capitalism, and the moral bankruptcy of some of it, have been exposed. It is striking that even big-name bankers have been looking back at the crisis through a religious prism. Stephen Green, chairman of HSBC and an ordained Church of England minister, has said there was no consideration of the “rightness of what was done”. He has charted the history of global finance and offered up a new moral code for bankers everywhere in an ambitious book, Good Value.
…
A nice article, PB. Anyone seeking moral redemption should probably not look at the Anglican Church, however. They’re the kind of organized religion that gives organized religion an especially bad name. They were founded basically to give the English Crown a stamp of divine legitimacy while they robbed the planet blind, and to convince the peons to give up all hope of justice or redress in this life since heaven awaited.
SS… you’re one of very few people that know their history. Excellent… well stated.
Thanks, Exeter. One of my heroes is John Bunyan, the tinker who wrote “Pilgrim’s Progress.” The pulpit prostitutes of his day had him imprisoned for daring to preach scriptural truths, which are vastly different than most organized religious institutions would have the serfs adhere to.
Are you suggesting that this religion is different?
Getting a condo in Heaven was the original real estate Ponzi scheme. Recent events have shown me that mankind is still willing to trade in his collective soul for a great view in an exclusive community.
“The Coynes admit they cashed out some $200,000 during the housing boom,
These folks just got $200,000 free and clear that they have no intention of ever paying back–or even paying income tax on–and they think they’re victims? They’re bank robbers!
The couple says most of the money went to paying parochial school tuitions for their kids, who range in age from 4 to 19.
I don’t know what religion they are, but it’s can’t be one that has a prohibition on STEALING or BEARING FALSE WITNESS (like entering into a contract you have no intention of keeping).
It doesn’t matter what they did with their money. They earned it by being shrewed real estate investors. They were doing everything right and being good Americans. They are not complaining about how they spent it. They are complaining because the faucet was turned off. They are very educated consumers - it is rumored the wife alone watched over 2000 hours of HGTV programming. She probably had the “gift” to spot an outdated kitchen and see the potential that SS appliances and granite would unlock. Such people should never face hard times, for they are Gods. Im glad they have activist groups to give them the protection they deserve.
There is no more noble creature than the self-entitled consumer.
+1, Sarah.
Gourmet sarcasm. Thank you Sarah!
Margaret Coyne said. ‘It took five minutes to sign our lives away and not realize what we had done.’”
One of life’s lesson’s moron!!!
No such thing as a ‘free’ lunch, perhaps your parents didn’t teach you that. You don’t ‘deserve’ a damn thing just because you were born and have kids.
It would take paragraphs to outline what is wrong with this mentality. No worries we’ll just legislate a solution to stupidity.
<i.No worries we’ll just legislate a solution to stupidity.
In their case a court-ordered sterilization would be a good start, even if it’s way too late.
COYNE, isn’t that an Irish name ? That explains it !!!
“The Coynes admit they cashed out some $200,000 during the housing boom, but claim a slick mortgage broker pushed them to refinance over and over again. The couple says most of the money went to paying parochial school tuitions for their kids, who range in age from 4 to 19. ”
Oh….so they took out a $200,000 loan to pay for private school tuition for their 7 kids? When Roslindale has perfectly good public schools right in the neighborhood? Idiots.
“Cash out” has got to be one of the biggest oxymorons of the decade. These houses don’t come with hidden suitcases of cash. It’s just a loan folks. If they had been renters would they have even contemplated borrowing $200,000 for private school tuition? I seriously doubt it. But somehow a refi is different?
Real Estate only goes up. The realtor, TV commercials and gubmint sez so.
“Real Estate only goes up. ”
Murphys Law: What goes up, must come down!
Murphy’s Law states that if something can go wrong, it will go wrong.
What goes up must come down is an empirical law of physics.
If it goes up fast enough (escape velocity or greater) it will not come back down — it will either stay in orbit or escape earth’s gravity completely.
“Cash out” has got to be one of the biggest oxymorons of the decade. These houses don’t come with hidden suitcases of cash. It’s just a loan folks. If they had been renters would they have even contemplated borrowing $200,000 for private school tuition? I seriously doubt it. But somehow a refi is different?
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This can’t be said nearly enough. The only way to get “cash” out of your home is to sell it (and not buy another, or buy a cheaper one). That is the ONLY way. Anything else is just debt that happens to be collateralized by a house.
So… the question is: is a debtor with a collateralized loan more innocent that a debtor with an unsecured loan when they eventually default?
Comment by Sarah
2009-12-25 10:18:28
She probably had the “gift” to spot an outdated kitchen and see the potential that SS appliances and granite would unlock. Such people should never face hard times, for they are Gods.
Perfect.
Suzanne’s research failed them. Who’d have thunk it.
Baghdad Bob lives!
“.. said Jay Bryson, global economist. There is little worry that China will see a credit crisis similar to the one in this country, however.”
equally comfortingly, he doesn’t lose sleep over it.
I’m sure he was all over the bubble and its dangers as it inflated.
Staffa, a formerly homeless man…thought he was doing everything right in 2005 when he worked a $20-an-hour job and bought a modest townhouse on a cul-de-sac.”
“It cost him $154,000 — well within his means at the time. ‘I didn’t buy more than I could afford,’ he said.”
****
‘Even though we signed the papers, we had no idea - no idea - that things would go like this,’ Margaret Coyne said. ‘It took five minutes to sign our lives away and not realize what we had done.
****
By 2005, San Joaquin County’s median home prices hit an all-time high of $400,000, despite only 11 percent of county residents able to afford such a mortgage, according to the California Association of Realtors.”
**********************
All I want for Xmas is some financial
sanityliteracy in this country.From reading the stories it looks like that Staff guy is a real piece of work…again, the “victim” in the sob story is creamed in comments.
More self pity from Greg Staffa:
becauseimfat.com
On that website, he seems to think that he was being responsible because he bought a house for $45,000 less than what he qualified for. So basically, he put the decision into somebody else’s hands.
I guess the mentality is “if I qualified for the loan, I must be able to pay it off. I guess I don’t need to think for myself, I can let my mortgage broker do my thinking for me.” Of course, mortgage brokers are salesmen too (duh - they’re selling a loan), and they must have viewed this sacrifice of buyers’ scrutiny to be like shooting fish in a barrel.
I have been renting through the housing bubble since 2002. In 2003, I “qualified” for a loan of $1.2M (Egad!). I quickly recognized that the bank was willing to lend me much more than I was willing to borrow. But I guess other people react by thinking “Well, if you guys approved the loan, I guess that means I can afford it, right?”
And so he asserts that he was acting financially responsibly, because he borrowed less than what he qualified for. Such are the brains behind all these sob stories.
Probably lower than 11 percent because the CAR changed the affordability formula to allow exotic financing.
““For many hopeful husbands, spending two or three months’ income on a diamond engagement ring became par for the course.”
There is a person born every minute in the USA that will fall for these types of marketing gimmicks. Those “hopeful husbands should have saved that money for their future divorce once they fell into financial hardship by being sucked into buying Realestate at inflated prices!
De Beers is a great marketing company. The real problem is that diamonds aren’t really all that rare in South Africa, so they act as a monopoly seller to keep supply down and prices up.
“Two or three times income”
-Created by Debeers
-Pushed by the Jewelry Store
-Bought hook, line, and sinker by their customers, who, after all, “deserved it”.
The diamond biz is probably about the only one that has a leg up on the used house biz.
True.
Ever ask a diamond seller if the two-months of income “rule” is pre-tax or after-tax?
You should. It is fun watching a sales drone try to critically think about a drop-dead easy question to determine which answer will increase their income the most.
The article makes it sound like there was at one time a lucrative secondary market for diamonds, whereas I had always heard that, contrary to the popular idea that “diamonds are a girl’s best friend”, they actually have a pretty poor resale value due to their lack of rarity and the market manipulation by DeBeers.
I was wondering about that as well.
You buy at retail and sell at wholesale. The only people who think that diamonds “hold their value” are people who haven’t tried to sell them.
A map inside the sales office of KB Home’s Riverbend development in north Stockton is marked by magnets indicating which lots have been sold, which are built on, and which are still available. An indication of how times have changed for home builders, only a quarter of the lot spaces on the map are filled.
You can’t necessarily trust such subdivision maps. One subdivision around here in Meridian ID has a map on their website http://www.kingsbridgemeridian.com/map.asp that fails to comport with reality. Most of the roads shown at the right of the map simply don’t exist: they are just dirt tracks. Most of those lots with a “red dot” don’t have houses on them: instead the lot was sold to a speculator several years ago and is now languishing on the resale market with little hope of being built upon any time soon. I’ll have to go over later today and mark up a copy of their map with the truth of the matter.
I took a drive over there. Their map shows 41 lots with a red-dot. But only 10 houses exist!
Fully 27 of the red-dots are shown for unimproved lots with NO STREET existing. It’s just a farmer’s plowed field there.
Why isn’t lying like this illegal?
We don’t call it lying anymore. It’s called marketing. Madison Avenue and our Republicrat politicians think you should learn to love it.
Yep… it’s ok to lie through your teeth in the name of business but you’ll be in jail if you stretch the truth in your personal life.
Public relations wasn’t the original term for trying to influence the masses w/massaged information. The original term was propaganda. Google Edward Bernays, nephew of Sigmund Freud, father of public relations.
found this in CL - someone trying to dump an approved subdivision. Um, that means things aren’t going well, right?
http://tinyurl.com/yf274ev
With Smurfit-Stone permanently closing their Frenchtown mill I imagine things are going to get nasty around Missoula, MT.
Is that right? Eighty (80) acres for $3.9MM? Wow…
Yeah I would like to live in WALDO, MT….sure buddy
Where’s Waldo?
These failed subdivisions are everywhere and I mean everywhere…I just can’t see household formation going forward coming close to being able to absorb all these potential houses…Also, the easiest part of the development process is the building of the house…It takes years to get to the point where you have a finished lot…Big builders can put up a finished house in 90-120 days…ANY up tick in demand will be meet with supply real quick…
“They want everything but can’t afford anything,’ he said. ‘If credit is extended and they can’t sustain the payments, the fundamental challenge is in (servicing the debt). How many do we expect to own houses. How many do we expect to own fancy automobiles. How many do we expect to own big-screen TVs.”
The business point of view. For an alternative, try this: “They want us to buy everything, but they don’t want to pay us anything, so they tell us we don’t have to pay until later and everything will be great.”
Until later.
But I digest. Merry Christmas.
Nice alternative POV, WT Economist. Agree completely.
Merry Christmas!
There you have the basic root problem facing the west. Debt to replace income. Wonder how that will work out?
just R-E-N-T
…I wonder if they even considered renting before trying to get a house given to them on a sob story.
Not owning a house does not mean living on the streets - people can RENT. You don’t have to rent a chain link apartment - you can rent a good house in a good neighborhood - and the rent will cost less than a mortgage.
Oh wait - if renting, you aren’t able to default on the rent payments but still live in the house for free for 12 months while you await some kind of adjustment.
During the bubble, people were willing to pay 3 times as much to “own” their house versus rent it, all the while wondering why house prices have risen so much. And now, even though the milking of fools has finally come to an end and the awareness of realistic affordability is the popular opinion, the guy in this article still wants to “own” his house.
There is no hope for people like this. Dumb to the bone.
just R-E-N-T for cryin’ out loud.
But it’s their house.
They are thowing them out of THEIR house.
No Consequences for Lying Borrowers
http://abcnews.go.com/Business/wireStory?id=9423265
maybe for tomorrow’s bits
http://news.yahoo.com/s/ap/20091225/ap_on_bi_co_ne/us_all_business
Now those who lied about income on original mortgage can have mortgage mods.
Charming.
“The government knows that reducing foreclosures could go a long way toward stabilizing property values, which would help reverse the housing slump and ultimately aid the broader economic recovery.”
Keeping housing at artificially inflated prices doesn’t aid a so-called economic recovery.
“Dishonesty fed the housing bust. Let’s not let it ruin the chances for its repair.”
Simply not rewarding past bad behavior is not enough. Part of the repair process needs to include punishment for those that were involved in illegal and unethical activities. But I suppose acknowledging those bad behaviors with punishment would make it more difficult to funnel expensive bailouts to those same crooks.
+1, SDGreg.
Condo developers…and another one bits the bk dust. Their high price gerbil boxes of air aren’t selling and they can’t get a loan mod.
Business
Park Lafayette developer files for bankruptcy protection
By Rick Romell of the Journal Sentinel
Fighting a $100 million foreclosure suit and a severe cash squeeze, the developer of the troubled Park Lafayette condominium towers on Milwaukee’s east side sought bankruptcy court protection from creditors Wednesday.
Renaissant Lafayette LLC, a firm led by Chicago-area developer Warren Barr, petitioned to reorganize financially under Chapter 11 of the U.S. Bankruptcy Code.
The move could place Renaissant in a more favorable position as it tries to turn around the big condo project and stave off foreclosure by its chief lender, New York-based Amalgamated Bank.
…In a document filed Wednesday, Renaissant said Amalgamated “has refused to engage in any meaningful discussions” on modifying its loan terms.
…The Park Lafayette, two 20-story towers at N. Prospect Ave. and E. Lafayette Place, is the largest new condo development in Milwaukee and has struggled amid the recession and the overall woes of the housing market. Buyers have closed purchases on just eight units. Another 13 are being rented under a lease-to-own plan. Renaissant said in a court document that it has entered into sales contracts for 39 units.
http://tinyurl.com/yff8cnx
Sad, but true.
Even in spite of the Government kicking in 75 billion or more for loan modifications ,a high percentage of borrowers still can’t afford the house or prove they can make the lower payments .
When are they going to realize that the reason homeowners bought homes
was to make money on a short term investment . Unless they pay the mortgage payment for these borrowers and send them a bottle of champagne ,the borrowers will likely default eventually. You can’t make a bad loan good ,and you can’t change the motive the borrower had for buying the house to begin with .
This was a silly idea from day one to interfere with contract law and the foreclosure process and the tax codes
and put these crazy mania real estate loan contracts (which often times were fraudulent ) into relief programs at the taxpayers expense .
I can almost see relief for a time being for parties that have lost their job
so they have more time to become re-employed ,but how do you help someone who inflated their income (or someone else did ) by 50% or more ?
You can’t call the real estate market after a certain point anything but a fraudulent market and one of the biggest crime sprees in history .This is why they can’t seem to solve the problem . Yes it makes sense to refinance someone out a toxic adjustable ,but if they can’t afford a low rated fix loan modification payment ,than it’s hopeless unless you pay their payment for them or reduce the principal by 60 % . Would it be fair to cram down a loan on a party that took out 200k in equity and had
a fun time spending a bunch of money ? Rewarding parties that got thousands of dollars for free and they don’t want to pay now doesn’t seem like a victim who would qualify for a relief program . 200 thousand is a lot of money for God sakes .
Well said, Wiz.
HW:
I think we all agree this type of person should get screwed real good. They should be forbidden to buy a house for the next 20 years ..that would be FAIR!
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Would it be fair to cram down a loan on a party that took out 200k in equity and had a fun time spending a bunch of money
http://www.safehaven.com/article-15346.htm
Thomson: Residential real estate in the US is a bargain for patient, cash-rich vultures. Commercial real estate, on the other hand, is a slow-motion train wreck. Residential property in the UK is still expensive and despite the hurrahs of the industry has probably got some way to go on the downside as unemployment increases and financing remains challenging for first-time buyers. Asia, however, is a bubble in formation especially China and Hong Kong. The authorities are aware of the problem and are increasing down-payments but may be behind the curve. Foreign investors may have a double whammy of higher prices and higher local exchange rates.