A Perfect Wave Morphed Into A Perfect Storm
KKTV reports from Colorado. “Millions of Americans facing foreclosure have turned to the government for help but a congressional report is showing mortgage aid programs aren’t doing much to help stop the housing crisis. For every person who got help, 10 others lost their homes. Here in El Paso County about 54-hundred families foreclosed last year. A Colorado Springs man who only wants to be called David has owned a home in the Village Seven neighborhood for 21 years. He and his wife have been in foreclosure twice in recent years and are nearing it again. ‘It’s a constant fear of not being able to pay the bills,’ David said.”
“For him the trouble began with a pay-cut at work. He’s had trouble getting help, even knowing where to turn. Now more than a year after the government made an effort to ease the mortgage crisis a congressional panel says it’s falling short. ‘We’re just looking for relief,’ David said.”
The Gazette in Colorado. “Woodland Park hasn’t been immune to the effects of the nationwide recession. Like other cities, it has suffered spikes in foreclosures, unemployment and commercial vacancies. Numerous businesses closed. A local bank has found itself struggling.”
“Construction, always a key economic driver, has gone from boom to bust. Housing prices won’t improve and new home construction won’t resume until the glut of foreclosed properties is reduced, said Brad Spivey, chief investment officer and vice president of loans for Park State Bank & Trust in Woodland Park. ‘Until we see a plateau in foreclosure filings, it’s hard to get confident that the housing problem is starting to be resolved,’ Spivey said. ‘We still have a large supply yet to come, which will keep housing prices constrained.’”
“‘We were fat, lazy and happy, thinking that what happened in California, Nevada and Florida wouldn’t happen here,’ he said. ‘But it did.’”
The Aspen Times in Colorado. “Aspen-area real estate prices generally tumbled between 20 and 40 percent during the recession from their peak in 2007, according to a in-depth study released in April by the Aspen Appraisal Group. Aspen real estate has been insulated to some degree from national economic downturns in the past, says the report, but Aspen’s property kept its value. The current recession was so severe that Aspen didn’t escape unscathed.”
“Randy Gold, a principal in Aspen Appraisal Group, has worked in the Aspen and Snowmass Village market for more than 30 years. The number of listings continue to grow, Gold noted. There was roughly a four-year supply at the end of 2009 compared to a three-year supply a year earlier. ”
“The upper end of Aspen’s luxury residential market is in even tougher shape. There were only three sales of houses priced higher than $20 million in 2008 and 2009, according to the report. There are 19 homes in that market segment currently listed for sale, indicating ‘this is likely going to be a slow part of our market for at least the next several years,’ Gold wrote.”
The Associated Press on Arizona. “The new AP Economy Survey asked 44 leading economists whether the recession created a ‘new frugality’ among consumers that will outlive the recession. Two-thirds said yes. many who became penny-pinchers during the recession are in no mood to start shopping again with abandon for clothes, cars and home additions. They’ve discovered the peace of mind that comes with rebuilding savings, shopping more prudently and learning to live with less. Susan Wilson, a freelance PR specialist in Scottsdale, Ariz., says her business is picking up. But her spending isn’t. Wilson still feels burned by the recession, when she lost her home to foreclosure. ‘Shame on me,’ she said. ‘I wasn’t paying enough attention to my financial health. That will never happen again.’”
“Wilson is renting now. She traded in her leased car for a used car she could buy outright. She’s started growing her own vegetables and air-drying her laundry to save money and stay out of debt. She’s looking to buy a home, but not one with an outsize mortgage. ‘I’m looking for pretty much the smallest house I can live in,’ she said.”
The Deseret News in Utah. “Sen. Orrin Hatch told Treasury Secretary Timothy Geithner on Tuesday that he thinks a proposed tax on big banks to pay for bailouts is unfair because some banks that did not cause problems are included, and auto makers who benefitted from bailouts would escape it. That tax-writing committee has been considering an Obama administration proposal to assess a fee of 0.15 percent on the liabilities (other than deposits and certain required capital holdings) of financial institutions that have more than $50 billion in assets.”
“‘Is it fair to apply this tax not only to companies that have repaid TARP (Troubled Asset Relief Program) with interest, but also to companies that did not take TARP money at all?’ Hatch asked.”
“Hatch also questioned why Freddie Mac and Fannie Mae were not included, saying their failures on housing loans helped cause the recession. ‘It would be one hand of government paying the other,’ Geithner said, explaining that the government has put those quasi public bodies into a form of conservatorship that he believes would make the federal government end up paying such a tax if it imposed it on them.”
The Las Vegas Sun in Nevada. “A federal homebuyer tax credit is set to expire June 30, but a Las Vegas real estate brokerage is participating in a program designed to mimic its effect. Coldwell Banker franchises across the county, including Coldwell Banker Premier Realty in Las Vegas, are trying to capitalize on the expiration of the tax credit. The brokerage won’t be putting up the money. Instead home sellers have the option of participating in the program that offers a credit of 3 percent, up to $8,000, of their home’s purchase price. The contracts must be signed by July 31, and there is no deadline for the closing date.”
“Tisha Black Chernine, an attorney with Black & LoBello, told members of the CEO-CFO Group on April 23 that she isn’t too optimistic about federal programs encouraging workouts in preventing more homes from going through foreclosure, and worries more homeowners will opt to default even though they can afford their payments. Black Chernine said 70 percent of local homeowners are underwater — they owe more on their homes than they are worth.”
“Government programs to encourage workouts between the homeowners and lenders have been geared for areas where homes aren’t so far underwater, she said. And because the programs are voluntary, they don’t have any teeth, she added. ‘The programs work for an Iowa market or a Texas market that didn’t have a nuclear bomb go off in terms of valuation like we had,’ Black Chernine said. ‘We are ground zero … What happened in all these programs is they sound great, but they are meant for a cold sore, and we have syphilis,’ she said.”
“Black Chernine said those going through a foreclosure shouldn’t expect they are off the hook for what they owe on the mortgage. The primary lien holder has six months after the foreclosure to file legal action to collect, but secondary lien holders have six years, and a lot of those notes are being sold on the market. Those collection companies are contacting those homeowners seeking payment, she said.”
“For hotel patrons, Sunday morning at the Ritz-Carlton Lake Las Vegas felt like any other. But this Sunday morning was different. At noon, the Ritz-Carlton would close its doors. Lake Las Vegas is in bankruptcy, burdened with $728 million in liabilities. Nicole Caples, of Las Vegas, stayed at the hotel Saturday night. She said she wished the city and hotel had done a better job of advertising Ritz-Carlton to locals, many of whom she said would have jumped at the opportunity for a ’staycation.’ ‘It’s beautiful,’ she said. ‘But [it is] an oasis dead in the desert.’”
The Las Vegas Business Press in Nevada. “For Summit Partners, a startup company funded partly by tapping a home-equity loan, landing a contract with the massive Fontainebleau seemed like a vaccination against the standard growing pains. But the outlook shifted dramatically a year ago, as the $3 billion project started to crack at its financial foundations without warning, leading to a halt in work and a Chapter 11 bankruptcy filing last June.”
“‘We read about it in the paper just like everybody else,’ said John Georges, one of Summit’s three founding partners.”
“By time Fontainebleau was sold in January to New York investor Carl Icahn for $156.6 million, little more than scrap value, Georges had become reconciled to never seeing any of the $71,000 he was owed for computer hardware and software he supplied during construction.”
“What initially looked like a perfect wave suddenly morphed into a perfect storm. A high-value project, about 70 percent complete, with nothing behind it when the banks cut off funding and a new owner who has not revealed when, or if, he will restart construction all coalesced to create the massive losses.”
“Adding to the problems was the speed of Fontainebleau’s demise. ‘It wasn’t something anybody expected to go south,’ said Scott Howard, a principal at Commercial Roofers, which has filed a $4.3 million claim. ‘We had been given assurances that all the financing was in place. Then Fontainebleau just basically exploded.’”
“There were times during the latter stages of construction when Fontainebleau started to drag out payments, but design work went ahead. ‘We didn’t want to be accused of holding up the job,’ principal Fontainebleau executive architect Joel Bergman said. ‘In good faith, we gave them some drawings and the next thing you know it was over.’”
“But in a market that has become ‘very, very, very competitive,’ he’s not sure he would get tougher on future clients. ‘You can be righteous as hell and believe in your heart of hearts that you will never let it happen again,’ he said. ‘You can stand astride your steed with your pearl-handled revolver and promise you will remain strong. But when you have to pay the rent and meet the payroll, who the hell knows what you will do at that point.’”
FYI, we’ll have the shadow inventory response from the OCC posted here and at the forum tomorrow.
Ben…About 5:00 AM this morning Meredith Whitney speaking at a hedge fund conference had some interesting comments regarding banks non-preforming loans…She is predicting a 2nd leg down in the housing market and a further worsening of bank balance sheets due to more non-preforming loans even as they slowly try to liquidate the existing ones…I only saw excerpts but I would love to watch the entire interview if someone knows how to get it posted here…
She seems to have her sh@t together as an analyst goes.Some of the darelicts they wheel on cnbc are clueless.
This Bloomberg story appears to have a link to Meredith’s interview on video. Scroll down to the bottom of the page.
Speaking of liquidation sales, is anyone who reads here interested in snapping up some state government buildings at fire sale prices?
And BTW, Kevin, fire sales are typically among the most competitive of bidding situations, especially in auctions with no reserve price.
Square Feet
Cash-Hungry States Are Putting Buildings on the Block
By PETER CARBONARA
Published: May 4, 2010
To ease its deficit, Arizona sold stakes in several office buildings, including the home of the state Senate.
In Los Angeles, 11 state office buildings are for sale, including the Ronald Reagan State Building downtown.
Is it better to rent or to own?
The default answer for a long time — when real estate’s horizon seemed limitless — was to own. Lately some individuals and businesses have decided that maybe owning is not always better, especially when you have other pressing needs for cash, like paying off your creditors.
Now the idea has spread to some states with serious debt problems. In January the state of Arizona concluded a deal to sell to investors ownership stakes worth a total of $735 million in several state-owned office buildings, arenas and other properties — including the buildings housing both chambers of the State Legislature. Arizona will lease back the property from its new landlords, among them the mutual fund giants Fidelity and Vanguard, for 20 years, after which ownership will revert to the state. Arizona is planning another, smaller round of real estate sales in June. For fiscal 2011, which begins in July, the state is estimated to have a deficit of $3 billion.
Although it has been drowned out by hotter issues, like the uproar over the state’s new immigration law, some Arizona politicians have sought to make an issue of the sale-leaseback. Dean Martin, the state’s treasurer and a candidate for the Republican nomination for governor this fall, has derided the sale as a one-time gimmick used to circumvent the state’s debt limit and avoid the hard choices he contends Arizona needs to make about what he calls “unsupportable spending.”
“How many times can you sell the state capital?” he said.
Mr. Martin said he wanted to repackage the state’s debt as bonds and use some of the proceeds to buy back the buildings.
“Who wants to make a long-term investment in a state that is renting its Capitol buildings?” he has been asking on the campaign trail.
Last month California received sale-leaseback bids on a portfolio of 7.3 million square feet of office space in 11 state-owned buildings. The Golden State Portfolio includes buildings in Los Angeles and Sacramento, as well as the San Francisco Civic Center, where the state Supreme Court sits. The deal had been expected to yield about $660 million in revenue for the state, after $1.1 billion in expected proceeds were used to pay off construction bonds. California’s deficit for 2010-11 is about $20 billion.
Kevin Shannon, a vice chairman of the commercial real estate firm CB Richard Ellis, which is managing the auction for the state, said he believed the state would take in more than expected once it analyzed the bids and completed a deal, which is expected to happen by the middle of May. Mr. Shannon said the auction had produced more than 300 bids.
“There’s been a lot of press about this being a fire sale,” he said, “but we’re in a competitive bidding situation.” Mr. Shannon said demand for the properties had been greater than expected.
…
That would be cool if you could swing it. Buy the state capital, move in to the best two or three offices. Have wetbacks move your stuff. Great security, I’ll bet someone would even take care of your car. Oh to dream…
http://www.youtube.com/user/Bloomberg
“A Colorado Springs man who only wants to be called David has owned a home in the Village Seven neighborhood for 21 years. He and his wife have been in foreclosure twice in recent years and are nearing it again. ‘It’s a constant fear of not being able to pay the bills,’ David said.”
Getting foreclosed on….. 3 TIMES!!!
C’mon…. this guy was trying to be Trump… & is now left crying like a baby.
WAAAAAA…. WAAAAAAA…. WAAAAAA!!!
Suck it up, whiner!!!
“. . . .has owned a home in the Village Seven neighborhood for 21 years.” It never struck the author of this story that it is impossible for someone that bought a home 21 years ago with a 30 yr mortgage to be facing foreclosure unless they pulled the equity out? I can assure you if there was a serious illness or something they would have been all over it. In short he pulled out phantom equity out for a reckless spending spree and now wants me to pay for it. Sickening. No wonder he doesn’t want to give his name. He should be ashamed. I have much less sympathy for these ppl than first time home buyers that bought homes at the peak. They were given more than they were entitled too, and they just pissed it away.
Yep. Is the crazy bubble “housing should pay for itself,” thinking so prevalant in bubble states that reporters never think to ask the obvoius quesions? Where did all the HELOC or REFI money go? Even if all we get is the ubiquitous “paid off some debts and redid the kitchen.” I’m convinced that’s one of the reasons that the broader economy is skidding to a halt. We have developed an economy based on unsupportable spending supported by unsupportable housing appreciation.
It irritates me that so many of these HELOC/serial refinancers want some sort of government or bank sponsored debt forgiveness, but DON’T feel that they should have to go through bankruptcy to get it. These people have show a propensity to spend more than they make. People who have suffered one time setbacks can often come back from bankruptcy in just a few years. It’s the people who have never managed to spend less than they make that can’t live without additional debt that have the worst problems with bankruptcy.
Crazy thing is… the more these people spent on houses, cars, boats, home improvements, etc. w/ borrowed HELOC money… the GREATER THE INFLATED PRICE FOR THESE ITEM were.
In other words, EXCESS CREDIT CAUSED I-N-F-L-A-T-I-O-N !!!
Now that the credit is gone… & prices for these things should be coming down to equilibrium… here comes the GOV’T to do everything to KEEP PRICES HIGH!!!
… all at the expense of the responsible savers, of course.
The irresponsible get rewarded w/ loan forgiveness (w/ no tax due on it!!)
Savers get low interest rates.. & are forced into risky bond & equity markets (the next bubble to burst!!)
Savers get low interest rates.. & are forced into risky bond & equity markets (the next bubble to burst!!)
I think that they’re forced in the same way that renters in a condo conversion were forced to buy. Low returns mean that one has the choice of deferring more current purchases and saving more or exposing oneself to riskeir investments. Sometimes one doesn’t have the choices one would want, but that is not the same as being forced.
They are “forced” when inflation is kicking in… & their hard-earned savings are decreasing in real value.
Meanwhile… Bernake, TTT & Co. are in collusion to keep rates abnormally low!!!
All I ask is to let the markets determine interest rates & risk premiums on bonds - & all would work itself out!!
On a side note to that, I can’t help wondering if divorce rates have increased recently. Money being one of the major stress identifiers for married couples.
OTOH, being underwater makes separation and divorce harder to achieve.
Unfortunately, it doesn’t take a great leap of the imagination to figure out what could happen if
1) the male in the relationship is the one out of work and frustrated (check) but
2) watching more TV and doing even less around the home than when he was working (check, saw this stat a month ago, but I don’t know where)
3) the relationship is on the rocks (check, somebody wants a divorce)
4) the couple is having money problems (not enough dough to live separately)
Ugh.
May give new meaning to the expression ‘going postal’.
I read that divorce rates dropped during the Great Depression, and I believe the same is true today. Divorce is expensive.
Might not cost much to separate and move in with Mom though.
they are going down believe or not…
they went up in the credit bubble and down once it popped. people may start to realize life isn’t easy.
b..b..but those Aspen, CO snowflakes are different.
They were once…pure Gold !!
Oh thank goodness. I sometimes feel alone in my lack of sympathy on these stories because I remember how smug everyone was about how much smarter they were and how much better they were living. They don’t get that they already got lots of loan modifications. No one was forced to take loans or refy. And the press is not asking these follow up questions like how could you be in a home 21 years and facing foreclosure. Frustrating.
FWIW, the job market in Colo Springs has always been dicey and the town (like Fort Collins up north) looks a lot more prosperous than it really is. So it doesn’t suprise me that this guy has come close to losing his house more than once. Springs has always been a boom & bust town.
Globalization has definitely taken the wind out out of the economy down there (much like it did in the Fort Collins area) as the few “quality” private sector employers there have been steadily shedding jobs over the past decade. Now that the bubble has popped all that’s really left is the Air Force Academy. Were it not for the Academy Springs would be an impoverished backwater like its neighbor to the south, Pueblo.
If what you say is true, then is should be reflected in the house prices. If jobs are seasonal and marginal, then high prices would never occur, unless, of course, you could get FREE money from the FED.
In other words, if you can’t rely on a moderate, regular income, you can’t afford “normal” house prices. you must adjust down to account for periods of low to no income. Consequently, under normal lending, housing prices would be less than similar prices in more stable economic environments. Therefore, any PRUDENT person could save the difference from lower prices and pay the mortgage during the slower seasons.
This obviously did not happen here. I suspect it seldom happens there, and just about anywhere else.
Well, compared to places like SoCal, Colo Springs is “cheap”.
There was brief period of stability for a few years in Tech in Springs during the 90’s but it has been in steady decline throughout the past decade. Military spending no doubt helped pick up the slack, but the bottom line is that a lot of people in the tech field (HP, Agilent, WorldCom, and others) lost their jobs in Colo Springs.
But I agree that a lot of people there, who should have known better, bought homes they shouldn’t have.
Boom and bust is a way of life in the Centennial State. Our local papers love to run stories about folks who move here from out of state and leave 2-3 years later, after 1 or more layoffs, with their tail between their legs.
Jobs are not necessarily seasonal in the Springs - there just a buttload of government contractors. Tons of layoffs occur in the Springs when contracts end. Also, you forgot to mention Fort Carson, Schriever, NORAD and Peterson Air Force Base.
When we finally admit that the ‘War on Terror’ is unwinnable without an infinite military budget, the soldiers will return and Colorado Springs will once again be a boomtown.
‘Until we see a plateau in foreclosure filings, it’s hard to get confident that the housing problem is starting to be resolved,’ Spivey said.”
There’s that happy, mythical, far-a-away land called “plateau” being mentioned again.
“For him the trouble began with a pay-cut at work. He’s had trouble getting help, even knowing where to turn. Now more than a year after the government made an effort to ease the mortgage crisis a congressional panel says it’s falling short. ‘We’re just looking for relief,’ David said.”
Wasn’t the term “Relief”, once a commonly used British slang word, meaning plain old State Paid Welfare, as in “going on relief” or the dole?
hummm…
Until it was co-opted into a connotation of “gov sux, so please cut my capital gains taxes.”
So I guess David is employing the 21st century usage of “relief.” Yet another example of individuals starting to play by corporate rules..along with socializing losses and strategic BK .
Time to call the Guinness people. This is one for the record book.
“You can be righteous as hell and believe in your heart of hearts that you will never let it happen again,’ he said. ‘You can stand astride your steed with your pearl-handled revolver and promise you will remain strong. But when you have to pay the rent and meet the payroll, who the hell knows what you will do at that point.”
A chilling comment. Coming soon to every town.
They’re ivory. Only a pimp from a cheap New Orleans whorehouse would carry a pearl handled pistol.
For all the coffee drinkers:
Coffee: Drink to Your Health
Wednesday, May 5, 2010 7:58 AM
By Sylvia Booth Hubbard
For many years, coffee was considered a vice, linked with sleepless nights and cigarettes. But scientists have discovered that coffee contains potent antioxidants that can fight numerous ailments, including heart disease and diabetes. According to the American Coffee Association, 54 percent of Americans drink coffee on a daily basis, and they drink, on average, over three cups each.
The diseases coffee can benefit include:
• Dementia. Drinking moderate amounts of coffee during middle age — classified as three to five cups daily — can decrease the risk of dementia by 65 percent, according to a 2009 study by Swedish and Finnish researchers.
• Liver disease. In those who drink too much alcohol, those who drank the most coffee — more than four cups every day — reduced their risk of developing alcoholic cirrhosis by 80 percent.
• Heart disease. Research associated with The Nurses’ Health Study found that women who drank two to three cups of coffee daily had a 25 percent lower risk of dying from heart disease. Along the same line, a Spanish study found that men who drank more than five cups of coffee each day lowered their risk of dying from heart disease by 44 percent, and that women who drank four to five cups each day reduced their risk by 34 percent.
• Prostate cancer. A recent study from Harvard Medical School found that men who drank the most coffee slashed their risk of developing the fastest growing and most difficult to treat prostate cancers by more than half when compared to men who drank no coffee.
• Gout. Drinking four or more cups of coffee each day dramatically reduces the incidence of gout, say U.S. and Canadian researchers. Men who drank four to five cups daily lowered their risk by 40 percent, and those who drank six or more cups daily reduced their risk of developing gout by 59 percent when compared to men who didn’t drink coffee.
• Breast cancer. Coffee can either reduce the risk of developing breast cancer or delay its onset, according to Swedish studies. They found that coffee alters a woman’s metabolism and produces a safer balance of estrogens. Women who drank two to three cups of coffee a day reduced their cancer risk by as much as two-thirds, depending on the specific type of breast cancer.
• Diabetes. Enjoying six or more cups of coffee daily can cut chances of Type 2 diabetes by 54 percent in men and 30 percent in women over those who don’t drink coffee.
• Parkinson’s disease. Several studies show that drinking coffee lowers a man’s risk of developing Parkinson’s up to 80 percent — and the more the better.
• Colon cancer. A Japanese report found that women who drank three or more cups of coffee every day slashed their risk of developing colon cancer in half.
What’s responsible for coffee’s healthy benefits? Most researchers believe it’s the antioxidants (polyphenols or flavonoids) in coffee, but there are hundreds of compounds in coffee that may be partially responsible.
© 2010 Newsmax. All rights reserved.
Didn’t mention hay fever. Caffine is an antihistimine. Back in the back when, they used to reccoment coffee to people with hay fever.
Geez! thank God I’m a coffee lover.
Great reference!
Cut back on payroll. Reduce monthly expenditures. and finally, if you can’t afford it, find another place to rent. Simple.
Oh! You don’t want to live in a way to which you are not accustomed?
I love that one (support in a manner to which they are accustomed).
Well, gee, change has come to Amerika!
‘Tisha Black Chernine, an attorney…said 70 percent of local homeowners are underwater — they owe more on their homes than they are worth.’
‘Black Chernine said those going through a foreclosure shouldn’t expect they are off the hook for what they owe on the mortgage. The primary lien holder has six months after the foreclosure to file legal action to collect, but secondary lien holders have six years, and a lot of those notes are being sold on the market. Those collection companies are contacting those homeowners seeking payment, she said.’
This lady has been throwing in some sober legal news for a while. Like, guess what? Lenders expect to be paid back!
Oh… c’mon now.
That’s CRAZY talk!!
I am unclear in non recourse states like California, if the secondary lien is non recourse or not. Many of the loans sold were 80-20 loans and such, so since the secondary will most certainly be 100% wiped out are these loans then collectible? If so, are the losses also taxable?
One thing the Feds are telling us is that all these rules vary state by state, of course. But when you hear ‘wiped out,’ that may be for the lien on the property, not neccesarily letting the borrower off legally.
It is telling that heretfore, there has been little if any difference between the interest rates charged in recourse and non-recourse states. If walkaways become more common, you would expect that to change.
The Arizona law doesn’t differentiate between 1st and 2nd position loans. As long as the loan is “purchase money” and secured by a deed of trust, it doesn’t matter if it is in 2nd position, it is covered under the anti-deficiency statutes. And there is legal precedent (B of A vs Beauvais, I think) that a refinanced loan doesn’t lose it’s purchase money protection as long as additional cash isn’t taken out.
In AZ there is a difference between 5+acres primary residence and other property. If the property is 5+ acres (easy to prove) or not a primary residence, loans are recourse. How do I know this? I financed a 6 acre lot.
Not that anyone will read this a day later, but it’s actually 2.5+ acres that isn’t covered and it doesn’t have to be used as a primary residence as long as it is used as someone’s residence. It is of course open to legal opinion as to what that actually means, but it is generally accepted that rental properties would be covered by the anti-deficiency statutes. AZ briefly passed a law last year that would have specifically excluded investment properties, but it was quickly repealed. Basically as long as the property is used as a residence, is on less than 2.5 acres, and no cash out refi was done, it should be covered by the anti-deficiency statutes.
Lenders expect to be paid back!
You are kidding aren’t you. They said it was a “loan” and the papers I signed said I was responsible for the money, but …..I thought they would just get the house back, and I didn’t really have any risk.
You mean I was responsible for the money I borrowed from the Bank??
Say it isn’t so. How can this be??
“I thought I was liberating equity, nobody told me I was getting myself further in debt!” Umm….You just signed a contract that spelled out in excruciating detail exactly how the people lending you money wanted to be repaid, and the consequences of non-payment. So, yes somebody told you exacty that. ISTM that knowing that any deal that sounds to good to be true probably is and that fine print matters is something most of us learn at the “not a flying toy” stage.
Thus good balances evil. The greedy HELOC and second mortgage abusers shall suffer the consequences in the form of lawsuits, liens, garnishees and bill collectors for years, if not decades. And those with money, who can afford to pay but now don’t want to, will suffer the most. Hallelujah! Can I get an Amen on that?
AAAAAAAAaMen
“Aspen-area real estate prices generally tumbled between 20 and 40 percent… from their peak in 2007, according to.. the Aspen Appraisal Group.
Aspen real estate has been insulated to some degree from national economic downturns in the past, says the report, but Aspen’s property kept its value. The current recession was so severe that Aspen didn’t escape unscathed.”
——-
The “recession” caused property prices/values to fall?
I thought it was the opposite.. that millions of loans on overpriced property defaulted, and caused the recession.
I might be wrong about that, but lets see if my math is any good.
40% drop since 2007. Three years.
100 - 40% is 60.
year one: 100 - 15% = 85..
year two: minus 15% (12.75) = 72.25..
year three: minus 15% (10.8) = 61.4
So it’s declining at a rate of 15% a year?
‘Gold noted that many buyers and sellers in the Aspen-area are connected to Wall Street, and Wall Street has been making money lately.’
“It might take several years for recovery in the market segment of homes greater than $20 million. There have only been three sales in that segment in the last two years yet there are more than 19 listings in that price category.”
I have to wonder how many of those listings are fake. List your house for $20 million.. $25 million.. and gain instant respect and admiration.
Gotta love that six year supply.
‘Gold noted that many buyers and sellers in the Aspen-area are connected to Wall Street, and Wall Street has been making money lately.’
It used to be that Wall Street vacationed in Vail and Hollywood vacationed in Aspen.
“40% drop since 2007. Three years.”
Try entering this into the search line on Google:
100*((1-0.40)^(1/3)-1).
The result?
100 * (((1 - 0.40)^(1 / 3)) - 1) = -15.6567335
(Your math was reasonably on target…)
i wasn’t really using math.. more of a multiple choice exam guestimation technique… got lucky since 15% was my first attempt.
Guess-and-check is a perfectly valid solution technique — especially on differential equations exams (you know — the old existence and uniqueness theorem…).
A Colorado Springs man who only wants to be called David has owned a home in the Village Seven neighborhood for 21 years. He and his wife have been in foreclosure twice in recent years and are nearing it again. ‘It’s a constant fear of not being able to pay the bills,’ David said.”
Sooooo much more to THIS story. But think - if this couple had taken out a 20 year fixed mortgage and had not taken out ANY home equity loans - they could have owned their home free and clear by now. Then the only fear would have been of how much gasoline for the mortgage burning party…
But, no, they listened to “financial” advisers on television that told them they were FOOLISH to have their money “tied up” in real estate.
Their money should be working for them. They took out a HELOC and gave the money to a broker to invest in start-up dot.com’s in the late 1990’s and bad luck, they lost it all.
But, their property “appreciated” over the next 5 years, so they got another HELOC and bought into the booming stock market. That too, went bust. Now they have no money and no equity.
But, at least, they don’t have all their money “tied up” in their house.
You are so right, I remember a mortgage broker telling us to get out - that we were too stupid to do business with because I refused to lie about source of income and insisted on a 30 yr fixed.
I think that translates as “Get out, I don’t get any kickbacks for sane mortgages.”
I can sympathize. On our last house, when we refinanced the mortgage to take advantage of a 1.25% lower rate (fixed), I had to veeeeerrrrryyyy s-l-o-w-l-y and patiently explain to the agent that we were not taking money out, just refinancing the amount of the existing loan. She really seemed confused over this. At the time - silly me - I thought I landed the dumbest loan agent in the crop. Turns out that I must have been that chickie’s first non-MEW client ever.
Homeowners on hook for road repairs ($7,700 each home!)
San Antonio Express-News | 05/04/2010 | By Jennifer Hiller - Express-News
Residents entering the Ventura Heights neighborhood weave between three massive, gaping potholes.
To spare car bumpers, they’ve placed sand, bricks and gravel at the base of their driveways, where the street has pulled away and left a foot-wide gap that’s a breeding ground for weeds and wildflowers.
Despite the fact that their modest neighborhood of one- and two-story brick homes near Converse is just a few years old, the street repairs are expected to cost $1.3 million.
And thanks to their defunct developer, the homeowners have to pay for it themselves.
Ventura Heights’ streets are among 77 miles of roadways located outside city limits that never have been accepted for maintenance by Bexar County.
Developer Obra Homes neither built the streets in Ventura Heights to the county’s specifications nor completed the needed fixes — steps required before Bexar County will take over maintenance.
With Obra Homes out of business, homeowners are stuck with cracked and failing streets that appear decades older and technically are not public.
“We all have to drive around like it’s a maze,” resident Victor Cruz said. “People are using sandbags to get into their driveways.”
A cursory glance at the contracts by any lawyer would probably have caught that one, prior to the sale. But people do tend to trust RE agents.. and anyway, why pay extra for legal advice. What could possibly go wrong?
Pretty common these days. In MANY newer developments, the HOA ends up paying for street maintenance ’cause the street was never built to code. Legally, they’re not really roads, just common driveways.
I’ve often suspected that the real purpose of HOA’s and developments controlling the roads was to simply pass the buck onto the homeowners vs. having the township maintain the roads. So, now they are hosed while the crooked, cheap developers made a fortune and “went out of business” before fleeing with their loot. Nice.
Homeowners on hook for road repairs ($7,700 each home!)
Wow. Just like on the Monopoly cards!
we have syphilis,’ she said.
Spoken like a true Vegas native.
Spoken like a true Vegas native.
Really. Seems like a better choice of words would have been, “…they are meant for a cough, and we have tuberculosis“
Spoken like a Shanghai native:
Syphilis birth every hour in China
(UKPA) – 18 minutes ago
Every hour a baby is born in China with syphilis, as the world’s fastest-growing epidemic of the disease is fuelled by men with new money from the nation’s booming economy, researchers say.
The easy-to-cure bacterial infection, which was nearly wiped out in China five decades ago, is now the most commonly reported sexually transmitted disease in its largest city, Shanghai.
Prostitutes along with gay and bisexual men, many of whom are married with families, are driving the epidemic, according to a commentary published Thursday in the New England Journal of Medicine.
The increase reflects the country’s staggering economic growth, providing both businessmen and migrant labourers more cash and opportunity to pay for unsafe sex while away from home.
“In the ’50s and ’60s in China, syphilis and other STDs were extremely uncommon. The number of new cases has just rapidly accelerated,” Dr Joseph Tucker, lead author and an infectious disease specialist at the University of North Carolina at Chapel Hill, said in an interview. “Even one baby born with syphilis in China is unacceptable.”
…
“To spare car bumpers, they’ve placed sand, bricks and gravel at the base of their driveways, where the street has pulled away and left a foot-wide gap that’s a breeding ground for weeds and wildflowers.”
The gap is a “breeding ground” for weeds and wildflowers? I would rather look at weeds and wildflowers than another tacky Texas subdivision.
Hey, yet another: “TrueRecruit™”
“Wilson is renting now. She traded in her leased car for a used car she could buy outright. She’s started growing her own vegetables and air-drying her laundry to save money and stay out of debt. She’s looking to buy a home, but not one with an outsize mortgage. ‘I’m looking for pretty much the smallest house I can live in,’ she said.”
The Government is now harassing me (even more than usual)!
I got a new phone number for my business about 6 months ago, and started getting calls from Advanta asking to speak to “Harry”, presumably the person who used to have the number. Nothing could get the calls to stop, until my Attorney Fed-Ex a letter to the CEO and Senior Corporate Council telling them to stop.
The calls stopped, for a while.
Now they started up again. The letter stated that we’d sue them under the “Telephone Consumer Protection Act” for $1500/call and the “Fair Credit Reporting Act” for $1000/call. (BTW: These laws protect only ACTUAL deadbeats! For people like me who aren’t deadbeats, the law is vague! We’ll try our luck anyway. There are many laws and free public services available to help deadbeats. Honest taxpayers, not so much.)
We started the process to initiate the lawsuit, naming 12 recent calls. But soon discovered this bank is now being run by the FDIC! http://www.advantabankcorp.com/ADV and they’re in Chapter 11 reorg. (The company’s based in Utah. The state where people somehow managed to send $100 Million Dollars to get CA Prop 8 passed–but can’t afford to pay their mortgages.) This may complicate things wrt the lawsuit.