Not Ready To Take A Loss
The Herald News reports from Illinois. “The foreclosure crisis has hit home for the Triezenbergs of Manhattan Township. Mark and Tia Triezenberg and their five young children, including one with severe disabilities due to autism, must leave their home by Aug. 29. Mark, who ran his own home-building business from 1999 to 2008, is looking for a rental unit. The couple took out a mortgage on their 4,500-square-foot, five-bedroom home with Lincoln-Way. The mortgage was sold off to another company. The Triezenbergs also took out a home equity loan on the house through Lincoln-Way so Mark could buy 10 lots for his business. The two loans totaled $825,000.”
“‘They approached us when we were doing good,’ Tia said. ‘Then when things got tough, they pushed us aside and said we’re on our own.’”
“‘This is like Pearl Harbor,’ Mark said during an interview at a Mokena restaurant. ‘Only a few people saw this coming.’”
The Detroit News in Michigan. “Southeastern Michigan set a foreclosure record for the first half of the year — 47,563 foreclosures, a 35 percent jump from the first half of 2009. Teresa Blundell wasn’t one of them — but just barely. It took the 55-year-old Lapeer woman nearly a year to get her mortgage modified to a lower payment. In the meantime, she was kicked out of a federal loan assistance program, her lender trashed her credit, and she was one week away from foreclosure without even knowing it. Five years ago, her home had been valued at $175,000. But that fell to $75,000 when the real estate bubble burst, making a new loan out of the question.”
“It’s a success story that’s rare under loan modification programs. Many homeowners who don’t get a federally backed no-fee modification get more expensive modifications from lenders, often with added fees. And, as Barry Zigas, director of housing policy for the Consumer Federation of America, points out, homeowners with no income can’t pay any loan, no matter how generously it’s restructured. ‘The program isn’t very helpful to people who can no longer afford their mortgage,’ Zigas says. ‘More than two-thirds of the applications for HAMP list loss or lack of income as the primary reason for requesting the modification.’”
“For homeowners who do get a modification, the hope is that changes to their loans will give them breathing room until home prices recover and they can refinance or sell. Blundell says that’s her goal. Her interest rate will start gradually moving up again in five years. ‘I’m hoping that people can actually afford to buy a house again,’ she says. ‘That’s my plan.’”
WEWS 5 in Ohio. “Fifty percent of Cleveland mortgages are underwater according to Cuyahoga County Treasurer Jim Rokakis. ‘In the Gulf of Cuyahoga County you can’t clean up the foreclosure mess until we cap the gusher of foreclosures. There’s no BP in sight trying to lower a cap on this gusher. It flows freely,’ Rokakis explained.”
“Rokakis heads to Washington Tuesday and hopes to talk with Obama Administration officials about potential solutions, so homeowners don’t just walk away from their mortgage. He believes the treasury needs to start an incentive program to force mandatory principal reductions. This would reduce loans to their current values, instead of having a $150,000 mortgage on a house valued at $100,000.”
“Rokakis would like the second component of that program to give bankruptcy judges the authority to reduce primary residential properties to their current value. It would be a cost to taxpayers, but Rokakis feels we’re already footing the bill for these programs on the back end.”
“‘The taxpayer will pay just as they paid for TARP, just as they paid for the bank bailout. But when mortgages go bad and at record numbers, eventually those properties come back at a much lower number and banks reflect those losses. We’re going to pay for those anyway. The difference is if we accept the loss now, we can save what’s left of the equity and more importantly we’ll save neighborhoods,’ Rokakis said.”
The Akron Beacon Journal in Ohio. “Government and community leaders call abandoned homes a scourge on neighborhoods, saying they destroy areas and drag down property values. But without a comprehensive list detailing how many there are, and where they are, it’s difficult to know the true impact and to address the problem. To that end, the Summit County Fiscal Office is asking county residents for help. People can log on to a Web site and anonymously report suspected abandoned homes.”
“It’s unclear how many properties are abandoned in Summit County, although officials worry that the number is high because the region has been hit hard with mortgage foreclosures. A survey last year of a two-mile area in East Akron turned up 523 vacant properties.”
The Plain Dealer in Ohio. “New foreclosure filings in Cuyahoga County rose more than 12 percent during the first six months of this year, with the suburbs continuing to feel the brunt of the increases. ‘We’re seeing increasingly more folks coming from the Westlakes and the Beachwoods,’ said Mark Seifert, Empowering and Strengthening Ohio’s People’s executive director. ‘By and large we don’t see bad loans anymore. These are good traditional loans. . . it’s unemployment that’s killing people.’”
“Euclid had the highest number of suburban filings during the first six months of the year — 420, a nearly 18 percent increase from the same time last year. But the city said a good number of filings have not been taken to judgement and sheriff’s sales.”
“‘The banks are sitting on them,’ said Marty Castelletti, the city’s manager of neighborhood development and chairman of its foreclosure prevention committee. ‘Banks seem to be trying to control their inventory by not letting too many foreclosures happen too fast so they track them better and dispose of them better.’”
The Grand Forks Herald in Minnesota. “It’s a buyer’s market short of buyers for lakeside cabins and vacation homes in northern Minnesota. A few years ago, many believed that every lake front property in the Land of 10,000 Lakes was going to sell fast, and prices climbed at double-digit rates. Now, some shorelines in northern Minnesota are dotted with ‘for sale’ and bank foreclosure signs.”
“It’s part of a growing trend: According to the National Association of Realtors, one of every 10 vacation homes nationally is in foreclosure, the highest rate in five years.”
“Greg Anselmo is a broker for Edge of the Wilderness Realty in Itasca County. He said counting lots, cabins and vacation homes, there are about 300 to 500 pieces of property available. ‘We’ve got 1,000 lakes in this county, and we’ve got a shortage of buyers, that’s for sure, and I don’t know how to change that,’ Anselmo said.”
“With buyers seeing a lake home as more of a want than a need, Anselmo said Realtors are putting in a lot of time evaluating property. ‘If it’s 35 percent off the high point from 2006, that’s probably where it should be,’ Anselmo said. ‘Buyers are pretty sharp and not going to overpay on the high side. If they see value in it, they’re making offers.’”
“In the Brainerd Lakes area, Realtors say banks are involved in about two of every five sales of waterfront property, which has helped push prices down, especially on the high end. Mark Kuhnley, Edina Realty, recently told the St. Paul Pioneer Press a lake home in the Brainerd Lakes area listed at $1.7 million two years ago is on the market at $999,000. Another home at $1.8 million three years ago is now $1.3 million. Kuhnley said there are 80 properties at more than $1 million on the market.”
“As for the sellers of lakefront property, some are willing to take a hit, some are willing to wait it out, and there are others not ready to take a loss. Anselmo likens the market to mutual funds and commodities. ‘It’s supply and demand,’ he said. ‘There’s a supply of homes, but people that normally had the money just aren’t in a position to demand a lake home.’”
Fox 11 in Wisconsin. “One in every 113 homes in Wisconsin is in foreclosure, and it’s hitting people right here in Northeast Wisconsin. For Dawn Gervais, home is where the heart is. And as her home slips into foreclosure, her heart is breaking. Three years ago, Gervais bought a house on Green Bay’s west side. With her husband, and four kids, she was living the American dream. But she fell behind on a few payments and now that dream is becoming a nightmare.”
“‘I have to come up with the current then and then you have the back payments,’ said Gervais. ‘I took on a second job trying to make things work, and it just seems like it’s not working.’”
“Gervais’ home is up for the sheriff’s auction in August, and she’s not alone. Brown County foreclosures are scattered all over the area. But inside the sheriff’s department, the walls are riddled with hundreds of foreclosure properties. ‘I would say we’ve got another good two years of more of the same…This is just the tip of the iceberg,’ said Realtor Yang Kong.”
“Kong works with distressed homeowners on short sales, which is trying to sell a home before it falls into foreclosure. ‘I think everybody’s one paycheck away from not making that mortgage payment. I don’t see a lot of people with big reserves,’ said Kong.”
“Gervais’ husband was let go of his job, leaving her struggling to make ends meet and feeling like they never will. But getting foreclosed on isn’t just about losing her home. ‘I’ll be admitting to failure, and looking like I can’t handle life,’ said Gervais.”
“‘This is like Pearl Harbor,’ Mark said during an interview at a Mokena restaurant. ‘Only a few people saw this coming.’”
Yea and about 95% of them visit this blog!!!
This is more like it.
“Only a few people saw this coming”
Count me in. I sold in Oct ‘05 at the top. That makes me a better man than Hank Paulson.
I got out in ‘04 and was “priced out forever”.
I refused to buy back in in ‘03 after a life change forced a move and sale. And yes, it looked like I might be priced out forever, because if I was unwilling to buy at ‘03 prices, I was _thoroughly_ unwilling to pay the prices after a few years of compounded 20%+ returns!
well, if you had been listening to the “professionals”, you, my friend, have missed the best time to buy.
It may not be too late, but time is running out. call a realtwhore and get some solid advice before you get “priced out forever” again.
“Realtwhore”
…OUCH! I haven’t heard that one yet!
you must be new
Sold in early 07…5 months before it all started downhill….did buy another home out of the state…but not underwater as I was the cheapest house built in a community where MOST upgraded to the “extras” the builder was selling….I spent only 10K extra on getting a bigger lot with no neighbors behind me..well worth it…
My old house..well it sits well underwater…basically at the bottom of the ocean…the buyers long gone…and just waiting for the foreclosure to go through…I expect it will sell for less than what I paid for it in 03…..shame..it is a nice house…but never worth what the buyers paid for it…in my opinion…who was I to argue..the bank was happy the lend and the buyers were happy to buy….
I can understand both sides…Walking Away and staying put…it just depends on the situation….
Forget the Pearl Harbor and the Japanese…
“Never in the field of human conflict was so much owed by so many to so few”
This was a well-planned full scale class warfare sneak attack by the Bad, Bad Boyz from our own East Coast.
I believe their motto is “We will take No Prisoners and any survivors WILL BE hung for their pocket change immediately after bankruptcy.”
Sorry about that Winston
The Triezenbergs also took out a home equity loan on the house through Lincoln-Way so Mark could buy 10 lots for his business. The two loans totaled $825,000.”
A California-sized loan package on an Illinois home…
It’s disturbing to see these average schmoe’s throw around numbers like 4500sq ft and $825k as if it is normal. Seriously….. if I were having a conversation with one of these dumba$$es and they fired off 4500 squares, I’d him a complete moron and ask him just WTF he was thinking.
I’m not missing anything here. It’s the deluded FB’ers who are not getting it.
You’d need an income of 250-300K to realistically afford a 825K loan. And if I made that kind of money, I sure wouldn’t be borrowing to the limit.
I’m a regular poster here, but just don’t want to share this personal information using my normal handle.
My household income is in your range for realistically affording a 825K loan. I currently have a loan on my house for less than 1/2 that amount. You’d have to be NUTS to go to 825K on 250K of income. I realize you probably could afford it, but it would be a huge burden; you’d be living like your making 60K, not 250K (except, of course, for your McMansion).
If you make 200-300K and you’re still at the “outside limit” of your borrowing capacity; you really need to sit down and have a little talk with yourself/family. That’s a tremendous amount of money; you should be able to have just about anything you want; nice house, nice cars, nice vacations, etc.. Just not a 1M dollar house with a Ferrari and a few jaunts to Aspen every year…
Live below your means (whatever that means is) and you’ll be fine.. Stretching (for just about anything) when you’re already in the top 5% of earners is just nuts. You’re much more likely to wind up in a lower income bracket (at your next job) than a higher one!
I agree with Overtaxed except I can’t have nice house,nice cars, and nice vacations on that income. Maybe it’s because we had a low income until we were 40 so have saved a lot over the last 15 years. I have a nice house, but we drive economical American cars. I take one nice foreign vacation per year and one domestic. Can’t afford more.
$300K = $25,000 a month.
$800K mortgage (not $800K house, just the mortgage) at 5% = $4300. Add another $1000 for tax/insurance. $5300 a month with a $25,000 a month gross income is easily affordable and not a burden.
If someone earning $300K can’t make the mortgage on an $825K house, it’s not the income or the house that’s causing this. There’s more to the story that simply income and house price.
I agree…at 300K a year..you should EASILY be able to afford a $825 note..the problem is the back end debt..most people in that position, stupidly have 100K in credit card debt, 2-3 car payments(usually luxury. gotta keep up with the community..which could easily be 900-1K a car…then the expensive clothes accesories, wife getting her hair done for $150 and the new chanel bag, kids in dance camps and tennis lessons and so on…
Its usually not the salary that is the issue…but all the expenses added in the “keep up with appearances” thought
Eddie,
Here’s my math..
“You’d have to be NUTS to go to 825K on 250K of income.”
250K/yr = ~21K/mo gross
21K/mo, after tax, ~14K/mo
800K mtg = ~4300/mo
Taxes (in FL, my home state), 16K/yr = 1,333/mo
Insurance (in FL) ~6-10K/yr (call it 6) = 500/mo
So, totally fixed carrying costs, 6,133/mo.
Figure another 2-500 for HOA dues, 6,333/mo.
So yes.. It’s doable.. But, you buy a 800K house on 250K a year, and you’re no longer living the “upper middle class” dream, you’re now solidly middle class. You’ve got about 6,500/mo left in disposable income (neglecting costs like electric, upkeep, 401K, savings, etc). If you’re making 250/yr, you’ve almost certainly got a 1-2K/mo car payment. Should be saving 1K per month (min). Should be contributing 1.2K per month to 401K.
Starting to see the point? Sure, you could swing it.
But, IMHO, you’d be nuts to do it; why make all that money and not be able to enjoy it? You’ll be house poor making 1/4 million a year… That’s kind of sad, isn’t it?
300k/yr is 150k/yr after tax or $12,500/ month.
Taxes on a $825k house in upstate NY run about $2000-2500/month.
Tax and Mortgage thus roughly $6300/month.
Heating a 4500sf house in winter? probably $1000+/month, let’s say avg e-bill $600/month the year, now at $7000+ expense
Maintenance? Another couple hundred per month or more?
Wow, more than half the monthly income for a rich man gone just for the house.
Stupid.
My $1000/month rent works out about right on my $325k/yr evil doc salary. And my superb, clean as whistle, loaded to bear leather 250hp Honda Accord Coupe 2004, long paid off. Yeah, i eat out every day before work at hospital, so, well, $1000/month on food.
Hmmm, my housing car and food budget $2000/month.
But, yeah, I guess I could spend $7000/month instead, since I can afford the note.
Sheesh.
Evildoc.
$2500 a month in taxes? For an $825K house? No way. Show me an example.
50% in taxes? Wrong again. The highest marginal tax rate is 35% and that only kicks in at an AGI above $375K which means a gross income of $350Kish if only taking the basic standard deductions. This is for someone single. Federal tax on $325K filing as single with just the bare bones standard deductions - which as a doctor you’re not taking and taking a lot of bidness deductions but I will give you the benefit of the doubt - is $92,000. Assume you’re self employed and pay the full FICA, it’s $12,500 for SS and $9425 for medicare. Total is $114K. NY top marginal tax rate is 7.85% which only kicks in above $200K. The highest below that is 6.85%. I’ll round up and say on $325K your total tax bill is about $20,000. Making your total tax burden - again assuming you take no deductions - about $135K. Which leaves $190K net which is $15,833. And this is for a single person. Married and making that much would be cheaper. Married with a couple of kids would knock off about $4K. Mortgage deduction on an $800K mortgage would knock of $5K-6K.
But even assuming you’re single and you earn $16K after taxes you can easily afford to spend $5300 a month on housing. And drive a nice car. And eat out. And heat your house.
Doesn’t mean you HAVE TO spend that much. But if you wanted to, you should have absolutely no problem doing so.
Eddie, it is obvious that, once again, you are arguing for argument’s sake and you don’t know what you’re talking about. Trust the three people on this thread who DO know and who say that anyone making $325k a year and paying $5300 a month on housing WILL BE HOUSE-POOR.
Sheesh. I hate having to shout to make a point.
There’s this one too:
‘The house went to a sheriff’s sale May 29, but no one bought it, so the bank will take ownership. On June 29, a judge ordered the family out by Aug. 29 and entered a default judgment for $112,000 against the Triezenbergs. “So they pushed us into bankruptcy,” Mark said.’
Well, he could just pay the $112k…
So many victim stories and so few victims.
This piece is something. First thing, they note the child with autism and then paragraphs later mention he borrowed against the house to buy 10 lots for his house-building biz.
“First thing, they note the child with autism”
That’s why they have an Escalade and eat at Applebee’s every night. They need to “cope.” See?
I noticed that too. People have too many damn kids. What they need is birth control and some brains.
Lane
That town is about 40 miles from downtown Chicago. $825K for that is a lot.
The house went to a sheriff’s sale May 29, but no one bought it, so the bank will take ownership. On June 29, a judge ordered the family out by Aug. 29 and entered a default judgment for $112,000 against the Triezenbergs.
So I take it the bank sued them for the deficiency.
Considering the local context, that price is even more ridiculous. It will take to much time to describe that context here, but trust me on this one, the south and southwest suburbs should never have commanded the prices they did.
“We’ve got 1,000 lakes in this county, and we’ve got a shortage of buyers, that’s for sure, and I don’t know how to change that,’ Anselmo said.””
Try lowering the price enough and plenty of buyers will show up. Oh, I forgot, most of the sellers are underwater on their borrowings and need bank cooperation to short sell.
I hope the eventually defaulted paper is purchased by collections agencies that hound these FBs into declaring BK.
So many lakes, and so few lakefront property buyers…
Stuccobearthrower, there are 11,000 or so lakes in that goofy shaped state. Many people dream of owning on a lake. I was never one of them.
When I was a kid people had lake “cabins”. This meant they had a small old house or a cabin or even a trailer on some lake lot that they owned. In the 80s and 90s people started building actual houses. These turned into McMansions. The beauty of many of the lakes has been destroyed beyond all recognition. It is really sad. The bubble on the lakes was huge.
We didn’t have a lake house. We had a neighbor that did. Look at a map of MN. The Twin Cities are quite a ways south on the state. Many people have lakefront property that is far north or west of the Twin Cities. Our neighbor’s place was about 2 1/2 hours from the Twin Cities, if there was no traffic. Throw an accident or two into the mix and it was a nightmare.
The Friday afternoon ritual was fun to watch. Both parents would try to get out of work early during the summer. They would then have to pack the car and get ready to go. Our neighbor was a funny guy. He had quite a temper and no patience. He would be screaming at his wife and calling her names. He had developed a nickname for her. He called her “Lightning” because she seemed to always be moving so slowly. She actually moved pretty fast but was so frazzled by his yelling that she couldn’t focus on anything.
They would make the drive, hoping to hit no traffic. Upon arriving at their 2nd house they would have to start doing housework. It could take hours to take care of the miscellaneous items that needed attention. They would go to bed early and then get up early on Saturday. On Saturday they could take out their boat, fish or mow the lawn. The wife would do more housework. On Sunday morning they would pack up and try to head back home, hoping there was no traffic.
It was for wonderful experiences like this that squareheads throughout the state were spending hundreds of thousands of dollars. They had to have “the dream”. Of course, as my buddy once told me, “you can never get hurt buying on water”. I almost broke his jaw just for saying that.
The lakefront dream, like the American dream, just seemed like mere propaganda to me. I never wanted that but so many around me did. I don’t mind going once or twice a year but if I can’t live there I sure the heck wouldn’t put up with all of the work and hassle of a second home.
And let us not forget that those houses, for the most part, are about as useless as an old man’s johnson during the protracted Minnesota winters.
Who could have known that it couldn’t last?
We didn’t have a lake house. We had a neighbor that did. Look at a map of MN. The Twin Cities are quite a ways south on the state. Many people have lakefront property that is far north or west of the Twin Cities. Our neighbor’s place was about 2 1/2 hours from the Twin Cities, if there was no traffic. Throw an accident or two into the mix and it was a nightmare.
The Friday afternoon ritual was fun to watch. Both parents would try to get out of work early during the summer. They would then have to pack the car and get ready to go. Our neighbor was a funny guy. He had quite a temper and no patience. He would be screaming at his wife and calling her names. He had developed a nickname for her. He called her “Lightning” because she seemed to always be moving so slowly. She actually moved pretty fast but was so frazzled by his yelling that she couldn’t focus on anything.
They would make the drive, hoping to hit no traffic. Upon arriving at their 2nd house they would have to start doing housework. It could take hours to take care of the miscellaneous items that needed attention. They would go to bed early and then get up early on Saturday. On Saturday they could take out their boat, fish or mow the lawn. The wife would do more housework. On Sunday morning they would pack up and try to head back home, hoping there was no traffic.
Something tells me that the wife was very unhappy in the marriage. Did she finally get a divorce?
Nobody divorced in my neighborhood when we were growing up. You just suffered and moved on.
I think for the most part she really enjoyed her life. I am sure there were times when “The Burning Bed” seemed like a “how to” for her but overall I think she was happy.
My parents have a lake house, or really just near a lake since the lake fronts themselves were very overpriced when they purchased their lot so they bought 1/2 inland with no lake views.
Your description sounds pretty much like what they do. Except my mom likes doing housework. Wierdo.
Who could have known that it couldn’t last?
I dunno, Old Man Johnson, maybe?
I grew up in Detroit. Lots of people had little cabins on lakes or rivers up north. They were mostly blue collar workers or cops who had little houses in the city. We were invited to stay at some of them when I was a kid. They were dumpy cabins. We would cook outdoors and fish for our dinner. It was a great escape from city life. Sounds like it’s been perverted. Too bad.
Not anymore. Has anyone had a look-see at the recent log-cabin magazines? More like Log McMansion. They’re all 3000 sq ft with an angled wall of glass in the front. With a regular McMansion you can at least claim that you live there all the time. But these things…how do you even drive to them in the winter?
Not anymore. Has anyone had a look-see at the recent log-cabin magazines?
Some folks I know went into the log home business back in the 1980s. AFAIK, they’re still building them. I also seem to recall that the upscale end of the market was where the action was, and that’s where they positioned themselves.
“Greg Anselmo is a broker for Edge of the Wilderness Realty in Itasca County. He said counting lots, cabins and vacation homes, there are about 300 to 500 pieces of property available.”
My crazy sister and BIL live up there by you, I’m sure that you know them or of them.
Note: Crazy is the keyword in my family.
The rest of my brain dead family freeze to death playing Jeremiah Johnson, entertain the tourists and southern relatives or just plain die off one by one, trying to put up a winter supply of soft pine firewood not 80 miles away near the BWCA.( Siberia East)
“We’ve got 1,000 lakes in this county, and we’ve got a shortage of buyers, that’s for sure, and I don’t know how to change that,’ Anselmo said.”
I DO Greg…I DO !!…I’ve been preaching it for years !!
1. Invest in and build a MONSTER mosquito-proof plastic dome entirely over both Itasca and St. Louis Counties, MN.
2. Build a monster fire and heat the entire freakin’ area to a comfy 78 degrees from November until April to keep the pool, sauna, Santa and the Elf girls are hot and toasty.
3. Send me a sign and sealed video of the said completed project certified by 3 (honest) Federal Judges, Santa and 8 of the robust Elf girls and I just MIGHT…just might, come home for Christmas this year.
Seriously, there was and still is a large RE price inflation of houses and vacation properties in both MN and WI considering the per capital wage and incomes of these states outside of their (small) larger cities.
Flippers, job losses, the credit crunch aren’t the only problem that will haunt MN and WI as they were fairly conservative handling these puppies. These were once hardy hardworking outdoorsy folks( until the 1st snowflake and then the yearly winter season unemployment checks and 3 extra deer and a very large freezer usually kicks in as very handy)
What these good folks WEREN’T so conservative with was the HELOC’S and MEW craze. Although their properties weren’t Costal or high value compared to other inhabited areas, the people in MN and WI went TOTALLY NUTS with the Home Equity Lines of Credit game. Everyone was buying or building a little something.
Hey, everybody NEEDED a new 54 inch HDTV to watch the Vikings lose again or a Packer bar/rec/mancave room in the basements. A House isn’t a Home without that stuff.
…and now they’re gonna have to pay, maybe even with the sweet lake cottage on Misty Morning Lane, up there in God’s Country, up there by lonely by Greg, the RE man.
Quit moaning and get a HELOC and buy a super luxury ice fishing shack…live a little Greg…everyone is DOING IT !
The difference is if we accept the loss now, we can save what’s left of the equity and more importantly we’ll save neighborhoods,’ Rokakis said.”
Rokakis misses the point, there is no equity left to save. This is a give away to people who consumed beyond tere means and safety net.
I say we do it. But everybody else who was sensible not to be underwater while living in their house/apartment/etc gets 100k (or whatever the average is). Renters get it, responsible home owners get it.
There. NOW how does that ’solution’ feel? Feels like friggin robbery giving it to people who don’t need it. The fact is, it’s robbery when you give it to the people who DO need it to keep their homes.
excellent post,my feelings exactly!!!!!
The concept Mr. Rokakis is advocating is called ‘enabling’ in psychojargon, I believe. It’s very like what Dina Lohan does with her daughter Lindsay - and that turned out well, didn’t it? If you give an addict dope, you’ll have a very happy addict for a moment, but when the dope runs out you’ll have one ticked off addict angry @ you for not giving him more dope. If a toddler throws a tantrum and as a result gets his/her way, you’ll end the tantrum but you’ll raise a monster. People learn when things turn out badly - it’s called consequences. We have been on an easy credit high for way too long and now nobody is handing out dope anymore and we are thowing tantrums.
Renters get it, responsible home owners get it.
Problem is, there are VERY few in this country that fall into that category and many more “voters” that are in way over their head.
We responsible few are about to witness the “tyranny of the majority” in spades…..
How goverment slowly takes control of the economy
“Barofsky said Treasury is giving mortgage companies too much leeway to decide which homeowners will qualify for a program to reduce the principal balance of their mortgages.
The program relies on voluntary cooperation from mortgage companies, Warren said. She said many of the mortgage debt collectors make more money when they foreclose than they do when helping homeowners.
“We have a crisis, and the consequences of not having cooperation from (mortgage) servicers is . . . felt by this entire economy,” Warren said. “We need a program with far more urgency and some real teeth in it.”
The only “crisis” we have is the fact that the Fed Gov’t gives our money & credit to the banks… & “trump-wannabe RE flippers” … for free… with no plan of ever being repaid.
This is considered… in their eyes.. as “stimulus”.
Meanwhile… responsible homeowners (as opposed to “home-debtors”) purchased modest, affordable homes.. have paid all their modest mortgage payments & prop taxes… receive NO bailout.. & are in effect.. PUNISHED for being responsible.
Americans have turned into perpetual “victims”.
Deed-in -lieu of foreclosure
Next trend. What do you guys and gals think?
How fast do you think the banks will put these homes on the market?
(I read the banks are ready to clean house on the stategic defaults and failed short sales. Loan Servicing Fees are dropping.)
How fast do you think the banks will put these homes on the market?
I wouldn’t hold my breath……..the lenders have absolutely no incentive to dump properties and in fact our elected leaders, the FDIC, and the Fed are actively giving them every incentive to hold on indefinitely….
In April 2005 homes were priced at 649k to 727k in a typical area near our home. Within a short period (4 months) these homes went to 899k to 1.1m.
Then the bust hit, the bank now has these homes at 669k to 799k. Where is the deal? If these homes were appaised orginal at 649k to 727k and their is a 35% drop in this area these homes should now be from the 400’s.
In other words we all have to take a cut in pay and expenses, maybe lose our jobs, get 1% cd interest and the banks still wants a profit on these places?
“For homeowners who do get a modification, the hope is that changes to their loans will give them breathing room until home prices recover and they can refinance or sell. Blundell says that’s her goal. Her interest rate will start gradually moving up again in five years. ‘I’m hoping that people can actually afford to buy a house again,’ she says. ‘That’s my plan.’”
In other words, you just postponed the inevitable for five years. ‘Hope’ is not a good long-term strategy.
Shows how this is not even close to over. What happens when these people who got modifications realize that prices have not (and will not) ‘recover’?
Somehow she doesn’t grasp that SHE can’t afford the home. And if she can’t, that means many more in her same socioeconomic strata can’t either. So where are all the rich people going to come from and ’snap up’ her property?
“I’m hoping that people can actually afford to buy a house again, she says. ‘That’s my plan.”
She means she hopes people can afford to buy her house for the imaginary amount she thinks it’s worth. Good luck with that lady.
Lapeer Michigan is no different from any of the other areas of the midwest these articles cover; thousands upon thousands of empty houses tucked between the corn fields, or cabins in the woods, or McMansions in the meadow. Every week I see another “see through” house (curtains gone, house bare inside), and this is just along my ten mile bike riding route just outside the Detroit suburbs. This is not just a big city or suburan problem. Rural America is slowly being drained of everybody who wants their 40 acres in the country. Not that I have a problem with that.
“Shows how this is not even close to over. What happens when these people who got modifications realize that prices have not (and will not) ‘recover’?”
Add to that the most recent batch of FB’s who jumped at the $8K buyer bait and 3.5% FHA down payments.
More and more folks are getting thrown under the bus, all in a doomed effort to prop up prices that even the government acknowledges were bubblelicious.
What happens when these people who got modifications realize that prices have not (and will not) ‘recover’?
They will get another modification …..lather…..rinse…..repeat…… courtesy of the FHA, Fannie, Freddie, or whatever federal acronym is around in 5 years…..
Congress:
A congress person is elected to look out for us at the local and national level, sure GREENSPAN and the rest of the clan did their dirty deed in this ponsi scheme we are all in, but your local repersenative is even more guilty.
Nobody in congress knew of the shell game and took to the floor yelling and screaming that we must stop these practices now. People learn one ting in your life trust nobody who knows less then you, a title or position doesn’t mean they are smarter.
This blog and a few others warned of this problem for years and although I’m not sure I bet few on this site were a member of congress or the fed reserve, if Ben and other posters were then we wouldn’t be in this mess I bet?
This blog and a few others warned of this problem for years and although I’m not sure I bet few on this site were a member of congress or the fed reserve, if Ben and other posters were then we wouldn’t be in this mess I bet?
Heartily agree.
And, while we’re on the topic of this blog, permit me to add the following $.02 worth:
There’s a lot of talk about social networking these days. Much of it centers around sites like Facebook, LinkedIn, and MySpace.
Well, let me tell you, I’ve spent time on those sites, and you know what? There are hordes of people who do nothing other than talk about themselves all day long. What, pray tell, is social about that? Sounds like narcissism to me.
Then we have the HBB. We socialize, criticize, tell stories, argue, kiss, make up, and even meet each other offline. Speaking of that, I’m still waiting to hear about the DC meetup. Sounds like you guys had a blast!
In short, what we have here is true social networking. Thanks, Ben, for kick-starting this thing and allowing us to join the party.
“There’s a lot of talk about social networking these days. Much of it centers around sites like Facebook, LinkedIn, and MySpace.”
First off, the talk you’re hearing is a couple of years out of date. Myspace is about as relevant as an interest only option arm.
I don’t see how you can compare those and HBB. HBB is an anonymous forum for people to express political/economic opinions. LinkedIn is a place to find jobs and/or expand a network that will help find jobs. Facebook is a place to share your life events with friends and family.
I was in the same boat as you regarding facebook. But once I was on I liked it. I don’t post very often. But I like seeing what everyone else is doing. I’ve friended friends from high school that I haven’t seen or talked to in 15, 20 years. It’s kinda cool to see what they’re up to, see pictures of their families. Even to know where they live and what they’re doing for a living.
As with anything else, some people take it to an extreme and put up 10 pictures a day detailing every second of their lives. But you can’t throw away the whole idea because of a small group.
Myspace is still where I go to check out music….and concert dates….
Not really useful for friends anymore…but still a FREE place to advertise….
But if it’s not useful for friends, who’s there to read the advertising?
I send people to my page to listen to the music….click on my handle…
If there were no social networking sites, those people most likely would not be what you imagine to be “friends”
Crush
We…kiss
Damnit, I missed the kissing? I always miss out on the fun part!
http://www.nola.com/news/gulf-oil-spill/index.ssf/2010/07/real_estate_agents_want_oil_sp.html
Real estate agents want oil spill compensation
Published: Wednesday, July 21, 2010, 1:38 PM Updated: Wednesday, July 21, 2010, 1:41 PM
The Associated Press The Associated Press
WASHINGTON (AP) — The administrator of a $20 billion oil spill compensation fund said Wednesday he’s been besieged by real estate agents and brokers, demanding that they become eligible for payments.
Kenneth Feinberg, in congressional testimony singled out the real estate agents’ demands as one of many tough eligibility decisions he’ll have to make in the coming weeks.
Feinberg told the House Judiciary Committee he’s working only for victims, not BP or the Obama administration. Operations of the independent fund will begin next month, starting with six-month emergency checks that will be processed within a day and paid out within the next two days.
The emergency payments will not require a release from future claims. Long-term settlements — for current and future injury or loss — will require agreements to accept the offer as final payment. Victims can reject the money and pursue claims independently in court.
Feinberg said he’ll need to work out a system for those who develop illnesses from the cleanup years afterward.
Feinberg said he has heard from many real estate agents and brokers about their lost income, and promised to address their concerns.
“The Realtors and real estate brokers are a major political force,” he said. “I’m hearing from them constantly. I’m not sure whether they have a valid legal claim. I’m not sure they can win if they litigate.
“If I am going to do justice here, we’ve got to do something.”
“The Realtors and real estate brokers are a major political force,”
Payment of claims should depend on the legitimacy of the claims. It should not depend at all on whether someone is a member of a group that is a “major political force”.
It disturbs me greatly that he would even use that phrase in the same breath that he is using to discuss whether they have a claim.
This is precisely why courts should adjudicate claims, not a political process.
Real estate agents want oil spill compensation
Published: Wednesday, July 21, 2010, 1:38 PM Updated: Wednesday, July 21, 2010, 1:41 PM
The Associated Press The Associated Press
WASHINGTON (AP) — The administrator of a $20 billion oil spill compensation fund said Wednesday he’s been besieged by real estate agents and brokers, demanding that they become eligible for payments.
Kenneth Feinberg, in congressional testimony singled out the real estate agents’ demands as one of many tough eligibility decisions he’ll have to make in the coming weeks.
Feinberg told the House Judiciary Committee he’s working only for victims, not BP or the Obama administration. Operations of the independent fund will begin next month, starting with six-month emergency checks that will be processed within a day and paid out within the next two days.
The emergency payments will not require a release from future claims. Long-term settlements — for current and future injury or loss — will require agreements to accept the offer as final payment. Victims can reject the money and pursue claims independently in court.
Feinberg said he’ll need to work out a system for those who develop illnesses from the cleanup years afterward.
Feinberg said he has heard from many real estate agents and brokers about their lost income, and promised to address their concerns.
“The Realtors and real estate brokers are a major political force,” he said. “I’m hearing from them constantly. I’m not sure whether they have a valid legal claim. I’m not sure they can win if they litigate.
“If I am going to do justice here, we’ve got to do something.”
Yeah, like real estate was booming even prior to the oil spill. They are such a joke!
I agree with the Arizona Slim. Facebook and those others seem to be for people who want to trumpet out great they are. My niece asked me to joing for a bit and all I got was news about their latest drunken party or their vacation to Hawaii. I finally got a bit angry about it one day and posted pictures of my trip to the local Target store. I laughed for a couple of days and then removed my page.
This blog is most interesting as it sticks to the topic of the housing bubble which has been the biggest bubble ever. You could see it coming and you could see it deflating and it is still deflating. All of Benanke’s horses and all Bernanke’s men can’t put the bubble back together.
I’m going to Target to buy socks.
Good place to buy ‘em.
Like.
Diogenes, you moor a sailboat at Marjory Park ?
No. I have a mooring in the SeaPlane basin by the airport.
Why? Has my boat turned up missing or damaged??
I clear about $90,000 a year and live in a house I bought for $135,000. I remember this real pr!ick who made fun of my modest house in 2007 who had just bought a lake “view” (not lake “front”) vacation property that recently enjoyed about a 65 percent decline in price. This guy would screw his own children in order to own two vacation houses, regular botox and fat suctions for he and his harridan wife, a private jet, and his third vacation house on the mexican riviera (which has declined about 50 percent in value).
Me? I just decided I could not live that way if it meant ruthlessly screwing other people so rapaciously. I rediscovered my conscience, when it was almost too late. But rediscover it I did. The entire mortgage and real estate industry during the bubble was the most immoral, atavistic, unscrupulous group of pr!cks and thieves this country has ever suffered under. May God help and bless this country, in spite of our failings.
Hear hear!!!
Funny but true: when I went to look up “harridan” (nice 50-cent word, btw), the service that I used chose an ad from flexjet.
Until recently, i was making a little over $100k a year and am living in a $90,000 house that i built myself. Most people never understood it.
I drive used cars and motorcycles and just keep putting money in the bank. Everyone told me that I had misallocated my funds and that I should “liberate” the equity in my house and invest in the market.
It’s funny how the game of inflation created by the Federal Reserve has made Maize-rats out of supposedly intelligent people. You just buy every asset you can at the current price, with as much leverage as possible, and then “appreciate” your way to success and happiness.
It worked for a long-time when the debt bubbles were being pushed by Wallstreet Conmen in cohoots with the FED.
But, i’m afraid that particular game has met MAXxxxed out Credit and a deflationary spiral. No payments forthcoming. The tenants aren’t paying, the appreciation is negative and the easy money game is over………….for a long time. Your baffoon of an acquaintance will need to find some more than a one-trick pony for the coming years. I wonder if his “wife” will be sticking around for the austerity??
Diogenes and Diggler: Sounds like you are both rewarded with security and peace of mind. Wonderful.
At some point there will be more ex-harridans than guys with “money,” and then things will get even more amusing!
“Greg Anselmo is a broker for Edge of the Wilderness Realty in Itasca County. He said counting lots, cabins and vacation homes, there are about 300 to 500 pieces of property available. ‘We’ve got 1,000 lakes in this county, and we’ve got a shortage of buyers, that’s for sure, and I don’t know how to change that,’ Anselmo said.”
My guess is FHA will have to go to <500 FICO scores, zero down payments and teaser rate option ARM’s….hey, it “worked” before….right?…….
Diogenes, think positive dude.
Hi All- I’ve been watching the MLS listings in Itasca/Brainerd/Lake County for quite a few years now. The most interesting change has been watching prices on the relatively new (2000-on) “ATM-special-the Kids need the Memories-Baby Boomer-Lake McMNMansions” come down from the wishing prices so dramatically. (Yes, we still have a LONG way to go) While the 1960-1980 “Hamm’s Beer Decor-Wood Panel Craptastic-I loved The Four Freshman-Do-Wop Generation Walleye Shacks” remain at true 2005 wishing prices. I can only attribute this to the inability of the original Do-Wop owners to adequately realize the seriousness of the crash. FYI- In 2005, the Star-Trib ran a front page weekend piece that said something along the lines of, “Lakefront is Gold”. I still rightfully believe, that as Gen X, it is really my fault for being one of only 30 million total folks in the US. In essence, there ain’t enough of my ilk to buy anything in MN Lake Country right now. Also, I hate Walleye. If I want to catch something that puts up no amount of fight, I will simply tie a brick to my line and then reel it in.