Bits Bucket For October 23, 2010
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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The Onion strikes again.
Gov. Arnold Schwarzenegger has declared a state of emergency in a Sacramento suburb after part of a regional mall was consumed by fire, causing at least $6.5 million damage.
Oh, wait a minute….
http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2010/10/22/national/a022630D02.DTL
“The Onion strikes again.”
Dream on. (If only it were true.)
You know that they make sprinkler systems to control these fires and it makes me wonder how this one got out of control.
I also have to wonder why this is a state of emergency. Theoretically the mall has insurance, the stores have insurance and the insurance companies will be writing the checks to make it all good real soon.
Taxpayers can foot the bill for cleanup?
There’s got to be a CRE back-story to this. The Galleria is owned by Australian-based Westfield Group. Back 20 years ago or so Westfield aggressively bought out, and then rebranded, all the shopping malls in the San Jose metro area. The “Almaden Fashion Plaza” mall was rebranded “Westfield Shoppingtown - Almaden”. The “Valley Fair” mall was rebranded “Westfield Shoppingtown - Valley Fair”. You get the picture - malls even more homogenized than they were before.
Now Westfield has extensive holdings in 4 countries: AU, NZ, US, and UK. From their corporate website:
Westfield Group is the world’s largest listed retail property group as measured by the FTSE/EPRA NAREIT index. The Group has interests in and operates a global portfolio of 119 high quality regional shopping centres in Australia, New Zealand, the United States and United Kingdom valued in excess of $61 billion, with approximately 23,700 retailers in 10.5 million square metres of retail space.
It would be interesting to investigate how leveraged they are.
They are traded on the ASX under symbol WDC. The stock skyrocketed up to around $22 in 2007 then crashed, currently trading around $12.
“Westfield”
They own a number of malls around San Diego County, and without having recently visited any of them, I can guarantee they currently all prominently feature Space For Lease signs around their periphery.
Got underwater CRE?
Their purchase of Valley Fair was more recent than I had remembered.
From Wiki:
In 1998, Westfield America, Inc., a predecessor of the Westfield Group and The Rouse Company acquired Valley Fair jointly from Hahn. Westfield bought out Rouse in 1999 and brought in an institutional investment partner to share its investment risk in this high-profile property.
I think the article said there was a police standoff with someone inside, and that person is likely to have set the fire?
While I agree not all real estate is affected by local influences, I am fully convinced that the vast majority of it is. Macro influences dominate, of course, but the Micro influences still make a huge difference.
“Macro influences dominate, of course, but the Micro influences still make a huge difference.”
I don’t have any idea what you are trying to argue here. Who said that ‘Micro’ factors have nothing to do with real estate, and who said that ‘Macro influences dominate, or course’ (besides you)?
Please either explain your argument, or confess that you are tilting at windmills.
“…explain your argument…”
[Crickets:] Chirp… chirp…
I think she’s saying real estate is local, still sorta.
In other words, channeling Lereah’s $1.99 worth of defunct BS?
Macro= 9.6% nominal unemployment (vs. 20% actual), while Micro= Phoenix, Las Vegas, and Detroit. Many areas like Orange County, CA, where I reside, were far less affected. Montana got it right -
It’s different where you live.;)
P.S. Perhaps this book provides valuable insights on the Micro and Macro aspects of real estate (I dunno — haven’t read it, yet):
All Real Estate Is Local: What You Need to Know to Profit in Real Estate - in a Buyer’s and a Seller’s Market [Hardcover]
David Lereah (Author)
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Ships from and sold by Amazon.com. Gift-wrap available.
Only 1 left in stock–order soon (more on the way).
13 new from $1.99 20 used from $0.01
P.P.S. Don’t overpay for your copy of this book!
David Lereah???
Wasn’t he the shill who was the head of the NAR before leslie appleturd young and now it’s Lawrence Yun I believe??
Home many homes did our dear David let go back to the bank?
LAY was CAR, not NAR.
For Spook, a couple of thoughts:
1) There’s really only one color that matters to the faux elites, and that’s the long green.
2) It is in the interests of certain groups to keep the people fighting among themselves. Their biggest fear is that the “masses” might develop affinity for each other across racial and cultural lines and turn on them. Thus, it is important that old animosities be kept alive, to turn one group against the other, to foment discontent, to manufacture controversies, etc. As long as the people are kept fighting amongst themselves, they consider themselves to be safe. It is also an amusement for them. The history of the Andalucia region in Spain is most interesting. Centuries ago it flourished, cultures existing side by side under a benign Caliph who ruled from afar, the unifying force being trade, from which the Caliphate benefitted, but not to the detriment of the people.
You must understand that there are those who can’t stand the idea of people calmly getting along, sharing ideas and prospering. Usually fights between two entities are started and encouraged, by a hidden and unknown third entity, to the benefit of that third entity or entities.
Deep Thoughts, by Jack Handey
“You must understand that there are those who can’t stand the idea of people calmly getting along…”
(I work with some of these people, some of these people live on my street)
“Usually fights between two entities are started and encouraged, by a hidden and unknown third entity, to the benifit of that third entity or entities.”
Hence the proxy wars we and others seemed to be mired in around the globe. Divide and conquer.
“There’s only one color that matters to the faux elites, and that’s the long green.”
True dat. The faux elites are driven by the lust for power. The long green represents power, is a form of power.
In other words, black + green = white?
Their biggest fear is that the “masses” might develop affinity for each other across racial and cultural lines and turn on them.
Which is not far from what happened during the Obama campaign. Which explains a lot.
That would have only been true if Obama had not been dishonest about his political belief system and what he meant by “fundamentally changing America”.
Fault Fannie, Freddie
NY Post ^ | October 22, 2010 | STEPHEN B. MEISTER
Fannie Mae and Freddie Mac, the government-run mortgage giants, share much of the blame for the foreclosure crisis.
Fannie and Freddie own or guarantee $5.5 trillion of mortgages — more than half of all US home mortgages. Major banks — Bank of America, Wells Fargo, Citigroup and JP Morgan Chase — service the loans for Fannie and Freddie for fees. And when they do, they do what Fannie and Freddie tell them to do.
To that end, Fannie and Freddie have long issued “Servicing Guides.” Fannie’s latest update (Aug. 31) noted that Fannie “has established time frames within which routine foreclosure proceedings are to be completed.” It warns that Fannie “reserves the right to impose a compensatory fee” on banks that don’t meet the guidelines.
The update perpetuates Fannie’s longstanding, specific deadlines for exactly how long banks have to complete foreclosures on a state-by-state basis: 185 days in Florida; 300 days in upstate New York and 420 days downstate, etc. In states where foreclosures don’t have to go through the courts, Fannie imposes much tighter time frames: 150 days in Nevada and just 90 days in Maryland.
Good morning and a happy weekend. Here’s one of very occasional series of posts on what I call Long Island North Shore Insanity… today, featuring a rather blandly contemporary if nice enough house (the usual granite stainless blah blah, etc… but not much yard or anything too outstanding from what I can tell) that is ridiculously overpriced STILL, as in what are they thinking in that whole area and when will it end?
http://www.trulia.com/property/3024254392-5-Old-Farm-Rd-Great-Neck-NY-11020
or go to mlsli.com and enter mlslid 2318220
Residential, Exp Ranch - Great Neck, NY
Lake Success Meadow Woods Fabulous Renovated Sunny Ex-Ranch. Wonderful Interiors, Vaulted Ceiling, New Kitchen And Baths. Prime Location. Country Club Community With Pool, Golf, Tennis, Police, Camp, Grill Room, Summer Camp And 6 Day Garbage Pick-Up!!
(My comment: 6 day garbage pickup as a feature?? Now is that really as important as a stainless steel fridge?? Well at least taxes are only around 15k, which is low for Long Island (try the town of Roslyn for 25k taxes for houses in the same price range)).
Now the fun part: the price history:
10/22/2010 Price change -$10,000 (-0.8%) $1,188,000
10/06/2010 Price change -$50,000 (-4.0%) $1,198,000
09/23/2010 Price change -$50,000 (-3.9%) $1,248,000
08/12/2010 Price change $1,298,000 emrealty.com
12/11/2008 Soldview details $1,140,000 Public record
06/08/2005 Soldview details $1,028,000 Public record
09/05/2003 Soldview details $785,000 Public record
03/02/1999 Soldview details $515,000 Public record
As you can see, they’ve lowered it a whopping .8%… And it sold in 1999 (after bubble inflation had begun mind you) for $515,000. 700k asking increase can buy you a LOT of “new bathrooms and kitchen”s…
Now in all fairness, the house claims to be an ex-ranch, and may have been renovated or somewhat expanded… but probably not since 2005… from what I can tell the increase in price is in keeping with many I’ve seen in Great Neck. The area has not deflated… I read articles by excellent author Keith Jurow on the state of housing, especially with respect to Queens and Nassau, which he claims are due for a huge fall. I hope he is right and that it happens already on the North Shore.
“Now the fun part: the price history:
10/22/2010 Price change -$10,000 (-0.8%) $1,188,000
10/06/2010 Price change -$50,000 (-4.0%) $1,198,000
09/23/2010 Price change -$50,000 (-3.9%) $1,248,000
08/12/2010 Price change $1,298,000 emrealty.com
12/11/2008 Soldview details $1,140,000 Public record”
It appears the Dutch auction has barely started on this property.
Great Neck wasn’t always just a suburb IIUC. Great Neck tools once had their factory located there.
Four years later, they decided to move their business to Flushing, New York, to be closer to the New York market. The fledgling manufacturer suffered a severe setback when fire destroyed their building in 1929, but managed to continue manufacturing by merging and moving in with another hacksaw blade manufacturer, Great Neck Manufacturing, who had a small facility in Great Neck, New York.
I grew up in Flushing/Great Neck. My parents had an apartment in the city and a weekend home in Great Neck. Now my brother and mom still live in Great Neck. The house my brother bought in 1999 is an 1800 sq.ft home and he paid 469K. A smaller home next to him sold for 1.2 million in 06.
The problem with Flushing is that most buildings in Flushing are owned by the Church of Korea. Koreans came into Flushing with cash and bought out properties. I think the property bubble perhaps started in Flushing in the late 80’s thru 90’s. Back in the 70’s my aunt a school teacher and my Uncle a clerk working for an Airline bought a duplex in Flushing for 55K. Houses near Union turnpike in the 70’s were being sold for 24K. My high school girlfriend’s mom sold her house in Roslyn NY for 157K in 81 and moved to Stony Brook and bought a nice place for 45K.
How have times changed.
Imagine what liberals would be saying if we gave FOX news $400 million in taxpayer monies per year…
Cut off their taxpayer funds
NY Post ^ | October 22, 2010 | Michelle Malkin
In the wake of commentator Juan Williams’ firing by National Public Radio, supporters on the Internet sounded a rallying cry: “Free Juan!” But Williams has now been liberated from the government-funded media’s politically correct shackles. It’s taxpayers who need to be untethered from NPR and other public broadcasting.
Public radio and TV are funded with your money to the tune of some $400 million in direct federal handouts and tax deductions for contributions made by individual viewers, not to mention untold state grants and subsidies. Supporters argue that this amounts to a tiny portion of state-sponsored media’s budget and an even tinier portion of the federal budget.
If it’s so negligible, why do NPR’s government-subsidized “journalists” cling so bitterly to the subsidies? Leverage. The government imprimatur gives NPR and PBS a competitive edge, favoritism with lawmakers and the phony appearance of being above the fray.
2banana, your last sentence nails it.
Cue the predictable liberal response, in 3..2..1…
I think Juan should have been fired. Saying he gets nervous when he sees Muslims on a plane he is on is way out of line and a clearly bigoted statement. I enjoy seeing four or five Muslim gentleman boarding a flight that I am on. I also enjoy getting lost on a Saturday night while driving with my family and end up driving through an underprivileged neighborhood much like Clark Griswald did in National Lampoons Vacation. Then it`s off to the Zoo after it has closed, hop a couple of fences and hand feed the Polar Bears some corn dogs. None of it makes me nervous at all and I should receive taxpayer money and anyone who disagrees with me should be fired.
I wonder if Juan would feel the same way if a prominent journalist said seeing a black man walking on the same side of the street made him nervous. I suspect the black population would feel this journalist could not be trusted when it came to stories involving the black community. This would of course damage the reputation of the news source said reporter worked for. This is the same reason Helen Thomas was fired and you didn’t see the talking heads and ditto heads foaming at the mouth then.
“I wonder if Juan would feel the same way if a prominent journalist said seeing a black man walking on the same side of the street made him nervous.”
Do black people as a group spawn an unusually high proportion of the world’s terrorists?
I was talking more about crime, which is of course micro terrorism. As a reporter or a governing official you can’t make statements that suggest you view all minorities what ever the type as potential criminals.
He clearly was voicing feelings that many Americans have, but as a reporter he can’t voice those opinions publicly. NPR put out a statement that said it’s reporters couldn’t participate in the Jon Stewart rally for the same reason.
Williams had apparently been warned before. The only reason this is an issue is because he worked for FOX. This of course get’s all the foaming mouths going.
Per Measton
====I wonder if Juan would feel the same way if a prominent journalist said seeing a black man walking on the same side of the street made him nervous.=====
Yo, Meason, Juan probably did feel exactly the same way when a very prominent black man said EXACTLY that about black men. His name was Jessie Jackson.
Make of it whatcha will. The Jester got away with it.
Per Measton
——e clearly was voicing feelings that many Americans have, but as a reporter he can’t voice those opinions publicly. —–
Of course he can. Reporters voice their feelings all the time. They just open mouth, and often out pop… feeeeelings.
“He clearly was voicing feelings that many Americans have, but as a reporter he can’t voice those opinions publicly.”
But he did voice those feelings, and got a better job for his courage. Long live Freedom of Speech in America!
From Krauthammer’s comments….
Well, I want to start by having people look at this quote from Jesse Jackson about 18 years ago in which he says, ["There is nothing more painful to me at this stage in my life than to walk down the street and hear footsteps and start thinking about robbery … then look around and see somebody white and feel relieved."] Jesse Jackson is saying this. In other words, if the people he looked at were black, he would feel anxiety or fear.
Now, this – there’s nobody in his right mind who’s going to say that Jesse Jackson is a racist, [an] anti-black racist. He’s not. So what’s happening here? There are two elements in what he does here. He talks about a feeling which is related to a statistical fact. The feeling is the anxiety he feels, and the fact he’s talking about — this is implicit, of course — is the empirical fact that there’s a higher rate of crime among young African-Americans than among young whites.
Now, he regrets this. He regrets this. And he says the feeling of relief is a result of this obviously statistical disparity.
Now, think of what Juan has said. It’s exactly the same kind of statement.
But he did voice those feelings, and got a better job for his courage. Long live Freedom of Speech in America!
I agree Long Live Free Speech, but don’t expect to work for an organization that wants to be impartial.
Jesse Jackson isn’t a reporter
He get’s on talk shows to voice his opinion. It boggles my mind that you can’t see the difference.
“…that wants to be impartial.”
And don’t expect to express your honest views on the air — even if almost every honest man, woman and child in America agrees with you.
Per Measton
====
I agree Long Live Free Speech, but don’t expect to work for an organization that wants to be impartial.
=====
Juan was not working for an organization that “wants to be impartial”. He was workin’ for bloody NPR.
What a riot.
Per Measton:
===Jesse Jackson isn’t a reporter
He get’s on talk shows to voice his opinion. It boggles my mind that you can’t see the difference.====
Some people are easily boggled. I am sympathetic for your lack of capacity in that matter.
But, your assertion that reporters may not speak opinion in any setting whatsoever is farcical.
Furthermore I offer the publicly stated positions of NPR-affiliated folks still in fine standing with “impartial, gotta done uphold them there rules” NPR
* Nina Totenberg:
…. if there was “retributive justice” in the world, former North Carolina Sen. Jesse Helms would “get AIDS from a transfusion, or one of his grandchildren will get it.”
* On “All Things Considered,” humorist Andrei Codrescu said:
…. the “evaporation of 4 million [people] who believe” in the doctrine of Rapture “would leave the world a better place.”
Codrescu, who was on contract with NPR but not a full-time employee, later told The Associated Press he was sorry for the language, but “not for what [he] said.”
* Julianne Malveaux. an occasional guest on Public Broadcasting, said on another network:
On November 4, 1994, Malveaux famously stated of Supreme Court Justice Thomas: “I hope his wife feeds him lots of eggs and butter and he dies early like many black men do, of a heart attack.
Totenberg should have been and possibly was reprimanded and I don’t see that she has made a similar statement since.
Her comment although insensitive was a commentary on Jesse Helms and not on an entire race or religion.
Helms was ‘bitterly opposed to federal financing of AIDS research and treatment’. Opposing the Kennedy-Hatch AIDS bill in 1988, Helms stated, “There is not one single case of AIDS in this country that cannot be traced in origin to sodomy”. When Ryan White a hemophiliac died in 1990, his mother went to Congress to speak to politicians on behalf of people with AIDS. She spoke to 23 representatives; Helms refused to speak to Jeanne White.
This boy died through no fault of his own. He had hemophilia and required a transfusion. Helms would have been responsible for many more dieing had he had his way. Research taught us how to screen the blood supply to prevent HIV. IT gave us medicines that decreased the risk of spreading it and gave us information to pass along to patients to make thems safer.
Again her statement was insensitive, crude and biased against Jesse Helms and any ignoramous who thought sticking their head in the sand was the right approach to AIDS. It was not racist, or anti religious (many religious people did support AIDS research) it was directed at Jesse Helms. Thus the difference.
per Measton:
===Totenberg should have been and possibly was reprimanded and I don’t see that she has made a similar statement since.====
Possibly she wasn’t. In any case… so?
===Her comment although insensitive was a commentary on Jesse Helms and not on an entire race or religion. ====
His comment was not about the race or religion; it was- rather- about his state of mind and observation about society, which was- whether for good or ill- rather… accurate. He probably should be rewarded by narrow-minded intolerant NPR rather than chastised.
===Again her statement was insensitive, crude and biased against Jesse Helms and any ignoramous who thought sticking their head in the sand was the right approach to AIDS. It was not racist, or anti religious (many religious people did support AIDS research) it was directed at Jesse Helms. Thus the difference.====
No difference. Or… difference in favor of Williams. His statement was not evil, hateful or crude, unlike liberal NPR’s more sanctioned statements, it seems. And, Juan was not racist at all. He did not demean a race. He commented on his own feelings. Key dialogue given the widespread prevalence in USA of similar feelings. If there was anyone Juan was harsh to, it was to himself.
Thus, the difference.
His statement was I judge people by their appearance and religious dress. A news service that didn’t publicly reprimand him for this would loose the confidence, support, and influence of the offended population. This is the difference between what he did and Totenberg did. She offended people with a (in my opinion abhorrent and self destructive) view of one particular issue. He offended people with middle eastern complexion, style of dress, language, and religion.
Her point was Jesse Helms was condemning a lot of people to death by withholding funding for AIDS research. Even if you are heartless and bigoted and think gays should die (which apparently he did) many non gay people would have died due to transfusions or partners who strayed. The comment that it would be cosmic justice if he got AIDS really get’s to that point. It’s a comment that might make a bigot like Jesse Helms change his tune, oh yeah maybe my family can still get AIDS, maybe we should fund research into how it is spread and how to limit its spread and how to cure it.
A muslim’s take home message is if I don’t want to be viewed as a terrorist then I need to change my skin color, language, dress, and religion.
Per Measton:
===His statement was I judge people by their appearance and religious dress. A news service that didn’t publicly reprimand him for this would loose the confidence, support, and influence of the offended population====
His statement thus was about him, not about them, independent of whether his views of them were accurate or not. And, as per prior notes, NPR has longstanding habit of not reprimanding frankly evil diatribes by their staff- which Juan’s remarks clearly weren’t. Thus political witch hunt. Thus the pain which NPR appropriately will suffer.
===A muslim’s take home message is if I don’t want to be viewed as a terrorist then I need to change my skin color, language, dress, and religion.====
There was no message for Muslims. The racism as usual is from the Left projecting their messages onto others.
Figures.
“Saying he gets nervous when he sees Muslims on a plane he is on is way out of line and a clearly bigoted statement.”
I personally feel most uncomfortable on a flight if there are not at least 20 bearded passengers on board, reading their copies of the Quran, accompanied by multiple wives cloaked in black from head to toe with only narrow slits for their eyes to peek through.
Anybody who does not feel equally uncomfortable in the absence of Quran-reading passengers is a bigot, and should steer clear of employment at NPR.
Your liberalphobia is amusing to behold. They cause bedbugs and the heartbreak of psoriasis too, don’t they? Should be rounded up and put in camps, for the good of the nation.
Keep sniping at your neighbor, while Goldman Sachs makes off with your nest egg.
NPR got exposed for being what it is. Now it and its kool aid drinking followers are spinning away. Fact is Williams was fired for breaking the 1st commandment of liberalism. Thou shalt not be un-PC.
Had he said he gets nervous on flights when he sees middle aged white men, would he have been fired? Obviously the answer is no. The double standard at NPR has always been there. No shock there. The shock is that what we’ve known for years is finally being exposed by the MSM.
And maybe this will be the final impetus to stop funding that operation once and for all. If I want far left dogma, I don’t need PBS. I can get all I need at msnbc, cnn, abc, nbc, cbs and abc news. No need to pay for yet an additional left wing news source with my tax dollars.
I just posted examples of there not being a double standard. It’s like Eddie’s an idiot.
Again Eddie let’s see one investigative report or comprehensive interview exposing the housing blog on FOX.
Cricket’s
It’s certain that reporters as a whole are more liberal than the US. Not surprising because being objective and looking for the truth are more associated with liberal views. The whole idea of asking reporters not to make public displays of bias is so foreign to the Eddie’s of the world. This isn’t to say that they don’t report objectively or that their editor doesn’t remove perceived bias. I posted a story of how NPR was banning it’s reporters from going to Jon Stewart’s rally as an example. Helen Thomas was fired from CNN for showing extreme bias against the jews. The reporters have a duty to their employer.
“Not surprising because being objective and looking for the truth are more associated with liberal views.”
Nice try. The truth getting out is like kryptonite to liberal progressives and revolutionaries.
Show me some investigative journalism from FOX. Show me a person on FOX who said something slanted that got fired or reprimanded. As noted below FOX has been caught doctoring film to make the crowd at a favored event look larger. Stewart caught them using footage from another rally to make the crowd appear larger. The leaves were green in one clip and then bam it was fall. Not one person was fired for that. NPR would have fired someone for that. Dan Rather got the ax for not properly vetting a news source, a much smaller crime than say doctoring film.
A have been saying for years we need to get rid of public government radio and give the licenses back, so that the real community, college, high school radio, public service radio and training of broadcasting students, can learn and work in this field, which the education band was originally designed for.
The Public radio stations hogged up all the high powered frequencies years ago, some states like south carolina have 3 radio networks and the public is not allow really to participate except for volunteering for fund raising.
1. Less than 2% of NPR’s funding comes from gov.
2. If you’ll look back Public Broadcasting had some of the best and earliest discussions of the housing bubble. Not beholden to Realtor advertising interests.
3. How many tax deductions does for profit television get? Now let’s remember companies like Exxon and Google often pay little to no tax on their income due to accounting and offshoring.
Reporters (Not opinion commentators) are supposed to remain neutral in their reporting. They are supposed to be trusted by all sides. Juan Williams wasn’t. I don’t know how you can be so dense. Helen Thomas was fired for the same reason. The only reason this is an issue is because they got the ditto heads all fired up about it. He worked for their opinion maker Fox. If he had worked for the New York Times you wouldn’t have heard a peep just as you didn’t when Helen Thomas was fired. You really are little people.
Seriously
Some of the Fox news people should point to some in depth reporting on the housing bubble that came out of Fox prior to the collapse. My guess is we’ll hear crickets.
If you understand that Fox News is more of an entertainment show than a news program, it all makes sense…
Entertainment/propaganda.
Seriously they can get their ditto heads to foam at the mouth on cue, it’s almost Pavlovian.
“…ditto heads…”
That’s entertainment!
“Almost” Pavolvian? How about totally Pavlovian? My mind is boggled by the instant falling in line they get. Can’t people think any more? How short the memories are. Repubs ran up the biggest deficit in our history under Bush II, almost get depression II going, started two wars that have gotten almost 10,000 US soldiers killed and cost a trillion dollars that is off budget, and two years later they are the party of fiscal and moral responsibility? WTF? Have we all turned stupid? The Republicans (or the Tea Party, same thing) are not looking out for the best interests of the citizens of this country. They are bought and paid for by corporate interests; give Social Security to Wall Street? Are you all insane?
And suddenly the emperor (Fox News) had no clothes. Will not one loyalist to the king not stand up and crow about the indepth coverage of the housing bubble from Fox News.
Per Measton:
-=====And suddenly the emperor (Fox News) had no clothes. Will not one loyalist to the king not stand up and crow about the indepth coverage of the housing bubble from Fox News. =====
I’m more than amenable to contemplate a documented statistical sample of Fox vs NPR coverage of bubble elements of housing for any given year. Verily, with nigh-infinite subjects out there to cover, I have no doubt that one subject or another is covered “first” by one or another organization.
But, so far all I hear are undocumented claims. Claims have little merit.
http://www.youtube.com/watch?v=A2_Hmt-MKLA
This one is brilliant 3 against Schiff cutting him off
http://www.youtube.com/watch?v=_HFNJw7xGSA
Here they call him AntiAmerican, listen to Cavuto frame his questions against Schiff.
http://www.youtube.com/watch?v=CZyvnWFbR84
Listen to the objections no numbers no analysis.
great series of videos. thank you measton.
Meatson:
http://www.schiffradio.com
M-F 6-8 pm est….any questions you want me to ask him?
+1 measton…
Per Measton:
===Less than 2% of NPR’s funding comes from gov.=====
1) Then… they won’t miss it.
2) Don’tcha forget to include the gov’t money that goes to local stations that feeds up to central NPR. Are you certain that is part of the 2% ‘total’?
Unlike Faux News, NPR is fair and balanced. Except for in the firing of Juan Williams, that is…
From NPR
Sent Wednesday morning, it expressly said employees could not attend the rallies in Washington on Oct. 30 hosted by comedians Jon Stewart and Stephen Colbert.
The memo failed to mention that NPR would cover the rally, and thus opened the network to host of charges on the Internet, all false, such as:
NPR is boycotting the Stewart-Colbert rally
NPR is “controlling” the private lives of its employees.
NPR made this rule up just for the Stewart-Colbert rallies.
NPR is under the thumb of Fox News and has ordered its staffers to stay away from the Stewart-Colbert rally because it fears the power of Fox News.
NPR has morphed into a right-wing media organ and doesn’t want its staff attending what will be perceived as a “liberal” event.
Barring staffers from the rally proves that NPR is left-wing because many of its employees would have gone.
NPR discourages curiosity.
My fave: NPR is opposed to “sanity”
Yes, these are some of the accusations I’ve heard since Ellen Weiss, head of NPR’s news department, sent the memo reminding staffers that, with elections around the corner, they must abide by NPR’s Ethics Code.
NPR has had these rules since 2004.
She added: “NPR journalists may not participate in marches and rallies involving causes or issues that NPR covers, nor should they sign petitions or otherwise lend their name to such causes, or contribute money to them. This restriction applies to the upcoming John (sic) Stewart and Stephen Colbert rallies
Yes I”d say they are fair and balanced, it’s just the foaming mouths make it seem like they aren’t.
NPR does foam a bit.
Hope its “impartial” leader, commenting on Juan and a psychiatrist, takes a charming financial hit
:) 
Odd.
Fox did not get “heartburn” from Juan being on NPR.
The NPR Ombudsbabe printed that NPR long has had heartburn from Juan being on Fox.
Must be because NPR is all warm and liberally, more tolerant of diversity than evil conservatives
Odd.Fox did not get “heartburn” from Juan being on NPR.
The NPR Ombudsbabe printed that NPR long has had heartburn from Juan being on Fox.
Not Odd at all
1. NPR wants it’s journalists to avoid public displays that might make large portions of the population think they are slanted. As posted above they forbid reporters from going to the Stewart rally (which wasn’t even a political rally, but NPR made a statement because they knew it would perceived as one). They can’t sign public petitions, or donate money to such causes.
Fox on the other hand really has no qualms about such things. In fact they do things like doctor film to make it look like there are large crowds at right wing rallies when in fact they are not.
the US, Fox News has been promoting a series of right-wing protests against Obama and the Democrats’ health care plan. They urge viewers to attend the protests, then give them huge coverage on the network.
But the network went a step too far this week, as Jon Stewart showed on the Daily Show.
The network’s Sean Hannity had a segment in which he and two conservative Republican congressmen crowed about the size of an anti-health care rally held last week. But as The Daily Show discovered, they used video footage from a much larger rally held in September. What tipped them off? Thursday was clear and the leaves on the trees were a beautiful autumn colour. On September 12, the sky was cloudy and the leaves green
Using fake footage to make a political propaganda piece would get any reporter at NPR fired. As far as I can tell Sean Hannity is doing just fine at FOX.
Sean Hannity isn’t a reporter, not are any of the Fox, MSNBC or CNBC “personalities.” When I first heard this story, my sympathies were with Juan Williams. After doing some research it seemed that indeed, he breached his responsibilities as a news journalist. Yes, we all have opinions, and reporters are entitled to their own opinions to which a majority of the public may agree with, but under traditional, neutral journalistic standards a real journalist is professionally bound to not express their opinions in a public forum. Taking this to the extreme, I sure don’t want to hear a reporter opine that a suspected murderer must be guilty, because, gosh, that’s their opinion, and most everyone in the community agrees with them.
Per Measton:
===Odd.Fox did not get “heartburn” from Juan being on NPR.
The NPR Ombudsbabe printed that NPR long has had heartburn from Juan being on Fox.
Not Odd at all
1. NPR wants it’s journalists ====
NPR workers still in good standing
* Nina Totenberg:
…. if there was “retributive justice” in the world, former North Carolina Sen. Jesse Helms would “get AIDS from a transfusion, or one of his grandchildren will get it.”
* On “All Things Considered,” humorist Andrei Codrescu said:
…. the “evaporation of 4 million [people] who believe” in the doctrine of Rapture “would leave the world a better place.”
Codrescu, who was on contract with NPR but not a full-time employee, later told The Associated Press he was sorry for the language, but “not for what [he] said.”
* Julianne Malveaux. an occasional guest on Public Broadcasting, said on another network:
On November 4, 1994, Malveaux famously stated of Supreme Court Justice Thomas: “I hope his wife feeds him lots of eggs and butter and he dies early like many black men do, of a heart attavk.
NPR has some excellent informative segments. The ones on drugs, nutrition, technology, and music are among their best. Just like any other form of media, you can’t just lump all it’s products together.
I learned about Fosamax and the Bone Density Testing Scam, and how dangerous the drug is on NPR, and thus saved my mother from continuing using it and getting sicker. I also learned about the new law for Gluten-Free food labeling on NPR. NPR isn’t all “liberal”. (I’m a Political Atheist.)
NPR has some excellent informative segments ?
Rupert Murdoch does not give a rats a$$ about being informative…He is agenda and ratings driven…Its that simple really…
I’ve heard Juan Williams on NPR radio and on the O’Reilly Factor. I never liked him because he is a chameleon - moderate on NPR and right-leaning on Fox - anything for a paycheck. And I’ve never heard him say anything particularly insightful. No loss for NPR. And Fox will pay him more, anyway, which is what he wants.
“…moderate on NPR and right-leaning on Fox…”
Sounds like he might actually be fair and balanced!
During the run up to this Idiotic War on Terror, two old neocon old aquaintances of mine, General Barry R. McCaffrey (Ret) and General Wayne Allan Downing (Ret and deceased) as well as many others, got a lot of Pentagon access materal and MSM air time to pimp these wars.
With all due respect to these men, I don’t believe anyone in their right mind couldn’t say that these men didn’t have a private agenda to spin it on the “news” channels yet millions watched and listened and nobody complained as far as I know.
(One of them, then a new 1 st Lt., along with the visiting Snaker Eaters from Panama, helped teach me the fine art waterboarding and many other evil things as a child on a tiny remote Pacific island long ago and far away…he was one fun guy)
Today, everyone presented on TV and the MSM …has an freakin’ agenda. “Hey–they lie to everybody, they lie to the fish.” Falling Down-1993.
They’ve taught that in The United States Army Special Operations Command (Airborne) (USASOC or ARSOC) for years and long ago and the civilains incorporated it with their MSM stations presentations as suppoused “news” and “commentaries”.
http://tinyurl.com/335ou
When you think about the History of Religion in the United States
you were taught that the Pilgrims came over here seeking religious
freedom .In the USA we represent religious freedom .But, when the right to freedom of religion is a mask to hide a military
operation to take over and conquer the Infidel ,which is religious
intolerance ,than that isn’t protected under the US laws ,IMHO .Its one thing to want to convert a party to your religion ,its another to
want to kill a party that isn’t the same as you and won’t convert .
We should have the right as Citizens to pick apart any organization that has a duel purpose and that would include any American-based organization or Religion .I’m sick of this being politically correct BS . And just who tells you what is politically correct ?
We should have the freedom to expose any hidden agendas of any
organizations and express our feelings about it ,rather than it just deemed Politically incorrect to make a comment .We should have the right to bad-mouth a Religion for being nuts also and certainly expose any convert military operations or be nervous about suspicious characters .
After Williams’s firing, NPR fears financial backlash
By Paul Farhi
Washington Post Staff Writer
Saturday, October 23, 2010
NPR faced fierce public and political reaction - most of it strongly negative - in the wake of its firing of commentator Juan Williams for comments he made on a Fox News program earlier in the week.
Even NPR’s own staff expressed exasperation at the decision during a meeting Friday with NPR’s president, Vivian Schiller. Several of those who attended said Schiller told employees that she regretted how she handled the episode.
The most serious issue facing NPR may be whether Williams’s firing will cause lasting damage to public broadcasting’s finances. Many conservative lawmakers and politicians - including House Minority Whip Eric Cantor (R-Va.), Sen. Jim DeMint (R-S.C.) and former House speaker Newt Gingrich (R-Ga.) - have called on Congress to curtail or eliminate federal subsidies for public broadcasting.
…
More disaster headlines to get readers.
Firing Williams was certainly in line with NPR’s guidelines for reporters. It wasn’t the first time he had stepped out of line. How is his firing any different then HelenThomas, how about Howard Cossel? You could just say they were expressing their feelings. The reason is that if you are a reporter you can’t make feelings like this public because it damages the reputation of the news source.
I”m one of the more anti-religious (not anti spiritual or anti God) posters on this site. I think islam is one of the worst because it is all encompassing and demands conformity. I and agree with Mr. Williams to some extent. I also agree that he should have been repremanded for making such comments and that firing him was reasonable if he had done this sort of thing in the past or had been warned.
Per Measton:
===More disaster headlines to get readers.
Firing Williams was certainly in line with NPR’s guidelines for reporters. It wasn’t the first time he had stepped out of line. How is his firing any different then HelenThomas, how about Howard Cossel? Y===
NPR probably has the right to fire Williams.
Others probably have the right to legally see NPR suffer as much as possible for an act revealing its dysfuction.
I’m awaiting NPR to have years ago disassociated itself from:
* Nina Totenberg:
… if there was “retributive justice” in the world, former North Carolina Sen. Jesse Helms would “get AIDS from a transfusion, or one of his grandchildren will get it.”
* On “All Things Considered,” humorist Andrei Codrescu said:
… the “evaporation of 4 million [people] who believe” in the doctrine of Rapture “would leave the world a better place.”
Codrescu, who was on contract with NPR but not a full-time employee, later told The Associated Press he was sorry for the language, but “not for what [he] said.”
* Julianne Malveaux. an occasional guest on Public Broadcasting, said on another network:
I have a weird slant on the Juan Williams issue . Firstly, Mr Williams
made his comments on another program that is known to be a opinion program and he didn’t make the comments on the NPR program . Does his contract with NPR state that he can’t have
other jobs or do political entertainment shows and express any personal opinions ? I have seen Mr Williams express a variety of
opinions on the Fox show that go from the right to the left to the middle . When Juan admitted his fears it was a feeling that a lot of people have had since 911 .
We have religious protections in the United States ,but I’m
wondering if you can protect a religion that in some factions have declared war on the Infidel ,which makes it also a military operation .Do you hear the leaders of those Religious groups in
question condemning this talk and military training that takes place in many of their Worship places around the World ,
in fact some of these so-called places of Worship are training places for military attack . Are the official Elders of this Religion condemning or breaking up these military operations that are taking place behind the mask of this Religion . It’s a known fact that the Military objectives of some factions of this Religion have
stated that you use the American laws against the Infidel
behind the mask of Religion to win the war ?
Given this situation ,you don’t know who the good guys are or who the bad guys are , So ,Juan Williams statements were reality statements if anything ,IMHO .
Again Helen Thomas, Sanchez, Howard Cosel were all fired for giving us there opinion. Media companies have the right to fire people when they make comments that appear racist and destroy the companies appearance of objectivity. As noted above their contracts often forbid them from participating in political events, giving public donations, and yes making racist generalizing statements that hurt the companies image.
Helen Thomas wasn’t fired.. she retired.
Howard Cosell quit MNF, and retired..
Yes they retired at the urging of their employer who would have subsequently fired them. Sanchez was canned.
Thomas actually fired herself
Thomas continued apologizing in the Washington Post, telling its media critic, Howard Kurtz, in a Monday column: “I’m very sorry for my remarks. I think I crossed the line. I made a mistake.”
So… you made a mistake.. like ten times in this thread.
You’re fired.
Per Measton:
==Again Helen Thomas, Sanchez, Howard Cosel were all fired for giving us there opinion.===
No, they gave statement of fact about other people(s), wrong and bigoted, although offhand I am not familiar with Howard’s gaffe.
Williams gave no opinion. He expressed his feelings of anxiety is specific situations.
I await the (retroactive, of course) firing by NPR for:
* Nina Totenberg:
… if there was “retributive justice” in the world, former North Carolina Sen. Jesse Helms would “get AIDS from a transfusion, or one of his grandchildren will get it.”
* On “All Things Considered,” humorist Andrei Codrescu said:
… the “evaporation of 4 million [people] who believe” in the doctrine of Rapture “would leave the world a better place.”
Codrescu, who was on contract with NPR but not a full-time employee, later told The Associated Press he was sorry for the language, but “not for what [he] said.”
* Julianne Malveaux. an occasional guest on Public Broadcasting, said on another network:
From that bastion of far lefties, The WSJ:
“Most of the funding through the Corporation for Public Broadcasting goes to local public radio stations, and the amount going to NPR’s headquarters, where the decision was made to fire Mr. Williams for a comment he made on Fox News, is relatively small.”
From Wikipedia:
In 2009 NPR revenues totaled $164 million, with the bulk of revenues coming from programming fees, grants, contributions and sponsorships.[14] According to the 2009 financial statement, about 40% of NPR revenues come from the fees it charges member stations to receive programming. Typically, NPR member stations raise funds through on-air pledge drives, corporate underwriting, and grants from state governments, universities, and the CPB. In 2009, member stations derived 6% of their revenue from local funding and 10% of their revenue from the federal funding in the form of Corporation for Public Broadcasting grants.[14][15] NPR receives no direct funding from the federal government.[16] About 1.5% of NPR’s revenues come directly from Corporation for Public Broadcasting grants.
During the 1970s and early 1980s, the majority of NPR funding came from the federal government. Steps were taken during the 1980s to completely wean NPR from government support, but the 1983 funding crisis forced the network to make immediate changes. More money to fund the NPR network was raised from listeners, charitable foundations and corporations instead.
Pesky facts again.
(2008) NPR reported its five highest paid employees were:
1. Managing Editor Barbara Rehm, $383,139
2. All Things Considered host Robert Siegel, $350,288
3. Morning Edition host Renee Montagne, $332,160
4. Morning Edition host Steve Inskeep, $331,242
5. NPR afternoon programming director Richard L. Harris, $190,267.
poor babies..
But Williams is gonna get $2,000,000 over 3 years? That’s about $700K a year.. putting NPR’s top execs to shame..
Adding to my comments above …..I think the law protects a individual from being arrested based on his/her ethnic group or religious group or hobbies or whatever .I think a person can’t be denied housing or entry into public places or other rights based on their ethnic group or religion or beliefs .But ,I don’t think people are protected from opinion unless they are slandered and damaged by that slander .
The Courts at one time attacked the position of the Mormon
Church on their stance on having many wives .This wasn’t a ethnic attack in spite of most of those people being white that were in
violation of the marriage laws of the land . This was a attack on a violation of the laws of the land verses the right to religious freedoms or beliefs that were contrary to the laws .
I believe people have the right to judge who they are dealing with .
Would we allow people from other Countries to beat and stone their wives in this Country just because it’s allowed and condoned in their Country and is part of their religious beliefs in some cases ?
Nobody cares if a religious organization is peacefully practicing their religion and abiding by the laws .But for instance should we force employers to allow certain ethnic or religious groups to wear religious garbs or veils at the job ?
It all boils down to one group demanding rights without regard to another group that feels that they are stepping on the toes of their rights .
Right now you have the “‘Politically Correct” imposing their standards on the majority to the point where you can’t even
make comments about a opinion on a group . Every person or Group should be Judged by their acts , even Martin Luther King said words to that effect .
Because America seemed to embraced all cultures and ethnic groups and Religious groups it stands to reason that one group could be offensive to another group . But to not be able to comment on what might be offensive is a violation of our right to free speech and the right to Judge .
..Right now you have the “‘Politically Correct” imposing their standards on the majority to the point where you can’t even make comments about a opinion on a group
yeah.. freedom of speech.. freedom of the press.. unless you say something the PC Elite doesn’t approve of.
Although nothing definitive is likely to come of it, Williams should get some top notch lawyer to sue NPR on the chance they will settle out of court for a few million bucks..
Hmmm, “from state Governments”. Yes, pesky facts indeed.
Good thing is, NPR no doubt will be happy to lose that funding, trivial as it is.
No Foreclosure Problems At BofA? Don’t you believe it
http://www.dailyfinance.com/story/credit/bank-of-america-foreclosure-problems/19680023/
PM Report: U.S. Encounters Turbulence at G20 Event
Oct. 22, 2010
U.S. efforts to prod China to let its currency appreciate ran into flak in the Group of 20 as other countries worried the U.S. approach, if applied globally, could impair their growth. Bob Davis explains. Plus, Dan Neil road tests Chevy’s Volt.
“U.S. efforts to prod China to let its currency appreciate ran into flak in the Group of 20 …”
We are screwed and it is all China’s fault!
China forced us to send trillions of dollars of wealth in the form of jobs and money from us to them. They forced us to live well - WELL - beyond our means.
Now they should forced to pay the price by having their currency be worth more than our currency!
They also bribed our top government official to facillitate this.
WTF purpose does title insurance serve, if not to cover this kind of situation?
Title insurers seek insulation from foreclosures
By Elizabeth Razzi
Saturday, October 23, 2010
The title insurance industry is maneuvering to protect itself from losses if courts rule that banks have played fast and loose with the foreclosure process. But people who buy foreclosed properties from banks may face some degree of loss despite having a title policy.
…
Look at the name associated with ALTA…. PFOTENHAUER. He’s and his potato-head wife Nancy are known elite criminals. He was chief liar, fraudster and propagandist at the mortage bankers assoc. throughout the entire bubble years. She’s a bribery artist enterwined in the GOP/Chamber of Commerce scandal raising $$$ from foreign govts and foreign coporations seeking to influence elections in the US.
They need to be indicted and imprisoned.
Amy Goodman: When banks are the robbers
October, 22 2010 10:30 pm
The big banks that caused the collapse of the global finance market, and received tens of billions of dollars in taxpayer-funded bailouts, have likely been engaging in wholesale fraud against homeowners and the courts. But in a promising development this week, attorneys general from all 50 states announced a bipartisan joint investigation into foreclosure fraud.
…
Game Over.
Cool.
* WEEKEND INVESTOR
* OCTOBER 23, 2010
What Does the ‘Foreclosure Crisis’ Mean for You?
By M.P. MCQUEEN, MARY PILON and JESSICA SILVER-GREENBERG
For the vast majority of homeowners, new questions about the state of foreclosures appear to be irrelevant. Few people seem to have been wrongly thrown out of their homes, and those who have been are generally months or years behind on their mortgage payments.
But the fallout from the crisis is beginning to be felt in real-estate markets across the country, particularly in places dominated by vacation homes and investment properties. Some of the worst-hit areas could be Western ski towns, because fall is the busiest time of the year for sales.
Real-estate salespeople in some of those places are worried. “September and October are usually the height of the selling-season for us,” says Rich Armstrong, who owns the brokerage Rare Properties in Jackson Hole, Wyo. “Now we are seeing a number of what we call ‘fence sitters,’ people who would have leapt in even a month ago, but now are waiting on the sidelines.”
…
By the Numbers
* 27%
Percentage of total home sales in 2009 that were second homes.
* 30%
Percentage of total mortgage defaults attributable to second-home and investment properties.
* 4.57%
Percentage of mortgages in some state of the foreclosure process, June 2010.
* 9.4 Months
The average amount of time from default until foreclosure proceedings begin on a “jumbo” mortgage loan.
Foreclosure flipper churn seems to be morphing into burn, or perhaps frost bite.
U.S. foreclosure mess chills investors, clouds market
A realtor stands in front of a foreclosed home in Bullhead City, Arizona in this November 4, 2009 file photo.
Credit: Reuters/Lucy Nicholson
By Helen Chernikoff
NEW YORK | Fri Oct 22, 2010 2:59pm EDT
NEW YORK (Reuters) - Investors who have been snapping up foreclosed homes are backing off in the wake of the U.S. foreclosure fiasco, driven by sagging inventory and fears over legal title, and some economists say the trend could hurt the overall housing market.
With foreclosed properties accounting for a large portion of housing sales, and investors accounting for a large portion of buyers — particularly in some key markets with very high foreclosure rates — the implications for the broader economy could be serious.
Investors who would buy, rehabilitate and then sell or rent foreclosures were playing a “huge role,” in helping to clear the market, said housing economist Tom Lawler.
But many of those investors are now staying on the sidelines.
“We’re like a plane flying around in a holding pattern, waiting to land,” said Tony Alvarez, an investor in southern California who is currently renting out 40 former foreclosed homes. “Nothing is going on, and why? Fear has taken hold in the marketplace.”
…
Fear has taken hold in the marketplace.”
Correctin
Logic and common sense have taken hold of the market, at least on the buyers side.
Budget constraints have taken hold on the buyer side, at least among local market end users. (Not sure about the horde of hair-of-the-dog funded foreclosure flippers with cash to burn…)
Touche
Reality has taken over the market
It’s part of the healing process. But it is far from over, and the Plunge Protection Team is doing everything in their power to prevent reality from running its full course before irrational exuberance returns to housing.
I don’t think it will work, but it will definitely serve to drag out for years what would otherwise be nearly over by now.
We are Japanese if you please
We are Japanese if you don’t please
We are from a residence of Japan
There is no finer cat than I am
“Logic and common sense have taken hold of the market, at least on the buyers side.”
And your proof is????
I think Measton means that buyers are sensibly stepping aside or putting on the brakes.
If only that were true here. I’ve seen a rash of houses going contingent (under contract) all of a sudden - in a variety of price ranges too. I mentioned that it was becoming as cheap to buy a teardown from a bank and rebuild as it is to buy existing homes, and sure enough, every SF teardown, gut rehab, or “handyman’s special” under $160,000 in my area is now under contract.
All this happened as foreclosuregate was unfolding and the title companies started sqwaking about issuing coverage. So you’d think folks would be extremely cautious.
Just makes no sense to me.
* BUSINESS
* OCTOBER 23, 2010
Understanding the Foreclosure Debacle
By RUTH SIMON
It has been a month since GMAC Mortgage suspended sales of foreclosed homes to review its paperwork procedures. While the company has lifted the freeze, the mess it unleashed has no end in sight.
A White House financial-fraud task force, which includes the Justice Department, is investigating how mortgage companies handled their documents. All 50 state attorneys general are hunkering down for their related probe, which also is at an early stage.
Courts are in chaos as banks cancel foreclosure hearings, review documentation for loans on houses heading for the auction block until they were detoured and replace questionable affidavits prepared by “robo-signers.”
Some experts predict that the only way out of the debacle is a huge settlement in which home-loan servicers modify the terms of billions of dollars of mortgages. Depending on how a settlement is structured, the potential losses could hammer banks. Investors who bought securities created out of pools of mortgages now in trouble are worried they could be stuck footing much of the bill.
The number of foreclosures, length of time that borrowers typically get to stay in their home after missing loan payments and foreclosure-sale processes vary widely by U.S. state and mortgage-servicing company.
…
* BUSINESS
* OCTOBER 23, 2010
Fannie, Freddie Seek End to Freeze
BY NICK TIMIRAOS
Fannie Mae and Freddie Mac have taken a leading role in preparing and endorsing an agreement between banks and title insurers that is designed to help restart foreclosure sales, according to people familiar with the matter.
As foreclosure-paperwork problems erupted last month, some title insurers stopped issuing policies on certain properties amid concerns that banks hadn’t properly processed foreclosures and that the insurers would face losses. Banks, along with Fannie and Freddie, were forced to suspend sales of those properties. As delays mount, so, too, do the costs of maintaining unsold homes.
…
Fidelity National to Require Banks to Sign Foreclosure Warranty
By Danielle Kucera - Oct 20, 2010 2:30 PM PT
Fidelity National Financial Inc., the largest U.S. title insurer by market share, will require lenders to sign a warranty assuring their paperwork is sound before backing sales of foreclosed homes.
An indemnity covering “incompetent or erroneous affidavit testimony or documentation” must be signed for all foreclosure sales closing on or after Nov. 1, the Jacksonville, Florida- based company said in a memorandum to employees today. The agreement was prepared in consultation with the American Land Title Association and mortgage finance companies Fannie Mae and Freddie Mac, Fidelity National said.
…
Know Your Foreclosure Rights
Michele Lerner
The recent foreclosure fiasco, with lenders discovering that the paper trail leading from a defaulting borrower to repossession of the property is littered with errors, has created consternation among many homeowners. Homeowners who are behind on their monthly payments or have already received a notice from their lender about late payments or even a foreclosure notice should take immediate action to make sure their rights are fully protected. (Learn the tactics you can use to prevent your home from being repossessed. Read Saving Your Home From Foreclosure.)
…
How shall Megabank, Inc screw thee? Let me count the ways…
Housing Advocates Seek Foreclosure Options
by Chris Arnold
October 23, 2010
Federal and state prosecutors are investigating Bank of America, JPMorgan Chase and other banks over allegedly fraudulent foreclosure documents.
Meanwhile, consumer groups say the banks have been equally sloppy when it comes to helping homeowners avoid foreclosure in the first place. This week, they were in Washington, D.C., pushing for stricter oversight.
Ever since these foreclosure paperwork problems came to light, the banks have said they have not been seizing houses that shouldn’t be foreclosed upon. But regulators and housing advocates say that’s not true.
“The same companies that are messing up all this paperwork are the same ones who administer the foreclosure prevention programs, and there is lots of evidence that they’re messing that up as well,” says Mike Calhoun, president of the nonprofit Center for Responsible Lending.
…
What a surprise.
Unraveling foreclosure mess
By Brady Dennis
Washington Post Staff Writer
Saturday, October 23, 2010
DES MOINES - Iowa Attorney General Tom Miller, the man heading a 50-state investigation into practices that generated mountains of flawed and possibly fraudulent foreclosure filings, understands the wave of anger the revelations have caused.
He had a visceral reaction himself when he first learned last month about “robo-signers,” backdated assignments and other problems that have driven some of the nation’s largest banks and servicing companies to halt foreclosures.
“My first reaction was concern, and curiousness as to the extent of it,” Miller, 66, said in an interview. “My second reaction was, ‘How . . . can they let this happen?’ ”
Not that the Harvard Law School graduate and seven-term attorney general was entirely surprised.
…
“This is not some bleeding-heart thing,” Madigan said. “This is a public policy issue.”
The loan officer who helped my wife into her no-doc loan now works for the bank(s). He is posting notices, changing locks, cutting checks when appropriate, winterizing, and generally assessing damages and getting people out of their homes. So he helped us get in, and will be helping us get out. Is this the type of business opportunity that one could look into. Cuz this guy profitted on the way up, and is also at least employed with no shortage of work in the near term on the way down?
Since he was a loan officer, he has an insider’s knowledge of the system and has worked with banks before
I guess Stiglitz is not hoping to serve a future term on the FOMC?
Economist Joseph Stiglitz: Put Corporate Criminals in Jail
By SAM GUSTIN
Posted 6:30 AM 10/22/10
An institutionalized system of skewed incentives allowed Wall Street bankers and other corporate executives to gamble with America’s wealth and then get away largely scot-free after the house of cards came tumbling down, plunging the U.S. into the worst economic crisis in decades and destroying trillions of dollars of wealth worldwide.
That’s the analysis of Joseph Stiglitz, an internationally renowned economist and winner of the 2001 Nobel Prize in economics. (His latest book, Freefall: America, Free Markets, and the Sinking of the World Economy, is just out in paperback.)
…
Great article!
Give it a good read and you’ll maybe understand why I think P/Es will go below eight before any of this is over with.
Phase 2 of the downturn is well on its way, IMO.
“Phase 2 of the downturn is well on its way,…”
And a big part of that, in turn, is the perfect storm created by the eruption of the Great American Foreclosure Fiasco in the wake of the end of the $8K stimulus program. The former will hammer used home supply going forward while the latter is already hammering demand. Hammering both supply and demand simultaneously is likely to lead to an all-time low in the volume of used home sales transactions.
You kids can try this at home by drawing yourself a Microeconomics 001 supply and demand graph, then see what happens when both line segments that comprise the big X take a wrenching shift to the left. Quantity of transactions also takes a commensurate wrenching shift to the left, while the price effect is indeterminate. However, given the realities of a high rate of mortgage defaults, a slowdown in foreclosure system and plenty of extant shadow inventory, it is quite likely that future supply will turn out ‘higher than expected.’
Add to that the lowest interest rates in history, and you can reasonably conclude it’s a great time to buy, no?
“Look at the regulatory reform that got passed,” said Stiglitz. “It was an intense battle. And you had on one side a few banks. And on the other side you had 300 million people, American people. And it was really right in balance. Five or six banks equal to 300 million people. And in the end we got what you might call an unsatisfactory compromise.”
Well, about half of those 300 million people have been taught by their shepherds that regulations equal socialism.
But here he’s exactly right:
Corporations are a legal entity,” Stiglitz explained. “We create them. And when we create them we create all kinds of rules. They can go bankrupt. And that means they owe more money and they get away scot-free. They can create an environmental disaster, and then go bankrupt and again go away scot-free. So, as legal entities we have the right to make the rules that govern them.”
“As individuals we have certain basic rights,” Stiglitz continued. “We aren’t created by the law. We exist by nature. But corporations are man-made. They are supposed to serve our interest, our society’s interests. And we are creating them with powers that are not serving our society’s interests.”
“And we are creating them with powers that are not serving our society’s interests.”
Is one of those powers to buy immunity from the highest law in the land? If that is not one of those powers, then how come we have seen no perp walks (yet)?
Is one of those powers to buy immunity from the highest law in the land?
I would say that is definitely one of those powers.
“And we are creating them with powers that are not serving our society’s interests.”
Correction: We HAVE created them with powers that are not serving our society’s interests.
What we are about to witness is the REMOVING of these powers that are not serving our society’s interest.
The system is in the process of being cleansed. This cleansing brings to light a lot of dirt that was previously hidden from sight. The dirt was already there; The only difference is now everyone can see it.
But when people see the dirt they get disgusted and demoralized and end up doing strange things such as selling any stock they might have bought during the boom days.
And all this selling will produce some very low stock prices.
And do not be surprised to see the MSM jump into the fray and suddenly get religion and go after the guys and the stories that they so pointly ignored all these years.
Oh the joy! The MSM gets to boost their circulation, the System gets to be cleansed, and stock buyers get to pick some VERY low hanging fruit.
It is all sooooo very good.
pointly = pointidly
Watergate was the scandal that accompanied the bear market of the mid-Seventies. I’m not suggesting that Watergate CAUSED the bear market, but I am saying it contributed to the bear market.
Political scandals and bear markets seem to fit well with each other.
“Well, about half of those 300 million people have been taught by their shepherds that regulations equal socialism.”
And, the other half just got played.
The real problem in the United States is we’ve adopted a tyrannical monetary system (Federal Reserve System) that cuts across the grain of free market principles, freedom, and democracy. Its construct enables and rewards looting and pillaging. It is evil disguised as savior.
“The real problem in the United States is we’ve adopted a tyrannical monetary system (Federal Reserve System) that cuts across the grain of free market principles, freedom, and democracy.”
1. Super-Constitutional
2. Rides roughshod with the Separation of Powers set forth in the Constitution by the Founding Fathers
3. Does whatever it wants whenever it sees fit
4. Probably would be illegal, if it weren’t authorized by Congress
Wasn’t the government’s role (assigned by Megabank, Inc) to look for high financial crimes and felonies, but find none? And isn’t this essentially the reason the Bernanke Fed was turned into financial regulatory Supercop — to basically put the banking industry’s fox into Main Street’s chicken coop? And the reason that Elizabeth Warren’s consumer regulatory agency will be put under the Fed’s thumb?
Yep. It’s pretty disgusting.
What can the average American voter do to end great Wall Street vampire squids’ death grip on our financial system and to restore a rule of law which would be enforced on banksters?
End the fed.
End the tyranny. End the Fed.
End the tyranny. End the Fed.
End the tyranny. End the Fed.
Nothing. The system is, indeed, too big and far too much money and power are at stake for them to ever voluntarily submit to any effective rules and laws.
Like all tyrannical systems of the past, it will have to collapse under its own weight if the people cannot or will not do anything about it.
Just spent the last day and a half in continuing legal ed, among nearly the entire bankruptcy bar and bench…heard lots of war stories.
It’s a massacree out there! Esp Bozeman & Flathead.
It’s a massacree out there! Esp Bozeman & Flathead?
Expand a little bit please…
Trying to remember…All types of bankruptcies “exploding,” so many Chap 11’s that lawyers who don’t know how to do them are jumping in and making a mess of things..broken titles in foreclosures, security interests not perfected. Heard about a young couple that came to Boze with millions they inherited in Cali or ??? blew it all on “investments” and had to go BK. People couldn’t believe what happened, “thought the market would go on forever.”
But, I think these lawyers are so busy, they can’t see the forest for the trees..one implied that maybe if the trustee lets the debtor hang on to the house long enough before selling, prices will bounce back…but no one knows what in hell will happen, except the bankruptcy court clerk said title problems will be litigated in bankruptcy/foreclosure for YEARS.
I haven’t done a BK since the new laws in 2005..and by the way, the reform was supposed to increase the number of people going Chapter 13 instead of 7, but after a few years the number of Chapter 13’s dropped back down to where they were before the “reform.” They try going the 13 route but can’t hack it, too far in debt, lost jobs, the case gets converted to a 7.
Maybe I should have studied bankruptcy and RE law rather than IP…
Career opportunity for Polly???!
Editor: Steve Kornacki
Updated: Today
Topic: Mortgage Crisis
Wednesday, Oct 20, 2010 13:15 ET
How The World Works
Bank of America’s big, bad mortgage problem
Government failed to punish banks for their bad loans. Maybe high-paid securities lawyers will be more successful
By Andrew Leonard
Keeping track of all the new developments in our brave new world of screwed-up foreclosures, misrepresented mortgage loans and toxic mortgage securities is a bewildering, Sisyphean task. Just this week, even as the Bank of America and GMAC both announced they were ending their self-imposed foreclosure moratoriums, the Obama administration’s Federal Fraud Enforcement Task Force launched a criminal investigation into whether financial firms broke the law by filing fraudulent documents as part of the foreclosure process, the sheriff of Cook County, Illinois (which includes Chicago) announced he would not enforce foreclosure evictions unless they were proven to be handled “properly and legally,” and a group of powerful bondholders announced its intentions has to sue the Bank of America in order to force it to repurchase bad mortgage loans.
…
If they can do this in Nigeria, then why not in the U.S.?
‘More bank CEOs will go to jail’
By Ebenezer Ajewole
October 22, 2010 02:57AM
CBN governor, Lamido Sanusi, yesterday in Abuja, warned that more chief executive officers (CEOs) of banks will join Cecilia Ibru, former Oceanic Bank CEO, in jail.
Mr. Sanusi said this during a breakfast meeting of financial regulators in Nigeria at the 16th Economic Summit in Abuja.
He was reacting to a suggestion that justice and fair play were not applied in the sacking of some of the former bank CEOs, and dismissed insinuations that the banking reforms were biased.
“There was a reason for every action taken. The reforms carried out in the banking sector were not a northern agenda,” he said.
He further revealed that five banks will soon get new owners, if conclusions in the processes were completely carried out.
…
Does the perception that high-level insiders can freely use sophisticated financial schemes to steal from the U.S. banking system encourage Main Street bank robbers to steal?
Bank robberies spike in county
Published: Saturday, October 23, 2010
By JAMILA T. WILLIAMS
jwilliams@MorningJournal.com
LORAIN — The number of bank robberies in Lorain County have spiked significantly this year, FBI Special Agent Scott Wilson said. Thursday’s bank robbery at First Federal Savings of Lorain, 2233 E. 42nd St., during which a young woman walked into the bank and demanded cash, marks the third in Lorain County in less than one week. There have been nine in the county so far this year.
…
Austin’s 2010 bank robberies at a five-year high
Institutions were targeted 27 times this year - and it may get worse, police say.
The so-called I-35 Bandit has been at large since 2004 and has been seen in disguises including Santa Claus and the Rastafarian look. He has robbed about 15 banks from Abilene to San Antonio and enters with his handgun drawn and pointed at people, officials say.
By Isadora Vail
AMERICAN-STATESMAN STAFF
Published: 8:29 p.m. Thursday, Oct. 21, 2010
Ernest Rodriguez Jr. didn’t have a master plan to rob banks across Texas.
In some of his eight heists, the so-called Cowboy Bandit didn’t even have a gun.
All Rodriguez wanted, much like many of the bank robbers plaguing the Austin area this year, was a lot of money in a short span of time to support a drug addiction.
Austin’s bank robberies are already at a five-year high, and police say it could get worse: Studies show the last three months of the year typically see a boost in bank robberies, mostly because of the pressures of upcoming holiday expenses.
Austin has had 27 bank robberies so far this year, compared with 14 this time last year. Three people are responsible for more than one robbery, and in one case, a man robbed three different banks, police said.
“It’s an alarming trend for sure,” said Brian Miller, who heads the robbery unit at the Austin Police Department. “They are in need of some quick cash, and to them, this is an easy way to do it.”
…
News
Alleged serial bank robbers arrested
Published: Saturday, October 23, 2010
By ROSE QUINN
rquinn@delcotimes.com
NKIKIA EARL Turned himself in
A pair of alleged elusive serial bank robbers in Delaware appear to have had a third accomplice, at least in one heist pulled across the Pennsylvania state line, authorities said Friday.
…
Why do police bother to go after these small fry criminals while the really big whales get to steal with impunity? Is it because small-time bank robbers are not too-big-to-jail?
Photo released from bank robbery attempt
By Pauline Repard
Originally published October 21, 2010 at 8:28 p.m., updated October 21, 2010 at 10:33 p.m.
This man tried to rob a Rolando bank
/ Courtesy of the FBI
SAN DIEGO — The FBI on Thursday released a photo of a man who tried to rob a Rolando bank last week, but the teller walked away to call police and the man left.
The holdup attempt occurred at Bank of America on El Cajon Boulevard near 68th Street about 12:10 p.m. on Oct. 13.
The man showed the teller a demand note, written on a 3-inch by 5-inch white piece of paper, that said he had a weapon. When the teller walked away and told another teller she was going to call police, the man left without any money.
…
Bank robbers take note: If you want to rob this bank, be ready and willing to hurt some people.
P.S. As long as you just steal, but don’t use a gun, you might do OK — especially if you either own or manage the bank.
Don’t use a Glock, use a BIC.
You’ll get more money and less jail time using ball points than you will using hollow points.
or computers..
there was a story.. long ago.. about some bank employee who programmed the computers to deposit 0.000001% of all deposits into a separate, personal account.
Some insanely small amount that didn’t show up anywhere… but after a few years, it amounted to a $million or so.
I tried to search it out to see how he finally got caught, but no luck.
He was taking the rounding fraction and putting it in his account, so no one noticed. He didn’t get caught, at least before he left the country. He might have been arrested later, but I went by his compound once in Costa Rica when I was a kid. There was a movie made about it.
even with that info, i still can’t find the original case.. or the movie title.
A snopes page has a short discussion about it, but the links pointing to the original crime, which might have happened in the early ’70s, are dead.
Movie Bank scam = Richard Pryor in Superman III
Wasn’t that the plot in Office Space?
RE:
It’s a new day and a new chapter. May you never EVER have to have to do that in any way shape or form for any reason ever again as long as you shall live.
Amen
Congrats!
a
Thank you a! When I recover from this last chemo, I’ll start radiation in 2 weeks or so. It’s supposed to be a lot easier.
Contact me offline?
dee vee ess enn tea tea at bee enn aye ess dot net
‘U.S. Rep. Barney Frank, in an intensifying clash with GOP upstart Sean Bielat, has pledged not to take campaign cash from lenders that got federal bailouts — yet has raked in more than $40,000 from bank execs and special interests connected to the staggering government loans, a Herald review found. Frank vowed in February 2009 that he wouldn’t accept campaign donations from banks that received money under the $700 billion Troubled Asset Relief Program (TARP) or political action committees tied to such institutions.’
‘Meanwhile, in a release responding to a Herald report yesterday that Bielat is tapping Wall Street bigwigs in a bid to force Frank into a Martha Coakley-style collapse, Frank said, “Mr. Bielat’s eagerness to serve as the agent of those wealthy Wall Streeters who seek to undo the financial reform bill explains why this race has become so expensive and why it is so important in order to prevent another economic crisis.”
http://www.bostonherald.com/news/politics/view/20101022barney_grabs_bank_execs_____despite_vow_to_shun_bailed-out_lenders/srvc=home&position=0
IMO, these sorts of things are important for a few reasons. It is increasingly unlikely more significant amounts of public funds will be directed at propping up the lending sector. With the GSEs doing much of the lending, what does this mean for the mortgage market in the future? If they drop out of the picture, 20% down or more will become the norm. This is what happened in previous busts. I’d suggest that will hammer this ‘fragile’ market we hear about. So, how does DC sell round after round of billion$ to Fannie and Freddie with budget cuts and pension shortfalls all over the map?
‘David Galland interviews real estate professional Andy Miller, Miller Frishman Group. In 1990, following the real estate debacle of the 1980s, Andy Miller co-founded SevoMiller, Inc. DG: Obama’s refusal to sign the bill regarding electronic notarizations strikes me as being based as much on politics as anything. After all, ahead of an election, it wouldn’t do to be seen signing something considered supportive of foreclosures. So the administration has just kicked the can down the road, past the election.
AM: At this point I would judge every event and every news story that you see by just one criterion, and that is that the government is doing everything it can to slow down or impede the foreclosure process.’
‘…If there are losses to mortgage holders and investors, the politicians will try to turn this to their advantage by framing it as being that the banks and mortgage lenders deserve the losses because they’re the cause of this problem…it’s all intended to be a feel-good solution that makes everybody believe that our government is really looking out for us. Meanwhile, the SOBs that originated all these mortgages are going to get what they deserve.’
‘DG: But ultimately this has to be resolved, that is unless the government is willing to give a bunch of people free houses. AM:..the latest developments are going to create a lot of intensity and only make things worse. DG: What about Fannie and Freddie? They were right in the middle of creating the mortgage mess, and they are at this point de facto government institutions? Not letting them foreclose would seem to be setting the stage for another huge loss to taxpayers. AM: The nice thing about being the federal government is that you can throw Fannie and Freddie under the bus and suffer no real consequences, at least not in the short term. For most people, that will look good.’
‘The important thing for your readers to remember is that these aren’t solutions that do anything. These are solutions that have optics, that’s all. There’s an election coming up. The government wants people to feel good. They want everybody to feel like our government is really addressing these problems. They want it to seem to the public like the government cares. And…I think you’re going to see some really very, very undesirable, unintended consequences.’
http://revolutionarypolitics.com/?p=4426
Any chance that politicians like Barney Frank will see themselves hung out to dry before this is over?
One has to keep dreams alive to survive times like these.
“If they drop out of the picture, 20% down or more will become the norm. This is what happened in previous busts.”
Playing the Devil’s advocate, wasn’t the common purpose of
1) uncapping the GSE funding limit,
2) federally guaranteeing almost all new mortgages,
3) spreading propaganda that there would be no mortgage lending without FHA & GSE lending,
4) finding new ways to qualify marginally qualified buyers to purchase homes,
5) running the GSEs at perpetual losses, charged back to the U.S. taxpayer,
6) driving mortgage interest rates down to record-low levels,
7) handing new home buyers (broadly defined) an $8K credit to provide incentive to purchase a home when financial prudence might have dictated greater end-user precaution,
all about avoiding reversion to a fundamentals-based lending market where 20 percent down payments and affordable home prices are the “new normal”?
P.S. I agree with Ben: The above efforts are destined to fail before this is over.
The feds can say what they want, but they don’t have any money. They have to borrow a huge amount of what they spend. What I think was missed with TARP and putting the GSEs in receivership is, it wasn’t the end of the story. It was kicking the can down the road. Now we’re down the road. Is this the reason we’ve seen the flip-flop from DC about expediting foreclosures?
The few hundred billion they threw at the GSEs was never enough to save them. Add to that this never mentioned possibility; many or most of the loans they’ve made since the ‘financial crisis’ supposedly ended are also going to be defaulted on. This was all really bad policy on top of an already terrible situation. Now we find out what this means for housing loans at a critical time.
“…they don’t have any money.”
But isn’t this where QE2 comes in? The Fed tells us they are going to do QE2, and the next thing you know, they ‘find’ another $1 t or so on their balance sheet that wasn’t there yesterday. Soon it is loaned out at zero percent or so to their top constituents, and all is well once again.
AT some point the banks will be flush with cash and the bottom will be in. At that point they will want the GSE’s to collapse and have to sell all their securities for pennies on the dollar.
This is how banking will come to own everything. They profit on the way up, sell all the garbage to the gov at inflated prices during the collapse, refill the coffers with free gov money, then buy back the garbage which will now have gov guarantee with it for pennies on the dollar.
Rinse lather repeat.
’sell all their securities for pennies on the dollar’
I could show you several examples of individual houses where, even after sellling the house, fannie lost more than 100% on the loan. My point is, their interest in the houses, or the related securities, don’t have a lot of liquidation value.
‘gov guarantee with it’
What I’m suggesting is the govt is incapable of backing the total GSE losses.
And…I think you’re going to see some really very, very undesirable, unintended consequences.’
Demanding that banks begin obeying the law is a good thing, and not to be feared. If it temporarily slows down foreclosures, that’s minor, compared to letting them once again break the law with impunity.
The ‘this will destroy the recovery’ meme is just their newest way to assign their blame elsewhere. The only thing that demanding they obey the law will destroy, is their ability to continue to cover-up their crimes.
Robo-signing is the ‘third-rate burglary’ of ‘foreclosuregate’. Let’s see where it leads.
I guess I don’t understand how he can call anything that is happening as the government “giving a bunch of people free houses”.
If that ever happens, it will be because of screw-ups by the banksters, not any action of the Federal Government.
The government “giving a bunch of people free houses” is the straw man disparagement of demanding that the banks start obeying the law.
“The turmoil will likely lead to pricey premiums for new homeowners,…”
Logical conclusion: The number of new homeowners will shrink further.
* WEEKEND INVESTOR
* OCTOBER 23, 2010
Other Ways the ‘Foreclosure Crisis’ Could Sting Homeowners
The foreclosure mess could hurt homeowners in another way: The costs of buying a home and paying off the mortgage are likely to go up, say housing experts.
The rising costs will come both during the closing and throughout the life of the loan.
At the closing, the cost of title insurance, which protects a property buyer from claims of ownership made by other people, is likely to rise, industry officials say. Title insurance is one of those annoying costs that can sneak up on a buyer during a close; premiums average around $2,000 across states, says Tim Dwyer, CEO of insurer Entitle Direct Group.
The foreclosure mess has sent insurers scrambling. One of the largest, Old Republic Title Insurance, told its agents on Oct. 1 not to issue policies on homes that have been foreclosed by GMAC Mortgage or J.P. Morgan Chase. And on Wednesday, the nation’s largest title insurer, Fidelity National Financial, said lenders must vouch for the accuracy of their paperwork before it will insure properties.
Just like homeowners-insurance rates rise after a hurricane, the rates for title insurance are expected to rise, to compensate for the added risk.
The turmoil will likely lead to pricey premiums for new homeowners, says McLean, Va.-based housing economist Tom Lawler. Adds Cameron Finlay, chief economist at mortgage lender LendingTree.com: “Any time there is uncertainty in the market or risk implied, it follows that costs go up.”
…
This is what I want to know:
We have discussed at length on this blog how to determine the fundamental value of a house or a market, which is usually some multiple of rents or incomes. But how do you determine the value of a luxury house? Comps are no good because these houses can sit on the market for a year waiting for that luxury buyer to come along. Incomes are no good because the buyers of luxury houses often live elsewhere, and this thing is a second home for them. Rents are no good because luxury homes are rarely rented. So how does one figure out the value of a 5,000 sq ft, top-dollar house on a 4-acre lot with a miniature movie theatre, personal dance studio, 6-car garage, and interior waterfall with meditation stream?
Maybe Ben can help us answer this question, since he is working with investors these days.
“…..determine the value of a luxury house……”
Determining the value implies that there is some logic to the process. Buying a house like that has less to do with what us normal people call logic, and more to do with “style points”. Less to do with what the house costs, and more to do with the impression it will make.
So what happens when there are waaaaayyyy more luxury houses than luxury buyers? Will a lot of luxury houses end up being sold to mere upper-middleclassmen? If so, will those houses end up being sold for just a tiny bit more than the nice, but not luxury, family houses?
Or will they end up being sold for not a dollar more than the nice, but regular, houses? Perhaps your successful working buyer will need to plan on higher costs for utilities and maintenance, and therefore can’t afford to pay more for the actual structure. Perhaps that movie room is a nice luxury, but totally unwanted/unneeded by any of the available buyers, so it just adds no value.
Perhaps a lot of the luxury that has been built in this country just has nowhere to go, and isn’t worth anything. I mean, the houses are worth something, but the added luxury of some of these houses may have little or no additional market value.
I would really love to hear Ben’s input on this. From what I understand, he is consulting with RE investors right now to identify good deals, etc. I doubt he’s looking at luxury houses right now, but I’m just wondering if this is something that’s being considered, in the general scheme of things.
My guess is there will always be a bonus for luxury, but perhaps not a proportionate bonus.
On other hand, besides “upgrade” luxuries (better materials, mainly), there are luxuries that could prove to lower values in right setting. If energy costs hyperinflate, will having a 6500sqft house suddenly seem unattractive? Even now, swimming pools (key luxury feature) can harm value, by limiting market.
Perhaps a lot of the luxury that has been built in this country just has nowhere to go, and isn’t worth anything. I mean, the houses are worth something, but the added luxury of some of these houses may have little or no additional market value.
This is certainly possible, if the free market (eek! close your ears, alpha, measton et al) is allowed to operate. The added luxury could even have a NEGATIVE value if the maintenance/demolition costs exceed the utility.
To take an extreme example, how much would the Cologne Cathedral be worth if put up for auction? I got into a debate with someone once about this once. I said that Europe is saddled with a lot of beautiful, historic, but extremely expensive buildings to maintain. The reply was, yes, but they make up for it with tourist revenue. But I believe that without subsidies, no one would buy these buildings at any price because the tourist revenue could not begin to cover the maintenance costs.
I suppose luxury can be defined as more than what’s adequate for a typical house. Bigger or non-necessary rooms, custom finishes, more expensive flooring and appliances, etc. If you look at rents here, they don’t draw that much more than regular houses, and certainly have a bigger difference between rent and mortgage payment. And if the rent is set high, sit vacant more often.
Percentage wise, the local mcmansions have lost more value than moderate houses. But they’re still beyond most incomes, and have almost twice the months-on-market statistic. Yesterday the Arizona bank that the FDIC took over was based in Scottsdale. If you look at their REO webpage, they were loaded up with very pricey houses. And I know of one big house in Scottsdale that has an electric bill around $1200 in the summer. Throw in maintenance, insurance, taxes; owning these things might not suit many people.
But beyond demand, there is financing. IMO, this segment will get worse before it gets better in AZ, as not many people have the down payment or income to qualify for one of these things. And I’m noticing REO brokers are starting to nit-pick about little stuff when giving a BPO on high-end stuff, indicating they’re negative on them. Then, there’s the HOAs. The most exclusive gated community in Flagstaff recently declared bankruptcy. They’ve got 2 golf courses, 24 hour security and a big clubhouse. Less than half the lots are sold, and they’ve got a smattering of foreclosures. Who wants to buy into that? Overall, I think the jury’s out on where this market is going. But there are already formerly million $ plus REOs not selling at $600k here locally.
“So what happens when there are waaaaayyyy more luxury houses than luxury buyers?”
1. They can sit forever unoccupied until they collapse into desuetude (one advantage of deep-pocketed owners is they can afford to wait forever).
2. If the seller must sell them, price discover will happen, screwing up the comps.
I have recently posted a number of articles which provide anecdotal evidence that case 2. is currently happening; most recently I posted about William Randolph Hearst’s home with the $70,000,000 price reduction from $165,000,000 down to $95,000,000. Obviously, luxury home prices don’t always go up.
Seems to me this can be broken down logically. The home theater is two years old and originally cost $9,000 for the electronics, $5,000 for Acoustic tiles etc. The whole place could be itemized and thus valued to within a few cents of what it is currently worth. A starting place would be the 4 acres of “improved land”. Each 2 x 4 can be added, each sheet of plaster and each yard of carpet, less depreciation for wear and age. So it goes, but I can see NO reason a home of ANY nature could not be properly valued using this criteria, rather than comps…
“But how do you determine the value of a luxury house?”
Same principle, though you need to figure in (1) permanent income (e.g. are some of the prospective owners trust fund babies with a massive stash of disposable cash); (2) thin markets, which potentially confer lots of market power to both sides of the transaction, turning it into a two-player Nash bargaining game.
I still believe the rental income (itself of course subject to obvious market forces). Yah, data might be more sparse, but fancy homes do rent. Still, I can see the challenge
The luxury market is not like the regular market. “Value” is more a function of several factors, like “the right address”, security, entertainment living of just family living, and/or tax write off to your personal (or whichever) corporation will be the actual buyer.
Right now, the luxury market is worse off than the regular market. The supply/demand is so far out of whack, that the bottom isn’t set by addresses, etc. Buyers have their pick, with lots of foreclosures, so it’s coming down to price competition.
“Buyers have their pick, with lots of foreclosures, so it’s coming down to price competition.”
We’re getting closer to a buyer’s market now. When the shadow inventory comes into plain view (I am guessing perhaps by next summer, unless stealth intervention stops it), we will be there.
I think it would best be determined by replacement value minus the amount to restore it to near new condition. In a word, comps.
That makes sense, unless reverse bid wars temporarily push them down below replacement values. For instance, if there are three homes in the same neighborhood that have all been hanging out to dry for a while in the shadow inventory smoke house, and there are almost no buyers, then if a buyer shows up and appears qualified and interested, he may be able to make successively lower offers on the three different properties until he gets one of them at a rock bottom price.
I once bought a viola this way on an two-way bid war which I set up between two rival violin shops.
I have a weird slant on the Juan Williams issue . Firstly, Mr Williams
made his comments on another program that is known to be a opinion program and he didn’t make the comments on the NPR program . Does his contract with NPR state that he can’t have
other jobs or do political entertainment shows and express any personal opinions ? I have seen Mr Williams express a variety of
opinions on the Fox show that go from the right to the left to the middle . When Juan admitted his fears it was a feeling that a lot of people have had since 911 .
We have religious protections in the United States ,but I’m
wondering if you can protect a religion that in some factions have declared war on the Infidel ,which makes it also a military operation .Do you hear the leaders of those Religious groups in
question condemning this talk and military training that takes place in many of their Worship places around the World ,
in fact some of these so-called places of Worship are training places for military attack . Are the official Elders of this Religion condemning or breaking up these military operations that are taking place behind the mask of this Religion ? It’s a known fact that the Military objectives of some factions of this Religion have
stated that you use the American laws against the Infidel
behind the mask of Religion to win the war ?
Given this situation ,you don’t know who the good guys are or who the bad guys are . So ,Juan Williams statements were reality statements if anything ,IMHO .
The New Tax Man: Big Banks and Hedge Funds
“Nearly a dozen major banks and hedge funds, anticipating quick profits from homeowners who fall behind on property taxes, are quietly plowing hundreds of millions of dollars into businesses that collect the debts, tack on escalating fees and threaten to foreclose on the homes of those who fail to pay.
The Wall Street investors, which include Bank of America and JPMorgan Chase & Co., have purchased from local governments the right to collect delinquent taxes on several hundred thousand properties, many in distressed housing markets, the Huffington Post Investigative Fund has found.
In many cases, the banks and hedge funds created new companies to do their bidding. They gave the companies obscure, even whimsical names and used post office boxes as their addresses, masking Wall Street’s dominant new role as a surrogate tax collector.”
Link: newsbuster com/Pages/content/the-new-tax-man-big-banks-and-hedge-funds html
No FB dollar shall be allowed to escape.
All sheep are to sheared! If there are not enough razors available then their wool should be ripped from their skin.
In big bold type the words “Please Sir, may I have another?” should be tatooed onto their bleeding flesh, right next to the tatoo that says “Kick me”.
..as if tax lien investing is a new thing..?
It may not be new but it probably has never been as profitable as it is about to become.
The money tree is dripping with ripe low-hanging lemmings just waiting to be plucked.
well.. low-hanging or not… in this environment? I wouldn’t touch a tax lien with a ten foot pole.
But if i held the note (like these lenders do) then I would be most anxious to pay off the FB’s taxes.. and any other bills they owe.. in fear the govt (or some other creditor) would seize the house.
“… in this environment?”
This environment is populated with millions of members of the Free Lunch Club - those who think they can just walk away from all their financial woes and be done with it.
Governments are desperate for money and Free Lunchers collectively owe the government (and lots of other people) a bunch money.
My bet is Times are about to become very Interesting for the Free Lunchers.
Unless you really, REALLY didn’t want the house and suspected that by the time you could take possession and then get rid of it, you might get less for it than the cost of the taxes and other expenses. Or simply didn’t have the cash to pay those taxes and expenses.
“I wouldn’t touch a tax lien with a ten foot pole.”
Why do you think Megabank, Inc is outsourcing the work to boutique specialists?
The same guys who can’t get the foreclosures right?
This will end well.
“With the GSEs doing much of the lending, what does this mean for the mortgage market in the future? If they drop out of the picture, 20% down or more will become the norm. This is what happened in previous busts.”
A conforming loan from the GSEs used to require 20% down, or 10% with PMI. If they drop out of the picture, it could be much worse.
People who bought houses in my Brooklyn neighborhood not long before I did had to pay cash. You can imagine what that did to the prices. After this debacle, much of the U.S. might end up redlined.
And that would be justice for younger generations, with no mortgage to offset that collective mortgage Generation Greed will bequeath IMHO. Let their home equity go away.
There may be bigger problems in the non-recourse states, which may have to go recourse as lenders want the security of the borrower’s income, not the property.
“If they drop out of the picture, it could be much worse.”
Nobody seems to be talking about this contingency, so why are you entertaining it? Do you have better information than the MSM mouthpieces have?
What the heck happened to all the resets that were supposed to start this quarter?
According to the March 2010 update to the famous Credit Suisse Option Arm reset chart, the lion’s share were supposed to start this quarter. I am sitting here in a corner, rubbing my hands like Gollum (OK, not really, but you get the idea), waiting for the dumps to start diving.
Here in No VA, the construction standards are execrable. Nothing is level or square. Regardless of when they were built, the cr*pshacks have no insulation because there was no oversight. ‘Qualified’ (a-yuh!) builders were empowered to perform their own building inspections. Minimum criteria for qualified status? A fat checkbook and plenty of in-kind favors. But you knew this already.
Goes to show the contempt in which builders hold white collar workers. Class envy at its finest, in a town where sober appearances are paramount. It goes without saying that nothing I might buy has any intrinsic worth other than as a storage shed for my greying carcass between duty pulls at the cubicle farm.
That being said, once the cost of buying is less than or equal to the cost of renting, I WOULD buy a cr*pshack. The rentals are built like sh*t too, and the tubercular, sore-faced, bedbug-ridden neighbors are not quite in the same proximity. Anyway, I want to avoid the 6AM January 40 minute walks with dog. These finally became so onerous that I have yet to get a successor for my magnificent Akita, who finally passed on. Plus, I really want to put on a holiday feast without being cramped.
So. When are the ‘30% underwater’ chickens going to come home to drown? THAT RESET CHART PROMISED ME IT WOULD HAPPEN.
Waaaaaa.
Do resets have any effect in a zero interest rate environment?
Do you mean after most of the equity has vanished?
Even if the interest rate is, say, zero, could a large loan that has little equity backing it be reset?
But ARMS generally are loans that have teaser rates that are due to be reset at higher rates. So the issue isn’t that the rates will be reset at a higher rate (which the borrower probably couldn’t do or wouldn’t do), the issue is whether the loan can be refinanced.
But in order to refinance a loan there needs to be enough equity left in the house to back the new loan.
Is this right or am I looking at this all wrong?
“the issue is whether the loan can be refinanced.”
And that is my understanding too. If the LTV is too high it won’t be refi-ed. But it has nothing to do with current interest rates as I understand the issue.
I imagine you’re right…I was thinking that the reset would only be bad if rates were higher, but I forgot that a ton of them were teaser rates that were guaranteed to go up by a certain amount no matter what the rates were.
Yes. There would be an impact. There is ALWAYs a ‘baseline’ rate, most often based on LIBOR (which is NOT at ZIRP). There are a couple of sandwiches of rates above that. First sandwich is a couple percent of spread. Next sandwich is a tailored add on between 0.5% and 1% depending on down payment, creditworthiness (really), etc. LIBOR plus spread plus variable adder = base rate for that loan. The money difference between the minimum payment at 1% and the what would have been the payment at the base rate is added on to principal.
There are generally four payment options. The minimum payment is based on the teaser - an interest rate “as if” the loan were amortizing at 1%. Seventy per cent of borrowers choose to pay the minimum rate. Next is ‘interest only’ at base rate, some 4% higher. Next is “as if” the loan were amortized at 15 years using the base rate. Final option is “as if” the loan were amortized at a fixed 30 year rate.
The loan recasts when the principal owed is at 120% of the original, OR after five years, whichever is first. At the point of recast, the loan turns into a conventional loan with a 25 year amortization period. No more pick a pay options.
There will be a payment shock for the 70% who paid the minimum amount at 1%. The monthly nut could almost double, since now the payment is based on a shorter amortization period, a higher principal amount, and a higher interest rate. Triple whammy.
I think I’ve got that right.
“Do resets have any effect in a zero interest rate environment?”
Yes.
1. So far as I am aware, homeowners do not qualify to borrow at the special near-zero rate deal which the Fed exclusively offers to Megabank, Inc. After all, Megabank, Inc has to pay many billions of dollars in bonuses, and how would that be possible without discriminatory lending from the Fed which enables them to borrow at ultra low rates, lend at ‘market rates,’ and pocket the spread? Megabank, Inc is too-big-to-fail, and hence they automatically qualify for the risk-free interest rate at the Fed’s discount window, or one of their many “special purpose” lending facilities set up to obfuscate the true cost of the Wall Street bailout.
2. Even at interest rates of zero, resets can (hypothetically) increase the monthly payment, due to the need to amortize principle over the remaining term of the loan.
For a simplified example, suppose a $500,000 loan started as interest only at 3% for a five year period, then went to fully amortizing for the remaining term of the loan.
The initial monthly payment would be
3% * $500,000/12 = $1,250.
The monthly payment after reset would be
$500,000/12/25 = $1,667, an increase of $417 a month.
Get it?
i think what happened is millions of those mortgages prematurely failed before the reset, and the houses were dumped in the pool of shadow inventory.
Cr*p.
So what will bring reality back to No VA?
Last time I was here, I bought a condo because it was a breakeven with renting, all in. Then the prices started bloating.
When I sold I got $100K worth of the bloat. Not because of anything I did, mind you. So there is precedent here for “Price of renting” = “Price of buying”, if you look at it from the standpoint of howmuchamonth.
I want to see it turn, baby, turn!
What would really help is a 10% across the board cut in government workers and contractors. Although I ‘r’ one, I don’t think anybody will dispute that there is enough fluff in the rosters to withstand the rolloff. For the most part, the govvie workers here are old. They come to the area for the last five years of their careers, because the high grade jobs are here.
A significant number of contractors are also old, since senior govvies do not like to deal with the rough edges most of us have until we’ve developed thick skins (aka ‘judgment’). So let the old people retire in peace, and permit the 30 somethings to eviscerate one another unchecked. A ten per cent reduction in govvies will translate into a 30% reduction in contractors. Long overdue, IMO.
The results could not be worse than they are currently. At a minimum, the leaner system, although equally ineffective, will at least be cheaper. It may check the hidebound arrogance of the government workers union (covers EVERYBODY until they are a GS-12), will precipitate a housing correction at last; will ease the traffic hell that is DC metro; and may force a shift in the astonishingly parasitic, though shrilly disseminated ideology that every government worker I have ever met espouses. What the heck - such a circumstance would be in synch what is going on in the rest of the country.
I’m tellin’ ya, a shack with some land in TN or WV is starting to look like a step up from what we currently experience. The HOA?
Oh, that would be Dot and Bob down the way. They paid off their trailer in ‘06.
THAT’s what I’m talking’ about. I’m thinking this ain’t gonna get better in our lifetimes. Therefore, embrace the new normal!
Yeah, I’m bein’ cranky. I want a place where I can sit on the porch with my 20 gauge, have a clear view of the driveway, tend the still, grow some whatever, and let my dog out in the yard. Without being beggared.
Screed of the day, Jane. Well done.
Saturday, Oct 23, 2010 16:01 ET
What you need to know about the foreclosure mess
One side accuses banks and their robo-signers for fraud; the other blames deadbeat borrowers. Who’s right?
By Andrew Leonard
How should we think about the foreclosure mess? Right now, two grand narratives are battling for supremacy.
On one side, expressed via editorials in the Wall Street Journal and sound bites from conservative politicians and careful statements from bank executives, we hear that the recent flurry of foreclosure-related activity — the criminal probes, the investigations by state attorneys general, the reluctance of judges to rubber-stamp foreclosure proceedings — is all much ado over nothing. Ambitious lawyers determined to keep deadbeat losers in houses they never really could have afforded to begin with, so the story goes, are seizing upon trivial paperwork errors to hamstring the entire residential real estate market. The sooner we get through the backlog of foreclosures clogging the system, says Wall Street, the sooner the economy will get back to normal.
On the other side, as propounded by scores of left-wing bloggers, homeowner advocates and longtime critics of Wall Street, we are told that the emerging foreclosure sins — the lost documents, the affidavits signed without ever being reviewed, the homeowners mistakenly foreclosed upon — is merely the latest proof coming to light of a fraud-infested system that’s rotten to the core. From the origination of a mortgage loan to the moment of foreclosure, willful fraud and misrepresentation have been the order of the day — and that includes all the mortgage-backed securities constructed by bundling together the bad loans. The worst part? There will be profound systemic implications. As banks and lenders and mortgage servicers are forced to own up to their sins, their losses could mount into the hundreds of billions of dollars, threatening, once again, the stability of the entire financial sector.
So what’s the truth? Somewhere in between, or heavily leaning toward one corner? Here are four questions, and associated answers, that might help readers decide.
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“left-wing bloggers”
= people who think banksters who commit felonies should serve hard time?!
Hmmmm…
Are some law firms cutting corners on foreclosures?
By Drew Griffin and Jessi Joseph, CNN
October 23, 2010 1:14 p.m. EDT
‘Foreclosure mills’ under fire
Miami, Florida (CNN) — Tony Louzado is facing foreclosure. He’s not alone — in central Florida, where Louzado lives and works, one in every 56 homes is in foreclosure.
That simple number, from foreclosure data firm RealtyTrac, doesn’t tell the whole story, especially in Louzado’s case. Two different law firms are pushing the foreclosure — on the same mortgage.
“I see now that there’s two people that are coming after me, that maybe [the bank] hired in this way,” he said. “I don’t know all the specifics, but there’s two people that are coming after me on the same loan number.”
Across the country, millions of Americans have lost their homes to foreclosure since the recession began in December 2007, according to RealtyTrac. Increasingly, however, more of those stories are becoming horror tales about a system in chaos with banks pushing people toward foreclosure, sometimes, allegedly, based on error-filled or even fraudulent and illegal documents.
Several of the nation’s financial giants, including Bank of America, Allied Financial, JPMorgan Chase and GMAC, have halted foreclosures, although Bank of America and GMAC announced they are resuming the process. While the Obama administration opposes a moratorium on foreclosures so the process can be examined, the federal Fraud Enforcement Task Force has launched a criminal investigation to determine if the banks and their lawyers have done anything illegal.
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Dumb question of the day:
Since the Great America Foreclosure Fiasco has come to light, has the Fed taken measures to contain it? After all, the Fed has been tasked with the job of lending system regulatory Supercop, right?
The Feds sleeping on the job on purpose again .
Halt reveals lenders’, firms’ dubious moves
By Kimberly Miller
Palm Beach Post Staff Writer
Updated: 6:17 p.m. Saturday, Oct. 23, 2010
Posted: 6:15 p.m. Saturday, Oct. 23, 2010
Meredith Audain’s three bedroom two bath townhome in Lake Worth was sold at a foreclosure auction in late September 2010 while she was working on modifying her loan with Bank of America.
Gary Coronado/The Palm Beach Post
The nation’s largest lenders have painted the foreclosure fiasco of the past few weeks as easy-to-fix technical glitches, pebbles in the path of their home repossession steamrollers.
But as Bank of America restarts its foreclosures Monday, and Ally Financial Inc. moves forward by resubmitting court documents where necessary, the exposure has dug up questionable activities by lenders, law firms and loan managers that may not be mended as easily as simple affidavit do-overs.
Much of the information is coming out of Florida as depositions of bank staff and sworn statements of foreclosure mill employees describe a system so bent on evicting derelict borrowers that corners were cut and laws possibly broken.
Allegations include:
* Foreclosure papers improperly served to borrowers, allowing cases to move forward before a protest could be mounted.
* Flawed foreclosure files hidden from Fannie Mae and Freddie Mac auditors.
* Banks modifying loans on one side of the office while legal teams sold the house at auction on the other.
* Loans tracked by the Mortgage Electronic Registration System, created by banks, with no clear paper trail on assignments.
* Penalties from lenders for not moving fast enough, creating an ultra-competitive environment among the four Florida law firms now under state attorney general investigation.
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Whitman Makes Money the ‘Old-Fashioned Way’—Tax Breaks for the Rich
by Mike Hall, Oct 22, 2010
One thing you’ve got to say about Meg Whitman, California’s Republican gubernatorial candidate, she sure knows how to make money. She amassed more than a billion dollars despite a not-so-shining track record as CEO of eBay, board member of Goldman Sachs and other corporate stops.
Now, she stands to add to that fortune and maybe replenish her personal coffers after dumping some $141.6 million of her own money into her campaign to buy the election.
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If Meg Whitman gets elected, what’s good for Goldman Sachs will be good for California. DON’T ELECT THIS WALL STREET WOLF IN SHEEP’S CLOTHING, CALIFORNIA!
Meg Whitman
Monday, Apr 12, 2010 07:01 ET
Meg Whitman’s fortunes entwined with Goldman Sachs
The GOP candidate for California governor steered the investment bank millions in eBay business while on its board
By Lance Williams
Meg Whitman’s fortune entwined with Goldman Sachs
Candidate Meg Whitman touts her experience at eBay, the online auction house that made her rich, but her career and personal fortune are entwined with another company: the Goldman Sachs investment bank, a major player in public finance in the state she wants to lead.
Whitman’s relationship with the giant Wall Street firm — as investor, corporate director and recipient of both insider stock deals and campaign donations — could pose conflicts of interest if the Republican front-runner is elected governor of California, critics say.
From 1998 to 2002, while she was CEO of eBay, Whitman helped steer millions of dollars of her company’s investment banking business to Goldman, court records show.
In 2001, Goldman put Whitman on its corporate board, paying her an estimated $475,000 for little more than a year of part-time service. The company also gave her insider access to the initial public offerings of hot stocks worth millions, according to the records.
Whitman left the board in 2002 after she was targeted in a congressional probe of bond underwriters and “spinning” — a financial maneuver, now banned, in which Goldman and other firms allegedly traded access to hot IPOs for bond business. Whitman later settled a shareholder lawsuit related to profits she and other execs made from buying the IPOs.
In recent years, Whitman has kept part of her fortune, estimated by Forbes magazine to be $1.2 billion, in investment funds managed by Goldman, her financial disclosure report indicates. For her campaign, she’s received $105,500 in donations from Goldman executives, state records show.
Meanwhile, Goldman is a major player in California state finance. It has been the underwriter of $78.9 billion in bonds issued by the state since 2006, records show, second only to Merrill Lynch, now a division of Bank of America, which was underwriter of $79.3 billion in the same period.
Goldman was underwriter of more than 2 percent of the bonds issued by the state in the past five years, the records show. State pension funds, meanwhile, have invested more than $1.3 billion with Goldman.
The firm has sought other state business as well. In 2007, Goldman and the now-defunct Lehman Brothers investment bank pitched Gov. Schwarzenegger on an ambitious plan to boost state revenues by privatizing the California Lottery, according to news reports.
Goldman also urged the governor to raise money by selling EdFund, the state agency that insures student loans. Schwarzenegger expressed interest, but the ideas weren’t carried out.
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WSJ Blogs
Deal Journal
An up-to-the-minute take on deals and deal makers.
* October 22, 2010, 1:06 PM ET
Proof That America Still Hates Wall Street
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When former eBay CEO Meg Whitman also was “serving on the board of Goldman Sachs,” she “was caught reaping millions from insider stock deals,” reads this ad from Jerry Brown, a candidate for California governor. The ad then pans over an image of the street sign for Wall Street. (Goldman Sachs does appear to be mentioned in numerous candidates’ ads.)
Common sense is starting to rise above the din of Fed-sponsored inanity. I expect it will eventually carry the day, and the Fed will shrivel into ignominy.
To fix the economy, let bad banks die
Bad banks, and their bad business model of willful incompetence, are still alive, and dragging down the recovery.
By Nicole Gelinas
October 24, 2010
Since the housing market peaked in 2006, the nation has suffered through nearly half a decade of financial and economic hell. It’s past time for the politicians to do what they should have done in the first place. That is, protect the nation’s priceless assets: the rule of law and free markets. Instead, the pols are protecting the worthless assets of zombie banks that do not know how to be banks.
Two years ago, many of the nation’s largest banks should have failed — because their business model failed. That business model was willful incompetence. Back then, banks, including Countrywide Financial, now part of Bank of America, showcased this incompetence in helping homeowners borrow money they could never repay.
Today, thanks to Washington’s bailouts, the bad banks are still alive. So is their disastrous business model. The banks now showcase their incompetency in their inability to foreclose on defaulted homeowners in an orderly, timely and non-fraudulent fashion.
In the past two weeks, Bank of America, JPMorgan Chase and some competitors temporarily halted most foreclosures. The banks stopped foreclosing as employees came forward to say that they had defrauded courts — that is, falsely attested that they knew the facts of thousands of foreclosure cases when they did not. Often, the banks cannot locate the documents that confirm a lender’s right to foreclose. Even as banks resume foreclosures, as Bank of America did this week, they have a motive to proceed slowly because they do not want to book the losses that come with property sales.
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