Bits Bucket For November 13, 2010
Post off-topic ideas, links, and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
About Me
Name:Ben Jones
Location:Northern Arizona, United States
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Never trust a realtor. EVER.
and your point is…?
Ex didn’t have the guts this morning to say FIRST……
I trust a realtor to deposit her rent check to me 10 days early every month. And she gardens, keeping the place looking good. And she had her son build me a length of fence. OK I had to pay for materials. And she took care of the irrigation lines. She ain’t all bad.
She blew all three of those lines for me with her own hot air! I suspect the lines speak to one another in hushed tones about that scandalous occurance…
You are very right. I’m looking at and investment property. It was listed at 120K in Jan, 106K in April, 95K in July and is now listed at 107K.
I asked the realtor how come the price moved up? He has an answer for everything. They take the house off the market, re-appraise it and put it back at high price. Also, the days on the market changed from like 220 days to just 60 days. All is scam and is allowed. Buyers have to be really careful.
exeter is not trolling for agreement..
Hold still.. lemme get that hook out of your mouth.
Realtors™ are liars.
The seller can change his asking price whenever he wants. Dont mean he will get it but just saying.In ca the should be a cumulative days on market catergory in the mls.Caveat emptor!
“days on the market” = scam marketing ploy.
Reators are the spawn of Satan. Okay, now that we got that out of the way, let’s move on with some substantive discussions, shall we?
I prefer to think of them as the winged henchmen.
Flying monkeys?
I thought those belonged to Nancy Pelosi.
“Flying monkeys?”
You got it, Sammy!
Lawyers in Fla are charging 40% contingency fees for helping people in foreclosure. The FB records a second TD if they don’t have any money in favor of the lawyer. Regardless of any equity, the scum suckers get their blood. The realtors have company. May have missed this story last week.
I actually know a REALTOR who is a very nice, honest woman. She is older than my mother, and I would never hesitate to give her a call for an honest opinion on any property, and have her represent me as a buyer. She is one in a million, probably.
While I find it inconceiveable that an honest person who puts the public interest above those of the banksters could ever rise to any position of influence at the Fed, the comments from this lady are nonetheless encouraging.
http://www.bloomberg.com/news/2010-11-12/fed-s-raskin-gravely-concerned-about-mortgage-servicing-irregularities.html
Federal Reserve Governor Sarah Bloom Raskin said she’s “gravely concerned” about the impact of mortgage-servicing problems on consumers and the housing market and that increased reforms are needed.
“Many may view these procedural flaws as trivial, technical or inconsequential, but I consider them to be part of a deeper, systemic problem and am gravely concerned,” Raskin said in the text of remarks given in Boston, her first public appearance since being sworn in as a Fed governor on Oct. 4. “Serious and sustained reform is needed to address the larger problems in mortgage servicing.”
Attorneys general in all 50 states began a coordinated probe in October into whether banks and loan servicers used false documents and signatures on hundreds of thousands of foreclosures in a process known as “robo-signing.”
Bank of America Corp., the largest U.S. lender, temporarily halted repossessions nationwide as it reviewed processes, while JPMorgan Chase & Co. and Ally Financial Inc.’s GMAC unit froze home seizures in states where courts oversee foreclosures.
“Given the potential ramifications for consumers, the housing market, and the economy as a whole, I believe it’s fair to say that every relevant arm of the federal government is taking the underlying dynamics of the mortgage foreclosure crisis very seriously,” said Raskin, 49, who had been Maryland’s commissioner of financial regulation since 2007.
The curtain is being pulled back and revealing the scam for anyone that cares to look.
This fraud will eventually collapse under its own weight but not without the PTB trying to extract every last drop of plasma.
One of the best lines i’ve heard here is, paraphrased,
“Our collective rebirth is on the other side of the collapse”.
Truer words were never spoken.
Not a big fan of collapses or “collective rebirths.” The worst elements of society tend to assert control and dominance in these scenarios.
yeah, my far lefty anarchist facebook friends are all giddily awaiting the rebirth - like somehow they’d do better ubder their new overlords.
“Our collective rebirth is on the other side of the collapse”.
Sounds so Evangelical.
Get your ammo before Feb 1, 2011 in Ca. Big Brother Brown is looking for you.
You’re way too paranoid to be living in CA. I picture you holed up in a small cabin in MT.
““Many may view these procedural flaws as trivial, technical or inconsequential, but I consider them to be part of a deeper, systemic problem and am gravely concerned,” Raskin said.
If Raskin actually believes this and intends to act accordingly, she will quickly be muzzled and removed from her position. As such, I tend to think this is more empty rhetoric intended to give the illusion that officials in high places are attuned to rising public concern over the state of the nation’s finances. However, if somehow an actual person of integrity managed to get past the Fed’s vetting process, this could be a major development. But I’ll be watching what she does, not what she says.
You are correct.
Remember Brooksley Borne? in charge of SEC or Board of trade? I can’t remember. brain is slow today.
I do recall, however, when she begin complaining about the risk of deriviatives and the global consequences and the need to REGULATE them, so we could have some transparency,
Larry Summers and Robert Rubin had a gag order issued to shut her up and move her out. As you recall, Rubin and Summers were the financial “experts”, now gone, in conjunction with Alan Greenspan, that were leading to a new world economic order of “financial innovation”.
The recipients of the graft will continue to promote the current system, or will work with periferal? changes around the edges, while keeping the current “system” in place.
She was head of the Commodities Futures Trading Commission, which was nominally charged with regulating the derivatives market.
Remember this?
“There are two administrative law judges at the Commodity Futures Trading Commission: myself and the Honorable Bruce Levine. On Judge Levine’s first week on the job, nearly twenty years ago, he came into my office and stated that he had promised Wendy Gramm, then Chairwoman of the Commission, that we would never rule in a complainant’s favor. A review of his rulings will confirm that he has fulfilled his vow. Judge Levine, in the cynical guise of enforcing the rules, forces pro se complaints to run a hostile procedural gauntlet until they lose hope, and either withdraw their complaint or settle for a pittance, regardless of the merits of the case”"
And for the HBB lurkers:
http://www.pbs.org/wgbh/pages/frontline/warning/
Geitner, Arthur Levitt, and Bernanke were also at those meetings in 1997 (Clinton).
From Yahoo: “G-20 fallout: Trade barriers, tensions could rise.”
“The world’s most important economies are going home to look after themselves. They left their summit without any meaningful agreement, finding it even harder to cooperate and more likely to erect trade barriers to protect their own interests.”
Could this have ended any other way? IMHO it really is a no-brainer to believe Globalization would work in an expanding economy but would not work in a contracting economy.
Times are continuing to get more and more interesting.
I think US ultimately has the key. All this emerging countries thing is blown out far from reality. It is ultimatley the US consumers that buy and the other countries enjoy. If US doesn’t consume enough due to unemployment and slow growth, other Asian countries do not have enough consumers(with enough money) yet to sustain world growth and bring the world economy out of recession. They all have money because of USA consumers.
Globalization was a scam. It screwed US of its riches. But with the RE/asset bubbles deflating in all the countries like Aus, China, Singapore, India, Korea, Russia, Brazil etc., USA will once again emerge to be Best among the Worst. Money will start flowing back to USA eventually. Corporations are evil. I wish US corporations had more allegiance to the US than money. Capitalism is good but immense greed to sell out our nation is crime.
I wish US corporations had more allegiance to the US than money.
Corporations’ goal is basically to make money. That’s the nature of the beast. Instead of wishing their nature were different, can we be practical about it?
Might we give American corporations good reason to show more loyalty to the US? Can we make the alliance between American business and America stronger by making it more profitable?
thus far, no. We have other, more important priorities which conflict..
Ok Joey here is a great incentive to business ,you get a penalty
tax unless you produce here and you get a penalty tax if you
outsource a job …………hows that for incentive . No reason to
cost the Government money to make our Industries not leave us in ruins . You want a loyalty incentive …screw you .
You can beat the crap out of a dog, and it will obey you. And chain it up so it won’t run away..
Joey ..thats what the Power Players want to do to the Great
Majority of Population ,beat the shit out of them for the purpose
of a greed that knows no bounds .
It’s really very simple that the population in the USA isn’t there
to be fleeced and than left in ruins .These Raiders of the Lost Ark
come in and get theirs and leave the ruins of their acts .
How come nobody has to beat the crap out of a cat for it to listen ?????
wiz.. you ever listen to one of them bible thumping preachers? I think you got it in you to be up there, among the best.
..just substitute “business” wherever the Book reads “devil”.
say hallelujah one time..
Go ahead paint me as a bible thumping preacher . Look,this has been going on since the dawn of man :a small group of people figures out how they can rape and fleece a large group of people .
I’m just into the concept that’s it practical to be efficient in not
letting all resources go to “Mad Men “,who abuse the allocation of
those resources . Actually ,I’m a free market capitalist that doesn’t like rigged playing fields or stacked decks against people who have had their power taken from them .
Joey …you just don’t know the concept of win/win situations .For you it’s someone has to win and someone has to lose.
Actually Joey this is where I’m at in life …
http://www.youtube.com/watch?V=cgaDhMg62jI
I wish US corporations had more allegiance to the US than money.
Your innocense is touching.
Your innocense is touching.
I own a manufacturing/Franchising corporation I can assure you there are Americans that feel that corporations should have social responsibilities. Corporations are basically run and managed by people and money is not everything in life.
bah..
Money certainly IS everything to the people who criticize businesses offshoring, and want to reverse the process.
It’s 100% about money.
It’s zero about constructing a functional, friendly mutually profitable partnership between people and business.
One guy up there wants to beat and starve business into submission, all for the sake of money..
“One guy up there wants to beat and starve business into submission, all for the sake of money..”
Thanks for sharing the world view of a banking lobbyist with us rubes.
I do not feel that corporations should have social responsibilities. I just feel that corporations should not have the same rights as persons. Unless you can find a way to put a rifle in Exxon’s hands and drop it on Omaha Beach.
+1 chilidoggg.
I’m also starting to recognize joey’s “I know you are but what am I?” debate style.
It’s only a matter of money, on both sides of the issue. Wages.. employee benefits.. product prices.. taxes.. regulations.
The notion that business is less fair to people than people are to business is disingenuous at best. You get what you give. Give nothing, get nothing.
Put the screws to business and it will defend itself. Make operating in the USA unbearably expensive and business will pack up and leave. Offshoring might sting, but things can be a lot worse.
You and your fellow travlers are confused, joey. Corporations are NOT the highest law of the land nor the pinnacle of human endeavor nor a model for social cohesion.
That’s ok, Marie Antoinette didn’t get it either.
Local and state governments appreciate business because business provides jobs and revenues and growth, and will use all sorts of incentives to coax big business into their state. Free land.. tax breaks, etc.
Working people, otoh, can see no value in encouraging business, and actively oppose it on every level.
Ironic, no?
The ironic part is how many people work for a corporation (or run their own like Michael Moore). No one has ‘their power taken from them’. People are free to work where they want and to start whatever business/corporation they want, but that isn’t fair I guess b/c it might actually be difficult and risky. Better to just rant against those that have already done so successfully and spew conspiracy theories and demand they ’share’ with the abused rank and file. Where are all of these bleeding hearts in the business world?
Joey:
Yep.
I have spent a lot of time looking at the Cheerleaders of the Business
Channels and I know how they think at this point . It’s all about keeping the rigged playing fields continuing . These people see no borders ,these people only see “bubbles ” they can make short term gains on .
I have a lot of respect for Dylan Ratigan who got off that bandwagon
and switched over to being a investigative reporter on his own show .
Ratigan is one of the few that is exposing the real game in a sane and
balanced way . The problem with Glenn Beck is he never attacks
Corporate America /Wall Street and he spends most his time
attacking Commie Groups ,as if Corporations /Wall Street aren’t
employing the same PR campaigns for the control for the minds as the commie groups are .
Eric Hopper wrote a book called “The True Believer “years ago that
outlined how a group interested in power captures the minds of the
followers ,and often times it is by creating a battle against another group while the “True Believer ” gets fleeced by the group leaders in the final analysis .
A human has their own self interest and should be self-governing and
should know where their interest lie and not subject themselves to
getting fleeced . Self-protection is normal ,but evil groups want to
take you eyes off their real motives .
Is “Eric Hopper” Hwy50’s real name?
You mean Eric Hoffer– and yes, The True Believer and also The Passionate State of Mind are well worth reading and re-reading.
I just can’t get past how Dylan Ratigan used to suck up to Maria Bartiromo and tell her how beautiful she was when he was on her show. Now he’s on MSNBC so he’s all born again left wing.
I wish US corporations had more allegiance to the US than money.
I wish people would stop referring to corporations as if they were human.
They have the rights of humans. It used to be that the only rights they lacked were the right to vote, bear arms, and donate to political campaigns. Now we’re down to one, because if you can anonymously donate millions to political causes, you don’t need one corporation, one vote. And they’re unaccountable, because they are not humans.
Exactly.
Little know fact: corporations were, in fact, given legal person-hood in 1862 as a side effect of a railroad dispute brought before the Supreme Court.
And no, they are not accountable to public as is the government, yet they wield more power on an everyday basis.
Globalization is necessary to a degree, we are never going to grow bananas, coffee and sugar in my neck of the woods.
Protectionism is necessary to a degree, without it we learn that playing fields are not level and opportunity goes abroad. Others will employ it whether we do or not.
We need a balance, a moving line to counter foreign changes. As we galloped towards globalization we gave up too much.
A consumer based economy has never made sense to me.
There is a difference in Trade and Globalization. The world has been trading for the past thousands of years. This Globalization thing has been created by Wall Street and highly educated MBAs/B-Schools who sold this country for short them gains.
“There is a difference in Trade and Globalization. The world has been trading for the past thousands of years. This Globalization thing has been created by Wall Street and highly educated MBAs/B-Schools who sold this country for short them gains.”
Spot on Martin. The money trail ends at the money changers.
I see your point, but do you truly believe that globalization wouldn’t have occurred but for academia and Wall Street?? You don’t think that the guy manufacturing t-shirts or widgets would have ever realized on his own that he could make more money or gain a competitive advantage by outsourcing his work? I think globalization started on its own well before everyone hopped on the bandwagon.
Bananas, coffee and sugar CAN be produced in the USA if the price is right. They just wouldn’t be third world labor products.
The US does produce sugar. This is a little old:
‘Currently, the U.S. cane sugar industry has 34 raw cane mills distributed in the growing areas: Florida, 7; Louisiana, 19; Texas, 1; Hawaii, 6; and Puerto Rico 1. These facilities vary in capacity with the mills in Florida having an average daily crush capacity of 20,000 tons per day versus the mills in Hawaii which average under 10,000 tons…Area harvested for sugarbeets is projected to rise modestly to 611,000 hectares by 2005, up about 2,833 hectares per year, according to the USDA’s sugar baseline…Sugarbeets for processing, which totalled 20.4 million tons in 1985 and 28.8 million in 1995, are projected to total 27.8 million in 2005.’
http://www.fao.org/DOCREP/005/X0513E/x0513e15.htm
We hear from a few on this blog that ‘we shouldn’t be making t-shirts and shoes.’ As if certain products are unworthy of being made by such an advanced people. IMO, we should want to make anything and everything that we can.
This reasoning is along the lines of how globalization was sold to us long ago. ‘We’ll write software and design financial products and sell those to the little colored people, who will send us cars, linens, etc, in return. Then their standard of living will grow so much that we’ll all prosper!’
Until this all got off the ground, the US was to be the “Worlds Economic Engine”, where we borrowed, consumed, and then borrowed, consumed some more. Kinda like a perpetual motion machine!
And there was always the waving away of any doubters or resistance. ‘Globalization is INEVITABLE! Only flat-earthers dare to question the elite decision-makers of corporate giants and free-trade technocrats.’
The truth is, we used to make our trade deals on a country by country basis, on terms that made sense. That was free-trade too. But these egg-heads forced us down this road where we make blanket trade agreements with entire regions, regardless of their labor policies, environments policies, etc. It’s simply a race to the bottom, that hasn’t come close to giving up what was promised.
From Ben’s linked article…
Sugarbeets, while expensive to grow, are generally more profitable than alternative crops in most areas where they are grown and, under the current U.S. government sugar program, sugarbeets are expected to remain more profitable.
During beet processing season, there are heaps of sugarbeets all over the Treasure Valley (metro Boise) waiting to be trucked to the giant beet processing plant in Nampa. For a couple of weeks every year there is a seemingly endless stream of beet trucks converging there.
+1000 well said Ben .
From wiki.
As of 2009, there are [Amalgamated Sugar Co.] factories in Nampa, Paul, and Twin Falls, Idaho. The Nampa factory processes about 1,500,000 short tons (1,360,000 t) of sugar beets, Paul processes 2,600,000 short tons (2,360,000 t), and Twin Falls processes 1,100,000 short tons (1,000,000 t).
And that’s just one processing company in one state. That 5.2 million tons of sugarbeets is a lot of stuff.
The real danger to local economies is to become overly dependent on a single product line. Look at timber towns in Oregon, or, well, Detroit. Diversity of the economic base is pretty important for the long-term health of a community.
After the revolution in Cuba the United States interest were never fully compensated for. I believe the USA increased beet sugar production after that and the cost of wholesale sugar declined to under four cents a pound and stayed low for a long time. I don’t know if that was some kind of retaliation but makes sense and could have been. Times keep changing corn sweetners really made an economic dent.
That’s the best post I’ve seen from Ben in a while.
..Globalization is INEVITABLE!
What reason is there (or was there) to bet against it?
What reason? It doesn’t work.
It appears to be working just fine for multinational corporations as well as international trade.
Nothing “works” when economies are contracting, but a recession eventually ends, and whatever conflicts arose due to it’s pressures will be forgotten.
You say it works?
So the current economic problems are just fantasy?
Your reality free statements are astounding… ly and literally bankrupt.
eco.. the question is about the continued trend towards globalization. It’s already survived a few decades and a couple recessions.
nobody’s saying the current problems aren’t real, or that they aren’t affecting it.. but will they kill globalization?
IMO, the problem with globalization is that it is indeed a race to the bottom. However, the alternative, if there is even one, is even worse - how do you regulate against it? The ultimate result would be so artificial - you’d basically have to subsidize domestic production (of almost everything btw) by either quality or price (or both) with the end result that consumers are, at the very least, having their decisions as to what to buy taken away from them (with inevitably leads to crappy products). People can buy US products, but they choose to shop at the big box stores b/c price is the most important thing for them. There’s nothing wrong with that - it’s our decision to do so.
And if it was such a bad idea, wouldn’t some businesses gain an advantage from not doing it (and then more follow, etc)?
The balance between pure capitalism and collectivism is a distorted economy that moves toward collectivism by blaming the distortions on capitalism.
Er, I mean “that blames capitalism for the blunders caused by the distortions.”
Latest in the news of BP. They are making a deal to buy ethanol from the Brazilians. Cheaper than the Mid-West corn stuff here in the USA.
..Globalization would work in an expanding economy but would not work in a contracting economy..
If by “works” you mean avoids pain, not much works in a contracting economy. Contraction causes problems for everyone.
imo, it will bend with the wind, and survive.
“…….it would bend with the wind and survive .”
Right Joey Industry will bend with the winds and make less profit .I think the issue here is ill-gotten gain and profit margins at the expense
of the Bee-hive called America .
Ways to cut deficit article on cnn.com:
It says Govt. hired 2.4 million Govt. contractors in 3 years from 2002-2005. I think that’s a really high number. Maybe many millions more till 2008 under Bush. Hiring one civil servant and 10 contractors, is that lowering Govt. size? Especially when these companies charge top dollars for their folks. I spoke to a friend who makes $88 per hour on 1099 and says his billing rate is $200 that his company charges Govt. Looks like lot of savings for all these contracting companies.
And to top it, most are long term contracts like 5-10 years and Govt. pays high money.
http://money.cnn.com/2010/11/11/news/economy/commission_top_10/index.htm
“…is that lowering Govt. size?”
Assuming a contractor is carrying out a well-defined task which a full-time employee would otherwise do, the answer is yes for two reasons:
1) After a contractor finishes said task, he no longer collects payment, unless hired to carry out a new task.
2) Contractors collect none of that pesky employee benefits overhead.
Contractors are required by law to provide comparable pay and benefits to their employees that would normally be given to a regular government employee.
2-3 years ago, the number of federal contractor employees became more than regular federal employee.
There is so much theft and corruption by the contractors that the DOJ cannot begin to cope with all the possible cases.
So much for “privatization” saving the government money.
It NEVER ends.
Feds to offer mortgage modification help in West Palm
By Kimberly Miller Palm Beach Post Staff Writer
Posted: 7:09 p.m. Friday, Nov. 12, 2010
WEST PALM BEACH — Representatives from the federal Making Home Affordable program will be at the Palm Beach County Convention Center on Tuesday to help eligible borrowers modify their mortgage payments.
It is suggested that borrowers bring these documents:
•Monthly mortgage statement.
•Information about other mortgages on the home.
•Two most recent pay stubs, documentation of income from other sources or most recent quarterly profit and loss statement if self-employed.
•Two most recent bank statements.
•Account balances and monthly payments for credit cards and other debts.
•Estimates of other monthly expenditures (such as utilities, insurance and medical bills).
For more information call (888) 995-4673 or go to hopenow.com. A request for modification form will be available on site.
Borrowers can also download and print the forms at makinghomeaffordable.gov.
Representatives will be in Miami from 1 to 7:30 p.m. Thursday at the Hilton Miami Downtown at 1601 Biscayne Blvd.
If you go
What: Making Home Affordable mortgage modification workshop
When: 1-7:30 p.m. Tuesday
Where: Palm Beach County Convention Center, 650 Okeechobee Blvd., West Palm Beach. Parking at the center is $5.
.
Home Affordable Modifications
Check if you qualify for a Home Affordable Loan Modification program; which may make your monthly mortgage payment more affordable.
Millions of borrowers having difficulty making their payments, and borrowers who have already missed one or more payments may be eligible.Find out if you are eligible by answering our simple 6 Questions.
Self Assess your situation to see what you may qualify for? Answer these questions:
1. Is your home your primary residence? Yes No
2. Is the amount you owe on your first mortgage equal to or less than $729,750? Yes No
3. Are you having trouble paying your mortgage?
For example, have you had a significant increase in your mortgage payment OR reduction in your income since
you got your current loan OR have you suffered a hardship that has increased your expenses (like medical bills)? Yes No
4. Did you get your current mortgage before January 1, 2009? Yes No
5. What is your monthly mortgage payment?
Note: The monthly mortgage payment includes Principal, Interest, Escrow & Taxes $
6. What is your monthly gross income?
Note: For example, This is the income of borrowers, before taxes and any adjustments are deducted. If your Monthly
Take Home Pay (Net Income) is $1000 then Estimated Monthly Gross Income will be $1250.
By clicking on “Submit” below, your answers will be analyzed, and you will be directed to Next Steps for the Home Affordable Modification
or to other options for additional help.
http://www.hopenow.com/questions.php - 24k
I went ahead and plugged in some lunatic numbers to see if they would qualify, and guess what!
You May Qualify For Home Affordable Modification
Based on your answers to the modification eligibility questions, you may qualify for a Home Affordable Modification. Check your response to the questions for eligibility criteria for Home Affordable Modification.
Your Response
1. Is your home your primary residence? Yes
2. Is the amount you owe on your first mortgage equal to or less than $729,750? Yes
3. Are you having trouble paying your mortgage?
Yes
4. Did you get your current mortgage before January 1, 2009? Yes
5. What is your monthly mortgage payment?
$ 3,225.76
6. What is your monthly gross income? $ 3,875.25
Proceed to Next Step
Submit Your Hardship Letter
The next step is to submit your details to the mortgage company, so that the mortgage company can get your Hardship letter and proceed with your case decision. We can assist you in contacting your mortgage company, after getting a few information from you.
I am working on my hardship letter.
I was born a poor black child, I dropped out of school in 1st grade and got a job cleaning the kennels at Michael Vick`s dog fighting ranch. It was at this time that I bought my dream house with a no money down 120% LTV pick a payment 0% neg am 2 month adjustable mortgage. My realtor told me I could refinance later and I would be fine. Soon after I wrote this letter to my Mom.
Well, Mom, remember my dream of owning a big house on a hill… and how I used to wish for a living room with a plaster lion in it from Mexico? And how I always wanted a large 24 seat dining table… in a dining room with original paintings by Michelangelo and Rembrandt? And remember how I always wanted a rotating bed… with pink chiffon and zebra stripes? And remember how I used to chitchat with dad about… always wanting a bathtub shaped like a clam… and an office with orange and white stripes? Remember how much I wanted an all red billiard room with a giant stuffed camel… and how I wanted a disco room with my own disco dancers… and a party room with fancy friends? And remember how much I wanted a big backyard with Grecian statues… S- shaped hedges, and three swimming pools? Well I got that too.
Soon after Michael Vick was arrested, I lost my kennel cleaning job and my mortgage payment adjusted up by $25,000 a month. I have not made a payment in 3 and 1/2 years. I don`t want to loose my home. Please help.
I have a hardship cause my teeth are gone.
Here’s a novel approach taken by dues-shorted HOAs. They sue the banks for NOT foreclosing, and take over the distressed properties themselves. Banks may either have to foreclose and pay dues, or waive their right to the property.
In the Wells Fargo case, the Palm Aire Gardens Condominium Assn. had foreclosed on the property and taken title to it in late December. But even though its borrower had been dispossessed from ownership, Wells, the first lien holder, was not foreclosing on the property.
On behalf of the association, Association Law Group sued the lender to force it to either initiate foreclosure proceedings or give up its ownership rights. And when Wells Fargo failed to act in defense of the suit, Judge Dale Ross entered a default final judgment in favor of Palm Aire.
Among other things, the judgment provides that the lender “is declared to have abandoned its mortgage and any claims it may have on the property” and that “it has no estate, right, title or interest in the property.”
The law firm’s strategy is a “quiet title action” that requires a lender to prove it owns a property free and clear by foreclosing or give up its lien. And since there is little equity left in these distressed properties, it often makes more financial sense for banks to walk away than it does for them to take the title.
http://www.latimes.com/business/realestate/la-fi-lew-20101114,0,6613373.story
“Banks may either have to foreclose and pay dues, or waive their right to the property.”
I like this general theme of taking property back from banks. I hope local governments get their act together and start charging banks in possession of vacant REO stiff penalties in cases where the property is not properly maintained, leading to community blight. Local governments should stipulate that banks which do not stay current on these penalties will have to hand the property over to the local tax authorities. If foreclosure works for deadbeat home owners, why not try it out on dead beat banks?
Strange situation when nobody really wants the title to the property because it has entered the minus equity zone .They use to talk about some of this junk being worth 22 cents on the dollar ,but no doubt
some of this junk has entered into minus 22 % on the dollar if you add
up all that has not been paid along with the damage to the property .
Sounds like a lawsuit the HOA doesn’t want to win.
What does the HOA win, aside from the financial burdens of owning and maintaining that home?
Sell it?
But if there was any profit to be had in that, the bank would have foreclosed and taken the house, and sold it… and made money.
They can sell it and take anything it brings to pay off the HOA dues. Since the bank (really the bond holders, but the bank as servicer is acting on behalf of the bond holders), has “given up” its lien, there is plenty of equity - the primary mortgage was just erased by the law suit.
If the lien is really gone, the leftover after the HOA takes its share (possibly its legal costs too) would go to the former owner or any second mortgage holders. If I were advising the HOA, I’d tell them to modify their by-laws pronto to allow for special assessments to be put again units the HOA has to forclose on. Not sure if a judge would accept it, but it would be worth a shot.
special assessments..
Would a judge think it’s fair that the HOA can recover their various expenses (by extracting some of the equity) while the lender cannot?
The lender has a choice.
1) Foreclose and pay HOA dues.
2) Avoid HOA dues by walking away.
You only get to #2 if you avoid choice #1.
The lender got “reimbursed” for its forclosure costs because they are included in the forseeable business expenses that the lender took into account when it set the interest rate and fees of the loan. That is what banks do. The fact that they assumed there would be no cost to foreclose because a borrower who couldn’t make the payments could just refi or sell the house for more than the loan is just bad business judgement.
HOA’s almost never foreclose on their own because any lien they have is subordinate to the original mortgage, any other mortgages and/or HELOCs and, presumably tax liens. A cost to foreclose would not be included in their business planning at all.
I don’t know if a judge would accept it, but if he or she is willing to accept that the lender constructively gave up its right to have its purchase money mortgage enforced because of a failure to forclose to the detriment of the HOA, I would advise the HOA to give it a shot. It wouldn’t add all that much expense to the process and you might be able to recover some costs.
“Would a judge think it’s fair that the HOA can recover their various expenses (by extracting some of the equity) while the lender cannot?”
Sure it is fair. The HOA only needs to take action in these cases because the lender is NOT!
If the lender were instead to complete the foreclosure, then the HOA dues would have to be paid for the period of ownership by the lender, or at least would need to be paid current at closing when they sell the property as REO.
but you see where this is going..
This is a fairly new type of risk and it really appears as though the banks were not prepared.
So, future loans will include clauses which protect the bank from this situation. And/or interest rates will be higher to protect the lender. Ergo, loans will cost everyone more.
You might get the better of them once.. if you’re lucky.
It isn’t the job of the HOA to protect the right of all borrowers to get cheap loans when they buy houses inside HOAs. The harm will affect their owners equally (probably more) than other owners in HOAs because of the suit. They are guessing that it is worth it because otherwise their remaining residents are going to go without snow removal or street repair or water or something. Their decision.
The two parties are dealing with entirely different legal arguments. The arguement you put forth, that the banks didn’t really understand the risk so they should be able to recover their foreclosure costs from somewhere (you don’t specify where) is under the theory of “mistake” in contract. This is a fairly obscure part of contract law for a good reason. It almost never works because the courts don’t accept that people didn’t recognize the risk. It is highly, highly limited and basically doesn’t work. If you are arguing a mistake theory to get a contract nullified you are basically admitting defeat. Especially if you are a lender and you have explicitly put a right of foreclosure into the loan,
The HOA, on the other hand is arguing for some sort of tort based on the idea that they are a third party harmed by the lenders refusal to do what is spelled out in the contracts that allowed the buyer to purchase a house in the HOA. I have to say that even if a judge accepted the theory of the tort, it seems to be more logical to subordinate the mortgage held by the lender refusing to foreclose to the other lien holders (and their expenses) not completely cancel it, but this involves state law and state judges and perhaps he was trying to get the attention of the lender. Cancelling their lien completely and making them take a loss on the entire amount certainly gets their attention.
“So, future loans will include clauses which protect the bank from this situation.”
Good luck with that—I fail to see how the bank can protect themselves from this risk, other than by acting on the foreclosure in the first place, which is what I would like to see them do.
The HOA is not a party to the mortgage loan contract, so no clause in it can affect their right to file such an action.
And if the costs of loans rise to more accurately price in the risks, I am only in favor of that. Or maybe they should just learn how to do real underwriting again.
Yay polly! I was thinking along the same lines, but in muddled fashion. You put it ever so clearly!
polly,
Many HOA CC&Rs contain a “transfer fee” that may serve as a replacement for lost HOA dues. My HOA dues are $300 a year, with a transfer fee of IIRC $1,200 upon any “change of ownership”. So the bank has to pay out $1,200 when they foreclose. Since any lien for HOA dues is junior to a 1st mortgage, this protects the HOA.
polly, if the HOA has successfully quieted title via the lawsuit before foreclosing then the previous liens would have been fully extinguished. Wouldn’t they?
Presumably, any amounts obtained in a foreclosure sale over the past-due HOA dues would accrue to the legal owner, which seems like it would be the FB.
Strange, but I could see it going that way if it was a quiet title lawsuit. If the HOA foreclosed instead, then perhaps the HOA would get to keep the amounts of the past-due dues.
Thoughts?
In either case, I like the idea of special-assessments on units that require lawsuits, specifically to cover the legal fees; that’s a nice touch.
You are getting way beyond my expertise. I’m arguing from first principles here (common law law of contracts and torts, etc.) so the details of exactly what is needed for a quiet title law suit in California (I am not admitted in CA at all) is just beyond my ken. It is possible that any other lien holders joined in with the HOA for the suit or gave up their interest in the property in exchange for an interest in the procees of the sale by the HOA. All sorts of interesting ways to settle that part of it. You just have to have some imagination.
And, I looked over the posted section of the article again. It said that the first lien holder (the original lender) had its right to own or make claim to the property extinguished. Didn’t say they wouldn’t be able to get any money at all. They still have the note. Maybe they just now have an unsecured note. Or just a right to get whatever is left over once the people with actual liens get paid. Whatever it is, it is an interesting theory and sounds promising at least in California.
Polly,
The article is in the LA Times but is discussing three court cases in Florida.
I’m admitted in CA but in “voluntary inactive” status (i.e. retired).
joey, you are ignoring the obvious: the bank does not want to foreclose, because then they are liable for the HOA past-due sum. In some cases, that may be a huge liability, so the bank has no upside.
The HOA has _nothing_ but upside. The past-due HOA dues are owed to the HOA, so after they take title, there is essentially no net liability there for the HOA. And the upside is huge: not only due to they get to keep the sale amount for the HOA, but they ALSO get a new owner who will pay current dues.
It’s a no-brainer for the HOA, with the only downside being the legal expense to execute the move.
Funny—I remember advocating strongly for associations to take exactly this approach a couple of years back. It is their best course of action.
no downside..
What about overdue taxes? Wouldn’t the owner (the HOA) have to pay those?
Then there’s the cost of fixing up the property.. costs to maintain it, possibly to manage it for a while.. and to sell it.. and who knows what else.
If the HOA is in such dire straights that it’s suing the lender to foreclose, they probably don’t have a lot of money to blow off on one person’s.
Sure, if there’s plenty of equity in the property the numbers may allow it, but if there’s plenty of equity, why did the bank let it go? They could have taken it, and sold it themselves reduced their losses.
polly said up there.. “the leftover after the HOA takes its share (possibly its legal costs too) would go to the former owner or any second mortgage holders.”
Where’s the profit in that?
i got a feeling that a lot of variables enter into the equation, and it may be that neither party can make money by taking a property.
“What about overdue taxes? Wouldn’t the owner (the HOA) have to pay those?”
You are correct; I was assuming that the value of the property would be greater than any past-due taxes. Those cannot be avoided, and the HOA would not want to act if they are higher than the property-value. Although for a solid analysis, you would also want to include the net-present-value of all future HOA dues. Even if it is slightly negative in terms of cash-flow in the short-term, it might still be the right move for the long-term.
“but if there’s plenty of equity, why did the bank let it go? They could have taken it, and sold it themselves reduced their losses.”
I totally agree—in most cases, the sensible thing for the bank to do would be to act by replying to the suit and foreclosing themselves instead. But at least the HOA can force their hand and make them do so, when left to their own devices, they might choose not to for a very long time.
“polly said up there.. “the leftover after the HOA takes its share (possibly its legal costs too) would go to the former owner or any second mortgage holders.”
Where’s the profit in that?”
My thinking was that after quiet title suit, the HOA would be first in line with its lien for dues that are in arrears. This is assuming that the other liens are extinguished.
So their next step is to file for foreclosure, based on their lien. If they succeed in this action, and the other liens were all extinguished, then they would presumably bid the amount of the past-due dues on the property (just like a bank normally bids the outstanding balance on the mortgage).
Assuming they win the foreclosure auction, then the HOA would hold the property free and clear, and any upside on the next sale would be theirs.
If some other party wins the auction, their lien gets satisfied out of the proceeds prior to title transfer.
I see the potential for upside, but no guarantee of it, because it depends on how others act in the auction.
Their downside risk is really just their legal expenses, particularly in the first action that is much less of a sure thing than the foreclosure action (depending on states law and whether it is judicial or not, of course).
So let me get this right. The HOA takes ownership, then sells the unit since it is free & clear. Reimburses itself for costs and past due HOA dues.Pays past due taxes. If it sets the price to MARKET it will TO a bunch of the other owners as they are probably in denial as to real value. hahahahahaha
Union members are thugs. Check out this article on “parent trigger” in the WSJ. In one California community, the opponents of the trigger petition even sent a flyer to hispanic parents (in Spanish) that they risked deportation if they signed the petition.
http:// (no www) online dot wsj dot com/article/SB10001424052748704462704575609781273579228.html
Buy the rumor, sell the news. Is anyone still betting on DJIA = 12K by year-end?
* MARKETS
* NOVEMBER 13, 2010
Investors Walk Out as the Fed Buys In
By MARK GONGLOFF
On the day that the Federal Reserve started buying, everyone else was selling.
Investors sold off everything from stocks to Treasury bonds and gold on Friday, just as the Fed began its “quantitative easing” program, its economic stimulus effort dubbed QE2.
“There were a lot of hopes and bets on QE2, and now that it’s actually out, those bets are all leaking away,” said Guy LeBas, fixed-income strategist at Janney Capital Markets.
The most striking thing about the post-QE2 moves is that they are the mirror image of the market action for months preceding the announcement, when almost all asset classes rose at the same time. Now investors are dumping trades that had generated months of healthy gains.
The Dow Jones Industrial Average fell 90.52 points on Friday to 11192.58, down more than 2.2% for the week though still up 7.3% for the year-to-date. Just a week ago, the blue-chip stock index was at its highest level since before the Lehman Brothers bankruptcy in 2008.
The Dow has now given up all of its gains after the Federal Reserve’s announcement on Nov. 3 of its plan to pump $600 billion in fresh cash into financial markets.
…
people took a little profit..
Forget not that the $600B in purchases is spread out over 8 months. Buy the dips.
I made some good gains on my individual stocks this year. One stock I sold had short term gains that barely are counteracted by the long term loss I had in Pfizer stock. What a loser Pfizer was the last ten years. Buy and hold of Pfizer was a bad move I made.
Now Combo will be proud of all the fiat money I have from my proceeds.
I feel financially secure with my asset allocation. But if I was 100% in cash or 100% in precious metals, I would not be able to sleep at night. I certainly would not feel financially secure.
Gotta be keeping cash in brokerage firms ready for some good buys ahead.
“What a loser Pfizer was the last ten years.”
I’m surprised with Mr. Wiggley’s medication costing so much.
We’re screwed.
* REVIEW & OUTLOOK
* NOVEMBER 13, 2010
Embarrassment in Seoul
The world won’t follow slow-growth, weak-dollar America.
Has there ever been a major economic summit where a U.S. President and his Treasury Secretary were as thoroughly rebuffed as they were at this week’s G-20 meeting in Seoul? We can’t think of one. President Obama failed to achieve any of his main goals while getting pounded by other world leaders for failing U.S. policies and lagging growth.
The root of this embarrassment is political and intellectual: Rather than leading the world from a position of strength, Mr. Obama and Treasury Secretary Timothy Geithner came to Seoul blaming the rest of the world for U.S. economic weakness. America’s problem, in their view, is the export and exchange rate policies of the Germans, Chinese or Brazilians. And the U.S. solution is to have the Fed print enough money to devalue the dollar so America can grow by stealing demand from the rest of the world.
[President Barack Obama walks off the stage with Secretary of Treasury Timonthy (SIC) Geithner]
But why should anyone heed this U.S. refrain? The Germans are growing rapidly after having rejected Mr. Geithner’s advice in 2009 to join the U.S. stimulus spending blowout. China is also growing smartly having rejected counsel from three U.S. Administrations to abandon its currency discipline. The U.K. and even France are pursuing more fiscal restraint. Only the Obama Administration is determined to keep both the fiscal and monetary spigots wide open, while blaming everyone else for the poor domestic results.
The American failure was most acute on trade, as the U.S. and South Korea couldn’t agree on a bilateral pact that the two countries had signed three years ago. Mr. Obama had campaigned against that pact in 2008, let it languish for two years in office, and now suddenly wants the South Koreans to agree to new terms.
…
I’d like to comment on the MID thread from yesterday, then I’m off to visit a college.
The MID is destructive , in that, it encourages people to borrow more than they need. So many of my co-workers use their tax refunds as reasons to borrow more. Either they feel it is prudent borrowing (i.e. tax break) or it’s used as a crutch to offset overuse of their cc’s. We have all seen how the lack of personal finance planning and easy money has helped to ruin the economy. People need to be encouraged to pay off their mortgages, for retirement, not endlessly borrow more with tax incentives as the lure. Of course, the PTB want the opposite, so the MID will probably stay.
MID = federal government handout to the rich
Agreed.
The pols keep talking about putting/keeping families in houses, but how does something like the MID put a roof over the heads of the homeless in the park? (who were fighting again last night and woke me up) The MID is a debt pushing device, it has nothing to do with providing shelter.
Yesterday someone thought maybe they’d cap it at $500k. Now how does a person who can swing a $500k house need the MID? If they must keep it - then the threshold should be much lower - say 2.5x the median annual wage for zip code of the property. And zilch for HELOCs!
The MID is a debt pushing device, it has nothing to do with providing shelter.
How about the Student Loan interest deduction? Just another debt pushing device?
Not the same at all, joey. The student loan interest deduction is capped at $2500/year, and you can’t claim it if you make more than $55,000/year. It was designed to help young people with below average incomes, like my son’s girlfriend, who makes $30,000/year and pays $1400/year interest on her student loan.
There is no limit on the amount of the MID and no income ceiling. The wealthy use it to put themselves into a lower tax bracket.
The page I read (2009) said you gotta make less than 70K a year, or 145K if filing jointly. Not exactly poor folk..
http://www.irs.gov/taxtopics/tc456.html
——-
but i’m asking about the principle of the thing.
Are these deductions purposely designed and implemented to encourage debt?
That was me. I didn’t “think” they’d cap it at $500K. That was straight off of Slide 26 of the Debt Commission’s presentation. And, yes, except for our free-market hold-outs, everyone here thought junking the MID was a good idea.
Do you realize how funny that sounds? Our free market hold outs wanting to keep an artificial subsidy not for homeownership in general but just for using debt for the purchase of a house?
Stunning really.
I’ll add another argument against having any mortgage interest deduction, in line with one of my normal themes, administration. In order to maintain a mortgage intrest deduction, not only does the government have to administer the deduction on their end, but banks have to have calculate what they receive from each mortgage holder that is attributable to mortgage interest, put it into what ever reporting format is required (regulations!), and send it to the IRS. Getting rid of the MID frees the poor banks from the burdens of government regulation. Getting rid of the MID promotes free markets.
Same thing for all sorts of deductions that require direct reporting of the expenses to the IRS. My LLM university sent me a report each year of how much in “eligible expenses” they had reported to the IRS.
Some book I was reading a couple weeks ago but it best:
The middle-class doesn’t like admitting they’re on welfare. So instead of welfare checks, they get the mortgage interest and student loan interest deduction.
Ok, I’ll chime in: I’m a free-market-eer, and I would love to see the MID go away.
My reasoning? It distorts the free-market signals on both the buying and the lending sides.
Ok, I could probably come up with another dozen good reasons, but that one is enough for me.
Our belated second installment of our 2009 property taxes (Cook Co.) arrived yesterday. The tax on my hole in the wall went up a full 50% from 2008. Considering my building successfully petitioned for an reduction, it could have been even worse.
2008 reassessment for 2009 taxes was the last bubble-era reassessment up here, prices only really started falling after they completed their work. And oh man are prices falling now! Yesterday I learned of a short sale in a neighborhood I’m considering moving to sometime. Wow! If what I saw in that short sale is any indication, then prices here will far overshoot ~1997 pre-bubble prices.
Recently paid the property taxes on my 40 acres of paradise in Montana. The amount was …………..$105. I thought about making installment payments but eventually decided to bite the bullet and pay it all at once.
Weekend Investor
Nov. 12, 2010, 5:20 p.m. EST
Why gold is a bad investment
Precious metal lures susceptible buyers into a Midas crush
By Jonathan Burton, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold does not always glitter, but you wouldn’t know that from surging worldwide interest that has turned the yellow metal red-hot.
Gold has become highly prized bling, as anxious and astute buyers alike, from hedge-fund players to central bankers, flock to the “currency of fear.” Gold at around $1,400 an ounce is almost double what it commanded two years ago, and gold’s price is up almost 25% so far this year alone.
It’s been a great ride. Except gold is a bad investment
…
It’s already bubble-poppin’ time once again.
BwaHahAHhAAHAHAHHAHAHAHAHAHAAHHAAAAAAAAAAAA!
I wonder which of the bullion banks with massive short positions in precious metals is paying this shill to write such drek.
Sorry Sammy — just havin’ a little fun. Seems I touched a nerve, though…
So you’re not buying this dip?
There’s been too much speculation by people buying on margin. That was bound to end badly. I’m hoping for a deeper correction so I can increase my PM position. Given the inevitable result of Bernanke’s hyperinflationary policies, that’s the only way ordinary people can protect themselves, asset-wise.
‘a deeper correction so I can increase my PM position’
Some of you may remember my money and metals blog, and if so you’ve heard this before. I bought my first gold/silver back in the 80’s. After getting excited about the first few run ups, I finally decided that these things go up and then go down, or down then up. Over the years I settled on a view of PMs as a form of insurance. It’s something that I hope I don’t have to use, but it’s there if things go wrong. Like insurance, having too much is wasteful, and the lower the cost, the better. So I would be happy to buy gold at $20 ounce.
Another way of looking at it is speculating for profit. This past week, I was working in BFE and I happened to have a shortwave radio. At night I was listening to people getting a little silly about how much the markets were up. One thing to keep in mind; if gold had tracked inflation from the 80’s until now, it would be pushing $4000/ounce.
Ben,
I respect you so I am going to split this post into two.
[1] Agreed on the insurance angle. No more need be said.
[2] Completely disagree on the “inflation” angle.
The idea that inflation can be measured is absurd. Did gold track the rise in prices during the British 1840’s Railway Bubble?
Nope, but prices rose to price people out of the market just the same.
Later they collapsed but that doesn’t exactly help the people it helped price out, does it now?
There is no magic that makes prices track gold. This is a fantasy.
Credit is real. It was as real in the 14th century as it is today. Prices track credit. That’s how the game works.
All the Fed actually does is monetize the credit and say, here’s a new baseline now.
‘no magic that makes prices track gold’
I guess that’s what I’m saying. Or if it did at one time track inflation, it doesn’t anymore. And who out there is receiving nobel prizes for explaining this age of deflation? I decided there are better things to focus on, like buying RE for pennies on the dollar!
I’m with you.
Read below: The secret (hardly a secret, really) is called “free cash flow”.
“Over the years I settled on a view of PMs as a form of insurance.”
I concur, but this insurance has a price tag that is currently too high.
“Credit is real. It was as real in the 14th century as it is today. Prices track credit. That’s how the game works.”
Well said, FPSS. (good to see you around, BTW!)
I actually like to think of credit in today’s economy as “fake money”. After all, its springs from fraction-reserve lending as its genersis in our system, so it is fundamentally based on nothing except for some book entries.
But the fake part of it ends there. The credit-produced money-flows are flowing through the REAL economy. It is used to buy real goods; so it sends REAL demand signals to the real economy. And as a result, the real economy adapts to these signals. It is fundamentally altered in structure.
I personally believe credit growth or decline is like a big amplifier of the economy’s signals, on both sides of the equation. Packman differs with me on this, but it’s a conversation I’d like to have at more length sometime.
i read that one last night. The reader comments were the best part.
If anyone wonders why those people are so negative about everything, answer is there’s a whole lotta bugs who make comment on MarketWatch.
It will end badly for commodities.
Nobody sees a bubble in their favorite asset class. That’s why it’s important not to have any a favorites.
For the record, junk bonds, emerging markets (both bonds and equities) and commodities are in an absurd bubble.
Particularly, junk bonds.
It will end badly. It always does.
“Nobody sees a bubble in their favorite asset class.”
That’s exactly what makes bubble poppin’ such a fun educational experience. It is transformative to help others see the light!
Yep, it’s always awesome.
For the record, I like gold. Always did. I just never bought into the “Cult of the Gold and Only Gold”™.
Gold could easily double. Easily.
Then, it must crash.
PS :- If you like to “invest” rather than “speculate”, there’s only one variable that counts. It’s called “free cash flow”. I strongly suggest that people learn a few basics.
OK, I wish I would have bought some gold last year. I was a chicken.
http://market-ticker.org/akcs-www?post=172126
Bernanke’s QE2 explained (animated video). Simplest primer yet on how Goldman Sachs is controlling US economic policy to benefit the banksters.
Language not safe for work.
How QE2 will (not) work and how GS really is running our government.
http://www.youtube.com/watch?v=PTUY16CkS-k
Look , Countries are no different than households . If you have a Country
like the USA giving their income to another household rather than some
win/win situation with another household than eventually the USA household will go BK . America was simply the “Willing Horse ” while the Middle men and profiteers and other households took advantage of
the USA not operating in reasonable self-interest.
I don’t know of too families with aircraft carriers and nuclear weapons.
It seems we still have a problem in downtown Tempe:
http://www.azcentral.com/arizonarepublic/business/articles/2010/11/07/20101107biz-centerpoint1107.html
Centerpoint was a “luxury” (is there any other kind?) condo project that was halted two years ago when the financing ran out. The two towers have been sitting vacant since then, attracting homeless people and drunk college students who prowl around the largely unsecured property at night. The firm that agreed to purchase them several months ago planned to market them as “upscale” apartments for college students (presumably the same college students who are struggling to pay increasing tuition and fees and leaving school with loan amounts pushing six figures). Now, as I’m sure we’re all shocked to hear, they can’t get title insurance and there are several contractors liens against the property. So the buyers walked, and we’re back to square one with two towers deteriorating by the day (there’s almost certainly water damage in the unfinished one, and the cabinetry and wood finishes of the nearly completed one have been destroyed by three summers’ worth blazing AZ sun heating the interior to 140 degrees + during the day). I sense a controlled demolition in our future.
..high-end student housing…
The concept makes me wonder if the developers ever went to school.
..hadda use Google Images to find pix. Those are big buildings, and will make a big pile of shovel-ready rubble.
Mechanic’s liens are durable.
An older but worth-reading, in-depth look at these buildings:
“The almost-completed 22- and 30-story buildings at Sixth Street and Maple Avenue are dark, shiny hulks at night — tombstones for the Phoenix area’s devastated real estate market.”
http://www.phoenixnewtimes.com/2009-10-15/news/concrete-bungle-tempe-s-twin-towers-condo-project-collapses-financially-leaving-investors-in-the-rubble/
Just how many people did developers think make a million dollars a year?
Once again, the economy for the rich mistook the map for the terrain and then drank their own kool aid.
This is poetic justice.
>i>Karl Denninger calls out the Left on their failure to acknowledge that their champion of Hope & Change has been a case of “meet the new boss/same as the old boss.”
Your (the Left’s) President didn’t actually:
•Refuse to declare a banking holiday and take the banks into receivership as his first act as President. You know, after stating he wasn’t elected to cater to Wall Street? Yes, that.
•Appoint the chief looter from the NY Fed to head Treasury - a guy who admittedly cheated on his own taxes and blamed it on a computer program. Yes, the same guy who had to know that Citi was writing crap mortgages (and selling them, since those securities were repo’d through the NY Fed literally daily) and had constructive notice of Lehman’s failure more than a month before it blew up. Yet this was “Hope and Change”’s choice to head Treasury.
•Reappoint Bernanke to The Fed and remain supportive of him to this day - even after Alan Greenspan admits, this last weekend, that the banks were engaged in criminal activity. An honest politician (can you use those two words in the same sentence?) would react to this by demanding Bernanke’s immediate resignation, given that Bernanke was at The Fed while Greenspan ran the joint!
•Extort FASB to allow the banks to appear to be solvent when they’re really not. Yes, that hearing. I’m sure you remember it. Spring 2009 and Kanjorski. I remember it well. Yes, it resulted in a huge stock market rally. But the bad debt is still there.
•Spent over $3 trillion dollars of borrowed money to cover up all of the rotting dead fish on the bank balance sheets. That’s right. “Stimulus” that didn’t - not one dime directed into an emergency plan to, for instance, build nuclear power plants (and therefore help solve our energy dependence.) No, instead the entirety of the program was and is about covering up fraud.
•Has failed to direct Holder to issue even one indictment against a major bank for their role in the financial mess. Over 150,000 admitted fraudulent affidavits later and an economic collapse and yet not one indictment has issued. Not one. Never mind the bogus MBS that almost-certainly have no actual securitites in them - that is, they’re empty boxes. How do I know this? Becaese there are multiple people who have it on good information that this is exactly what happened - and they’re very believable, in that if it wasn’t what happened someone would have shown up with a properly-endorsed note. Somewhere. Of course you can’t produce what doesn’t exist……
The so-called “progressives” are not progressive at all. Oh sure, we hear bleating about “Green Jobs” and similar, but this is small potatoes. The problem lies in the looting - and until it stops, there will be no solutions that work.
Democrats want to pretend they didn’t have their fair part in this. Barney Frank wasn’t really sleeping with one of the Fan/Fraud crowd - literally - post their “employment.” There really wasn’t an attempt to deflect any meaningful reform that came out of Dodd. The extortion of FASB wasn’t “real.” The indictments didn’t need to be issued. And so on.
Cut the crap folks. The so-called “Progressives” are anything but. You want to argue over Abortion and Gays in the military as a diversion for the looting that you have permitted exactly as have the Republicans!
Sammy ……Great Post
Thanks - I’ve become a big fan of Karl Denninger, expecially after he called out Sarah Palin & her ilk for the Statist frauds that they are.
Abortion is the No. 1 issue and sometimes only issue that matters for millions of conservatives. Especially the Catholic and Evangelical Republicans, of which there are many. If Obama suddenly became pro-life and McCain just as suddenly became pro-choice, many would have been obligated to vote for Obama.
Huh? And a bunch of progressive women would have voted for McCain. And if your aunt was a man she’d be your uncle.
Report: 80 percent of Las Vegas homeowners underwater on mortgage
Las Vegas home values as measured by Zillow fell 4.2 percent in the third quarter and pushed the region’s percentage of underwater properties to 80.2 percent.
The number of homes underwater — when property owners owe more on their mortgage then the home is worth — increased from 78.1 percent in the second quarter, the Seattle-based firm reported. Phoenix ranked second with 68 percent underwater during the third quarter.
http://www.lasvegassun.com/news/2010/nov/11/report-80-percent-las-vegas-homeowners-underwater-/
All homes or just those with a mortgage? couldn’t tell from story, but I’m half asleep too..
http://www.thesun.co.uk/sol/homepage/features/2651937/The-people-living-in-drains-below-Las-Vegas.html
More and more denizens of Los Vegas aren’t just underwater, they’re underground. Literally.
Not to worry, Vegas is saved …
“Harrah Eyes $531.3 Billion IPO And Plans To List Shares Under New Name.”
“As the company looks for growth in the near future, it points to an earlier announcement of a retail, dining and entertainment development project in Las Vegas, the completion of a new 600-room hotel tower at Caesars Las Vegas and a potential joint venture with Rock Gaming to build casinos in Cleveland and Cincinnati, Ohio.”
IPO = Lemming food.
The IPOs are coming out of the woodwork in hopes of sucking in money from hopeful investors while the sucking is good.
I think I’d rather go with the upcoming GM IPO rather than this one.
that is great .the lemmings are going to be introduced to GM again soon.
“IPO = Lemming food.”
Great stuff for the public pension systems.
Now we are engaged in a great National debate over were the
great distribution of the tax burdens will fall ,who will be the winners
and losers .
First the great debaters start out with the premise that we all share
in the burden of playing down a National debt that trillions were created
by specific groups that were engaged in a fraudulent Ponzi- Scheme that ended up enriching themselves .As if we all should have collective guilt
for what a bunch of fraudulent kingpins got away with and were bailed
out as if they were a deserving group that had social value rather than a criminal that needed to be taken from the streets .
So than the talking points go on to attack a insurance system called SSI
in which the receivers paid in for years ,but Congress robbed that fund
for other needs . So now they argue that the old lady living on $1000.00
a month who can barely survive should be thrown into poverty and not get any cost of living increases because damn it everybody should pay .
Further the talking points start out with the premise that Insurance Monopolies should not play and their only function in life is to increase their payments yearly because profit is their right .
Further the talking points don’t go near the premise that the culprits or industries that got ill-gotten gains by fraud or monopoly advantage should not be touched in spite of them being the parties responsible for the great National Debt ,or a big portion of it .
Maybe we should start out with talking points of who/what group was unjustly enriched by all the schemes and scams and those are the parties and groups that owe the greater share of burden to the new great distribution of burden .
And than you have the welfare receivers that should be cut in the minds of the one side of the battling forces ,so another group can take their profits
out of this Country and further destroy our tax base and SSI base .
I think people have to look at the Great re-distribution in terms of what cuts will keep money in America and prevent more people joining the ranks of below the poverty line .Cuts to the top 10% and Corporations and Wall Street and Banks insure more money going out of America furthering
our inability to pay the bill .
“I think people have to look at the Great re-distribution in terms of what cuts will keep money in America and prevent prevent more people joing the ranks of below the poverty line.”
“… keep money in America…”
A good start would be to stop the thinking that our “consumer-based economy” is such a wonderful thing to behold.
Still the bill has to be paid and some ways are better than others .
the only thing thats means a damn is old dogs and children and watermellon wine anyway .
What’s the alternative to the consumer-based economy.. export based?
It would take a LOT of wealth to consume everything the USA is capable of producing. What countries are wealthy enough to afford to buy all of our exports?
An consumption-based economy requires immense wealth.. enough to overcome huge trade deficits.
Consider that we will destroy several country’s export markets once we start producing products. We could undercut any price on any product if we wanted to.
Germany got around the problem by lending it’s customers money so they can buy German products. That strategy is strictly short term.
How about the term “balanced economy”.
An economy that is seventy-one percent consumer-based sounds to me to be an unbalanced economy.
“It would take a LOT of wealth to consume everything the USA is capable of producing.”
Our consumer-based economy doesn’t have any problem PRODUCING; Producing is not the problem. The problem is getting BUYERS to BUY what we are capable of producing.
71% consumer based might sound unbalanced, but maybe the world can’t afford to buy more from us than it is now buying. Maybe we are selling all the world can afford to buy.
That’s the thing.. if you wanna sell stuff, your customers must be prosperous enough to afford that stuff.
It’s been said (by you combo if I’m not mistaken) that we are making the world more wealthy by our heavy consumption. Dollars are leaving the US for parts unknown.
Well, that’s one way to build a wealthy customer base… give them another ten years and maybe their economies will be big enough to stand alone, and they won’t need our help.
And people without jobs or stability in the jobs they do have, don’t, won’t and can’t buy anything.
“…give them another ten years and maybe their economies will be big enough to stand alone, and they won’t need our help.”
This true. If we ship over to them all of our wealth then they definitely will be standing alone.
I am not among those who think we are giving away the farm… for a couple reasons.
First of all, almost everyone is very concerned about the possibility.. and that alone insures we will never let it happen.
Second, and more importantly, there are natural checks and balances in play.
——-
If current trade practices are ultimately disadvantageous to the people of the USA…. if they lessen our income or lower our standard of living, we must naturally slow our spending and consumption.
Countries which were the beneficiaries of our money will then get less of it, and they will likewise suffer.
Such a trade situation cannot persist. Something will change, and it won’t require conscious thought or deliberate effort.
http://www.youtube.com/watch?v=l1aGT-8WwTc
Robo-Signer Crystal Moore deposition. Unbelievable. Unleash the class action lawsuits!
Agreed. WTF were they thinking? I think this may be the tipping point to kill of some of the zombie banks - double edge here: foreclose process mucks up (and gets a lot of people to stop paying too I’d bet) + a ton of liability and fees and PR nightmares.
Home >> Special Offers
Special Offers
New Buyer and Selling Agent Incentive on HomePath® Homes
Fannie Mae is offering buyers up to 3.5% in closing cost assistance and a $1,500 bonus for selling agents on HomePath properties through December 31, 2010.
Buyers and selling agents must meet the following qualifications to be eligible for the incentive:
•HomePath property sale must close on or before December 31, 2010 and close within 60 days of offer acceptance
•Only owner occupants purchasing a HomePath property as their primary residence will receive up to 3.5% in closing cost assistance
•Only selling agents representing owner occupants purchasing a HomePath property as their primary residence will receive a $1,500 bonus. To be eligible for the agent’s bonus, the initial offer must be submitted on or after September 23, close within 60 days of offer acceptance and close on or before December 31, 2010. No bonus will be given for investor purchases.
•Buyers and selling agents must request incentive upon submission of initial offer in order to be eligible.
Uh, there’s a post from 2006 on the home page..
Lots of ‘em.
Gee we talked a lot about real estate back then, and not so much about politics.
Red, White and Blue Chips
Nov. 12, 2010, 8:58 a.m. EST
Vacation homes are being downsized
Some resorts are slashing prices for vacation homes. And the size of second homes is shrinking as the fallout from the housing market meltdown continues. Ann Cates reports.
Bailout time again already so soon?
* EUROPE BUSINESS NEWS
* NOVEMBER 13, 2010, 3:38 P.M. ET
EU Urges Ireland to Take a Bailout
By MARCUS WALKER, BRIAN BLACKSTONE And NEIL SHAH
European officials are encouraging Ireland to accept a bailout to restore confidence in its solvency and stop the spread of financial-market turbulence to other euro members, according to senior EU officials.
Many European policy makers increasingly believe that early action on Ireland would be better than waiting until markets force the country’s hand, recalling that repeated delays in coming to Greece’s aid this spring led to a near-collapse of investor confidence in the whole euro zone, officials say.
European Union officials are due to discuss the possibility of a bailout for Ireland at a series of meetings in Brussels early next week, amid growing concern that investors’ loss of confidence in Irish government bonds could spread to Portugal and Spain.
Ireland’s government remains reluctant to accept the loss of sovereignty and deepened austerity that a bailout would likely entail. An EU-led rescue package would include a tough policy program drawn up in conjunction with the International Monetary Fund, people familiar with the matter say.
Ireland has repeatedly said it is not seeking a bailout from the EU or IMF. Irish Finance Minister Brian Lenihan told Ireland’s RTE Radio One on Friday that “we have not, contrary to much speculation, applied to join any facility, or avail of any facility.”
However, Mr. Lenihan said European officials have grown worried about rising turbulence in the bond markets of the euro zone’s weaker economies. “Our European partners are anxious to bring this matter to a resolution,” he said, adding that Irish officials are “in constant liaison with the Central Bank and with the (European) Commission.”
…
* OPINION
* NOVEMBER 13, 2010
The Trouble With Robo-Lending
There’s a lot to be said for bankers knowing their customers. Too bad the financial reform bill does nothing to restore that tradition.
By AMAR BHIDé
The scandal of the improper handling of foreclosures won’t go away. GMAC Mortgage and J.P. Morgan Chase are investigating whether their employees engaged in practices such as the “robo-signing” of foreclosure documents, falsely asserting that they personally reviewed the details of each case. The Federal Reserve has announced its own “intensive review.”
Illegal repossessions are deplorable. But it is also time to confront the long-term problem of robo-lending that led to the robo-foreclosures.
Traditional mortgage lending was based on on-the-spot decision making. Bankers would evaluate mortgage applications taking into account what they knew about the applicant, the property and the local market, and after talking to borrowers to ascertain their beliefs and intentions. Staying in touch afterward facilitated judgments about adjusting terms, if that became necessary. Foreclosing without knowledge of the specific circumstances was out of the question.
But high-touch gave way to high-tech. Statistical models that took no heed of specific circumstances replaced the bankers’ on-the-spot judgments. The use of models also facilitated securitization. Investors could know precisely the values of all the variables (such as the borrowers’ credit scores) for every mortgage that was securitized and didn’t have to worry about the poor judgments of lending officers. Mass production ensured a dependable, high volume supply of the raw material needed.
Giant data-processing factories collected and passed on mortgage checks and took responsibility for foreclosures if borrowers couldn’t pay. And when the housing crisis hit these thinly staffed operations were trapped between their contractual obligation to security holders to foreclose and the legal requirement for case-by-case review. Robo-signing was an almost inevitable result.
Advocates of high-tech finance continue to applaud judgment-free lending as an advance comparable to Henry Ford’s assembly line. Models, they say, reduce the costs of making lending decisions. Making it easy to securitize mortgages also helps investors diversify. And because diversification reduces investors’ risks, home buyers can borrow more cheaply.
In fact, the mass production of consumer loans isn’t like the mass production of consumer goods. Robo-lending and the securitization it facilitates lead to the misallocation of capital and economic instability. In models used to assess creditworthiness the income of an employee of an auto plant scheduled for closure is indistinguishable from the income of a federal judge. Moreover, not all lending can be easily mechanized. Arguably small business lending has been neglected because it is harder to mass produce than housing loans.
…
Matt Taibbi’s Devastating Portrait of Florida’s Rocket Docket Foreclosure Courts
Published: Saturday, 13 Nov 2010 | 11:37 AM ET
By: John Carney
Senior Editor, CNBC.com
The latest issue of Rolling Stone is out with a devastating portrait by Matt Taibbi of the foreclosure process in Florida. If it pierces the public consciousness the way Taibbi’s articles on AIG and Goldman Sachs did, it could be a game-changer.
The set-up is pretty simple. Taibbi goes down to Florida and sits in on one of the make-shift foreclosure courts Florida has set up to deal with the enormous volume of foreclosure cases in the state. It’s really just a small conference room run by a formerly retired judge who has been brought on to speed through foreclosures.
Taibbi discovers far worse than sloppy paperwork on the part of banks—although he discovers plenty of that too. He discovers that the foreclosure process is heavily skewed to favor the banks. If a homeowner doesn’t show up to defend himself or herself, the judge issues the foreclosure order. If the bank fails to send a representative, he just pushes back the date. When a bank submits a trail of ownership of the mortgage note that makes no sense, it just comes back later with a different set of ownership documents.
From Rolling Stone:
Is this a fair portrait of the foreclosure process? We have no idea. But it may well wind up changing the politics of foreclosure in a way that could make it far costlier for a bank to foreclose on a homeowner. Depending on your point of view, that could either convince banks to be more open to loan modifications or keep the housing market in turmoil for even longer. But poison or pure, this apple looks ripe for the picking.
…
Get a copy now at the deflated 50% off price of $13 and change!
Rolling Stone writer rips Goldman Sachs in new book
In ‘Griftopia,’ Matt Taibbi lambastes the bank’s ‘air of superiority’ amid financial crisis
By Christine Kearney
Reuters
updated 11/12/2010 9:49:58 AM ET 2010-11-12 T14:49:58
NEW YORK12 — Rolling Stone writer Matt Taibbi famously compared investment bank Goldman Sachs to a giant money-sucking vampire squid a year and a half ago. Now his new book “Griftopia” apportions more blame for the financial crisis and fallout.
The new “grifter class” of America who have successfully defrauded the average Joe are the major players on Wall Street propped up by willing politicians, Taibbi says in his recently published, “Griftopia: Bubble Machines, Vampire Squids and the Long Con That Is Breaking America.”
The 250-page book employs the colloquial style of Rolling Stone magazine to detail the roles of major players such as former U.S. Federal Reserve Chairman Alan Greenspan in the destabilization of the economy in the lead up to the 2008 crisis, and why Goldman Sachs got a $10 billion federal bailout while other banks were allowed to fail.
Taibbi says “a concentrated group of connected financial companies that are growing bigger and bigger all the time,” now wield “enormous political influence.” He compared them to powerful interests in developing countries who “write the rules of the game so that they can’t lose.”
“They are the dominant political powers in the country now,” he told Reuters in an interview. “When you get so much political influence that you can’t not make money, it’s just like a license to steal and that is what the book is about.”
Goldman Sachs, he added, became a favored target of his partly because former Goldman officials crossed over to government positions. Hank Paulson, a former Goldman CEO, was U.S. Treasury Secretary when he decided to bailout Goldman Sachs while rival Lehman Brothers was allowed to fail.
“I don’t think there is a parallel in American history that is worse than that,” he said. “There is a particular culture at that bank that is different from other banks, they cultivate this air of superiority.”
Taibbi said he is not surprised Goldman soon posted record profits after the bailout since they were allowed to borrow from the government at near zero percent interest and lend that money back to the government in the form of U.S. Treasury bonds at a higher rate.
“It’s like hooking an ATM machine up to the United States Treasury — that is one of a dozen different ways Goldman got money from the government,” he said.
Goldman Sachs declined requests to comment on the book.
…
Florida’s foreclosure courts get harsh look
By Robert Trigaux, Times Business Columnist
In Print: Saturday, November 13, 2010
Should we be surprised that the Rolling Stone writer who called Goldman Sachs the “great vampire squid wrapped around the face of humanity” would find judges rubber-stamping foreclosures no less evil?
Rolling Stone hit newsstands Friday with an expose of Jacksonville’s “rocket docket” courts. These slam-bam courts were concocted not with legal fairness in mind but to expedite thousands of home foreclosures — too many of them poorly or fraudulently documented — sought by lenders against Floridians behind on their mortgages.
The story by Matt Taibbi is kind neither to the court and its judges nor the attorneys and their client banks. The story’s headline is a giveaway: Courts Helping Banks Screw Over Homeowners. Here’s one memorable excerpt:
“The judges, in fact, openly admit that their primary mission is not justice but speed. One Jacksonville judge, the Honorable A.C. Soud, even told a local newspaper that his goal is to resolve 25 cases per hour. Given the way the system is rigged, that means His Honor could well be throwing one ass on the street every 2.4 minutes.”
…
Dunedin foreclosure leaves homeowners in limbo
Michael D. Carlson recently filed a motion to undo a foreclosure judgment against him from 2008. Carlson wants his home in Dunedin back. The problem is the lender sold it to another couple. (Nov. 11, 2010) [Kris Hundley & Ilyce Meckler]
Mansion for rent; family rents rooms to avoid foreclosure
Tim and Trese Canham worked for years building the home of their dreams from scratch. As the economy slowed, so did the family’s ability to pay bills as foreclosure looms. [Joseph Garnett, Jr. | tampabay.com] (Oct. 1, 2010: East Lake, Fl.)
Foreclosure predictions from the Fed:
2010 2.5m
2011 2.5m
2012 2m
Total 2010-2012 7m
That’s a lot of shadow inventory for the housing market to work through over the remainder of the 20-teens decade!
Fed Official: Foreclosures No Better In 2011
Posted: November 13, 2010 at 8:42 am
Foreclosures, along with unemployment, are the plague that continues to bedevil the economy. The problem has caused the collapse of Fannie Mae and Freddie Mac, which could eventually cost taxpayers over a half a trillion dollars. The housing problem was also a major contributor to the credit crisis. And, beyond foreclosures, a drop of home prices, which exceeds 40% in some markets, has stripped away trillions of dollars in consumer net worth which has left millions of Americans without any equity left in what was once their primary asset.
One of the governors of the Federal Reserve, Sarah Bloom Raskin, says the worst is not over.
“Our projections remain very grim for the foreseeable future: All told, we expect about two and one-quarter million foreclosure filings this year and again next year, and about two million more in 2012.”
…
The Associated Press November 12, 2010, 3:43PM ET
Housing shares fall on drop in DR Horton’s orders
NEW YORK
Housing stocks dipped Friday after one of the major national homebuilders reported a 21 percent decline in new orders, a sign that the housing market is still struggling.
D.R. Horton Inc. said Friday its revenue slid 9 percent in its fiscal fourth quarter on fewer sold homes. Orders for new homes dropped to 3,979 homes during the period, down from 5,008 a year earlier, the Fort Worth, Texas, company said.
Other homebuilders have reported similar declines in demand for the most recent quarter. PulteGroup Inc. said its new home orders slid 12 percent from a year ago and roughly 15 percent since the second quarter. Meritage Homes Corp. said orders were down 36 percent from a year ago, while Ryland Group Inc. posted a 37 percent drop in orders.
Home sales received a boost earlier this year as federal homebuying tax credits convinced buyers to take the plunge. But since the credits expired at the end of April, buyers have been reluctant to purchase because of job fears, tight credit and further erosion of home values.
…
Home / News / Local News
Montana suffering its share of foreclosure pressures
By JAN FALSTAD Of The Gazette Staff The Billings Gazette
| Posted: Sunday, November 14, 2010 12:15 am | No Comments Posted
Troy Boucher lightly kicks away pieces of the front door lock he destroyed getting into a foreclosed split-level home along Buffalo Trail east of Shepherd.
Boucher is a broker and owner of Boucher and Associates. He said the mortgage lender hired him to clean up the home sitting on an acre of what used to be farmland and then get it sold for as much as possible.
After falling behind in their mortgage payments, the homeowners left, taking all the appliances, even carting off the propane fireplace in the living room. Old toy boxes were left piled in the garage being remodeled into a playroom for the kids.
“This is kind of typical. They sort through what they want and leave everything else,” he said.
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