Bits Bucket for December 26, 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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Name:Ben Jones
Location:Northern Arizona, United States
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Now that Christmas is over, I feel relief. And we’re about due a terrific snowstorm here on Long Island. Waiting for the sky 2 fall.
I hope you get dumped on in LI and it misses us in NYC….nah nah nah!!!…..
In wainscott ny on li now…it’s really coming down…too much for this southern boys liking. Anyone know how much DC got? Heading back there on Wednesday.
DC got flakes.
Maybe half an inch. But if you’re driving to DC, the 95 corridor is getting smacked.
“DC got flakes.”
duh
Better yet, flakes with a bunch of wind behind them.
I was out and about today. If there had been more snow we would have been in a white out because of the wind. Those of you who are in the path (north and east) please be careful.
Sounds fun!
BTW, do you work for the Fed (aka Lenderoflastresort)?
How about a 45 year moratorium in foreclosures? Then extend unemployment benefits to, oh I don`t know say 25 years. Would that be enough for ACORN?
” Forty-five days is not a long enough moratorium; it doesn’t include those families already in foreclosures”
Crist Announces Florida Banks Halt Forclosures for 45 Days
TALLAHASSEE, Fla. – Dec. 3, 2008 – Florida’s bankers and credit unions announced Monday that they’d suspend foreclosing on homeowners for the next 45 days.
Gov. Charlie Crist called a press conference to announce the halt in foreclosures, but neither he nor the president of the Florida Bankers Association, Alex Sanchez, could say how many people this could help.
The halt in foreclosures, however, wouldn’t help the 444,000 property owners who are in the process of being foreclosed upon. Florida has the third-highest foreclosure rate in the nation. Crist, who said last week that he would consider issuing an executive order halting foreclosures, said this moratorium would only cover homeowners with a homesteaded property who need the help.
“This is to help people in a time of need,” Crist said. “This is not for somebody who went and bought a bunch of condos in South Florida on the spec market.”
The housing-and-wage advocacy group ACORN called for more action from Crist and the banks.
“While we eagerly await more details, recent history has shown that voluntary measures have fallen fall short of addressing the enormity of the foreclosure crisis Florida faces,” ACORN organizer Paul Griffin said in a written statement. “We appreciate that the industry has delayed the crisis but now they need to help us solve it.”
Orlando Democratic state Rep. Scott Randolph, whose wife is an ACORN organizer, found greater fault with the proposal, saying in a written statement that “what they have offered Floridians is not relief, but rather vague promises made by unspecified lenders. Forty-five days is not a long enough moratorium; it doesn’t include those families already in foreclosures; and today’s press conference left Floridians wondering if their bank is even included in the offer.”
Again NO help for renters in the same boat….dumb and dumber
Again NO help for renters in the same boat….dumb and dumber
I’m a renter, and I don’t need, want or expect government “help.” I want the gov’t to butt out entirely from the housing business, since gov’t meddling has enabled rampant speculation and moral hazard, and shielded FBs and reckless lenders alike from reaping their just desserts. When gov’t “helps” somebody, it means they are taking money away from somebody else to fund said help, or worse yet borrowing it from the Chinese. That’s a fundamental concept that most of the sheeple still don’t grasp.
What would John Galt do?
I’m a renter, and I don’t need, want or expect government “help.
————————————————————————-
You’re helping the govt to pay for this BS.
The government’s real estate price support policy, which is designed to help home owners and banks, is detrimental to renters, as it higher housing prices support higher rents and make it more expensive for renters to get on the property ladder.
I supported Ron Paul. It’s not my fault that 95% of the electorate supported Statist politicians like Obama and McCain.
What a joke. Neither FBs or the banks are being held accountable for their own greed & stupidity. Nobody forced these fools to buy or lend into a housing bubble. Extend & pretend only defers the final reckoning day.
ACORN? Those guys are great! They tried to hook Hannah Giles and James O’Keefe up with no doc loans to run a bootyfactory employing sub-teenage girls from El Salvador.
Fodder for retards. And look who consumed it. lmao.
You’re a smart kinda guy, Zeus. Educate yourself on this one so you don’t look like a hand tool.
Too late. See below.
ACORN expose ‘pimp’ James O’Keefe among 4 accused of trying to tamper with senator’s phones
Published: Wednesday, January 27, 2010, 10:53 AM
Updated: Wednesday, January 27, 2010, 11:49 AM
The Associated Press By The Associated Press
YouTubeFilmmaker James O’Keefe dressed as a pimp before entering ACORN offices last year. O’Keefe was arrested Monday after allegedly attempting to tamper with U.S. Sen. Mary Landrieu’s office phones in New Orleans.
New Orleans — The four men accused of trying to tamper with Democratic U.S. Sen. Mary Landrieu’s office phones share a common experience as young ideologues writing for conservative publications. Here are some more details about who they are, and details the incident state Democrats are calling “Louisiana Watergate:”
Who are they?
» Read the FBI affadavit
» O’Keefe: ‘I am a journalist. The truth shall set me free.’ [The Atlantic]James O’Keefe, 25, who became a darling of conservatives after he posed as a pimp with his prostitute last year in a hidden-camera expose of the liberal group ACORN.
O’Keefe brought a young woman posing as a prostitute to ACORN offices where staffers appeared to offer illegal tax advice and to support the misuse of public funds and illegal trafficking in children.
The videos were first posted on biggovernment.com, a site run by conservative Andrew Breitbart. In the past, Breitbart has said O’Keefe — now a paid contributor to BigGovernment.com — is an independent filmmaker, not an employee.
In an e-mail to The Associated Press, Breitbart said: “We have no knowledge about or connection to any alleged acts and events involving James O’Keefe at Senator Mary Landrieu’s office.”
Joseph Basel, 24, formed his own conservative publication at the University of Minnesota-Morris.
O’Keefe and Basel gave a joint interview Jan. 14 to CampusReform.org, a Web site that supports college conservatives on student publications.
Stan Dai, 24, is a former assistant director of a program at Trinity Washington University that taught students about careers in intelligence, university president Patricia McGuire said. It was part of a national effort to interest students at liberal arts colleges in careers in intelligence but did not teach spy craft, she said.
He was listed as a “freelance consultant” in a Junior Statesmen program at the Central Intelligence Agency, where he appeared as a speaker.
Robert Flanagan, 24, wrote for the conservative Pelican Institute and had recently criticized Landrieu for her vote on health care legislation. Flanagan, the only suspect who lives in Louisiana, is the son of the Bill Flanagan, acting U.S. Attorney for northern Louisiana. President Barack Obama recently nominated Stephanie A. Finley for the U.S. Attorney’s post.
What happened?
Federal authorities said Basel and Flanagan posed as telephone workers wearing hard hats, tool belts and flourescent vests when they walked into the senator’s office inside a federal building in New Orleans on Monday. O’Keefe and Dai were accused of helping to organize the plan.
A federal law enforcement official said one of the suspects was picked up in a car a couple of blocks away with a listening device that could pick up transmissions. The official spoke on condition of anonymity because the information was not part of the FBI affidavit. Another official said Dai was the suspect arrested outside.
All four suspects were charged with entering federal property under false pretenses for the purpose of committing a felony, which carries a penalty of up to 10 years in prison and a $250,000 fine.
“It was poor judgment,” Flanagan’s lawyer, Garrison Jordan, said. “I don’t think there was any intent or motive to commit a crime.”
Freelance media whores of any persuasion illegally planting wiretaps to eavesdrop on citizens, even elected officials, is criminal, creepy, and wrong. It won’t bother me to see these clowns get the book thrown at them.
I am sure what those kids did in the ACORN offices was illegal, but that was a major broom job by somebody.
Thank you for giving us your legal opinion.
They were eventually brought up on charges of illegal wiretapping a federal official, (major federal time) but managed to plea bargain down and be convicted of federal trespassing with a very long probation period.
Although ACORN was to lose its federal funding due to O’Keefe’s actions, it was later declared un-constiutional after his fraud was exposed.
As for ACORN itself, I’ve learned that they are under constant MSM assault and any story related to them must be researched and taken with a grain salt… either way.
The upside of it all is that because of their persecution, it also makes it easier to spot the MSM/ditto head tools.
Barry and the Dems are still giving Millions Of your money to Acorn.
Good. I agree and support ACORN’s fundamental goals.
..just havin’ a little fun to see who would get defensive and swallow.
How’s this one?…Sarah Palin/Zell Miller 2012.
Just pointing out who is dumb enough to believe it.
“How about a 45 year moratorium in foreclosures? Then extend unemployment benefits to, oh I don`t know say 25 years. Would that be enough for ACORN?”
No.
“Florida’s bankers and credit unions announced Monday that they’d suspend foreclosing on homeowners for the next 45 days…”
…thus extending the duration of economic pain for an additional 45 days.
This story is 2 years old. Why the repost?
Answer: Jeff is a troll.
Snowing lightly here. We will just get a dusting, which is all we’ve ever seen in the 5+ years we’ve lived here.
2010 is almost gone! Did Einstein’s theory of relativity cover the phenomenon of time speeding up as one gets older?
Life is like a roll of toilet paper, it goes faster as
you near the end of the roll……
Life is like a shat sandwich.
The more bread you have, the less shat you have to eat.
The less bread you eat, the less you shat.
And all the good freebies for old guys may not be so wonderful anymore.
The local ski resort, Bogus Basin, is giving away free season passes if you are over 70 years old.
http://www.idahostatesman.com/2010/12/26/1467260/does-bogus-really-give-away-passes.html
I applaud them for trying to cut health care costs for the rest of us by starting their own soylent green double diamond trail.
Our rent is $875 per month. It looks like we may be able to buy our first house for about $80,000 if we move east of the Triangle - unless the houses we looked at online are all in ghetto areas. We could probably put down about $20,000. Even though I think housing will continue to drop, are we crazy for looking? From my online searches over the years, it finally seems like prices near Raleigh are starting to drop
Also, don’t flame me, but if we do decide to look in real life, how do we pick a good agent? Or how do we do things without an agent?
“unless the houses we looked at online are all in ghetto areas”
That is what has been allowed to drop in SE Florida, decent neighborhoods are still propped up at unsustainably high prices.
how do we pick a good agent?
Avoid the ones with cloven hoofs & forked tongues who reek of sulphur & deception. Oh wait, that’s all of them.
“how do we pick a good agent?”
Ask exeter.
Realtors are Liars.
On an equal note, commit to none of them. If you’re interested in seeing a place, schedule a showing and offer the RealTard a $100 bill at the end of the showing and only if you think you want to work with that particular realtard. If he accepts it, he might be worth working with. If they yammer on about “ethics” and refuse to take it, walk away. Any realtard who refuses to accept a donation is a diehard RealtLiar of the most legalistic type.
Also, incentivize the lower price. Once you find a realtard hungry enough, offer him in cash the delta between ask and sell prices with the caveat that there will not be an offer at a price greater than __% of asking.
“offer him in cash the delta between ask and sell prices”
While I get that this aligns his incentives with yours in terms of bargaining the price down instead of trying to bargain you up (and I fully support that alignment), wouldn’t this also give him an incentive to steer you towards houses that have more ridiculous asking prices, since presumably he could negotiate a higher percentage reduction on those?
The well-documented realtor proclivity to throw “clients” under the bus if a quick commission is involved can work to our advantage. The whole concept of “buyer’s agent” pushed by NARsters is inherently fraudulent, as both sellers and buyers agents have a vested interest in extracting the highest possible price out of the buyer. But if the seller’s agent gets to pocket the whole 6% without splitting it with another realtor, they will have every incentive to cut a deal as quickly as possible, i.e. lower the price to close the sale.
So you suggest that I don’t choose an agent and then offer $100 after a showing if I like the seller’s agent? Why is mentioning “ethics” such a warning sign? Is it something only slick agents say? Keep in mind, I’ve never bought a house and both our sets of parents haven’t bought a house in decades, so we are completely inexperienced in this area. I want to be forewarned and avoid trouble, which is why I’m asking for advice here.
The closest thing we’ve had to a real estate agent is dealing with potential landlords. I’ve learned to not believe any promises they make that aren’t in the lease (and even then, I doubt they will keep their promises until they deliver). We read every lease, too. (The longest was 18 pages! For an apartment! Our rental house lease was much shorter.) I’m even more leery with buying a house. So many people lie left and right today.
You’re offering $100 for their time and effort. Personally, I demand alot and their effort is worth the $$ to me. If they accept $, you’ve succeeded to some degree in moving them to your side. Money talks, BS walks. If the shack has been sitting for months and you’re a serious buyer, the real-tard is going to detect it. A gratuity cements that attitude but that’s just me. I won’t be steered by a minor player in the REIC. If $50 or $100 is a big deal then you should reconsider.
BTW, I’ve had 2 realTards accept a gratuity already and 1 reject. One that accepted escorted us all over two different counties in an un-named state for an entire weekend. We liked her and she was a friend of a friend and her knowledge was worth the $$. We’re still working with the other that accepted the gratuity. He’s also acknowledged and accepted the delta between ask and offer. And unbelievably, he agreed to it in writing(email). I knew I could work with this guy as we’re both in heavy construction(formerly in his case) and he knows whats on the menu for housing. He’d make a good contributor here on the HBB.
“He’s also acknowledged and accepted the delta between ask and offer.”
Wouldn’t offering him ALL of the delta between ask and offer mean that you would end up paying ASKING price regardless of what offer ends up being accepted?
Or are you only offering him a percentage of the delta? If so, what percentage?
Ooops….. I should have been specific. The delta on the *commission*.
Ah. Offering him the delta on the commission makes it a wash for him what the eventual accepted offer price is. It sounds like he gets the actual commission, plus the delta; that would work out to him getting exactly the commission on the asking price. In other words, he has no incentive to work the price down.
I think I would offer him the base commissions (e.g. at accepted price) plus 2X the delta. In other words, he wins as the offer is lowered, just as you do. Aligned incentives are a good thing.
“In other words, he has no incentive to work the price down.”
Not true.
1) He knows I’m a cash buyer and a guaranteed commission at a specific price.
2) He only gets half the commission on the transaction price because he must split it with the house. 100% of the delta goes to him, unreported.
Using $250k asking price and 6% commission rate as an example;
(6%)(250k)/.5=$7,500 salesman net less taxes
or working off the books for me;
(6%)(130k)/.5=$3900 on the books to salesman
add the delta —>(120k)(6%)=$7200 unreported cash for a total of $11,100 to salesman.
Sales volume is light and it’s not getting any better. I’m gonna leverage that.
Seems hard to go terribly wrong spending 80000 in a 5% interest rate env vs. 10500/year rent… Hope it is a nice house! in 1997 I bought in Manhattan for 150k (for 700 square feet) with 600 / month maintenance and it was a great value vs. 1550/month rent which i had paid before… I loved the ownership. Alas moved in 2001 (did sell for 360k, bubble had begun) and today the apartment (coop) would still go for 600-650k… New York and Long Island remain simply insane. Alas.
Contrast that rent vs. purchase you are considering that with my moderate (truly not a high end) area on Long Island NY where rentals are around $1900 but purchases are still asking well over 400k, with 9k+ taxes… Not that lots are selling right around here, but I’m told that in the higher-end or generally more desirable areas prices are actually picking up (confirmed for myself with a recent look at Miller-Samuel, who does a comprehensive quarterly appraisal of the NYC/Long Island market…). The market has gone down but simply not collapsed here, and moderate (similar) houses in nicer areas (around 750k such as in Port Washington) are holding there own, increasing relative to other areas rather than dropping more percentagewise. They are IMO and by historical standards still massively overpriced. The crappy areas that went up to much in the early 2000’s (Shirley, Mastic, Brentwood, etc.) are falling dramatically while Smithtown/Northports less so and the Port Washington/Great Necks / Roslyns seem to have arrested their falls for now.
I would give my eye teeth to be able to find a nice place on long island for 350k for a free-standing house in nice shape… that would be scraping the bottom of the barrel too. A relative is considering a sale her mother’s house she could not sell for years do to some legal restrictions (her mother is still alive but has been in a nursing home for years and there was some legal prevention of her selling the house for a while). The place needs massive work on central Long Island, really an OK cookie-cutter street with OK but narrow bi-level houses with not much space between them, and the realtor advised putting no work in and selling as a pure fixer-upper (understatement) for 320k. I doubt they will get that(I’m guessing 270 for a reasonably quick sale and 250k for a faster one, but we’ll see) but still… seeing the condition of the house it is still quite a price, and that is in Suffolk county (farther from the city)… The Nassau prices remain insane… just commenting. I don’t know the market or taxes down in that part of North Carolina, but 80k + 2-3k for taxes (or less?) seems reasonable vs. 875, compared to 400k + 9k taxes and approximately 2k rent up here for a 1600 square foot house on a 60X100 property in decent shape.
After all the rant, you must consider risk of further losses, but the Price:Rent equivalent certainly seems at least reasonable to me. Where were these houses priced 10 years ago? Sounds to me like you should go for it. Good luck!
Save yourself some time. If you are like me, you already know the basic extended areas of your local ghetto. I know most of the areas in the Tampa Bay area, although encroachments are common.
Put the address on Mapquest and locate the neighborhood. I believe, if your area is similar to mine, you will find the about 75% of the “really good buys” are in areas I would not buy anything.
Would you “invest” in a slum?
Better to stay a renter and know your house won’t be vandalized every time you head off to work.
I definitely wouldn’t buy in a slum. I’d rather rent forever than live in a ghetto and worry about the family’s safety. I suspect many of the “good buys” are in questionable areas but since I’ve never lived in that part of the Triangle, I’m not sure. I think we need to drive around a bunch with a map and note which roads and neighborhoods are out.
“how do we pick a good agent?”
I have had good luck using the seller’s agent.
Can’t speak for North Carolina, but in CA the California Association of Realtors put together a standard sales agreement. It’s 8 pages long and spells out the terms for purchasing a home.
The most important ones are price, financing, closing and occupancy (inspections included in this). So if you know how much you want to pay for the house, how you’re going to finance it, when you want to occupy it, and who pays what part of closing costs - you’re almost home.
My advice is to go online and see what the North Carolina Association of Realtors (or whatever they’re called) offers new home buyers in terms of education and if there’s a standard form. If there is a standard form, find a real estate attorney and buy an hours worth of time to explain any parts of the contract you don’t understand.
Second - there must be a “How to Buy a Home for Dummies” or some such thing on Amazon.
Once you understand the terms of negotiating the purchase of a home, use the seller’s agent as your agent. It’s been my experience that when you give the seller’s agent both sides of the deal (thus the entire commission instead of splitting it with the buyer’s agent), the agent is more likely to talk the seller into a lower price.
At 100x monthly rents, you seem to have good price-parity—assuming, of course, that you could not rent for even less in the neighborhood that these houses are in.
The key questions, I think, are:
- is it a neighborhood you are happy living in, and do you expect the area to remain a good one.
- are you likely to be stable in your living situation and job situation for the next 5yrs or so.
- is the price-to-rent ratio reasonable. It sounds good from what you describe, but you need to know the area rents, and you weren’t sure about that area.
If you can answer those questions in such a way that you are comfortable, then it doesn’t sound like a bad move to me.
Are you REALLY secure in your job (or are you self-employed)? Any chance you’ll have to move to stay employed in your field or to advance in it?
If the answer to #1 is “no” or the answer to #2 is NOT “no” then don’t buy.
To paraphrase Mr. McGuire in “The Graduate,” I want to say one word to you, just one word: “Mobility.”
My spouse is now self-employed and our work history since we graduated college <8 years ago has been a complete roller coaster. No stability at all. Contract after contract with the never ending “will they renew my contract after six months?”
I think (hope?) our income will probably be more stable now that my spouse has successfully established a decent work history in a new career. Working from home means moving for a job is much less likely than for most people. However, all my reading here over the years suggests that people my age will probably never have any stability as far as jobs, where to live, or even what career to be in. The idea of being easily mobile appeals to me.
Maybe we’d be better off just saving up more money for another year or two? If we bought, we’d only consider something so inexpensive (but not in a bad neighborhood) that we could pay it off in 5-7 years.
If you’re not sure about the stability of the job yet, please wait on purchasing. You’ll be able to save a bigger down payment and not raise your blood pressure if the job stability turns out to be a little shaky.
On the plus side, that gives you a LOT more time to research neighborhoods and houses and determine what you like. A quick rule of thumb is to drive through a neighborhood and see what, if any, cars are out on the street or in the driveways. No cars = locals scared of break-ins = bad. Minivans = families. Also check to see if the lawns have been mowed. Dead’s okay (I live in a low-water area, so brown lawns are not uncommon), but it has to be at least somewhat groomed, because that indicates the neighbors care.
And many cities now have crime maps, so you can check the incidence of certain types of crime. Obviously, you should avoid the clusters. You should also be aware of where the major thoroughfares go in relation to the clusters; my parents live in a great neighborhood, but they also live just off a major thoroughfare that goes straight to some less savory areas, and this means that on occasion a bike or something else goes missing from the carport.
Take your time. Do it right. Prices aren’t going to ramp up at an insane angle for years if not decades, so it won’t hurt you financially.
I’m not sure, but I suspect rents in the towns we’re looking in are probably closer to $750. We have an amazing deal on the house we’re renting. We’ve been there almost two years, no rent increase, month-to-month lease, and the property manager lets us paint, replace yucky floors, etc.
We love our location but could never buy in our town and couldn’t even find another house to rent without paying hundreds more. If we bought in another town, we could have a larger lot, but for $80,000, the house would likely be smaller.
There is nothing wrong with buying a house as a place to live. Shop carefully and you will be fine.
The only time I’ve used a realtor was because the house I wanted was under her contract. I shop on my own. With the Internet, it is easy to find both several properties and their historic comps. Then all you have to do is actually visit the property to see it and the neighborhood. And you don’t need the realtor until you are ready to see the inside.
You’re local MIL, tax assessor and Google/Bing maps as well as other independent RE sites are you’re “go-to” WWW resources.
“Are we crazy for looking?”
My advice as a new homeowner:
No, you are not crazy for looking. Many/most no doubt are in ‘ghettoish’ type areas. We looked for months until we found one that not only wasn’t in a bad area, but met all of our wish list items. And our price.
You have the luxury of time, as housing prices are not going up anytime soon. You have plenty of time to look firsthand to see what that “outside the triangle” area is like. After a few showings, you’ll know. Many surprisingly cheap listings will pop up. With most of them, you’ll see immediately why the price was so damn low. But in that bunch, imo, over the course of a year, a couple of non-ghetto gems that meet your price criteria are likely to show themselves.
Could someone help me out here. Even though the median sales price of a home has been cut in about half since the peak. Doesn`t $226,600 sound a little high for a county where 1 in 8 is receiving food stamps?
Palm Beach County home prices drop to $226,600 in 3rd
quarter
by Kim Miller
The median sales price for single-family homes in Palm Beach County dropped to $226,600 in the third quarter of this year, a 7 percent decrease compared to the same time in 2009.
———————————————————————–
Report: Palm Beach County food stamp applicants double; biggest increase in state
By Ana M. Valdes Palm Beach Post Staff Writer
Posted: 4:28 p.m. Wednesday, Dec. 22, 2010
One in eight Palm Beach County residents now receives government food aid — 151,448 people — a number that has more than doubled in less than two years and which represents the biggest jump of any county in the state.
As my brother-in-law argues with me, when the dot-com bust hit, pets.com went out of business but amazon and ebay and google all did great (not that all were public companies back then but you get the idea)… Prices may still be too high, but median doesn’t give the picture. I’m sure there’s lots of wealth down there, and question is what is bottom eight or prices vs. bottom eight of incomes… and how many are renting and don’t have any impact on prices… It’s never quite so simple. I do firmly believe prices are still too high here where I live but there is incredible stickyness… as long as NYC still prospers relatively (whether due to bank bailouts 2 years ago or otherwise), Long Island is in its insane penumbra for people moving out from Brooklyn or Queens who don’t realize how overpriced and ugly it is here OR who work in NYC with big bucks jobs and will pay for the short commute from a few nice areas close in. (Even though I would choose nice areas of NJ in a minute if not for my dear wife). Still, median prices may not tell the whole picture if many people don’t even own, though I am no statistician…
While people on food stamps may already own a home, people on food stamps are not in a position to purchase homes. So, if the median income for households that are actually looking to buy is around $80K, then that price is OK. Maybe not great, but sustainable as long as there isn’t massive overbuilding and incomes aren’t about to plumet. The income of the people who can’t qualify as purchasers isn’t the right stat to focus on.
Hate to answer my own question, but…
Median Family Income
Palm Beach County: $67,600 (2010)
Change from a year ago: Unchanged
Home prices
Palm Beach County
Median single-family: $226,000 (July)
——————————————————————–
Where homes are affordable
Residents who live in these 25 growing towns see their incomes go the furthest.
Last updated July 13 2010: 5:16 PM ET
Deerfield Beach, FL
Median home price: $67,000
Median family income (per year): $56,519
Lafayette, IN
Median home price: $82,210
Median family income (per year): $60,643
San Antonio, TX
Median home price: $78,627
Median family income (per year): $55,958
Deltona, FL
Median home price: $80,473
Median family income (per year): $56,907
Spring, TX
Median home price: $112,062
Median family income (per year): $75,412
Glendale, AZ
Median home price: $105,000
Median family income (per year): $68,099
Avondale, AZ
Median home price: $111,100
Median family income (per year): $70,672
Des Moines, IA
Median home price: $100,000
Median family income (per year): $60,900
Cedar Rapids, IA
Median home price: $120,500
Median family income (per year): $71,466
Wichita, KS
Median home price: $115,138
Median family income (per year): $64,889
Dale City, VA
Median home price: $163,000
Median family income (per year): $90,719
A bit over 3X income does not sound that unreasonable…
Of course polly makes a good point that it should really be 3X the median income of the pool of potential buyers (e.g. not those receiving food-stamps, who obviously are unable to buy)—but that stat is likely impossible to obtain, whereas overall median is readily available.
“Where homes are affordable”
Mainly where nobody wants to live…
Nationwide IIRC the food stamps rate is 1 in 7, so Palm Beach County must be a more exclusive area.
Doesn`t $226,600 sound a little high for a county where 1 in 8 is receiving food stamps?
——————————————————————————
I suppose it would depend on if you are buying or selling. IMO the knife is still falling and still has a long ways to fall. We ain’t to second base yet.
“Doesn`t $226,600 sound a little high for a county where 1 in 8 is receiving food stamps?”
…and the true median income is 38K?
Now why would you think that? Haven’t you heard that our consumer driven economy no longer needs consumers?
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/8224338/Lehman-prophet-fears-second-crisis-if-US-interest-rates-are-kept-low.html
Lehman “prophet” fears 2nd crisis.
KRUGER: George, I don’t get it. If there’s no Human Fund, those donation cards were fake. You better have a damn good reason why you gave me a fake Christmas gift.
GEORGE: Well, sir, I - I gave out the fake card, because, um, I don’t really celebrate Christmas. I, um, I celebrate Festivus.
KRUGER: Vemonous?
GEORGE: Festivus, Sir. And, uh, I was afraid that I would be persecuted for my beliefs. They drove my family out of Bayside, Sir!
Enjoy. Cut, fix, and paste.
http://gizmodo (DOT) com/5716969/skim-your-way-over-a-winter-wonderland?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+gizmodo%2Ffull+%28Gizmodo%29
That was awesome, Rancher! Thanks.
People on a Phoenix blog are complaining about section 8 moving into neighborhoods. One fellow is down $12,000 on his house - to me that does not seem much. He is questioning if he should walk away, because his neighborhood is going downhill fast.
In a few days Ben will be asking for predictions for 2011. I wonder what some of the Arizona predict the house prices will do in Phoenix and Tucson in 2011?
I don’t think prices will go up in 2011 in either community. That’s as far as I can predict for now. Jobs, jobs, jobs…Where are they besides CVS Pharmacy, Wal-Mart, LosBetos, and In-&-Out?
Florida, for me!
If he’s only down $12K, he’s just looking for an excuse to follow the herd.
JMO, but I think all the jingle-mail people are going to have a day of reckoning, eventually. Too much money is at stake, and somebody is going to be looking for someone to pay, one way or another.
As someone said above, median prices don’t tell the story. Whatever the local economy turns into is the story. Some places aren’t going to take that much of a hit. Some places that were way overbuilt, whose economy is basically built around jobs that are disappearing, are going to be worth zero, or close to it.
Someones gotta pay.
It is poetic justice when sheeple who vote for statist politicians, i.e. just about every Republican and Democrat incumbent or candidate except for Constitutionalists like Ron Paul, find themselves reaping the consequences of their own actions or inaction. People with Section 8 scum (as most of them are) moving into their ‘hoods might suddenly begin to take an active interest in abolishing gov’t programs that promote and expand parasitic lifestyles.
Don’t forget the landlords that “benefit’ from section 8 are part of the equation… relocated underwater owners and other accidental slumlords who can’t find regular renters can find a section 8 renter attractive.
I’m missing all the snow at home spending time with parents in Florida.
On way here, on I-4 in/near Orlando there was a large office or condo building. On left coming from GA to FL. Black/Grey colored. It looks like it’s mostly constructed, but was totally dark at night. It’s been that way for a while. Maybe a year. Did construction halt?
That building has looked like that for at least five years. Its in Altamonte Springs.
Ahhhh, the pleasures of being a bizjet mech………
Coming in at 6am Sunday morning (w/OAT at 15 degrees F) to preflight and launch the airplane.
Good thing I get paid the big bucks……oh wait…….never mind.
“preflight and launch the airplane.”
Preflight??? Call me naive, but I would have assumed that the PIC would be responsible for preflight… Or do you both do it?
I do it, then he does a brief one. My preflight is to make sure everything will work on his pre-flight.
Missing a trip in this type of aircraft can get real expensive in a hurry. Especially if it’s something that I can fix/address before we push it out.
Some pilots can’t even put air in tires (re: the video of the pilot blowing the nose strut and tire off the nose gear of a Falcon 10……150psi tire, serviced with 2000psi nitrogen = big boom), much less address anything else found on the preflight.
“Some pilots can’t even put air in tires…”
Dude. You’re scaring me….
Mmmmmm—coffee in hand, warm fire in stove, and the HBB on my laptop. What a great way to spend the post-Xmas morn…
Sure, rub it in…….
Could be worse. Like being one of the “outside guys” doing a compass swing when its 10 degrees, and the wind is blowing 40mph.
There was a reason why I got my “run card” ASAP.
The U.S. foreclosure tsunami has rolled all the way inland from the wealthy coastal states to inundate small towns in the deep south.
Regarding those Alabama foreclosure homes on the market for an average price of $138,463, I had to look up the median household income in the state for comparison; it was $42,586 as of 2008, per this site. Assuming no big income gains were achieved since then, the average foreclosure home is on the market for $138,463/$42,586 = 3.25 times typical household income, at the tail end of a bad recession when one would expect foreclosures to be selling at a discount to the rest of the market, and the home price to income ratio for the reset of the market to be under its traditional stable ratio of 3:1. Ergo the housing bubble lives on in ‘Bama!
P.S. Ya gotta love a newspaper whose editor assigns Adam Smith to write the real estate column!
December 26, 2010
Lenders, sellers predict stronger housing market
By Adam Smith
The News Courier
Sun Dec 26, 2010, 08:22 AM CST
— The housing market in Limestone County didn’t see a rebound in 2010, but real estate and mortgage experts said this week that local numbers are still much better than those in other parts of the state and country.
According to the Irvine, Calif.-based RealtyTrac, there are currently 55 foreclosed homes on the market in Limestone County. One out of every 2,346 housing units received a foreclosure filing in November 2010, with most of those occurring within the Athens city limits.
Across Alabama, there are 11,627 foreclosures on the market at an average sales price of $138,463. In Jefferson County alone, there are 4,274 foreclosures on the market. In the neighboring counties of Madison and Morgan, there are 1,379 and 307 foreclosures on the market, respectively.
MLS figures for North Alabama, which includes the Huntsville, Madison, Athens and Decatur markets, showed a downward trend in November, decreasing by about 14 percent from October and 34 percent below November 2009.
…
“and the home price to income ratio for the reset of the market to be under its traditional stable ratio of 3:1.”
Sure, ideally we would see it overshoot on the downsize, but close to 3:1 is a far cry from the bubble years of 10:1.
At 3:1 in my area, I would think about buying. However, we are a FAR cry from that in the PNW.
If you dislike high housing prices, you can always consider relocation to Alabama or North Dakota.
Or Oil City, PA……
Or Richmond, CA…
Ha
PB, your link is broken.
Richmond once was a nice town. My mother was born there in 1920. However, I’m aware that the neighborhood has gone downhill since that time.
Tempting, but no thanks…
Instead, I’ll just relax and enjoy my awesome rental. There are other things in life besides being a loanowner!
“PB, your link is broken…”
Works for me. If you can’t get it to work, try using Google to find this Wall Street Journal crime story:
* SAN FRANCISCO BAY AREA
* DECEMBER 16, 2010
Violent Crime Jumps Outside Big Cities
Sheriff’s Offices in Alameda and Contra Costa Counties Face Rise in Incidents
By JUSTIN SCHECK And BOBBY WHITE
Violent crime jumped in the first half of this year in parts of Alameda County and Contra Costa County, even as the rate for such crimes fell broadly in California and in the Bay Area’s major cities, according to a recent state report.
…
From article: “In Contra Costa County, Richmond’s violent crime jumped by 8% in the first half of the year but homicides, rapes and robberies all fell.”
If those fell, what the hell is left?
“If those fell, what the hell is left?”
Violent assault
“and the home price to income ratio for the reset of the market to be under its traditional stable ratio of 3:1.”
The “Grant Co, WA” assessor says my 1550-sqft 3/2 spec is worth $181k, and the median income for a 4-yr degree w/ fives years on the job is roughly $62k/yr. However home sales have nearly seized with the current lending requirements according to a RE peep I know, but he said the biggest problem in the area were the number of cash-out ReFi(s); seems few could resist the free money. I mentioned that if I had to leave town in a hurry I’d list my place for $145k, and he said it would sell in less than a week; I paid $125k in early 2003, and it will be paid off this June.
Alabama currently has 9% UE.
Anti-Monopoly: The Real Estate Trading Game for the 21st Century
A couple of bear cubs are enjoying this Christmas present in the living room as I type. My favorite square on the board reads:
Monopolists: Go to Jail
Competitors: Go to Price War
The more I ponder it, the more I realize that a banking system ruled by Wall Street investing bank monopolists is no better than Colonial America ruled by a mad king. We need a real Tea Party to send monopoly power back to the Old World where it belongs, in order for the New World of America to return to prosperity.
P.S. Too bad there was mad rush of dumb sh!ts like Palin hijacked the fledgling Tea Party movement before it even got off the ground…
Ain’t it always the way?
To amass power, you need to have lots of people. Many of the people with the time and inclination to deal with this political crap are nuts. So you have to welcome in the nuts.
Then, once you have power, the manipulators move in and manipulate the nuts.
It certainly turned into a celebration of stupidity and ignorance didn’t it?
“…..manipulate the nuts.”
That’s what she said…..
After chatting a bit with my sons, I think this game needs an update. Apparently monopolists in the Anti-monopoly game cannot qualify for too-big-to-fail bailouts — a serious distortion of real-world economic reality.
As depressing as this story is, there is a note of accidental humor in having a family named Voltaire in the middle of this story. I doubt this seems like the best of all possible worlds from their viewpoint.
A Mistake That Stole Christmas? A Foreclosure Story
by Chris Arnold
December 23, 2010
Like many Americans, Jennifer Ryan-Voltaire is trying to get ready for Christmas in her home outside Boston.
She and her family have their tree on display. “We’ve decorated the outside of the house,” she says. “We’re trying to get into the spirit of things, despite what’s going on.”
Wells Fargo recently foreclosed on the family’s home and owns the property.
“We’re trying to make it as fun for the kids as possible without them knowing or having to worry about what we’re going through,” says Voltaire, an office manager at a medical practice.
She hasn’t told her three kids that they don’t own their house anymore.
Across the U.S., state prosecutors are investigating whether the nation’s largest banks have been improperly foreclosing on thousands of homeowners. The banks say they do not seize people’s houses without justification.
The Voltaire family bought the house, situated in a middle-class neighborhood, four years ago. They’ve always made their payments. But after Voltaire’s husband had his hours cut back at work a year ago, they couldn’t afford their loan anymore.
I think very clearly the bank made a mistake. This is something that we see over and over again — people are sending in their documentation and still get denied.
- Gary Klein, lead lawyer for a group suing the major banks
So they applied for and got into the Obama administration’s loan modification program, which starts out with a trial period. Voltaire made lower monthly payments while faxing in proof of income and other documents to Wells Fargo. But she says the bank kept losing the paperwork.
A paperwork debate dragged on for more than six months. But Voltaire says she always re-sent anything the bank wanted and she thought everything was in order.
An Auctioneer In The Front Yard
But one day this past July, Melissa Mercogliano — Voltaire’s cousin who lives across the street — saw an auctioneer from the bank standing in the front yard, selling the house in front of a crowd of about 30 people.
Mercogliano ran over, waiving her arms and shouting that the house was not for sale. But the auctioneer told her that Voltaire no longer owned the property.
Voltaire tried calling Wells Fargo. She says she knew Wells Fargo had said it was missing a tax document again and had scheduled a foreclosure. But she says she faxed the document to the bank and a call center worker confirmed that Wells Fargo now had all the documents it needed and that it would call off the foreclosure sale.
Meanwhile, when buyers at the auction saw Voltaire’s neighbors running and yelling into cell phones, it scared them off. No one bid on the house. The bank ended up foreclosing and taking ownership.
Voltaire was shocked, since she’d always made all her payments and appeared to be qualified for permanent help through this federal program.
“What they did was illegal,” she says. “I mean, how do you just take somebody’s house?”
…
OK, ’tis the season & all that, but I just can’t conjure up any sympthy for such FB tales of woe. Guess what, FBs, you signed a legally binding contract called a mortgage. If your life circumstances change for the worse, that doesn’t automatically entitle you to demand a change to your legal obligations. The victim mentality and utter lack of accountability these FBs spout is truly mind-boggling.
+1, Sammy!
““What they did was illegal,” she says. “I mean, how do you just take somebody’s house?””
How exactly does having a temporary modification make foreclosing illegal? WTF? They only promised to _consider_ them for a modification; they did not promise to give them one.
If they had paid their original mortgae per the original terms, and were current on it now, then they would have a leg to stand on.
Otherwise? Not so much.
This kind of entitlement-thinking (they OWE me a modification!) blows my mind.
The fact that the income went down because of the economy is
part of the problem with this foreclosure ,but I think this couple was stroked somewhat that they were going to get relief from the
Lender .While it is true that nobody is entitled to a loan modification,something has to be said for the entire scheme of things that lured people into buying into a fraudulent real estate
market in which lending was faulty . Therefore the competition people had for homes was based on fraud and bogus appraisals . By
the same token a person knows it if they push it on their ratios and
buy to much home for their income ,but if the Lender approves it
the layman assumes their loan was acceptable . These are trapped homeowners that would normally sell if they ran into financial problems but they can’t because it was a bogus real estate market .
I’m just saying you can’t treat this Lending Ponzi-scheme from Wall Street with all the fraud in lending as something that didn’t victimized homeowners in general ,especially now when they can’t even sell because the prices have crashed .
I just wish that home buyers would of rejected those absurd prices
of the Boom and the Lenders didn’t loan to people who couldn’t afford a loan long term .
How does a bank decide whether an FB is qualified to move from the trial HAMP period to the permanent? Is that in the HAMP regulations or is it at the discretion of the bank?
It seems to me that HAMP just gives the bank 3 extra months to foreclose.
Foreclosure homes are like a box of chocolates: You never know what you’re gonna get.
Prepping foreclosed homes for resale can be hazardous
09:07 PM CST on Thursday, December 23, 2010
By STEVE BROWN / The Dallas Morning News
FARMERS BRANCH – Most of the modest houses along this street off Josey Lane are sporting some kind of Christmas decorations.
But the only sign of the season at one home reads: “This house has been winterized.”
“We put these signs up at all of the properties,” said Rich Dake, who cuts off the water and treats the drains in foreclosed houses to prevent freezes.
“Last week, we took three trailer loads of trash out of this place,” he said. “You wouldn’t believe what I’ve found.”
Stolen appliances, oceans of junk and even the occasional abandoned cat – it’s all part of the business of securing and fixing up Dallas-area foreclosed homes.
After more than 20 years in the business of handling foreclosed properties, Dake has a sixth sense about what he’s going to discover in an empty house.
“Usually before I even open the door, I can tell what I’m going to find inside.”
…
Photos by JIM MAHONEY/DMN
An attic air conditioner was apparently a good idea to a former resident of a foreclosed home in Farmers Branch.
It’s both sad and disgusting how many people are hoarders.
“We find a ton of porn and old lottery tickets,” Dake said.
So THAT’S what FB do while not liberating their equity…
Here’s one way to warm things up during the holiday season and also help contain the excess inventory of foreclosure homes:
East Meadow house engulfed in fire
Originally published: December 25, 2010 9:13 PM
Updated: December 25, 2010 10:42 PM
By NICHOLAS SPANGLER nicholas.spangler@newsday.com
A house fire in East Meadow breaks out
Photo credit: Paul Mazza | A house fire in East Meadow breaks out Saturday night. (Dec. 25, 2010)
A vacant house stuffed with debris in East Meadow burned so fiercely 100 firefighters from five departments could not save it Christmas night.
Firefighters responded to a call at 7:27 p.m., said Chief David Marschall, of the North Bellmore Fire Department. But by the time they arrived, the house at 2563 Tonquin St., near the intersection with Midvale Avenue was consumed by fire, with flames shooting 40 feet into the night sky.
It took firefighters 25 minutes to get the fire under control, Marschall said. He added that once it was established the house was unoccupied, there was little that could be done to save it. Efforts then focused on containing the blaze, he said.
Earlier, a fire department dispatcher, said at least six fire trucks had responded to the blaze. “It’s fully engaged from all sides,” the official said.
A neighbor, Phil Wakefield, said the house had gone into foreclosure recently. He described the former owner as a man in his 60s who also owns the property adjacent to the house that burned last night. The man had resided in the adjacent property, Wakefield said.
…
seems a bit too coincidental to me. does it happen to say if the “neighbor” was home at the time?
Home ownership is a destructive force in American society, as it often leads to foreclosure, divorce and attempted murder-suicide.
Man Accused Of Christmas Eve Arson
Mans Tries Burning His Former Home With Child Inside
POSTED: 2:01 pm EST December 25, 2010
UPDATED: 2:59 pm EST December 25, 2010
LAWRENCEVILLE, Ga. — Gwinnett County Fire Investigators are trying to locate a Lawrenceville father who took his young daughter to their former family home and then set the house on fire.
According to witnesses, the two went to their former home, which is currently under foreclosure and was not being lived in at the time. The man is estranged from his wife and was visiting with his daughter. Roberto Fernandez-Centena and his 6-year old daughter exited from their vehicle then enter the home witnesses said.
Fernandez-Centena was carrying a gas can, according to witness accounts. Another witness saw flames erupt and the child running from the house moments later. The child told authorities that her father set the house on fire and was trying to kill himself.
“Fire Investigators believe Roberto was intending to cause harm to the child as well as himself,” said Gwinnett Fire Captain Tommy Rutledge.
…
Virginia puts homeowners on fast track to foreclosure
By David S. Hilzenrath
Washington Post Staff Writer
Friday, December 24, 2010; 12:00 AM
Since the meltdown in the housing market began more than three years ago, Maryland and the District have changed their foreclosure laws to give borrowers greater protection. Virginia has moved in the opposite direction.
Last year, the state legislature overwhelmingly passed a law making it easier for lenders to defend themselves when accused of giving homeowners too little warning of impending foreclosures.
The process moves so quickly in Virginia - one of the fastest states in the nation - that homeowners can receive less than two weeks’ notice that their house is about to be sold on the courthouse steps.
…
There’s a whole process between foreclosure and court house auction and between notice of foreclosure proceeding and and actually foreclosure.
I don’t see how anyone could even STILL BE a homeowner by the time it gets to court auction.
Sharga Says Decline in Home Foreclosures Won’t Continue
Dec. 16 (Bloomberg) — Rick Sharga, senior vice president at RealtyTrac, discusses U.S. home foreclosures. A total of 262,339 properties received default or auction notices or were seized in November, down 21 percent from October and 14 percent from a year earlier, RealtyTrac said in a report today. Sharga speaks with Lisa Murphy on Bloomberg Television’s “Fast Forward.” (Source: Bloomberg)
12*262,339 = 3.1 million annual rate; and that was down 21 percent from October? How will that rate of foreclosure notices shape up when the lenders go into “Fast Forward” mode to clear new defaults plus the backlog created by the recent revelation of the robo-signer scandal?
“12*262,339 = 3.1 million annual rate”
PB, that is counting both the pig as it enters and exits the python. E.g. it is double-counted. NODs start the process, and auctions finish it.
So half of that, or 1.55M annual rate is a better guess.
There’s never been a better time to buy in San Diego!
EconoMeter: Was 2010 the bottom?
By Roger Showley
Saturday, December 25, 2010 at 11:14 p.m.
…
Gary London, The London Group
…
For housing the biggest problem has been the interference of the federal government producing false hopes for borrowers and delaying a recovery by delaying foreclosures.
The robo-signing fiasco did not help anything and until we get the distress sales through the system we could still see housing prices slip especially in those markets with more subprime borrowers.
Housing cannot fully come back without more job creation, something the private market must do, not the government. Tax credit programs for hiring would help in this regard but we now have a California-style federal government.
Capital is beginning to flow and while underwriting is tight and we need more equity, there is some money available.
On the horizon the biggest concern, other than jobs, is interest rates.
We have seen Treasury rates move up sharply in the past few months despite quantitative easing. Inflation fears are trumping liquidity effects and if T -bond rates continue to climb, the higher mortgage rates will dampen prices on both commercial and residential property.
My biggest concern, aside from a successful terrorist attack, is a currency/trade war with China that will disrupt both economies and possibly drive up our Treasury rates even faster. Chances are slim.
Still, it remains a good time to buy housing with relatively attractive mortgage rates for qualified buyers …
Can’t see where it was illegal……..unethical, back-stabbing, con-job maybe, but not “illegal”.
Really, keep these stories coming……the sooner HAMP (and all the other keep the dream alive programs) gets outed as a scheme that helps nobody except the banksters, the better off we’ll be.
HAMP = Hoamoaners Aren’t Making Payments
My darkest view of the HAMP is that by requiring home owners to stop making full payment on their mortgages in order to qualify, it mainly served increase the number of homes on which Megabank, Inc could foreclose. Certainly our government would not support such an evil plan, would they?
Isn’t artificially propping up housing prices antithetical to Uncle Sam’s affordable housing objective? If the goal was to save Wall Street’s bacon, I guess I understand.
Secretary Timothy F. Geithner
Written Testimony
Congressional Oversight Panel
December 16, 2010
…, the Administration took a series of actions to help address the crisis in housing markets. The focus of our strategy has been to provide stability to housing prices and to give Americans who can afford to stay in their homes a chance to do. By reducing mortgage rates, and reducing foreclosures that could be avoided with sensible incentives, these policies helped put a floor under housing prices, helped bring stability to house prices nationally on average, and have given a chance to millions of Americans, a chance to stay in their homes.
The Home Affordable Modification Program (HAMP) has helped catalyze the market to provide millions of loan modifications. More than 3.73 million modifications were started between April 2009 and the end of August 2010 – more than double the number of foreclosure completions during that time. These modifications include nearly 1.4 million trial HAMP modification starts, more than 600,000 Federal Housing Administration loss mitigation and early delinquency interventions, and nearly 1.8 million proprietary modifications reported through HOPE Now data.
…
* crickets *
Weren’t the crickets Buddy Holly’s backing band?
Given the news of government intervention to artificially prop up U.S. housing prices, coupled with related news that there are 8-13 million foreclosures expected through 2012, prospective buyers have every reason to feel a high level of caution and anxiety about purchasing a home at this point.
Try not to catch yourself a falling knife! With ginormous and bottomless Fed-funded bailouts available to them, banks are in a better financial position to shoulder the cost of plunging real estate prices than are American households.
Home Prices Probably Fell, Baring Weak Link in Accelerating U.S. Recovery
By Bob Willis - Dec 25, 2010 9:01 PM PT
Home prices probably dropped in October, a sign housing will remain a weak link as the U.S. recovery accelerates into the new year, economists said before reports this week.
Property values in 20 cities were down 0.2 percent from October 2009, the first year-over-year decline since January, according to the median forecast of 14 economists surveyed by Bloomberg News ahead of a report from S&P/Case-Shiller in two days. Other data the same day may show consumer confidence rose to a seven-month high in December.
A wave of foreclosures waiting to reach the market means home prices will remain under pressure in 2011, representing a risk to household finances. Rising equity values and an improving job market will probably help offset the damage, ensuring that confidence and spending continue to climb.
“The inventory overhang is so big, with foreclosures looming, it’ll take five years to absorb the supply,” said Paul Ballew, chief economist at Nationwide Mutual Insurance Co. in Columbus, Ohio. “The consumer is feeling better although there is still a high level of caution and anxiety.”
…
Finally, Congressional Oversight Targets HAMP, Treasury (In Hindsight?)
Justin Bartlett
For a while now I’ve been ranting and raving to everyone that will listen about the gross failure of the HAMP (Home Affordable Modification Program) program and lenders’ inability and incompetence with regard to actually helping homeowners to stop foreclosure.
Over the duration of the last year and a half The Treasury Department has threatened, begged, cajoled, et. al. major lenders in hopes that they will finally stop using Making Home Affordable Trial Modifications as their own personal forbearance agreements, and actually grant loan modifications.
People are getting peeved, and Congress has now stepped in and found that of the original target of helping 3 – 4 million homeowners through HAMP, lender’s are going to fall very, very short at a measly 700,000 – 800,000 homeowners helped. So they’ve issued a big report and Treasury especially is in big trouble.
Wait lets back track a minute. How did we get in this predicament? And why is The Treasury Department in hot water? Let’s backtrack to the start of HAMP and take a look at what happened.
…
I’ve noticed that most of the articles that mention the Obama administration’s goal of 3-4 million mortgage modifications avoid mention of the HAMP’s Congressional Oversight Committee’s expectation for 8-13 million foreclosures through 2012. If 13 million foreclosures eventually ends up being about right, then the HAMP will only have succeeded to “work out” (800,000/13,000,000)*100 = 1 out of 16 foreclosures — nice try.
Congressional oversight committee deems the HAMP loan modification program a failure
Filed under The Homeowner Affordability and Stability Plan
Below is an interesting interview from the folks at Yahoo Finance with Senator Ted Kaufman. Kaufman chaired a recent panel looking at the effectiveness so far of the Home Affordable Modification Program and has come to the conclusion that the program has generally been a failure. That is largely because the program started with a goal of modifying 3-4 million mortgages in order to avoid foreclosures but is on pace to actually modify 800 thousand or fewer.
…
I hope everyone had a Merry Christmas yesterday.
For me Its a lazy day after Christmas kind of day
I hope everyone else is enjoying the day.
Merry Christmas SFBAG . Hope things are going OK for you .
COLE: Big banks profiting from foreclosure crisis
The longer real estate is frozen, the more they make
By Rebel A. Cole
The Washington Times
6:47 p.m., Friday, December 17, 2010
The U.S. housing crisis is entering its fourth year, yet Lender Processing Services says more than 2 million homes are in the process of foreclosure and another 2 million are seriously delinquent, having missed more than three monthly payments. Moreover, the average home in the process of foreclosure has been delinquent more than 16 months. How can this be? Certainly, it is in the best interests of both borrower and lender to resolve a delinquency quickly; the borrower wants to avoid eviction, while the lender wants to avoid the typical 50-percent-plus loss associated with a residential foreclosure.
…
Government Foreclosure Prevention Effort Continues to Wane
Dec 22 2010, 1:48 PM ET
Mortgage modifications through the government’s HAMP foreclosure prevention program continued to trickle in during November. During the month, around 30,000 modifications were made permanent. That brings the total active permanent modifications to just over 500,000. Considering how slow new modifications are coming in, it’s pretty clear that the program meant to prevent three to four million foreclosures will be lucky to stop even get to one million.
Here’s a chart summarizing the program’s performance over the past 19 months:
(CHART APPEARS HERE IN ARTICLE)
Let’s start with trial modifications started (yellow line). Those peaked at nearly 160,000 in October 2009, but have declined ever since. There have been fewer than 30,000 for seven months straight.
The performance of modifications made permanent (green line) isn’t much better. They peaked some time ago, in April 2010. They also pretty steadily declined from there, though they increased a bit in November to around 30,000 after bottoming out at 24,000 in October. With so few active and new trial modifications, it will be harder for this number to increase from here on out.
…
My son is reading to me from a book I gave him as a Christmas gift, An Exaltation of Larks:
- A lot of Realtors™
- A mountain of debt
- A euphemism of escorts
- A den of thieves
- A can of worms
- An unkindliness of ravens
- A murder of crows
etc.
-A flummox of FBs
-A tangle of lawyers
-A snatch of Senators
-A flush of banksters
-A bumble of Democrats
-A looting of Republicans
Wouldn’t it be a fornication of FBs?
Around my house there’s just a clodder of cats.
Hey kids — feel free to try this stuff at home! Like blogging and freeway driving, but unlike banking and high school English class, and contrary to what your high school English teachers taught you, language is among human civilization’s most intrinsically democratic institutions.
Though alpha-sloth beat me to the punch, I came up with a few collectives for the post-housing-bubble-collapse state of the real estate industrial complex. Here are my contributions:
A rapacia of robo-signers
A cabal of central bankers
A cacophony of politicians
A comeuppance of put-backs
A frenzy of flippers
A tumble of real estate prices
A morass of underwater mortgages
A flood of foreclosures
A boondoggle of bailouts
A malevolence of mortgage bankers
A hopelessness of homebuilders
A tsunami of adjustable-rate mortgage resets
A Mottle of Musicians
————————
A brazenness of brass players
A condescension of conductors
An obsequiance of orchestral musicians
A fanfare of trumpeters
A virtuosity of violinists
An oblivion of violists
A camaraderie of cellists
A bombast of bassists
A shriek of sopranos
A tub of tuba players
A flock of oboists
A shrill of piccolo players
A flutter of flautists
A flatulence of bassoonists
A calumny of music critics
A petulance of pianists
A snootery of classical music snobs
Sounds like more Fed-funded hair-of-the-dog stimulus might be in order. Apparently at this point, the Fed finally recognizes the existence of a housing bubble.
Wednesday, December 1, 2010 - 10:42
Fed’s Tarullo: Housing Bubble ‘Hangover’ Still Very Much W/Us
By Heather Scott
WASHINGTON (MNI) - Federal Reserve Gov. Dan Tarullo said Wednesday the “hangover” from the housing bubble continues to trouble the U.S. economy, including the overhang of homes awaiting foreclosure, which makes a “strong case” for action in the mortgage servicing industry.
In testimony to the Senate Banking Committee, Tarullo said the Fed has found “significant weaknesses in risk-management, quality control, audit, and compliance practices,” and will use many of its supervisory tools, including referring some cases to law enforcement.
Those flaws also could cause the Fed to lower the examination ratings on bank holding companies, he said.
“I regret to say that the hangover from the housing bubble of this past decade is still very much with us, as revealed both in the inadequate capacity of mortgage servicers and the continued impact of foreclosed homes on the housing market,” Tarullo told the committee.
And, he noted, “While bank regulatory agencies can and should respond to specific failings that are being identified in our interagency examination, there is a strong case to be made that broader solutions are needed both to address structural problems in the mortgage servicing industry and to accelerate the pace of mortgage modifications or other loss mitigation efforts.”
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Bank of America Loses Bid to Stop MBIA Using Statistics in Fraud Lawsuit
By John Gittelsohn and Margaret Cronin Fisk - Dec 22, 2010 9:01 PM PT
MBIA Inc. can use statistical sampling to pursue repurchase demands against Bank of America Corp. in a lawsuit claiming MBIA was fraudulently induced to insure $21 billion in mortgage-backed securities. Photographer: Craig Ruttle/Bloomberg
Bank of America Corp. lost a bid to prevent MBIA Inc. from using statistical sampling to pursue repurchase demands in a lawsuit claiming it was fraudulently induced to insure $21 billion in mortgage-backed securities.
MBIA asked New York State Supreme Court Judge Eileen Bransten to allow company lawyers to develop evidence using samples from 368,000 mortgages in 15 securitized pools to establish its fraud claims, rather than go through each loan. Proceeding loan by loan might lead to “a delay of several years before trial,” Philippe Z. Selendy, an attorney for Armonk, New York-based MBIA, said in an Oct. 13 letter to the judge.
“The court does not find any prejudice in deciding the motion before it and allowing the use of statistically significant samples of the securitizations at issue,” Bransten ruled yesterday. She said the defendants could also choose to use their “own sampling chosen in a statistically valid manner” to rebut MBIA’s arguments.
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This is absurd ,all you have to do is look at the foreclosure rate in each pool and you can determine that the Lenders breached their duty to underwrite loans and rate securities in a proper manner ,or even record
the transfer of the note in a proper manner .At one point I think I read that Countrywide had foreclosure rates of beyond 80″s on some of those
Pools they were trying to pawn off on the World . Suffice to say that it
should be under 1 percent as far as foreclosure rates are concerned .
Nothing but a Ponzi-scheme and Financial Fraud to the World that is being glossed over as .”We didn’t see it coming .”
China Rate Increases in 2011 May Be Front-Loaded as Inflation Accelerates
By Bloomberg News - Dec 26, 2010 8:00 AM PT
China’s monetary tightening in 2011 may be mainly in the first half as officials tackle the fastest inflation in more than two years, JPMorgan Chase & Co. and Morgan Stanley said.
The People’s Bank of China increased key one-year lending and deposit rates by 25 basis points on Christmas Day in its second move since mid-October. The change took effect yesterday.
Premier Wen Jiabao’s government aims to limit asset bubbles in the real-estate market and prevent rising prices from leading to social unrest after flooding the economy with cash from late 2008 to drive an economic recovery. Officials may keep raising interest rates and banks’ reserve requirements, sell bills to soak up cash and allow more gains by the yuan against the dollar, according to JPMorgan.
“These policy moves could be front-loaded in coming months, as headline inflation figures remain high and economic growth faces overheating risks early next year,” said Wang Qian, the brokerage’s Hong Kong-based chief China economist.
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So, was housing debt the lending industry’s biggest money maker? It’s biggest product?
I find it odd that the Fed has a mandate of full employment rather than Congress. Shouldn’t full employment mean a sound industrial and economic policy? Educational policy? Trade policy? Appropriate allocation of resources? Why should an unelected autocrat be making trillion dollar asset allocation decisions, rather than congress?
As I consider the issue, it becomes more and more amazing at how derelict in its duty Congress has become. It seems that the politicians’ primary goal is re-election and raising money. And that massive decisions about the economy and employment have fallen to one unelected individual.
Remarkable.
neuromance , …You are so right on in your post above me . Congress
has breached their duty to manage the Country in favor of re-election
and allowing self-interest groups to call the shots and screw up this Country with their unbridled greed and faulty self-policing BS.
It is a remarkable situation as you said and I’m scratching my head all the time wondering how it’s going to become a functioning Government with this level of corruption .
Congress holds their bogus Kangaroo Courts where they take in the
information from the so-called experts and than they turn around and cave with their decisions .The Fed has way to much power these days but
these clowns in Congress have no problem ignoring this fact .
At one point years ago Congressmen/women were rated as having one of the most respectable jobs along with Court Justices ,but the Public
now is seeing these people as incompetent and bought off . Just look at the decisions they are making ,a 12 year old could make better decisions
than these traitors are making . Just kick the can down the road . The World must be just laughing at those BOZO’s .
How about if we hold off on this plan until after Obama is re-elected?
WSJ Blogs
Washington Wire
* December 26, 2010, 1:11 PM ET
Coburn Sees Dire Scenario on Debt
By Jeffrey Sparshott
The U.S. could face 15% to 18% unemployment and a decline in economic output of up to 9% if political leaders in the coming years don’t make cuts to spending and slash the national debt, according to Sen. Tom Coburn (R., Okla.).
“I think you’ll see the middle class just destroyed if we don’t do this,” Mr. Coburn said on “Fox News Sunday.”
Mr. Coburn said international confidence in the U.S. economy and currency would be undermined if the nation doesn’t start down a road to austerity within three to four years.
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If you look over the last 50-70 years you can see we have continually taxed the wealth less and less across time. Back in the 50’s the highest income brackets were taxed at a rate of 90%. The result is that the middle class has stepped in a bit, as well as well as a policy of running at a deficit.
My thinking is that quantitative easing serves to reduce the real value of the dollar, but that those in possession of the most dollars are also the ones who haven’t been paying their fair share.
So I ask, is weakening the dollar the most equitable distribution of wealth, or debt and services? I am leaning towards yes…
Treasuries Lead Monthly Losses in Global Bonds as U.S. Prepares Debt Sales
By Wes Goodman - Dec 26, 2010 5:25 PM PT
Treasuries headed for their steepest monthly loss in a year as the U.S. prepared to sell $99 billion of debt amid signs the economy is improving, leading global bonds down for a fourth month.
Benchmark U.S. yields were at their highest level in a week as economists project American consumer confidence is rising and after China lifted interest rates to tackle the fastest inflation in more than two years. Bonds are falling as investors seek higher returns in stocks, sending shares around the world to their highest level since before Lehman Brothers Holdings Inc.’s bankruptcy in September 2008.
“The global economy recovered this year and will keep growing in 2011,” said Hiroki Shimazu, a Tokyo-based economist at Nikko Cordial Securities Inc., part of Sumitomo Mitsui Financial Group Inc., Japan’s third-largest publicly traded bank by assets. “There is inflation pressure in the U.S. and in China. Equities will offer better opportunities than bonds next year.”
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Treasuries Lead Monthly Losses in Global Bonds as U.S. Prepares Debt Sales
By Wes Goodman - Dec 26, 2010 5:25 PM PT
Treasuries headed for their steepest monthly loss in a year as the U.S. prepared to sell $99 billion of debt amid signs the economy is improving, leading global bonds down for a fourth month.
Benchmark U.S. yields were at their highest level in a week as economists project American consumer confidence is rising and after China lifted interest rates to tackle the fastest inflation in more than two years. Bonds are falling as investors seek higher returns in stocks, sending shares around the world to their highest level since before Lehman Brothers Holdings Inc.’s bankruptcy in September 2008.
“The global economy recovered this year and will keep growing in 2011,” said Hiroki Shimazu, a Tokyo-based economist at Nikko Cordial Securities Inc., part of Sumitomo Mitsui Financial Group Inc., Japan’s third-largest publicly traded bank by assets. “There is inflation pressure in the U.S. and in China. Equities will offer better opportunities than bonds next year.”
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We don’t need no stinkin’ deposits!
Consumer-Backed Bond Sales to Diminish After Fed Ends TALF: Credit Markets
By Sarah Mulholland - Dec 26, 2010 2:52 PM PT
Bond offerings tied to automobile loans and leases are poised to dominate sales of asset-backed debt for a third straight year in 2011 after issuance of all types of the securities plunged 31 percent in 2009.
Vehicle debt bundled into securities will likely total from $70 billion to $75 billion, up as much as 23 percent from 2010, as auto sales rebound from a 27-year low, according to Barclays Capital. Bond sales linked to auto and education loans, and credit cards may reach $115 billion in 2011, Barclays said.
Total issuance fell to $92 billion this year from $134 billion as banks relied more heavily on deposits to fund credit card lending and the Federal Reserve ended its Term Asset-Backed Securities Loan Facility, which financed investors buying asset- backed securities.
“The auto finance companies continue to originate good volumes of new loans,” Brian Wiele, a managing director at Barclays in New York, said in a telephone interview. “They are not banks, and securitization offers attractive funding.”
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I guess CA, with its $91 bn in post-Terminator debt, is in even deeper doo doo than NYC, with its mere $69.5 bn in debt.
What I cannot fathom is how CA can issue so much debt, given the supposed legal need to balance its books. I guess I don’t understand what debt means? It seems to me like debt is debt (kind of like how dead is dead), but perhaps there is some definition of debt of which I am unaware which makes it legal for CA to keep a perpetually unbalanced budget?
Whopping $69.5 billion debt hangs over city as short- and long-term spending gets cut
Adam Lisberg
Sunday, December 26th 2010, 4:00 AM
Now that all the Christmas gifts have been unwrapped, it’s time to pay the bills.
That’s the dilemma in City Hall, too.
A report from Controller John Liu shows New York is carrying $69.5 billion in debt - the highest level ever.
That breaks down to $8,281 for every man, woman and child in the city, 7% higher than a year ago.
New York, like most governments, runs up those huge sums on long-term projects like parks and bridges and schools - as well as big tech projects like CityTime - then pays them back over time with interest.
“The credit card bills are coming due,” Liu said.
Many of those projects are worthy, but Mayor Bloomberg has plowed the taxpayers’ money into them like never before - even as he plans to lay off workers and close fire companies at night.
“There always has to be a balance. We’re trying to strike that,” said Bloomberg spokesman Marc La Vorgna. “We do haveto deal with the growing cost of debt service.”
When Bloomberg took office, the city’s annual bill to pay off the debt was $3 billion. This year, it’s $5.4 billion - and it’s projected to rise to $7 billion in three years.
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Thank heavens California did not elect another spend-but-don’t-tax Republican to the governor’s office. We are in a deep enough hole already after the last one.
California’s debt triples in Schwarzenegger’s 7 years
December 23, 2010
In Arnold Schwarzenegger’s 7 years as Governor of California, the state’s debt tripled. The debt went from $34 billion in June 2003 to $91 billion on June 30, 2010.
The tripled debt means that every man, woman and child in the state owes $2,362 versus the $977 owed when Schwarzenegger took office. Just to pay interest every year on the state’s debt takes up 7.1% of all spending from the state’s general fund. Planned future borrowing, such as that for the California High Speed Rail System, will increase annual interest payments on debt alone to 10% of the state’s annual budget by 2012.
When Schwarzenegger was elected, he said he would rip up the state’s credit cards.
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And what is jerry brown going to do for us again?
Try to undo the wreckage the Republicrat Gubernator left behind, I guess.
Schwarzenegger’s legacy: Green laws and red ink
By Paul Rogers
Posted: 12/26/2010 12:00:00 AM PST
A month before the historic recall that drove Gov. Gray Davis from office in 2003, Arnold Schwarzenegger appeared in a TV commercial making a promise to the voters of California.
“Here’s my plan,” he said. “Audit everything, open the books, and then we end the crazy deficit spending. … If you’re happy with the way things are, keep your current leaders. If you want to change this state, then join me.”
Voters joined in droves. But as he prepares to leave office seven years later, Schwarzenegger’s promises are a distant echo.
He leaves a legacy of landmark environmental laws, public works spending and the first steps of significant political reform. Yet Schwarzenegger also leaves California a financial basket case, with the nation’s lowest credit rating and a staggering $25.4 billion budget deficit — far larger than the $10.2 billion deficit he inherited from Davis.
At his peak in 2004, Schwarzenegger enjoyed a 65 percent approval rating in the nonpartisan Field Poll — higher than legendary governors Ronald Reagan or Pat Brown ever achieved. His latest rating is 23 percent, no different statistically than the 22 percent with which Davis left office.
“He was going to tear down the bureaucracy and blow up the boxes, make government more streamlined and efficient. It didn’t happen,” said Field Poll director Mark DiCamillo. “People still like the man, but he was just ineffective. He didn’t do what he said he was going to do.”
Schwarzenegger, 63, has exuded optimism since he first came to the United States in 1968 from Austria. A champion bodybuilder with little money, barely able to speak English, he became one of Hollywood’s A-list actors and a member of the Kennedy family through his marriage to Maria Shriver.
But as California’s 38th governor, the larger-than-life Schwarzenegger failed to break the gridlock and dysfunction of Sacramento, where Democrats and their union backers are loathe to cut spending and the GOP and its business allies vow never to raise taxes.
Add to that the billions in spending required by voter initiatives — and the fact that until voters ended the practice last month, California was one of only three states that required a two-thirds majority to pass a spending plan — and the budgeting options have been few and ugly.
Schwarzenegger clearly underestimated those challenges at first, many political observers now believe.
“In Hollywood, you can say, ‘Do the scene the way I want, or I’ll walk off the set!’ ” said Sherry Bebitch Jeffe, a senior fellow at the School of Policy, Planning and Development at the University of Southern California.
“But in Sacramento, the Legislature perceives itself as an equal with governors. They are not production assistants.”
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I thought Lockyer lived in the state of California, but I now stand corrected.
Lockyer lives in state of delusion
By STEVEN GREENHUT -
North County Times - Californian | Posted: Sunday, December 26, 2010 12:00 am
SACRAMENTO —- California Treasurer Bill Lockyer raised eyebrows last week by arguing in a newspaper column that “California isn’t broken,” but it’s not allaying the fears of the state’s hard-pressed taxpayers. If the state’s top financial official is in deep denial about California’s precarious situation, then it’s time for the rest of us to be very concerned indeed.
Jointly written by Lockyer and Stephen Levy, a lefty Palo Alto economist and longtime advocate for higher taxes, the piece dismissed criticisms that California has a hostile business climate and denied businesses are leaving the state. They argued that the state’s government is relatively lean, and that California is, in many cases, in better economic shape than other states.
Our budgetary problems and nation’s highest unemployment rate are not the result of governmental policy, in Lockyer’s and Levy’s view, but “have been caused by the devastation visited on our revenue base by the recession.”
This confirms what I have long argued —- California’s Democratic leaders don’t see any fundamental problems in the way the state spends tax dollars or regulates the economy. There’s nothing going on that won’t be fixed by an economic recovery and higher tax rates.
Apparently, the authors never considered that the state’s private sector is so energetic that the golden goose survives despite efforts to kill it.
“We’re still an economic engine,” Howard Jarvis Taxpayers Association President Jon Coupal told me. “As bad as our policy makers have been, it takes a long time to totally screw up a state.”
Lockyer and Levy apparently believe that incentives and disincentives don’t matter.
California has the nation’s eighth-highest corporate tax rates, the third-highest top personal income tax rate, and the highest state and local sales taxes in the country. Except for property taxes (32nd, thanks to Proposition 13), California is at or among the worst in virtually every tax and regulatory measure. Yet this supposedly has no effect on the economy and job-creation decisions.
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