Bits Bucket for January 23, 2011
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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.
January 23, 2011
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“Even Habitat for Humanity sometimes has to foreclose”
http://www.tampabay.com/news/courts/civil/even-habitat-for-humanity-sometimes-has-to-foreclose/1147134
Is Habitat still building houses in the sand states? Because that would seem a little…insane. (They really shouldn’t be building them anywhere, for that matter.)
I guess a good future for Habitat would be to buy, or be given, the rotting foreclosures, and rehab them for the needy.
I read in a R E periodical a while ago, that Habitat has a high foreclosure rate due to sweat equity vs. income level, and the lack of responsibility habits. I haven’t followed it lately, but I presume its gotten worse.
Correct me, if you read or heard otherwise. I don’t like being misinformed.
Maybe I’ll take a drive through our local Homes for Hillsborough (Tampa Bay area USDA funded sweat equity program) developments. It’s the modern, suburban version of the old urban apartment projects, except individuals “own” their homes, and instead of being vertical, they’re one story sprawls.
It doesn’t sound like her ’sweat equity’ had much value to the woman in the article:
“Like a lot of homeowners these days, Margaret L. Thornton, a school bus driver in St. Petersburg, said she fell behind on her house payments. She said this was partly because of not having much work in the summer, but she acknowledged she hadn’t aggressively looked for a summer job. She said she did not blame Habitat for the foreclosure.”
Not much work in the summer for a school bus driver, eh? Who could have predicted that? Her solution? Quit paying the mortgage. It beats ‘aggressively’ looking for a summer job.
Habitat is just another bulls–t feel good program bound for failure. It is painful to hear but that is the reality. Too many of the people are given something and don’t appreciate it. It only makes sense that this is one of Jimmy Carter’s pet programs.
This isn’t Jimmy Carters program, its the Fullers…
It is a successful program that has put families in over 400,00 homes since 1976.
With any business model, there are pros and cons. Also, of the few foreclosures that Habitat files for, several of them are for reasons other than payment. For example, a Habitat homeowner cannot be a felon nor commit a felony or violent crime while a Habitat homeowner, or if there is a divorce and neither party wants the home.
I worked on a couple of Habitat houses in inner-city Baltimore back when I was in school. It very quickly became apparent that the beneficiaries had an outsize sense of entitlement and little to no sense of responsibility, and zero civic virtue or neighborhood pride. A classic case of pearls to swine. Since then I’ve been a lot more selective about who I help.
Yes I worked briefly with someone who’d gotten a Habitat house. She complained about having to make payments. I guess she thought it should have been free.
Habitat for Humanity has the lowest foreclosure rate, this is the first one in Pasco County since they started 16 years ago.
Yes, they put in sweat equity as their down payment, put then they must make zero interest payments, that money goes into a revolving fund to build more homes and so forth. And yes Habitat does adjust the payments to the homeowners financial situation, but in some cases like these two, it has nothing to do with the economy. One case is that the homeowner violated the mortgage agreement, (i.e. a Habitat homeowner cannot commit a felony or violent crime) and the other case is a couple that is going through a divorce and neither of the homeowners can nor want to carry the mortgage. And since Habitat hold all of their own zero interest mortgages, these foreclosed homes are not going to an investment firm, they will be refurbished and resold to a new Habitat family.
Habitat is a hand up, not a hand out.
You cant even put the homeless or section 8 people into perfectly good structured homes but have Chinese drywall…
Well we’re more than 5 years past the peak building: apart from the Chinese drywall, how is the rest of the construction holding up? People were posting here for years about the shoddy building in the bubble years was going to be unprecedented. I haven’t seen anything in the news. A possibility is that too few of those houses were actually ever occupied…
I’ve been hearing for the last twenty years from people who bought cookie-cutter vinyl houses in new developments that competed with each other in prices and amenities, that their houses are true POS, and that they’ve had to replace almost everything replaceable (windows, furnaces, flooring, plumbing, you name it.)
The irony is many of them bought new houses because they didn’t want the maintenance problems of an older home.
Besides the fact we aren’t fond of starkitecture, HOA’s, and yuppies, we like the feel of established neighborhoods, and prefer a less open floorplan. If we find a tree tunnel street, that would be the icing.
We’ve always bought new, and never really liked our home after the honeymoom wore off. Our 1st in 1983 had no defects, but OMG, the one built in 1998 was an 18 month fight with the builder. It even rained through the walls, when it was a windy rain.
Newer gives you some nice amenities, but we’re buying an older home this time, in an established neighborhood. We’ll take a plain wrap.
I still can’t understand the allure of vaulted ceilings.
All that wasted space. All that wasted heat. All that maintenance (and all those spider webs and high windows).
All that wasted money.
And all for bragging rights versus the Joneses? How idiotic.
I used to have a 12 foot Palm tree in the vaulted entry of my Deaver 4/3. Had a party and had people throwing icicles over the palm for Xmas decorating. It was art.
It wasn’t a bad house but the landscaping was 2 inches of dirt over hard pan.
Lots of rust-stains running down stucco on tuscan-styled facades in FL. Looks like shit. Also seams on flat stucco walls showing (mostly on 2nd story) where particle-board has warped underneath.
pressboardbox
If you had to guess the time frame those homes were built in, what would you say?
(I’m curious from a datapoint perspective.)
The mid-80s seems to be the approximate time where shoddy construction began replacing quality around here (Lexington, Ky). It coincided with the rise of one builder-subdivisions with HOAs, as opposed to the previous model of various builders building houses of general consistency in a new, non-HOA subdivision.
The mass-production of the single-builder model seems to have paved the way to amenities and square-footage replacing quality.
I’m glad both houses I’ve owned were of the “various builders” variety with no HOA. I wasn’t thinking in those terms when buying, though I found typical subdivisions repellent somehow.
Wipeout - I am seeing houses (some pretty “high-end stuff even) with the rust stains and bulging seams that were built at the height/end of the boom just less than five years ago.
alpha-sloth
Thanks for the datapoints and yours posts. I just got home and got caught up. I didn’t realize Ky was that cold. Beautiful part of the country, unless developers ruined it.
In Montana
You should be our buying pal. Apparently you have better buying matrix than us. Oh well, this 3rd and final home will be the right one.
Welcome to NYC, we have alternate side of the street parking twice a week so they can sweep the streets. so instead of plowing the streets.. Thursday and Friday to eliminate a lot of icy snow drifts , give us some parking spaces back and prevent everything from freezing solid (tonight its going to be 8 degrees)…….the traffic cops are out in full force to ticket everybody who forgot to move their car….
PS i am lucky to have off street parking
EXECUTIVES who run public companies, and the directors who oversee them, are supposed to operate with the shareholders’ best interests at heart. If a capitalist society like ours is to function, that has to be a bedrock principle.
How’s that working out….
The company also emerged from its Chapter 11 status with a raft of new shareholders, many of whom had bought the company’s debt. The former stockholders were wiped out.
While many companies undergoing a fresh start do so with a new chief executive, Citadel did not. The man who ran the company in the years leading up to its bankruptcy, Farid Suleman, is still the C.E.O. And he has become a lightning rod for shareholder criticism.
Back in mid-August, less than two months after the company emerged from bankruptcy, Mr. Suleman received 1.9 million shares of restricted Citadel stock worth roughly $44 million. Other managers received generous stock grants.
The directors each received restricted shares worth more than $1 million.
The value of these grants totaled approximately $100 million.
A nice payday, to be sure. But the grants ran afoul of compensation arrangements discussed in bankruptcy court. In those discussions, company officials said that awards would come in the form of options, which align the recipients’ interests with shareholders.
Angry Citadel shareholders brought these grants to the attention of the bankruptcy judge who had overseen the Citadel matter. Shortly thereafter, the recipients forfeited all the grants. They were replaced with options.
“First they try to overpay themselves and management to the tune of $100 million,” said Geoffrey Raynor, senior managing partner and founder of Q Investments, an investment group in Fort Worth that owns Citadel shares. “Then they put up roadblocks to a merger, which can only be a desperate attempt to keep their jobs, in our opinion. After all, if they lose their seats on the board, how else are they going to be able to siphon off another $100 million when no one is looking?”
So … knowing the company is under the thumb of the current management, who does not have the best interest of the stockholders in mind, they are holding onto their stock?
Oh, please Sir, may I have another?
If the management of a company has a history of screwing the company and screwing the stockholders, what better reason does one need for selling?
“It’s amazing how many people are shocked by honesty and how few by deception.” ~Noel Coward
Kind of ironic statement, coming from a guy who spent his life in the closet. But perhaps he’s telling us his reason why.
I’m shocked when the person walking ahead of me into a store or the gym actually holds the door for me.
You Think Houses Are a Slow Sell? Try a Yacht ~ NYT~
In boom times, yacht enthusiasts would order a new dream boat and keep their old one for the two or three years the builder needed to complete the new boat. Then, they would quickly sell the older yacht to impatient new millionaires and billionaires eager for their requisite status symbols.
But that equation changed with the financial crisis two years ago and took the superyacht market down with it.
Some of the wealthy have ended up like Peter A. Hochfelder, the principal and founder of Brahman Capital Management, a private investment firm in Manhattan. Mr. Hochfelder already owned a 134-foot Lürssen, named Blind Date, that was built in 1995. He commissioned a second boat in 2007, a 161-foot Trinity yacht, that he christened with the same name. It was completed in 2009.
Now, Mr. Hochfelder, who declined to be interviewed, has put both on the market, in the hope that he can sell at least one. He has been asking $9.5 million for the older yacht and $33 million for the new one, which is big enough to sleep 12 guests.
Maintaining a big yacht, after all, is expensive. Yacht specialists estimate that Mr. Hochfelder pays about $4 million a year to run his two boats.
“It was a fool’s paradise,” said Malcolm Maclean, editor at BoatInternational.com, a Web site that tracks the yacht industry. Now, he said of the owners who cannot get rid of their boats, “They have caught very bad colds.” By one estimate, 300 new boats were sold annually worldwide from the mid-1990s until the 2008 collapse, when sales dropped to about 100 boats.
I know nothing about yachts, but it seems to me that 161 feet could sleep more than 12 people …
I’m guessing that means there are six actual rooms with beds. I could probably sleep six on my 32 footer, but they’d have to all be on pretty familiar terms!
It says 12 guests, not 12 people. Perhaps the 12 guests are in addition to the owner, the owner’s family and the crew.
Sheesh… I don’t even have 12 friends!!!!
THE WALL STREET JOURNAL
Friday, May 25, 2007
The Wealth Report | Robert Frank
Flip That Yacht
Rich Buyers Sell Unfinished Boats, Reaping Millions in Profits
…
I posted this article back in May 2007 when it first appeared. I mentioned at the time that it was a “shoeshine boy moment” for the credit bubble collapse, and I am proud to note that I was 100% correct about my assessment, contemporaneous with Ben Bernanke’s repeated assurances that “subprime is contained.”
But, all the talk over the last few years was that yacht sales were UP.
One of my exes (boyfriend) is in the yacht industry. He did tell me less than 6 mos ago that that strata barely felt a bump during the 2007/08 slowdown. I haven’t checked w/him lately but he still posts some interesting photos online so I know he’s still bouncing around Europe regularly.
Sheila Bair Wants to Protect Foreclosure Victims
By Alec Foege (RSS)
Jan 20th 2011 4:35PM
Sheila Bair wants to help rescue the nation’s homeowners from the foreclosure disaster. On Wednesday, the chairman of the Federal Deposit Insurance Corp. (FDIC) recommended the formation of a foreclosure claims commission not unlike the one created to aid victims of the oil spill in the Gulf of Mexico in 2010. Bair was speaking at the Mortgage Bankers Association conference in Washington on the future of mortgage servicing when she made the proposal. “The mortgage servicing industry is fundamentally flawed and in desperate need of reform,” she said, explaining that homeowners needed protection from improper foreclosures.
http://realestate.aol.com/blog/tag/sheila+bair/ - 45k -
Oh geez she gets into a nice cushy job then screws everybody…
No more bailouts for home owners unless you include renters….
Such a disappointment so soon
“On Wednesday, the chairman of the Federal Deposit Insurance Corp. (FDIC) recommended the formation of a foreclosure claims commission not unlike the one created to aid victims of the oil spill in the Gulf of Mexico in 2010″
Bwahahahaha! Ask some of the oil spill victims how that commission is working out for them. The media seems have put an iron lid on the illness and disability being suffered by those affected by the spill. Let’s talk about kids with skin lesions, shall we?
Are there any non-MSM, non-govt web sites that document this?
maybe they can give these victims all those old travel trailers sitting around near the gulf coast.they can park them at the local koa and all will be well.
I thought FB’s already had protection from “improper” foreclosures — the robosigner lawsuits, or taking the bank to court just long enough for the bank to gather the title paperwork and re-file properly. But sorry, there are no laws protecting FB’s from their own stupidity.
Maybe they’ll allow Bair to throw the FB’s a bone — some kind of FICO foregiveness or recourse re-work. But as for something drastic, like a cramdown? No way, Congress is too deep in the bank’s pockets for that.
Blinky Bair is just another sociopath running the asylum. Anything she tries to get for the “homeowners” will definitely be a gift to her banking buddies. Believe none of what she says and little of what she does. it shouldn’t be hard at this point in the game to figure out that there are no honest parties working on our behalf.
+1000
I agree NYCB . I have always felt she was one of them and I could never understand why she wasn’t fired along with the rest of the group that put the deposits of the Nation at risk . They kept all the incompetent, BS ,cover their own ass people in History . If they were in another Country they might of been shot at dawn .
Don’t take that last sentence wrong ,its just a figure of speech ,for all you nut
cakes who think I’m suggesting that you take Justice into your own hands ,thats for the Court system .Peace brother ,peace sister .
Protection in this case is government speak for getting the same result as the individuals defending against the foreclosure, but without them having to get their own lawyers.
Taking care of this by definding against foreclosure is a nice fantasy, but it takes money that a lot of these people don’t have anymore. In addition, there are not enough judges and court rooms to handle this stuff one case at a time. When something that is illegal is happening 10s of thousands of times and may happen millions more times, it is not unreasonable to find a non-court procedure to stop it.
The whole thing is moot anyway. I am certain that we are in the process of figuring out who actually owns this stuff and those people will be filing the proper foreclosure actions eventually. Or more likely transferring their interests to private equity funds for a fraction of the par value and the private equity funds will be doing it. May take a while.
“The whole thing is moot anyway.”
That was my other thought; so many homeowners in default have gotten the foreclosure shaft in so many ways, whether deserved or not, it seems intrinsically discriminatory to be proposing new programs to save future foreclosure ‘victims’ at this point.
However, from a political standpoint, perhaps it makes sense, as Obiwan can point to a trail of efforts to help foreclosure ‘victims’ during his upcoming reelection bid, whether or not any of them were successful.
I have always said that this was to big for the Courts . Can you imagine the tie up in Courts . Come on, thousands of foreclosure
cases challenged .
Along with the ill effects of BK’s of Homeowners Assoc,property taxes left uncollected ,homeowners themselves going down the tubes ,great wealth lost by many ,health care skyrocketing ,post crash high unemployment ,contract breaking ,moral hazards
,eyesore property with brown lawns and broken windows , savers screwed by rated ,wage decrease ,pension people screwed ,etc., the Culprits created a situation that would over
stress the Court system leaving the normal business of the
Courts compromised . Add to all this the direct link to the BK of
the States and robbery of the coffers , how can we watch as the Looters and Raiders flaunt their bonuses and Corporations are having banner years in profits .
What you see with your eyes is the true distribution of the ill-gotten gain and reward to the Looters and the ruins and pain to the rest ,better know as Main Street . Your eyes aren’t playing tricks on you ,its happening right in front of your eyes .
“What you see with your eyes is the true distribution of the ill-gotten gain and reward to the Looters and the ruins and pain to the rest ,better know as Main Street .”
I know it is different this time, but didn’t similar societal inequities provide the underpinnings of the French and American Revolutions of the late 1700s?
“What you see with your eyes is the true distribution of the ill-gotten gain and reward to the Looters and the ruins and pain to the rest ,better know as Main Street .”
Has our government always been so corrupt, or is it just in my adult life?
FICO foregiveness for homeowners, unless it’s for a Medical BK (we’re 37th in world healthcare), would really give us responsible folks a kick in the pants (or in my case a dress). God, I hope all of this is just talk. I work hard to keep my credit score in the 800’s. They’ve already punished us prudent savers.
“Maybe they’ll allow Bair to throw the FB’s a bone…”
Given millions of foreclosures that already happened, whatever comes out of this will prove too late and will probably amount to political window dressing.
Rather than protecting foreclosure “victims,” why not give all American households the same bailout protection the taxpayers were forced, against their will, to give the largest investment banks on the planet (not just American ones, I must add) FOR FREE, and against their will?
What is it about the form of organized crime known as “banking” that gives it special protection?
What is it about the form of organized crime known as “banking” that gives it special protection?
They have better “tailors” for their Zoot Suits.
“…The amount of material and tailoring required made them luxury items, so much so that the U.S. War Production Board said that they wasted materials that should be devoted to the World War II war effort.”
It’s getting ugly when seniors must choose between ruffle net or food…
Beverly, Mass.-based Orchard Brands, which sells clothing and home products targeting women and men older than 55, filed for Chapter 11. Orchard owns Draper’s & Damon’s, an Irvine-based women’s clothing retailer that has at two locations in Laguna Hills and one each in Newport Beach, Seal Beach and Tustin, according to its web site. Last year, Draper’s & Damon’s closed its location at 5 Points Plaza in Huntington Beach. That store opened in 2008.
“Adverse economic conditions and increased levels of unemployment have led to a decrease in consumer confidence and a decline in consumer spending,” according to an Orchards bankruptcy court document. “The debtor’s customer base – which is largely comprised of individuals who are retired and rely on investment income for consumption – has been adversely affected by declines in investment securities in the United States and around the world.”
The company hopes to complete the restructuring process in three to four months and in the mean time, plans to continue to operate as it has.
Draper’s & Damon’s has 44 stores in six states. Virginia Draper opened the Draper’s Studio of Modes in 1927. The company also has an annual catalog circulation of more than 30 million. Draper’s & Damon’s pieces include a $39 ruffle knit tank made of polyester and spandex and a $119 georgette tank dress with a scalloped and embroidered jacket made of polyester.
I’m pretty familiar with this company. Their prices are solidly middle-class: $49 for a pair of jeans, $39 for a pair of knit pants, $78 for a blazer/jacket, $29 for an under-suit shell, $68 for a simple dress… It’s really too bad to hear them filing Chapter 11, because their work clothes are fairly good quality. However, if you’re retired and just knocking around the house, $10 sweatpants from Wal-Mart is just as good.
Jeez oxy…. $50 for pair of jeans is no more middle class than a $500k house. Try 15-20 max.
My wife just purchased some 501’s for me @ $40 per.
Where are you guys getting $15 jeans?
Ross, Marshalls, Etc.
Wranglers at Wallmart for 10. Private label at costco for 12. Second hand at thrift stores. Wranglers are the best fitting most comfortable jeans ever.
I remember when 501’s were 20 bucks a pair.
Walmart sells wranglers pretty cheap if you are desperate.I bought a couple pair for work pants.
Every year I buy a new pair of jeans. Last year I got lucky and found a perfectly fitting, comfortable pair for $30 at Costco. The year before I tried on a bunch before finding the best pair for $50 at Nordstrom Rack. I don’t mind paying a little more if they look and feel good.
But my crazy nieces want $100 jeans and that is stupid, particularly since they are young and beautiful and look good in anything they wear.
Remember the quote “Kmart sucks” from Rain Man? Well it applies to Wranglers too.
I found brand new Mudd (teen fitting, I’m petite) jeans at a 99C store one day. (2009) I bought them, and they fit perfect. Now, that’s a bargain!
Now, if I could duplicate “such a deal” in a home purchase.
I’ve been living in my fleece-lined WalMart jeans this winter. I think they’re ‘Faded Glory’, which is their house brand. They’re warm as toast, comfy as sweats. $19. Kinda bulky looking, but who cares when it’s 2 degrees out?
I bought two pair of Bass brand jeans for $10 each at the local Bass Outlet store here in Boise. They were closing out an old style. Very high quality.
alpha-sloth said
“2 degrees out?”
Geez, where are you?
Way down south in Lexington, Kentucky. Where it was *negative* 2 degrees two nights ago. (Actually we have southern culture and northern weather.)
negative 10 here in lower hudson valley last nite.
Saving a few bucks by buying cheap, made-in-overseas’-sweatshops jeans is going to help our economy, how?
I just took a look at a couple of pairs of Levi’s hanging in my closet. One pair was made in Mexico and the other in Lesotho. Can you actually find jeans made in America anymore?
I buy most of my clothes at a local Western-wear store (my shirts all have snaps instead of buttons). I try to make sure that everything I buy there is made in the USA, but since I only re-clothe myself every two years or so, it’s getting harder and harder to buy all made-in-the-USA stuff.
You get this: “It’s really too bad to hear them filing for chapter 11.”
Because of this: “…$10 sweatpants from Wal-Mart is just as good.”
I can’t wait to get old so I can buys me some of dem $10 Walmart sweat pants and pull them up to my armpits. I can pair them with some of dose great black velcro tennis-shoes. I will be the envy of every octogenarian at the AARP meeting. God bless America.
When money is tight and hard to get, when Social Security is talked about being cut back, as with Medicare, when pensions are shaky - these are the times when people will once again be happy to get what they can.
Name brands matter when money is loose; They don’t matter much at all when money is scarce.
“Name brands matter when money is loose; They don’t matter much at all when money is scarce.”
ding ding ding…. we got a winner…… again.
I refuse to shop at Walmart. I don’t even go to the store. I think I bought a quart of motor oil there once more than 5 years ago. I am doing my part to put that POS company out of business.
I only buy jeans on sale, usually at Macy’s or some other department store. $30 jeans seem a bargain to me since they last quite a long time.
Let’s see. Keeping clothing prices artificially high is good. Keeping used home prices artificially high is bad.
Buying low quality crap at a low price doesn’t exactly seem like Nirvana to me. Pretty soon we can have slave wages for all and shop at Ikea and Walmart for everything.
The thing about the housing bubble was that quality was crap and prices were high. Paying somebody to put care into a product and add value sounds pretty good to me. Sweatshop clothing for all doesn’t sound so good to me.
“The thing about the housing bubble was that quality was crap and prices were high.”
Prices were high because money was borrowed into existence and this newly-created money was circulating about and was available to finance the higher prices.
Now that money is being poofed out of existence, along with being withdrawn from circulation, money is not available to pay those high prices. So the prices have to come down.
But the irony is: Quality will be making a comeback.
People don’t care about quality in a throw-away society, when times are so good that they can just throw away something old because they can always replace it with something new. But they do care about quality - getting their money’s worth - when money is scarce.
Bull S#@t.
I have a parka I bought 30 years ago.
I have numerous heavy plaid shirts the same
age. My wife and I buy top quality clothes because they wear well, not designer crap, but well built, top quality cloth for longevity.
“I have a parka I bought 30 years ago.”
Pre-China parka?
We had a manual can opener that wore out after 10 or so years of use. Bought a new one - made in China. It lasted 2 months. While at mom’s house, noticed she still used the same can openers from 30 years ago. Bought 2 of them used from E-bay. With S&H they cost less than the Chinese made can opener. That was 2 years ago and I’m fairly confident they’ll last at least through my lifetime.
After wearing out three Chinese juicers from Wal Mart in one year, we found a Juicit (made in USA) from the ’70s at a yard sale for five bucks and it has worked hard for years.
Old people invest in treasuries and bonds. Interest rates are being held down by the FED to help Wall Steet CEO’s and Bankers retian their bonus money. Thus anyone who caters to the elderly is S.O.L.
The Charlotte Observer published several articles in today’s paper about foreclosures in the area. It was the lead story on page one above the fold on the paper edition.
The website has extensive coverage as well including interactive maps. Their main website address is CharlotteObserver dot com.
A quote from one of the articles:
“The public has no idea how bad the residential real estate market is,” said Bernard Helm, whose market research firm studies home sales in the Charlotte area. “If you want to know why the economy is not picking up, take a look at the condition of the residential real estate market.”
“The public has no idea how bad the residential real estate market is,” said Bernard Helm, whose market research firm studies home sales in the Charlotte area. “If you want to know why the economy is not picking up, take a look at the condition of the residential real estate market.”
> This person is a complete retard, the housing market has zero effect on our general economy. Experts have said so, all that matters is how wall street is doing. Remember this is a jobless recovery. Go team Barry!
“If you want to know why the economy is not picking up, take a look at the condition of the residential real estate market.”
What a complete idiot, typical market “research” bs. OK, so WHY is the residential real estate market in bad condition? Who can buy if they don’t have a gig that can support a mortgage? It’s the jobs, buddy. Oh, and the fact that wishing prices and shadow inventory make for a dead-in-the-water market.
That is nonsense. The Charlotte real estate market is doing wonderfully. Just ask Zillow. I have come to enjoy having access to Zillow’s website but sometimes it seems their Zestimates really zuck.
The house we sold in Charlotte has been rising steadily for the past 6 months. Our run-of-the-mill McMansion is up 15% over its low from last year. This is in an overbuilt area that I would guess has a lot of foreclosures taking place. But it is still up 15% in less than a year, according to Zillow. And don’t forget that BofA has become everybody’s favorite target, especially since they don’t have the close in Fed ties like JPM or Goldman. Another hit to BofA will really knock the wind out of Charlotte.
So, who do you believe, Zillow or The Observer?
“The public has no idea how bad the residential real estate market is,”
Oh, yes we do.
Obama Teams Up With G.E.; Iran Palaver Peters Out; 2012 Arrives At White House ~ FoxNews.com
Obama Brings Good Things to Light at G.E.
“Jeff Immelt’s experience at G.E. and his understanding of the vital role the private sector plays in creating jobs and making America competitive makes him up to the challenge of leading this new council.”
– Statement from President Obama announcing that G.E. CEO Jeff Immelt will lead the new President’s Council on Jobs and Competitiveness.
Immelt has been an outspoken advocate for clean energy, which he views as a boon both to his company, which produces wind turbines and other energy infrastructure products, and for the economy. Obama wants the council to “focus its work on finding new ways to encourage the private sector to hire and invest in American competitiveness.” That could mean a renewed focus on green jobs and a price on carbon.
green energy for jobs, that’s the ticket, ask spain
Obama to Push New Spending
Mr. Obama will argue that the U.S., even while trying to reduce its budget deficit, must make targeted investments to foster job growth and boost U.S. competitiveness in the world economy. The new spending could include initiatives aimed at building the renewable-energy sector—which received billions of dollars in stimulus funding—and rebuilding roads to improve transportation, people familiar with the matter said. Money to restructure the No Child Left Behind law’s testing mandates and institute more competitive grants also could be included
if they have failed here and elsewhere then they are policies obama and immelt will follow.
Maybe if we doubled the amount of Chinese-made solar panels?
Green jobs create power, they do not create jobs.
Yes, that’s a double entendre and should be taken as such.
I’m going to be optimistic on butter’s assertion that Obama is getting in bed with the corporatists just to learn the system and be re-elected…and then “go medieval on their a**es” in 2013.
I have a bridge to sell you. Obama drools over these guys. Just look at the love poems he reads to Blankfein and Dimon. And of course Immelt, outsourcer of jobs, and head of one of the world’s largest hedge funds (GE Capital), is also a member of the Fed Board of NY. In the nasty three-way that is going on between The Fed, The Treasury and Goldman they count Obama as the fluffer in chief.
Obama is not a socialist. He wants the government to run people’s lives. He wants the corporations to run the government. That doesn’t reek of socialism to me.
The textbook definition of that circumstance is Fascism.
Don’t ever call Obama a Fascist. At least not on this board.
I did that about 6 months ago and was continually harrassed by a dozen or so posters for 2-3 weeks.
I was a liar, a dolt and all the rest.
Sammy posted this yesterday, but I think it’s the news of the week, maybe of the year. So I shall repost it:
Banks drop foreclosures in southwest Florida
news-press
“Banks in recent weeks have been dropping hundreds of their Southwest Florida foreclosure lawsuits instead of facing defendants at trial, according to local attorneys and court records.
Opinions varied sharply on whether that means banks are just taking a breather before refiling with stronger evidence - or giving up for good on hopelessly flawed cases.
Some foreclosures at large law firms were never actually read by the attorneys who filed them here and elsewhere, and some of the mortgages that ended up in mortgage-backed securities sold to investors were never legally transferred by the banks, defense attorneys have alleged.
“We think they’re going to come back and refile,” Lee County Clerk of Court Charlie Green said.
That’s an expensive proposition, he said, noting foreclosure suits carry a hefty filing fee: about $1,900 for a $250,000 house, for example.
What happens is lawyers for the banks are asking judges to dismiss their cases, which is “very much out of the ordinary,” Green said. “You don’t see cases dismissed without prejudice that often.”
… eight voluntary dismissals were filed Tuesday alone by seven different banks including Bank of America, one of the largest filers of foreclosures in this area. Bank of America did not reply to a request for comment Tuesday.
At one court hearing alone, attorney Kevin Jursinski said, one of his associates watched as “50 in a row” were withdrawn.
“Can they re-litigate?” Fort Myers-based attorney Carmen Dellutri asked. “I don’t think so.”
Most of the mortgages in dispute were sold to Wall Street and sold in bundles to investors as mortgage-backed securities, he said. But so many mistakes were made in the process it’s unlikely the banks can win those cases. “
MBS investors, sucks to be you!!!!!!!!!!!!
Renters, sucks to be us.
Squatter FBs: “Sucks for everyone who was not completely irresponsible like us. Party on.”
“MBS investors, sucks to be you!!!!!!!!!!!!”
Au contraire. I believe The Fed is setting it up that any losses it takes on MBS purchases will be moved to The Treasury. Somebody posted about this on another blog yesterday. This means The Fed can suck up all of the garbage MBS and move any, and all, of the losses over to the Treasury.
U.S. taxpayers, it sucks to be us. Once again.
Why do you say that, given that the Fed snapped up all those toxic MBS with freshly printed liquidity? Didn’t that pretty much turn the Fed’s balance sheet into the SIV for toxic MBS that Henry Paulson kept trying to create but couldn’t while he served as Treasury Secretary? And wouldn’t this action have pretty much made moot the fact the toxic MBS had, in many cases, dropped to below five cents to the dollar in value?
Is a loss that is never realized actually a loss?
the missing link: http://www.news-press.com/article/20110119/RE/101190387/1076/Banks-drop-foreclosures-in-Southwest-Florida
You can’t unring a bell, or unrun a red light…
Some mortgages still held by the bank that made the loan might be defensible but those are in the minority, Dellutri said.
He said he’s seeing cases withdrawn in large numbers in Lee, Collier and Charlotte counties, and he heard from an attorney in Jacksonville the situation is the same there.
April Charney, a Jacksonville-area legal aid attorney who’s an expert on foreclosure issues, said for the most part banks have no way to prosecute their cases because the mortgages in mortgage-backed securities were never actually legally transferred to the trusts.
She said much of the recent wave of voluntary dismissals may be a result of a Massachusetts Supreme Court ruling Jan. 7 upholding a judge’s decision two foreclosures were invalid because the banks didn’t prove they owned the mortgages, which he said were improperly transferred into two mortgage-backed trusts.
Now, she said, many mortgages simply aren’t fixable. “You can’t go back and securitize. You run a red light, you can’t go back and unrun it.”
You can’t run a waterfall backwards, or run an earthquake, a fire or a tsunami in reverse, either.
But for some strange reason, the Fed seems to believe that real estate busts are reversible processes. Go figure.
‘the news of the week, maybe of the year’
As I head off this Sunday morning to try and salvage yet another abandoned house, I’ll go over a couple of things.
‘50 in a row’. Wow, 50 houses in Lee County. Do you have any idea how many foreclosures there are in that part of Florida? Look at the pics I took there last summer. There are thousands and thousands of abandoned houses, some with plant growth showing no one has even opened the door for years! Remember the Zillow guy quietly mentioned they count 6 million shadow inventory units in Florida alone. Even 10 or 20 thousand cases would be statistically insignificant.
Then there’s this; if the entity that loaned you the money is having trouble enforcing the default, it has no bearing on your ultimate claim to title. If you stopped making payments, better get some boxes. A squatter has just as valid a claim on the house. So why don’t you just go out and take over a foreclosed house and live there as long as you can? Probably because you don’t want to live with the uncertainty of being evicted at any time. And that’s why almost all FBs leave.
The history of RE law regarding title has developed to handle every conceivable flaw, screw up, illegality, you name it. It may take time when you are dealing with millions of properties, but title will be sorted out. For this part of Florida, based on the houses I saw, many will go to the county for unpaid taxes, as I doubt the lenders even want them.
The wheels of justice grind slowly, but they grind to dust. So Florida will turn into Detroit, except that that the dwellings they own won’t be grand old well-built homes from the height of the auto era; they’ll be mold-encrusted crapshacks. Maybe they should take out the copper pipe and anything else of value, dig out the sewers, and let the rest sink into the Everglades.
“…they’ll be mold-encrusted crapshacks.”
Florida’s tropical climate and frequent hurricanes don’t bode well for the rate of physical depreciation of abandoned homes.
“…they’ll be mold-encrusted crapshacks.”
A home with a defaulted loan gathers much moss.
“many will go to the county for unpaid taxes”
There is where I am curious as to how this all goes down. I’d like to think I can buy from the county, but something tells me that is completely rigged, too.
My guess: REIC insiders with deep pockets get the cream of the crop; you get the chaff.
“The history of RE law regarding title has developed to handle every conceivable flaw, screw up, illegality, you name it.”
I hope you’re right, but I’ve mentioned before that a RE lawyer I know, who’s been in the biz almost 50 years, says ‘no one really knows’ what to do in this situation, because this situation has never occurred before.
Here’s one problem:
Daily Finance
Charles Hugh Smith
“In most states, the necessary paperwork must be physically transferred when mortgage ownership is transferred from one party to another. Clearly, that has not been done in the robo-signing cases. Indeed, the entire MERS registry was intended to bypass this cumbersome and often arcane process. If the procedures were not followed, then it will take a monumentally labor-intensive cleanup to track down every owner of securitized mortgages and rebuild the properly executed chain of transferred mortgages.
These costs could weigh heavily on banks’ cash flows and profits.”
There have certainly been times in the past people thought that loans had been transferred and it turned out that the legal requirements to complete the transfer didn’t happen. You friend is mistaken.
The only thing that hasn’t happened before is the volume.
This is a good one-page summary of the MERS problem.
See full article from DailyFinance: http://srph.it/hLR9vp
“The only thing that hasn’t happened before is the volume.”
And the volume alone could overwhelm the system. Ask an RE attorney how long it takes to straighten out a defective title. Multiply that by millions.
But there’s also a lot that hasn’t happened before:
Securitization on such a scale has certainly never occurred in RE before.
Slicing and dicing of mortgages has never occurred to such an extent before. Remember, in some cases the interest repayment and the principal repayment of a loan were separated into different ’securities’. Who owns that title? It’s listed with MERS, but they’ll assure you that they don’t own it. Who does?
One major problem, it seems to my non-lawyer mind, is that if you sell a loan, you have no more right to it. If you bought the loan, but you never got the title to the underlying property, you might have some potential lawsuits you can pursue, but you can’t foreclose on the property. Because you don’t hold the title. Who does? I’m not sure we know.
A good law review article can be found here:
FORECLOSURE, SUBPRIME MORTGAGE LENDING,
AND THE MORTGAGE ELECTRONIC REGISTRATION SYSTEM
Christopher L. Peterson
UNIVERSITY OF CINCINNATI LAW REVIEW
Volume 78, Number 4, Summer 2010
“There are thousands and thousands of abandoned houses, some with plant growth showing no one has even opened the door for years!”
So long as the lazy MSM ignores them, and banks are allowed to hide the market value of overgrown REO housing off balance sheet, I guess only the Ben Joneses of the world need to feel troubled by the ground level reality of myriad abandoned, dilapidated McMansions.
Probably because you don’t want to live with the uncertainty of being evicted at any time. And that’s why almost all FBs leave.
See the Megabanks are going to get CLEVER…again. (it’s in their DNA). Once they figure out the “habits” of most FB’s. Most are not going to challenge them with “legal exhaustion”…the ones that do, will have to face the bankers new hired gun “sub-contractor’s” attitude: “Go ahead FB, make our day!, do ya feel lucky FB?, well…do ya?”
Gotta respectively disagree with you on this issue, Ben.
The history of RE law has been ignored for about the last decade.
It appears to me that the problem isn’t confusion over who actually owns any given home loan. The problem seems to be that the Banks neglected to worry about, after passing their responsibilities off to MERS, documenting anything resembling proof of their ownership of the original loan(s).
A Lawyer, representing the Bank, can’t do much without that piece of paper.
My wife and I bought our house here (SoUtah) about 7 years ago. We have paid more than the monthly payment each month.
We decided a couple of months ago to pay it off. Our loan was through a local Bank, then sold to Countrywide then on to BofA.
I’m a curious fellow and following discussions on this site a few years ago concerning MERS I checked my County records at that time and while the search caused more questions than providing answers I did notice that a MERS was recorded on my loan.
Back to the present, I contacted BAC and asked about paying off the loan and about the title. What do I get when I make the final payment for proof of ownership, do you have the note, clear transfers of title, etc.
I didn’t get any answers from any of the individuals at BAC that I talked to. Overall, the attitude of the people I talked to seemed hostile even though I was polite at all times. I was told that I would have to send a request for info on particulars of my home loan.
I sent in the request and got a form letter back stating that they didn’t have to respond to my information request. However, they did send me a copy of the original note from the Utah Bank that we first got the loan with for some reason that I don’t understand.
So, I want to pay off my loan and the Bank doesn’t seem to want to address any of my concerns about what proof of ownership I get from them.
Add that with the MERS record and I’m getting nervous about whether BofA is even the right party to have been sending my payments to.
Hopefully, some group of investors from some Country I never heard of aren’t going to show up at my doorstep demanding payment for the (my) home loan at some time in the future.
steadykat
If you want to learn how and why MERS is recorded on your property county records, The Norris Group’s radio show (online)interviewed the CEO/President (Esq) of MERS recently. He explains what they are, in relations to lenders, trustee,and so forth. Interesting 2 pt interview. He mentioned no one has gotten a home free & clear yet. He says he believes that will never happen.
“Remember the Zillow guy quietly mentioned they count 6 million shadow inventory units in Florida alone.”
That is rich! If only one state accounts for 6 million in shadow inventory, how humongous is the total for all of the U.S.? It boggles the imagination to contemplate this!
“…many will go to the county for unpaid taxes, as I doubt the lenders even want them.”
Where do unwanted, unclaimed houses go after the county assumes possession? I assume auction is a likely next step, but I would be interested to hear what the alternatives are.
In most counties I know about, the county has “tax sales” once a year on properties with delinquent taxes. Anyone can bid, with the initial bid amount being the past due taxes plus penalties and accrued interest. The successful bidder pays the county and the clock starts ticking. The FB or the mortgage holder now has 12 to 24 months (varies by county) to cough up what the bidder paid, plus additional accrued interest. The person who bid successfully receives this money (i.e., gets paid back with interest). If the money is not forthcoming, the county awards title to that bidder.
What I don’t know is whether that bidder gets clear title if there’s a mortgage or other recorded lien on the property.
So the NAR guys were right: A homebuyer should have over-commited as much as he possibly could when it came to buying a house.
The house is the best investment once could ever hope for because, even if you put no money down, even if you never made a payment, you’ll end up getting the house for free.
There are advantages to staying within the herd.
Right. For example, most politician’s attempts to use your tax dollars to make whole those who made poor household financial decisions are funneled towards the herd.
The house is the best investment once could ever hope for because, even if you put no money down, even if you never made a payment, you’ll end up getting the house for free.
You will get a zero rent structure, but you will still have to pay the maintenance, taxes, utilities, etc. You will not be able to sell it for the fabulous wealth you were promised because you won’t have the title, either. Furthermore, no bank will loan a dime to anyone to buy a property with no clear title. If local governments encourage loanowners to default with the promise of getting a free house, and it seems more and more are doing this, the banks will cease to make residential real estate loans completely. Why loan money if it’s a sure thing all of the borrowers will never pay it back? The IRS eventually will probably eventually hunt you down and hound you to your grave since the “free” house constitutes a form of income and they need the money real bad. The people who are getting all excited about using this issue to get free houses can’t see past their own noses.
And then you must also consider entire neighborhoods of cheating deadbeats. If I was a deadbeat, the Dirk would be wiped off my face to realize everyone else in my hood is a deadbeat. What type of culturebdoes America want? Socialized losses? Subsidies to the people who never ever were on the dole, but by virtue of the fact they stopped paying mortgages years ago makes them on the dole?
Dirk = smirk. LOL
So does the borrower still owe the money, back payments, penalties etc., or do they just get the house for free ??
They owe the money. It is not clear yet who has the legal right to enforce the debt.
So what does that mean? If the bank drops the foreclosure, and the “owner” stays, does that mean that they live in the house for free for the next 30 years? Seems unlikely.
“You don’t see cases dismissed without prejudice that often.”
Note to non-lawyers: a case dismissed without prejudice means the party may re-file the case at a later date with updated pleadings.
Why do you think multiple banks would suddenly start seeking to have their own cases dismissed without prejudice, all of a sudden? Especially after they’ve paid thousands of dollars in non-refundable court costs, not to mention legal costs, to get the foreclosures to trial?
It’s quite a sudden sea change, and it’s coming right after the Mass Supreme Court ruling. What else might explain it?
To avoid pissing off the judges. That is all they are doing.
What would piss off the judges, other than the attorneys not being able to produce proof that they have the right to foreclose?
That’s why I think this is so important. At the very least, many of the banks have suddenly (all at once!) decided they either can’t presently, or maybe any time soon (or ever?), show they have the right to foreclose. And they seem so unsure of themselves that they’re willing to forfeit thousands of dollars in sunk costs in each case they’re ‘walking away’ from.
Whether it’s a short-term problem, or a long-term problem, is what will determine if this is news of the week, or year. But I don’t see how re-establishing the proper chain of title in millions of titles could even possibly have a ’short-term’ solution.
This isn’t establishing a chain of title. The owner still has the title. The question is who has the right to foreclose. Title only transfers when a legitimate foreclosure is complete.
The owners of the bond are the “beneficial owners” if you will allow the term (from trust law). They get the funds in some predetermined way if a payment is made on the loans. But because of MERS they don’t have the right to foreclose. The banks set up a system to get around the time consuming process of actually jumping through the state law hoops because they figured it would never be an issue as a person who couldn’t pay could always either refinance to a lower payment or sell. MERs is fine as long as they are only dealing with shoving around money, not rights under state law.
Guess who cares about state laws? That’s right, state court judges. So they get all the cases dismissed. Eventually the entity that does have the right to foreclose (or that entity’s successor in bankruptcy) will foreclose, if for no other reason, than because they will be getting sued for the money that the bond owners can’t get on their own.
“Eventually the entity that does have the right to foreclose (or that entity’s successor in bankruptcy) will foreclose, ”
And apparently no one knows who that is right now, or else the banks wouldn’t have suddenly walked away from nearly-complete, expensive foreclosure cases.
The question is how long will it take, and is it even possible, to track down the entities that do have a right to foreclose.
http://www.news-press.com/article/20110119/RE/101190387/1076/Banks-drop-foreclosures-in-Southwest-Florida
Here’s the link. Wall Street fluffers CNBC and Marketwatch are strangely silent on this huge development.
Was anyone aware that Phil Angelides’ Financial Crisis Inquiry Commission will submit its report this Thursday January 27?
not sure what there is out there that we dont already know.
I predict yet another whitewash.
New feature.
Sheila Blair Victim of the week.
ERIC my neighbor who I have never talked to, purchased his house in 2002
Type: MTG
Date/Time: 8/8/2002 10:44:44
CFN: 20020413404
Book Type: O
Book/Page: 14010/1990
Pages: 9
Consideration: $193,800.00
Party 1: MALCOLMSON ERIC
MALCOLMSON ASHLEY M
ERIC starts taking money out of his house
Type: MTG
Date/Time: 10/15/2003 09:36:06
CFN: 20030627948
Book Type: O
Book/Page: 16021/1544
Pages: 15
Consideration: $227,200.00
Party 1: MALCOLMSON ERIC
MALCOLMSON ASHLEY
Party 2: RIVERSIDE NATIONAL BANK OF FLORIDA
Legal: TEQUESTA PINES L86 L
Type: MTG
Date/Time: 4/18/2006 11:16:53
CFN: 20060226562
Book Type: O
Book/Page: 20213/127
Pages: 6
Consideration: $50,000.00
Party 1: MALCOLMSON ERIC
MCCOY-MALCOLMSON ASHLEY
Party 2: WACHOVIA BANK NATIONAL ASSOCIATION
Legal: TEQUESTA PINES L86 L
Type: MTG
Date/Time: 12/8/2006 09:46:45
CFN: 20060679999
Book Type: O
Book/Page: 21172/1867
Pages: 17
Consideration: $270,000.00
Party 1: MALCOLMSON ERIC S
MALCOLMSON ASHLEY
Party 2: MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC
WACHOVIA MORTGAGE CORPORATION
Legal: TEQUESTA PINES L86 L
Type: MTG
Date/Time: 8/22/2007 09:18:42
CFN: 20070401265
Book Type: O
Book/Page: 22046/241
Pages: 14
Consideration: $87,000.00
Party 1: MALCOLMSON ERIC S
MALCOLMSON ASHLEY
Party 2: WACHOVIA BANK NATIONAL ASSOCIATION
Legal: TEQUESTA PINES L86 L
ERIC stops paying and quit claims his wife off of the house (who he is still married to and lives with in this house)
Type: D
Date/Time: 12/19/2007 14:15:59
CFN: 20070568417
Book Type: O
Book/Page: 22332/1469
Pages: 1
Consideration: $10.00
Party 1: MCCOY-MALCOLMSON ASHLEY
Party 2: MALCOLMSON ERIC
Legal: TEQUESTA PINES L86 L
Lis Pendens is filed
Type: LP
Date/Time: 10/19/2009 14:46:20
CFN: 20090363320
Book Type: O
Book/Page: 23500/1110
Pages: 2
Consideration: $0.00
Party 1: DEUTSCHE BANK TRUST COMPANY AMERICAS TRUSTEE
Party 2: MALCOLMSON ERIC S
TEQUESTA PINES PROPERTY OWNERS ASSOCIATION INC
MALCOLMSON ASHLEY MCCOY
WACHOVIA BANK NA
MALCOLMSON SPOUSE
Legal: TEQUESTA PINES L86 L
Final judgement of Mortgage Foreclosure
Type: JUD
Date/Time: 8/20/2010 09:49:01
CFN: 20100310696
Book Type: O
Book/Page: 24024/1210
Pages: 6
Consideration: $0.00
Party 1: DEUTSCHE BANK TRUST COMPANY AMERICAS TRUSTEE
Party 2: MALCOLMSON ERIC S
TEQUESTA PINES PROPERTY OWNERS ASSOCIATION INC
MALCOLMSON ASHLEY MCCOY
WACHOVIA BANK NA
MALCOLMSON SPOUSE
Legal: TEQUESTA PINES L86 L
Eric and Ashley are obviously victims who have only been allowed to live in their “home” for at least 3 years for free after stealing large amounts of $. I will now go walk Dozer down the street and around the corner where Eric and Ashley live. It`s Sunday so I don`t know if they are getting ready to host a party for the games, like last Sunday. Or if they have the BMW and the Range Rover to the side of the driveway so they can hook the boat up to the jeep for a day on the water.
If you see Eric, ask him how liberated he feels after liberating his equity.
Eric is exhibit A when answering how people appeared to be solidly middle class in the absence of a upper middle class income. I don’t recall how many times my wife and I would get this puzzled look on our faces when we observed the ERIC’s of the world, circa 2002-2006. None of it made sense as we knew lots of ERIC’s and most of them earned much less than we do.
Exeter, saw the same thing in Phoenix with my wife’s family. I could not figure out how bug sprayers were buying 300,000 dollar homes. Or 4 homes plus pricey acreage in Scottsdale. Or 50,000 dollar trucks. I could not figure out what I was not seeing. After reading this blog, I understood. Saved me from falling into the bubble trap. My only 2 cents is that all forgiveness of the loan difference should have been a taxable event. This at least would have been some justice for the prudent individuals. Thanks all for your contributions!
bug sprayers….. lmao. A family of Orkin men.
Yep. So many victim stories and so few victims. I hope Dozer drops a large one on Eric and Ashley’s front lawn.
So many victims, who were the perpetrators of their own victimhood.
‘The needle and the damage done…” Neil Young
I’ve seen the needle
and the damage done
A little part of it in everyone
But every junkie’s
like a settin’ sun.
“But every junkie’s like a settin’ sun.”
Likewise for every FB.
” I hope Dozer drops a large one on Eric and Ashley’s front lawn.”
Sorry NYCityBoy, Dozer didn`t come through. But he never does, he always waits till he is out on Seabrook Rd. (no yards public landscaping, which is always nice and green) All quiet at Eric and Ashley`s this morning. No sign of party prep, boat is in the backyard and the jeep and BMW look fine. Only problem is the passenger window of the Range Rover has been broken. It has a hefty bag blowing in the rather brisk breeze we have today. And I swear I didn`t break it.
Anyone ever hear of this statutory 6% dividend?
From Wikipedia:
Thus the Federal Reserve has both private and public aspects.[12] The U.S. Government receives all of the system’s annual profits, after a statutory dividend of 6% on member banks’ capital investment is paid, and an account surplus is maintained.
I think we should call our congresspersons to enact a new “statute” for a dividend of 1/4 of 1% or whatever the rest of us have been getting in our passbook accounts the last 3 years…
It would be kind of perfect to tie it to the passbook savings rate, or at least the one-year CD avg.
Questions to ponder~
Given the fact we have substantial evidence to suggest that the inventory out there is massive when you consider defaulters still living in the shack, bank REO, individuals holding multiple shacks in a deflationary spiral wanting to liquidate, builders infilling demand, etc;
1) Is it fair to suggest actual MLS inventory will skyrocket?
2) If yes, when will it occur or will they extend and pretend over a decade
It’s likely nobody knows the answers but it’s good to kick around.
I think it’ll be a slow, steady feed over the next decade, as extend and pretend, and the legal system, slow everything. A lot of stuff will be sold off to well-connected investors, just like after the S&L meltdown.
“A lot of stuff will be sold off to well-connected investors, just like after the S&L meltdown.”
And what, exactly, will these well-connected but somewhat stoopid investors do with their inventory of empty, unwanted, surplus single-family housing?
They won’t buy the crap, that’ll be doled out to us plebs. Or if they do buy the crap, it will be at such a bargain that they’ll still make money off it.
They’ll pick out the pearls before we get the slop. Same as it ever was…
It’s good to be the king. Or at least his banker.
“Or if they do buy the crap, it will be at such a bargain that they’ll still make money off it.”
Can’t say that thought didn’t cross my mind. I guess Fannie, Freddie and Feddie will figure out a way to offer special low prices American households will never see to their deep-pocketed bankster friends, in exchange for an implicit promise to share some of the ginormous profits with their politician friends who are looking for campaign contributions.
“1) Is it fair to suggest actual MLS inventory will skyrocket?”
It seems our command-and-control economic leaders prefer to allow vacant homes to crumble into desuetude than to allow inventory adjustment coupled with a return to housing price affordability. If you bear in mind that the key objective is saving banks, and that there is an implicit policy assumption that it is possible to protect banks by allowing them to indefinitely commit accounting fraud, then this will make more sense to you.
Looks as though it will turn out that way. Ten years of slow deflation in RE values.then a slow uptrend in 2023 to 2030, but no better than the stock market.
Here is a provocative piece which proposes a deus ex machina type fix for the liquidity trap problem in which American home owner households find themselves.
Why renter households should be forced to pay for write downs of FB balance sheets eludes me — I guess because Smith says they should, and he is a Nobel laureate economist? My preference would be for lenders and borrowers who made bad financial decisions to eat the consequences of their own choices, rather than to force nonparties to their transactions to eat the costs of stupidity. And just because the government bailed out the banks does not provide any justification to do it for households: Who ever said two wrongs make a right?
I propose a fourth option, which this Nobel laureate economist some how overlooked, which is to get the government out of the housing price support business and let the market find a new equilibrium at affordable price levels. It seems to me that this is going to inevitably happen, anyway, as there are way too many vacant houses to move them at current seller wishing price levels. Whether this is achieved through inflation or through nominal price reduction seems like an argument about money illusion.
Mired in Disequilibrium
Do for households what the Fed sought for the banks.
(Page 1 of 2)
Rudy Sulgan / Corbis
The headline of this piece refers to the housing-market disequilibrium that caused our economic troubles and not to its consequence, which is the persistence of a 9 to 10 percent unemployment rate.
Our disequilibrium course is reflected in the ratio of the median house price to median family income, steady around 4 in the 1990s, recovering to its previous high of 4.15 in 2001, and then surging to the unprecedented high of 5.2 in 2005. Economically, we borrowed massively from future income-based growth in housing demand, financing it by credit creation: from 1997 to 2010, the total market value of housing rose by $4.09 trillion, while mortgage debt rose by $4.52 trillion, a dismal sector performance. Some 23 percent of homeowners owe more than their home is worth on the market, and their demand for goods is restrained by the need to pay down debt. This is the essence of a balance-sheet recession, and is what underlies the so-called Keynesian liquidity trap.
Most postwar recessions also had origins in housing but were much less severe. All past sustained recoveries have been accompanied by a recovery in housing, hence the uncertain sustainability of the current recovery.
The flip side of homeowner negative equity is bank negative equity—to wit, insolvency. The Fed took care of that by relieving the banks of some $1.2 trillion in shaky assets in late 2008, rescuing the system from the consequences of its own decisions, not good policy but deemed by the Fed to be far better than the alternatives. When you are left with no good options, the important lesson for the future is to avoid getting into that bind in the first place and to start rethinking what you have been up to.
Meanwhile, in fiscal policy, the Bush-Obama trillion-dollar “stimulus” was a scattergun shot, not a surgical strike at the source of our distress—homeowner negative equity and the need for the relative price of homes to fall. Moreover, programs to subsidize new home buyers served to prop up home prices, not restore them to equilibrium; many people were suckered into buying too soon. And programs to lower mortgage payments by stretching loan horizons and/or lowering interest rates did not reduce negative equity by lowering mortgage principal closer to home value. Negative equity causes a lock-in; if future employment requires a move, you face the prospect of realizing a capital loss on your home and have no down payment for a new one.
There are three routes to restoring equilibrium:
• Inflate the prices of all other goods, including labor, while housing demand remains stuck in its negative equity loop. Fed policy has been consistent with this objective since 2008 with no evidence of success, as is typical in severe balance-sheet recessions.
• Allow the household deleveraging process to grind through an extended period of low GDP growth and high unemployment until we gradually recover. This option will surely succeed in due course, but not without high annual opportunity cost in terms of lost wealth creation. This was the path followed in the Depression.
• Do for households what the Fed sought for the banks: the Treasury (facilitated by Fed monetary ease and bank capital requirements) finances the banks to restate the principal on current negative-equity mortgage loans, restoring them to new mark-to-market zero-equity baselines.
The last option, in principle, seeks to reboot homeowners’ damaged balance sheets in an effort to arrest a prolonged deleveraging process and more quickly restore household demand to levels no longer dominated by negative home equity. It is analogous to a mortgage “margin call” with public funding of the restored household balance sheets.
…
Smith is a professor at Chapman University and a 2002 Nobel laureate in economics.
Whenever I read a piece like this one, which proposes a publicly-funded bailout of underwater households, the first questions that cross my mind are, (1) how much money has the writer personally lost on HIS real estate investments, and (2) how much does he stand to gain if a public bailout measure is passed to make underwater households whole on their real estate investment losses?
but not without high annual opportunity cost in terms of lost wealth creation.
Oh, Professor Bear, whatever will become of thy MegaBankers Inc. bastard child’s wail?: “WORK! “House Equity”…WORK!”
One problem with a Democratically-administered version of Uncle Sam, Amalgamated using deus ex machina arrangements to bail out homeowner households at this point is that since so many of the Democrats’ specially favored low-income constituents have undergone foreclosure and are now renting, any efforts to save homeowners from the financial crisis of their own making could miss a large part of their target special interest group.
“Our disequilibrium course is reflected in the ratio of the median house price to median family income, steady around 4 in the 1990s, recovering to its previous high of 4.15 in 2001, and then surging to the unprecedented high of 5.2 in 2005.”
Wouldn’t the logical remedy for this situation to be to get the government out of the housing price support business in order to allow market forces to restore equilibrium to affordable levels? It is amazing to me how many big name economists overlook the simple, obvious solutions.
“The flip side of homeowner negative equity is bank negative equity—to wit, insolvency. The Fed took care of that by relieving the banks of some $1.2 trillion in shaky assets in late 2008, rescuing the system from the consequences of its own decisions, not good policy but deemed by the Fed to be far better than the alternatives. When you are left with no good options, the important lesson for the future is to avoid getting into that bind in the first place and to start rethinking what you have been up to.”
Should we expect a meaningful post-mortem any time soon on the failure of U.S. federal housing policy over the past couple of decades?
Back to work last week. Real estate stuff:
My scrub tech tells me that they are going to buy their first house this year. Her father-in-law referred them to a real estate agent who will give him a kickback if they buy a house from her. With family members like these you don’t need enemies. She asked for my real estate card. It will be a pleasure to help her find an affordable house in the neighborhood where they currently rent.
I put in an offer for some friends for a bank-owned house that’s a good deal as a rental. Was initially listed at $245,000 in October, current asking price $180,000; our offer $170,000. Bank countered with $177,500; our counter $170,000. Plenty of fish in the sea.
My clinic nurse asked me to research recent sales in her area. She lives on 4 acres and wants to downsize to a normal-size yard. She owes $200,000. I hope she can get $250,000 and have enough to buy a house for less than $150,000.
Good stuff. Thank you.
You’re in in CA IIRC?
She’s not in California: she’s in Sacramento.
(Joke)
REhobbyist
Seems like you help a lot of people. This country needs more people like you and less “who will give him a kickback if they buy a house from her.”
There are two people at worker that have people close to them that listed their houses for sale in December. Both are second houses, one in Joisey and one in Long Island. Both are completely unrealistically priced.
I laugh about the little Joisey POS. It is listed at $299,000. I made a comment about that stupidity the other day and the guy at work, though pretending he gets it said, “but it is close to NYC”. So, I guess hedge fund guys are buying piece of crap broken down boxes in Carteret, NJ.
The house on Lawn Guy Land is even more foolishly priced. The taxes on it are $15,000 per year. The neighborhood is not the best. They have dropped the price $40,000 now. Zillow’s zestimate, though not always a great metric, is $230,000 below the new price. This one is still a mile away from even looking reasonable.
There is a lot of hidden inventory that is hiding in plain sight. The listings that are still listed for 2006 pricing may as well be shadow inventory. I look forward to both of these sellers being punished for their greed, getting less than they would have if they had just priced right in the first place. I love the smell of greedy people getting deep fried.
“Both are completely unrealistically priced.”
Bubble-era wishing prices have been amazingly persistent during this real estate bust. I guess the Fed has managed to keep the home sellers’ cargo cult hopes alive for higher market values some time in the near future?
12 Things That Will Cost Less in 2011
(Too bad it`s nothing you can eat or put in your gas tank)
http://www.comcast.net/slideshow/finance-12thingscostless2011/external-two-tb-usb-drive/ - -
EconoMeter: Will home prices rise or fall in 2011?
By Roger Showley
Saturday, January 22, 2011 at 10:31 a.m.
Will San Diego home prices be higher in December 2011 than they were in December 2010? If the overall median was $333,000 last month, what will it be at year’s end?
Yes, it will be higher than $333,000
No, it will be the same or lower than $333,000
or See results
The San Diego area is projected to have the 28th largest drop of the 384 markets surveyed.
…
Hey CA has x6 out of the top 20!
Good thing CA has a renters $75.00 per year rebate!
O.C.: 8th priciest apartment rent in U.S.
January 23rd, 2011 / by Jon Lansner OC Register
PRICEY DIGS
Here’s the 20 large U.S. metro markets with the highest average rents, as tracked by Reis Inc for 2010′s fourth quarter — plus that market’s change in rent in a year:
1. New York: $2,867 (up 4.8% in a year.)
2. San Francisco: $1,858 (up 2.5%)
3. Westchester: $1,857 (down 0.5%)
4. Fairfield, Conn.: $1,779 (up 2.3%)
5. Boston: $1,738 (up 2.5%)
6. Long Island: $1,553 (up 2.5%)
7. San Jose: $1,531 (up 3.3%)
8. Orange Co.: $1,516 (up 0.8%)
9. No. New Jersey: $1,510 (up 1.9%)
10. Suburban Virginia: $1,489 (up 4%)
11. District of Columbia $1,443 (up 2.3%)
12. Ventura County: $1,403 (up 1.6%)
13. Los Angeles: $1,396 (down 0.1%)
14. Oakland: $1,345 (up 1.1%)
15. San Diego: $1,341 (up 0.1%)
16. Suburban Maryland: $1,303 (up 3.1%)
17. Providence: $1,205 (up 0.1%)
18. Central New Jersey: $1,159 (up 1.2%)
19. Palm Beach, Fla.: $1,114 (up 1.6%)
20. Fort Lauderdale: $1,113 (up 1.3%)
19. Palm Beach, Fla.: $1,114 (up 1.6%)
Some of that is my fault. I have been paying $1,700 a month for over 5 years to victims who for most of that time have not payed the mortgage.
“Hey CA has x6 out of the top 20!”
I guess everyone still wants to live here, even with potholes, city governments on the verge of bankruptcy, and a public education system whose future funding status is in serious question.
Real estate: The U-T’s weekly outlook
By Lily Leung, UNION-TRIBUNE
Sunday, January 23, 2011 at 6 a.m.
We’re heading into a full week of key reports, from year-end foreclosure numbers for San Diego County to home prices for the local region and 19 other metro areas.
Tuesday: The S&P/Case-Shiller Home Price Index, a leading indicator of residential-market health, is released. It shows changes in home prices in 20 metro regions, including San Diego County. The index comes out monthly but has a two-month lag, so upcoming numbers will cover November. (Click here for last month’s story by U-T reporter Mike Freeman.)
Also on Tuesday, DataQuick Information Systems will release December and year-end foreclosure figures for San Diego County.
…
Published: Jan. 21, 2011
Updated: Jan. 22, 2011 11:05 a.m.
2010 a ‘disappointing’ year for housing
By JEFF COLLINS
THE ORANGE COUNTY REGISTER
http://www.telegraph.co.uk/news/worldnews/europe/ireland/8277048/Irish-Government-in-chaos-as-Greens-quit-Coalition.html
This is going to roil the markets. Banker errand boy Cowen, who after cozy dinners and rounds of golf with his bankster masters cut a deal to transfer liability for massive non-performing loans and bank losses onto Irish taxpayers, is facing a political revolt as the enraged populace has turned on their political class. Now the $85 billion bailout deal Cowen crafted wih the EU and IMF (read: the banksters) is in serious danger of being repubiated, Iceland style, by the next government. And here the MSM told me the Eurozone crisis was “contained.”
One only hopes that the 95% of US voters locked into Wall Street’s Republicrat retardosphere will similarly wake up and realize the Republicrat duopoly is leading them to disaster.
repubiated
God, Irish Whiskey, pub, rule the world…there’s a hidden truth in there somewhere, I can almost feel it, ifin’ I wasn’t so numb this AM.
Repubiated, Iceland style, probably would include vodka, not Irish Whiskey.
I see that the WaPo has now taken the position that the MID is a scam….
http://www.washingtonpost.com/wp-dyn/content/article/2011/01/21/AR2011012102933.html
[Myth] 4. The mortgage interest deduction is necessary to support the housing market and the economy.
Hardly. The deduction is a favorite among homeowners, real estate agents and lenders, but its broader economic benefits are debatable.
Cat fight in Dallas!
File under: “What would you have done…?” …or…”They shoot elephants on main street in Hawaii.”
Dallas taxpayers have every right to be pissed about the goings on at the city’s animal shelter.:
By Andrea Grimes Thursday, Jan 20 2011
“Munoz was torn. He loved animals, and his job as a cruelty investigator allowed him to be on the front lines, saving them from horrible situations. But he also loved his family and couldn’t risk his job by going over his bosses’ heads and cutting the cat out of the wall. That just wasn’t the way things were done at Animal Services.
“If he had kicked that wall in, he’d have been fired,” says Arlington animal rights attorney Don Feare, whom Munoz retained. “[Munoz] had three small children to feed. He just had to deal with it.”
More days elapsed and the cat stopped crying. That’s when the stink began. Not the stink made by shelter workers furious with supervisors, but the literal stink from the cat’s decomposing body. It was so bad that workers couldn’t eat their lunches in the break room.
On May 18—more than two weeks after the cat’s cries were first heard, McGill cut a square hole in the wall—about a foot across, in precisely the location Munoz had identified. After the day shift ended, McGill and a few other workers pulled the cat’s decomposed body out of the wall.
Disgusting, and ridiculous. Sounds like something out of a Kafka novel. Or ‘Brazil’. Frikkin’ cat with his head stuck in the wall, meowing and dying, but no one can do anything because of the bureaucracy.
Yes sad commentary on how some of us have become slaves. I think I would have called PETA and let them kick down the wall if I was worried about my job. And let them call in the TV networks. Sounds like they need to clean house. In Phoenix, sheriff and animal protection have no problem going after animal abusers. We have 3 rescue dogs and this kind of stuff just gets me very angry.
Foreclosure prevention event in Wellington
by Kim Miller
Wellington residents facing foreclosure will be able to meet with representatives from major lenders on Jan. 29 at the Wellington Community Center, 12165 West Forest Hill Blvd.
The event, which is open from 9 a.m. to 4 p.m., is free and open to the public.
Bank of America, JP Morgan Chase, SunTrust, PNC, Ocwen and Housing Partnership, Inc., will be at the event to provide information and assistance regarding home loan modifications, home loan refinancing and government assistance programs. HUD-certified counselors will also be available to help residents who do not have their mortgage lender represented at the event or are having problems communicating with their lender.
Residents must bring two months of their most current pay stubs and two months of bank statements, recent mortgage statements, recent W-2 forms, a list of household expenses and a hardship letter.
To schedule an appointment with an attending mortgage lender or counselor, call Wellington’s Helping Residents With Needs line at 561-791-4796.
Tags: foreclosure
This entry was posted on Thursday, January 13th, 2011 at 9:03 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
15 Responses to “Foreclosure prevention event in Wellington”
1. mike Says:
January 13th, 2011 at 11:15 am
Dear JPM Chase…please reduce my mortgage..I was dumb(and greedy)..I paid 600k for a 2600 sq ft house to live in the crime pit of Olympia.I came from NY..thought housing would go up forever..at least that is what Lorri Friedman the realtor said..OH..and i needed that pool and hot tub and entertainment center and new car..so i took out 200k in home equity loans..even though i only make 75k a yr. NOW i spent(stole) that money..cant pay it back..get to keep all my stuff and dont want to pay my mortgage anymore as i now realize this house is worth crap.So let me off..just reduce my obligations..I am OK being a deadbeat..everyone else is doing it..This is South FL
Thanks,
Deadbeat homeowner who spends above his means to keep up with the Joneses..
2. ForeclosureHamlet.org Says:
January 13th, 2011 at 1:08 pm
Dear JPM Chase,
Thank you for accepting my payments for the past three months but for some reason you did not post them until after the grace period despite the fact I sent then to arrive by the due date, before the start of the grace period. Now that your system shows me as late for three months with incurring late fees, you have refused my check this month and have served me with foreclosure papers.
I find it frustrating, if not impossible, to find someone at your offices or call centers who can help me get this fixed.
Thanks,
ForeclosureHamlet.org
3. ForeclosureHamlet.org Says:
January 13th, 2011 at 1:11 pm
Dear Ally/GMAC,
Thank you for accepting my modification application and sending me a contract for a trial period modification. I have made 18 payments under this trial period, all on time, all for the full monthly amount due.
Today, I received a letter that my modification was canceled and that I owe $12,234.00 (difference between modified payments and original mortgage payment x 18 months + lots of fees) in 3 weeks or else foreclosure proceedings will begin.
Please help work this out with me.
ForeclosureHamlet.org
4. ForeclosureHamlet.org Says:
January 13th, 2011 at 1:15 pm
Dear Citimortgage,
Thank you for adding a $750/month forced place insurance policy on my monthly mortgage payment six months ago. I have been working with your customer service representatives trying to explain, and often faxed proof, that I have adequate insurance on the property and am paying the premium in full monthly in addition to my original mortgage payment amount.
Why did you return my check this month and serve me with foreclosure papers? I was just trying to get the second insurance policy you force-placed onto my account resolved because I don’t need it, don’t want it, never agreed to it, and won’t pay for it.
Thanks!
ForeclosureHamlet.org
5. ForeclosureHamlet.org Says:
January 13th, 2011 at 1:18 pm
Dear US Bank,
Why did you serve me with foreclosure papers last month? I have a mortgage with Chase and am in their hardship program due to my child’s serious medical issues and the impact on our family’s finances.
US Bank, who are you in regards to the mortgage I have with Chase?
Thanks,
ForeclosureHamlet.org
6. mike Says:
January 13th, 2011 at 3:05 pm
Dear JPM Chase,
Dont worry i have a list of excuses to use just in case i dont want to pay my mortgage anymore.I realize we all have to plan for the worst(except me!) in case of illness,financial difficulty or plain old stupdity(ME)..but dont u worry….we all know if my house was still going up in value..i would not be whining like a baby..blaming everyone else but myself. I understand how “mean” you are by not modifying that 200k home equity loan that i spent on adding a pool,jewelry for the wife, and a new car(thanks for the BMW)..but as u know..i want u to modify my mortgage(eliminate my debt!) but the great part is i still get to KEEP all my stuff.
So Dont WORRY…cause i have more excuses to come..wont be paying anytime soon while driving my BMW to CityPlace for sushi..OH tell my neighbor who pays his bills..”good luck Sucker!”
Thanks,
A HAPPY DEADBEAT
7. ForeclosureHamlet.org Says:
January 14th, 2011 at 1:58 pm
Dear Bailed-Out Bank,
Hope you are enjoying the funds we citizens of America bestowed upon you in your time of dire need. Guess what goes around doesn’t come around in this instance despite the fact that Congress added trickle down provisions that you are ignoring with impunity.
ForeclosureHamlet.org
8. Lsmith Says:
January 14th, 2011 at 2:05 pm
Mike or Happy Deadbeat,
I am under the impression you must be bank executive! anyone who is on the side of the banks and are being condensending towards the suffereing homeowner must work for the bank. I think before you assume people struggling are deadbeats you might want to look at the crimes the bank has imposssed on the nation and not to mention how we bailed them out on top of it all! You should be asshamed!
9. mike Says:
January 14th, 2011 at 2:53 pm
Dear Those who want sympathy,
Yes i know i bought that 600k house in Olympia making 65k a year..BUT my Realtor said Dont worry..it will keep going up and u can always sell it! I know i could not afford a conventional Mortgage..but how great is that OPTION ARM! i got to pay 2% a yr while living like a KING! YES..i know it was great when i also took out a 200k Home Equity loan to fund my lifestyle that i could not afford with my REAL income..
I understand all the excuses..i did sign a contract for a loan..but who cares! I did spend all that 200k Home equity loan on stuff..but who cares..i get to keep it all too!! So please just wipe away my debts..i can fax u a list of excuses to use..who cares about personal responsibility? I dont! My kids wanted an Iphone and a MAC..thanks to that Home Equity loan..i actually did not have to work any more hours to buy it!
So Thanks again JPM Chase for never realizing how many millions of deadbeats in the U.S who could care less about paying back a loan.Some call it stealing(i do)..some call it too bad sucker!
Oh and by the way..good luck in getting me to pay that balance on my credit card..got a list of excuses for that too!!
The Happy Deadbeat
10. ForeclosureHamlet.org Says:
January 15th, 2011 at 11:32 am
Dear Bank of New York Mellon and Chase,
Why did you both file foreclosure lawsuits against me this month? I have one home, one mortgage. I just received my modification application approval when I got served with these two foreclosure lawsuits.
Now which of these three entities say THEY are the one which owns my note and mortgage and each of them fabricated the paperwork to prove it.
ForeclosureHamlet.org
11. cd Says:
January 16th, 2011 at 8:43 am
The group is run by Haitians who teach their own kind how to rip other people off. Its a survivor technique that allows savages to live in 5000+ sqft homes without paying a dime. They’ll teach you how to pretend to be a realtor without ever getting a license. They’ll teach you how to identify abadoned homes in a community and rent them out to fellow savages. And for a special bonus, they’ll teach you how to strip the house bare upon your exit from the mansion when white boy try to evict you.
12. PalmBeachCountyForeclosurePrevention Says:
January 16th, 2011 at 8:13 pm
These programs never seem to work for those in dire need. Beware! You get what you pay for.
13. jacqueline Says:
January 18th, 2011 at 9:45 am
Dear, palm beach post thank you for doing this for us homeowner who are in foreclosures. I fell behine becouse I got in a car accident.Iwas 23month I received that the loan was modified in my opion it was not I was paying 1945.45 and it was hard the send me a payment for 2618.15 that do included ta
14. tim Says:
January 19th, 2011 at 11:16 am
Dear Deadbeat Homeowners…….you want a bank to loan you 300k to buy a house…BUT you dont want to pay IF get sick.lose job,house goes down in price,etc…..your int rate should be at loan shark levels……then just rent!!!!!!!
15. Grandma Dreads Says:
January 19th, 2011 at 1:29 pm
cd - you’re a bonafide idiot to point out just one group of people, and accuse them of being savages. I guess Madoff was a Haitian too? All of the rich people and organizaitons that he ripped off??? Yes, I am of Haitian heritage, my family never ripped off a soul. Also, FYI, we are not nor will we ever become “savages”. Your comments are offensive and will not go unanswered - I don’t care if you are a “white” boy as you stated. SO WHAT.
Bloomberg
Fannie, Freddie’s $24 Billion Glut Imperils Recovery
January 21, 2011, 6:03 PM EST
More From Businessweek
By Clea Benson
(Company corrects number of owner-occupied properties in 10th paragraph.)
Jan. 21 (Bloomberg) — Fannie Mae and Freddie Mac’s combined inventory of foreclosed residential property has quadrupled in just three years and now stands at a record $24 billion. The number of properties on their rolls — now at nearly 242,000 — has increased fivefold.
That’s roughly a third of the total U.S. portfolio of repossessed homes. And it’s growing because the two mortgage companies operating under U.S. conservatorship aren’t finding buyers faster than new foreclosures come in.
So far, officials at Fannie Mae and Freddie Mac say, the two companies have been trying to stabilize neighborhoods by selling their massive inventory at prices that are close to market. With home seizures projected to increase this year, some housing analysts predict they may have to drop prices, with potentially far-reaching impacts on the real-estate market.
“The concern we have is less what Fannie and Freddie are showing at the moment as defaulted loans and more what’s in the shadow,” said Michael Feder, chief executive officer of Radar Logic, a real-estate data firm based in San Jose, California.
…
“And it’s growing because the two mortgage companies operating under U.S. conservatorship aren’t finding buyers faster than new foreclosures come in.”
Here’s a modest proposal for the shortage of buyers relative to the rate of new foreclosures: LOWER THE WISHING PRICES!
Oh, we buyers are out here. Maybe they’ll find me. I’ma offer $45k on a house they paid $215,000 for about 6 months ago which is sitting vacant…
I take that back. I think I’ma offer $35k instead. Just because…
Missed reporting deadlines are a hallmark of the era of the GSEs’ protracted battle with terminal illness.
P.S. (SPOILER ALERT!) Look for the State of the Union address to include a renewed Obama administration pledge to prop up the value of Americans’ most valuable possession — their homes — as though all American households were homeowner households, and to announce some newfangled taxpayer-subsidized scheme to do so.
* MARKETS
* JANUARY 22, 2011
Fannie-Freddie Report Likely to Be Late
By NICK TIMIRAOS
The Obama administration is likely to miss a deadline for issuing a long-awaited report about the future of mortgage giants Fannie Mae and Freddie Mac, and what might replace them.
The Dodd-Frank law enacted last year to overhaul financial-industry regulations didn’t address how to reshape the troubled mortgage concerns, which have cost taxpayers a combined $134 billion since they were taken over by the government in 2008. But the law did require the Treasury Department to report recommendations for Fannie and Freddie by Jan. 31.
The administration now plans to release the report by mid-February. Officials say the delay is needed to accommodate other major policy initiatives, including next month’s release of the annual budget and the president’s State of the Union address next Tuesday.
People familiar with the matter say a final proposal has also been stymied by turnover of senior staff that had been heavily involved in drafting the report. There have also been policy disagreements between Treasury and White House officials, which has complicated efforts to reach consensus, these people said.
Due to the lack of agreement, once a final report is released it is likely to contain two or three proposals for what should replace Fannie and Freddie, and discussions of the merits and drawbacks of the different approaches, according to people familiar with the plans.
One of the proposals will outline a way for the government to continue backing certain mortgage-backed securities, while another will discuss how to structure a market with no government guarantees. The report also is likely to include a detailed road map for the short-term steps that can be taken to prepare for a transition to either model.
Offering multiple proposals could help the administration build support from different stakeholders and frame the coming debate with Congress. Republicans may face their own divisions over whether to embrace a fully private market, a goal of many conservative lawmakers.
Republicans were sharply critical of the absence of Fannie and Freddie in the Dodd-Frank bill and missing the deadline is almost certain to spark further criticism from GOP lawmakers.
…
Kept seeing ForeclosureHamlet.org so I searched it, and there they are fighting for the “victims”
Foreclosure Hamlet
Supporting, Informing & Connecting People in Foreclosure
A safe, supportive online community empowering those challenged with foreclosure with the tools, resources & connections they need.
http://www.foreclosurehamlet.org/ - 90k -
Worth a look.
I liked “The Wall of Shame”.
I assumed that “victims” meant taxpayers, but then I looked at the web site and I see they are actually on the deadbeat borrowers’ side.
Obama housing proposal now expected in early February
By Corbett B. Daly
WASHINGTON | Fri Jan 21, 2011 5:45pm EST
WASHINGTON Jan 21 (Reuters) - A long-awaited proposal from the Obama administration on what to do about mortgage finance giants Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB) is now expected to be unveiled in early February, rather than late January, congressional and administration sources said on Friday.
…
I guess since Bawney Fwank got himself a piece of Fannie pie, the banksters want pieces, too.
January 21, 2011, 2:00 am
Investment Banking
Banks Want Pieces of Fannie-Freddie Pie
By DEALBOOK
As the Obama administration prepares a report on the future of Fannie Mae and Freddie Mac, some of the nation’s largest banks are offering a few suggestions, Louise Story reports in The New York Times.
Wells Fargo and some other large banks would like private companies, perhaps even themselves, to become the new housing finance giants helping to bundle individual mortgages into securities — that would be stamped with a government guarantee.
The banks have presented their ideas publicly through trade groups. Housing industry consultants and people familiar with recent meetings at the Treasury Department say these banks view the government’s overhaul of the mortgage market as a potential profit opportunity. Treasury officials have met with executives from several institutions, including Wells Fargo, Morgan Stanley, Goldman Sachs and Credit Suisse, according to a public listing of the meetings.
The administration’s report, to be released later this month, is expected to be sweeping and could address basic questions like whether a government guarantee is needed at all for middle-class homeowners.
…
My proposed remedy: PERMANENT SHUT DOWN.
Posted on Sun, Jan. 23, 2011
Healing the mortgage ills
Remedies are possible in the case of Fannie and Freddie: All private, all government, or some mixture of both.
Washington is gearing up for its next epic policy debate: what to do about Fannie Mae and Freddie Mac.
Fannie and Freddie are the two mortgage behemoths that the federal government created decades ago, and then took over as the financial system unraveled in 2008. What policymakers decide will determine how high mortgage rates go in the future, how easy it will be to obtain a home loan, and whether the popular 30-year fixed-rate mortgage continues to exist.
No one wants to return to the situation that existed just before the financial crisis. Fannie and Freddie had evolved into odd combinations of public and private: profit-maximizing, shareholder-owned companies with unique charters and implicit - but never clearly spelled out - federal backing. Each could thus borrow more cheaply than other financial institutions could, and both used that advantage to earn rich profits investing in higher-yielding mortgages. Fannie and Freddie were also allowed to operate with very thin capital cushions to protect them if their investments went bad.
There was a political quid pro quo for these advantages: Fannie and Freddie had to give a significant share of their mortgage loans to lower-income homeowners and members of disadvantaged groups. It wasn’t a bad goal, although it was probably taken too far, and the nation clearly paid a high price for it. Of all the federal government’s bailouts during the financial panic, those of Fannie and Freddie will cost taxpayers the most - almost $150 billion. Rescuing Detroit’s automakers cost about $15 billion, while the bank bailouts resulted in a net gain for taxpayers.
One solution to the Fannie and Freddie problem is to formally and permanently make them part of the federal government. The chief benefit: a guaranteed steady flow of credit, at reasonable rates, in good and bad economic times.
But nationalizing Fannie and Freddie would saddle the government with significant new risks, as well as with the institutions’ debts, which would add to an already-mountainous federal debt load. In the long run, such a system could also stifle innovation, while tempting lawmakers to subsidize mortgages for favored constituents, distorting a huge part of the U.S. economy.
…
LETTER TO THE EDITOR:
Government agencies failed to protect citizens
Bruce Feher, Las Vegas
Sunday, Jan. 23, 2011 | 2:03 a.m.
Friday’s front-page column “Afflicted by debt, morality” hits the nail right on the head but not hard enough.
Like (Scott) Dickensheets, my wife and I are in a similar situation, including a grandchild living with us. In addition, we have two adult children and one of their friends sharing our household.
I believe the article missed an important point — the responsibility of all the government agencies that were asleep at the switch and allowed this tragedy to occur.
Where were the officials at HUD, Fannie Mae, Freddie Mac and the legions of state agencies?
Oh, I remember now, here in Nevada they were taking gifts and Rolling Stones tickets from the companies they were supposed to regulate. No conflict of interest there, right?
…
To walk or not to walk: Underwater homeowners face moral dilemma
By Scott Dickensheets
Friday, Jan. 21, 2011 | 2 a.m.
Mine is a nice house. Big enough for a family and all of its furniture and clothing and toys and books and papers and dogs and more books and miscellaneous junk and even a cat. Decent-size back yard, for a suburban tract home. Good-enough neighborhood.
Sometimes I really dislike that place.
Not for aesthetic reasons, although it is exactly the sort of home people have in mind when they sneer about the stucco banality of the suburbs. I’m OK with that.
My bouts of bad mojo have more to do with, of course, money and, perhaps surprisingly, morality.
We bought this house new in 2006, not market-savvy enough to sense the trapdoor already opening beneath us. In truth, we bought a little more house than we should’ve; we had a granddaughter on the way, she’d be living with us and … well, never mind the exculpatory details. Point is, it was a stretch, but we could, and still can, pay the bank its monthly vig, even though the house has hemorrhaged half of its value.
…
“Mine is a nice house. Big enough for a family and all of its furniture and clothing and toys and books and papers and dogs and more books and miscellaneous junk and even a cat. Decent-size back yard, for a suburban tract home. Good-enough neighborhood.”
By contrast, my family has rented a smaller home than we could have comfortably fit into with a smaller backyard, no dogs or cats, and a shortage of miscellaneous junk, in order to avoid FB status.
We bought a 1550-sqft home that feels small now because the kids are entering their teen years, but I bought with the California dotcom bubble still fresh in memory, so I didn’t want to over-extend myself. A home at 2.5 x income doesn’t buy much in metro America right now, but it will again down the road.
By contrast, my family has rented a smaller home than we could have comfortably fit into with a smaller backyard, no dogs or cats, and a shortage of miscellaneous junk, in order to avoid FB status.
I’m so glad that at least someone has the money to help cover their losses. Please accept the thanks of a grateful nation. Just make the check out to Cash.
I really appreciate the writer’s honesty in this article. It is a rare virtue in an MSM dominated by propaganda, willful ignorance and lies.
…
‘At moments like that I hear two conflicting voices. One is the internalized voice of my late father, reminding me that it’s important to fulfill my obligations. He was big on personal responsibility; we like to believe that’s an American virtue. That’s a mark of your character, I can hear him say, and that if you default on your responsibilities just because it’s easier, it says something about you that you don’t want said.
But I also hear another American voice, the voice of capitalism’s moral relativism, the one that preaches “enlightened self-interest.” Because America also salutes doers smart, nimble and entrepreneurial enough to game a bad situation to their advantage.
That voice tells me I’m a chump for sticking to my outmoded principles while all these other people are snagging great deals. Look at your new neighbors, this voice purrs, they’re getting the same amount of house for half what you paid.
(Actually, there’s a third voice, one that wants to cram a fistful of negative equity down some mortgage-broker’s craw, but let’s leave that for my future shrink to deal with, shall we?)
I’m far from alone in this. “I’ve seen sellers agonize over whether or not to walk away from their homes,” says Realtor Diann Tonnesen of Prudential American Group; she’s a 28-year veteran of this crazy market. “It’s not what they want to do, it’s not how they were raised. But at the same time, they feel it would be stupid not to in this market.”’
…
“Bidness” is “Bidness” …in America!
Individual (person) = “Suffer the consequences of YOUR actions!”
Corpooration Inc. (SCOTUS/person) = “Indemnified”
Speaking of SCOTUS, here’s a recent 2011 example:
By Kim Geiger, Washington Bureau / January 22, 2011 / LA Times
Clarence Thomas failed to report wife’s income, watchdog says
Virginia Thomas earned over $680,000 from conservative think tank the Heritage Foundation over five years, a group says. But Supreme Court Justice Clarence Thomas did not include it on financial disclosure forms.
“It wasn’t a miscalculation; he simply omitted his wife’s source of income for six years, which is a rather dramatic omission,” Gillers said. “It could not have been an oversight.”
But Steven Lubet, an expert on judicial ethics at Northwestern University School of Law, said such an infraction was unlikely to result in a penalty. Although unfamiliar with the complaint about Thomas’ forms, Lubet said failure to disclose spousal income “is not a crime of any sort, but there is a potential civil penalty” for failing to follow the rules. He added: “I am not aware of a single case of a judge being penalized simply for this.”
The Supreme Court is “the only judicial body in the country that is not governed by a set of judicial ethical rules,” Gillers said.
In most cases, judges simply amend their forms when an error is discovered.
“It wasn’t a miscalculation; he simply omitted his wife’s source of income for six years, which is a rather dramatic omission,”
IRS Compliance Investigator agent Joey:
“BWAHAHHAHAHAHHAHAHHAHHAHAHAHHHHHHHHHHHHH!!! (fpss™)”
&
“Ho ho, hah hah, hehehehehehe, BwaHaHaAhHAHAHAHAHAHA!!! (Cantankerous Intellectual Bomb-thrower™)”
‘“It wasn’t a miscalculation; he simply omitted his wife’s source of income for six years, which is a rather dramatic omission,” Gillers said. “It could not have been an oversight.”’
I guess if the Treasury Secretary does this kind of thing, it is no big deal if a SCOTUS justice does it, too? After all, they are both at a sufficiently lofty level of the U.S. government to live effectively above any rule of law.
“is not a crime of any sort, but there is a potential civil penalty”
Why then do I suspect that if one of the ‘little people’ out there in flyover country inadvertently underreported $680,000 in income to the I.R.S., they would head to jail?
Didn’t Al Capone ultimately wind up in federal prison over issues with the IRS?
Why on earth are you guys assuming that “financial disclosure forms” are tax returns?
Polly — Are you trying to suggest that Clarence Thomas is not a tax cheat like Tim Geithner is? If so, I’m relieved; if SCOTUS justices don’t follow the law, we are in trouble.
Conservative Political Humor and Satire Banner
Timothy Geithner Tax Cheat American Hero
January 24th, 2009 by Fiar
President Obama’s choice for Treasury Secretary Timothy Geithner has been taking some heat for tax evasion, but I have a different take on his tax fraud. In this political editorial I will explain why I applaud President Obama for choosing Timothy Geithner to head the Treasury Department.
According to reports, Geithner “failed to pay self-employment taxes for money he earned from 2001 to 2004 while working for the International Monetary Fund.” Although many have criticized his minor oversight, I believe that Geithner is just the kind of person that we need in charge of our money. President Obama has made a shrewd choice in selecting this American Patriot to this important government office.
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I don’t see how this has anything to do with Justice Thomas’s income tax. Presumably he and his wife file separately since they both have sizeable incomes. Nothing in the article discusses Virginia Thomas’s tax returns, only reporting his income for ethics reporting.
This part sounds to me like sour grapes to FBs:
“…and soon enough a U-Haul will back into the driveway, and a happy family will spill out of a minivan, all smiles at having nabbed a bigger house than ours for a lot less than we paid. It’s already happened around our neighborhood, short-sale or foreclosed homes snapped up on the cheap.”
Austerity, American style = STAGFLATION, coupled with high profits and big bonuses for investment bankers.
Here Comes $4 Gas, $5 Cups of Coffee
The final dam to stopping $150-a-barrel oil and $4-a-gallon gas is being breached, as financial regulation continues its daily erosion into worthlessness.
Watching the CFTC attempt to back up Dodd-Frank legislation since it was passed in July has been like watching salmon flop upstream as the water drains out — it’s slow, arduous and likely to lead nowhere.
It is clear now that we will instead be witness to the highest prices for commodities ever, fueled by the biggest influx of profit-driven trading and investment ever, unstanched even in the slightest by the hopes of financial regulation legislation.
…
we will instead be
witnessunwilling participants to the highest prices for commodities ever, fueled by the biggest influx of profit-driven trading and investment ever, unstanched even in the slightest by the hopes of financial regulation legislation.(Hwy50, rummages through his misc. “Happy Camper” box for his 1970’s… “WIN” button.)
Banana Hymn of the Republic?
To the tune of America the Beautiful:
O beautiful and spacious lies,
For fraudulent Wall Street gains,
With pinstriped swindling tragedies
Above your 401k! America! America!
God won’t shed these disgraceful thieves
And crown those hoods–the Banksta Brotherhood
From scheme to ponzi scheme!
O beautiful thievery and politico crony lies
Whose two faced disgrace
A thoroughfare of lobbying and greed
Across the populist wilderness!
America! America!
God hang every corrupt and crony fiend,
Confirm thy soul without self-control,
Their liberties are obscene!
O beautiful for heroes screwed
In bungled economic strife
Those who love themselves above their land
And moral hazard more than life!
America! America!
May God’s work Goldman refine
Till all success be Fat Catness
And bailout gains divine!
O beautiful for patriots reamed
That sees beyond the tears of subprime slime
Thine asset bubbles gleam
Undimmed by quantitative legerdemain!
America! America!
God won’t shed this disgrace from thee
And crown those hoods– the Banksta Brotherhood
One big den of pinstriped Wall Street thieves!
(From William Banzai)
New York Gov. Andrew Cuomo is weighing plans to lay off more than 10,000 government workers, rivaling the number of pink slips handed out by his father a generation ago, according to individuals familiar with budget discussions.
While Mr. Cuomo has not settled on a figure, the governor in recent days has told lawmakers and other officials that he is looking at dismissing 10,000 to 12,000 workers, or more than 5% of the state’s public work force, the individuals say.
Not since the early 1990s, when Mario Cuomo was grappling with a recession, has a New York governor threatened layoffs of that magnitude.
Talk of layoffs has escalated as Mr. Cuomo prepares to submit his budget for the upcoming fiscal year. Since taking office on Jan. 1, after a landslide victory in November, the former state attorney general has enjoyed robust public support and has courted cooperation across a spectrum of government players: labor leaders, upstate advocates, real-estate developers and Wall Street bankers.
But his standing—particularly his effort to avoid a damaging clash with public-employees unions—will face the most daunting test in just over a week, when he lays out his plan to drag the state out of a $10 billion budget hole, a deficit that encompasses 15% of projected state spending.
“It’s obviously going to be an extreme amount of pain and suffering for families across the state,” said a Republican senator on Wednesday evening. “The dark days of the ’70s have returned.”
10,000-15,000 is just FIVE PERCENT of New York’s state government workers?
Talk about bloat.
And of course he doesn’t want to take on the public unions. Cutting 10,000 of these employees would save 1 billion dollars, assuming each employee costs $100,000. The deficit is 10 billion dollars.
These idiots don’t want to spit on the golden calf of ridiculous benefits and pensions that have been promised to the public unions. And anybody that is going to jump out to defend these people can come here to NYC and do it in person. Let’s watch the MTA, the police and other recipients of these wonderful benefits and then try to defend these appartchiks.
“10,000-15,000 is just FIVE PERCENT of New York’s state government workers?
Talk about bloat.”
I sure hope they don’t touch The Department of gay, lesbian, bi-sexual and transgender African American lefthanded midgets. That would really be a death blow to the well being of the middle-class of this state. Maybe they can cut something from the Ministry of self-esteem and well being of illiterate, diabetic, insomniac dog catchers. We could probably live with that.
Don’t know for sure, but are school district employees counted in this. If then, the number makes sense. Even though, I’m sure the number could be cut.
Texas is looking at cutting 80,000-100,000 school workers alone.
I heard that the CA state education bldg in Sacremento has some 8000 on staff. Good place to start cutting.
“Texas is looking at cutting 80,000-100,000 school workers alone.”
I guess the streets aren’t paved with gold there after all.
“the National parties and their presidential candidates, with the Eastern Establishment assiduously fostering the process behind the scenes, moved closer together and nearly met in the centre with almost identical candidates and platforms, although the process was concealed, as much as possible, by the revival of obsolescent and meaningless war cries and slogans”
- Carroll Quigley, “Tragedy & Hope”, pg 1247.
For those who think that private charities always do a better job than government.
http://seattletimes.nwsource.com/html/nationworld/2014014387_apeuaidsfundcorruption.html
“A $21.7 billion development fund backed by celebrities and hailed as an alternative to the bureaucracy of the United Nations sees as much as two-thirds of some grants eaten up by corruption, The Associated Press has learned.
…
The Global Fund was set up as a response to complaints about the cumbersome U.N. bureaucracy, and is strictly a financing mechanism to get money quickly to health programs. In just eight years it claims to have saved 6.5 million lives by providing AIDS treatment for 3 million people, TB treatment for 7.7 million people and handing out 160 million insecticide-treated malaria bed nets.
People should focus on those results, said Homi Kharas, a senior fellow at the Brookings Institution and formerly the World Bank’s chief economist for East Asia and the Pacific.
“Without a spotlight, without investigations, and without some sort of accountability, it’s impossible to root out corruption,” he said. “But just simply withdrawing donations, I do believe, would condemn millions of people who are not involved in the corruption to terrible fates.”
“
Like welfare, which costs roughly $4.00 to giveaway $1.00?
And still both parties cry for more government. For the left it is government of every flavor that doesn’t include military or police. For the right it is police and military. And with each added layer of government we see our freedoms slip away and the future of the country become dimmer. Too bad there is no real party that distrusts government.
I would repeal welfare but I’ll call bs on the statement that they spend 4 dollars to give a way 1 dollar.
Medicare spends 6 cents of every dollar of medical care it pays for. This is much more complicated than welfare.
Private insuance takes 15-25 cents.
http://www.google.com/trends?q=buy+a+gun
If all the MSM happy talk of an economic recovery and boom times ahead is true, then why is “buy a gun” topping Google searches?
People still must be worried Obama’s gonna take all their guns away.
Got stag?
* EUROPE NEWS
* JANUARY 24, 2011
Global Price Fears Mount
As Food, Raw Materials Soar, Europe’s Central Bank Head Warns on Inflation
By BRIAN BLACKSTONE And MARCUS WALKER
Inflation fears—fueled by spiraling food, oil and raw material prices—are mounting around the globe, prompting the head of the European Central Bank to signal that it could raise interest rates in the future even though some countries have been weakened by the Continent’s debt crisis.
Jean-Claude Trichet, president of the European Central Bank, pictured last week at a euro group finance ministers meeting in Brussels.
In an interview with The Wall Street Journal ahead of this week’s annual meeting of the World Economic Forum in Davos, Switzerland, Jean-Claude Trichet warned that inflation pressures in the euro zone must be watched closely, and urged central bankers everywhere to ensure that higher energy and food prices don’t gain a foothold in the global economy.
Mr. Trichet’s warning comes at a time when inflation concerns are mounting among investors around the world. Fast-growing emerging markets such as China and Brazil are seeing rising inflation at home, and their demand for globally traded commodities is pushing prices higher elsewhere.
While high unemployment and spare capacity are restraining underlying inflation pressures in the U.S. and elsewhere in the developed world, annual inflation in China is almost 5%—and a sizzling 9.8% economic growth rate in the fourth quarter triggered fears of more price pressures ahead. Inflation in Brazil is even higher.
With the global recovery still in its early stages, those moves could accelerate. Higher raw material prices, especially coal and iron ore, are pushing up steel prices across the globe. Steelmakers including AK Steel and Nucor in the U.S., and China’s Baosteel and South Korea’s Posco—the world’s second and third largest—have been steadily increasing prices in recent weeks. The world average carbon-steel price is forecast to exceed $1,000 per metric ton by the second half of 2011, up from an average $733 last year, according to U.K.-based consultancy MEPS.
“All central banks, in periods like this where you have inflationary threats that are coming from commodities, have to…be very careful that there are no second-round effects” on domestic prices, said Mr. Trichet in his office overlooking Frankfurt’s financial district.
…
Will Wall Street steal away Fannie, Freddie?
By Steven Pearlstein
Sunday, January 23, 2011
What’s to be done with Fannie Mae and Freddie Mac?
Right now, a cottage industry of analysts, lobbyists, regulators, financiers and elected officials is hard at work formulating a future course for the mortgage finance giants, which have been under government conservatorship since September 2008. White papers are now spewing from think tanks and trade associations, and the Treasury is set to issue its recommendations early next month, to be followed by a round of congressional hearings.
This is likely to become a noisy, ideological debate that reignites the old argument about whether Wall Street greed or Washington meddling is to blame for the financial crisis.
Most of the shouting is likely to come from free-market ideologues, including the House Republican leadership, which is determined to get the government out of the business of providing mortgage guarantees and sell Fannie and Freddie off in pieces.
These leaders will be opposed by a formidable coalition of home builders and community bankers, along with low-income-housing advocates and the Obama administration. Their view is that without some form of government guarantees, loan rates will rise, housing prices will fall and the 30-year fixed mortgage will disappear.
Whatever is decided will have significant impact on the national housing market and the economy. But for those of you reading this column on paper, the much bigger impact could be on the economy of the Washington region where you live. Fan and Fred are among the largest private employers and the pillars of a much larger housing finance cluster that accounts for tens of thousands of high-paying jobs. They have helped to make Washington the capital of the secondary mortgage market and a growing center for banking, finance and asset management. If the conservative ideologues have their way, this engine of the regional economy will be dismantled and shipped north to Wall Street.
…
Judges to weigh mortgage document destruction
By Scot J. Paltrow
WASHINGTON | Sun Jan 23, 2011 2:50pm EST
A realtor and bank-owned sign is displayed near a house for sale in Phoenix, Arizona, January 4, 2011.
REUTERS/Joshua Lott
WASHINGTON (Reuters) - Federal bankruptcy judges in Delaware are due to hold separate hearings Monday on requests by two defunct subprime mortgage lenders to destroy thousands of boxes or original loan documents.
The requests, by trustees liquidating Mortgage Lenders Network USA and American Home Mortgage, come despite intense concerns that paperwork critical to foreclosures and securitized investments may be lost.
A series of recent court rulings have increased the importance of original loan documents, holding that they are essential for investors to prove ownership of mortgages and to have the right to foreclose.
In the Mortgage Lenders case, the U.S. Attorney in Delaware has formally objected to the requested destruction because loss of the records “threatens to impair federal law enforcement efforts.”
The former subprime lender shut down in February 2007. In a January 6, 2010, motion, Neil Luria, the liquidating trustee, asked Bankruptcy Judge Peter J. Walsh for permission to destroy nearly 18,000 boxes of records now warehoused by document storage company Iron Mountain Inc.
Luria stated that destruction is necessary to eliminate $16,000 per month in storage costs as he disposes of the last assets of the bankrupt company.
In the American Home Mortgage case, the liquidating trustee, Steven Sass, has asked Bankruptcy Judge Christopher Sontchi to approve destruction of 4,100 boxes of loan documents stored in a dank parking garage beneath the company’s former headquarters in Melville, Long Island.
AHM had been one of the biggest originators of subprime loans until it abruptly collapsed and closed in August 2007. The boxes are the last still held by AHM. Sass stated that the local fire marshal wants the documents removed as a fire hazard, and he said the cost of moving them would be prohibitive.
In accordance with a 2009 court order, the bankrupt company earlier had destroyed the contents of thousands of other boxes after banks and other loan servicers had been given a chance to request and pick up particular files.
The issue of document destruction is sensitive because in recent months evidence has turned up that vast numbers of original loan documents by major lenders were never transferred as required when the mortgages were securitized and sold to investors.
Lawyers for homeowners have strongly objected to AHM’s document destruction, contending that vital evidence borrowers need to defend themselves in foreclosure cases will be lost.
…
Step 1 to a stronger mortgage credit system: Get the government agencies primarily responsible for undermining stability, namely HUD, the FHA, Fannie Mae and Freddie Mac, out of the mortgage lending business.
FDIC wants more loan modifications, fewer foreclosures
By: Ethan C. Nobles
23 January 2011
Here’s a newsflash — foreclosures are still plaguing the real estate and mortgage industries.
The amount of foreclosures in the nation has prompted Federal Deposit Insurance Company (FDIC) Chairman Sheila C. Bair to declare it is in the best interests of borrowers and lenders to pursue loan modifications.
We all know the story by now. People got in over their heads with either subprime or — in some cases — prime mortgages and the ramifications have been severe. Entire neighborhoods stand nearly empty in some parts of the nation and home values have been dragged down as a result of a glut of homes in foreclosure. After all, who’s going to pay, say, $200,000 for a home when a similar one down the street is in foreclosure and is available for considerably less money?
It doesn’t appear we’ll see fewer foreclosures in the near future unless something radical happens. A few months ago, Kathy Deck — director of the Center for Business and Economic Research at the University of Arkansas — said she expects foreclosures to remain a problem through at least the first quarter of next year. Why? A lot of those homes in foreclosure were purchased with subprime loans.
Quite often, those subprime loans allowed a buyer to get into a home at a low rate and not worry about unfavorable terms — such as the interest on an adjustable rate mortgage — kicking in for five years. The subprime lending industry pretty well collapsed in 2007, meaning a good number of loans were written up until that time. To that end, we’re likely to see some troubled loans for quite some time.
To confuse the issue even further, the foreclosure processes used by some in the mortgage industry came under fire last year. We’ve had questions about whether the paperwork filed in those actions was adequate, investigations by the federal government and attorneys general throughout the nation and just a lot of questions about foreclosures that might not be answered until later this year.
The foreclosure mess prompted the national Mortgage Bankers Association and other industry insiders to form a task force — the Council on Residential Mortgage Servicing for the 21st Century — to take a hard look at the entire loan servicing industry and suggest ways to establish a stronger, less risky credit system.
…
Articles like this one get to one of various reasons I cannot get as giddy about the prospect of snapping up a foreclosure home as the REIC fluffers would like me to be.
Let home buyer beware
Builder appeals ruling, seeks clear title to foreclosed property
By Thomas Grillo
Monday, January 24, 2011 - Updated 4 hours ago
Buyers of properties who thought they were getting a bargain at foreclosure auctions could be out of luck depending on the outcome of a lawsuit.
The state’s Supreme Judicial Court will decide whether a home buyer can be the legal owner if the bank that sold it to him lacked the right to foreclose on the original owner.
“This suit frames the issue as the competing rights of someone who purchased a foreclosed property, and the rights of the former owner who might have been unlawfully foreclosed on,” said Gary Klein, a Boston attorney who specializes in real estate law.
…
Posted: Sunday, January 23, 2011 2:23 am |
Updated: 2:27 am, Sun Jan 23, 2011.
It’s not over yet: foreclosures dominate local housing market
By Karen Walenga
Home foreclosures in Sahuarita’s largest residential development were up about 80 percent in 2010, reflecting the turbulent housing market across the state and nation.
For 2010, 188 homes went into foreclosure in Rancho Sahuarita, up from 104 in 2009, said Tom Murphy, Rancho Sahuarita’s community liaison.
In Pima County, 11,663 homeowners received default or foreclosure notices in 2010, according to the Pima County Recorder’s Office, and 6,793 were sold at auction. A year earlier, the county had a record 12,184 notices of default or foreclosure, and 5,826 of those were sold at auction.
The number of Pima County homeowners receiving such notices quadrupled as of 2010 from 2,842 in 2006, before the recession hit. Those homes sold at auction rose ten-fold from 627 four years earlier.
“2011 is going to be the peak,” said Rick Sharga of RealtyTrac, which tracks foreclosures. The company predicts 1.2 million U.S. homes will be repossessed by lenders this year.
…
Note to banksters executing foreclosure evictions: Don’t forget to check for live animals inside before leaving the premises.
17 pets dead in foreclosed Granite Falls home
THE ASSOCIATED PRESS
GRANITE FALLS, Wash. — Police say they found at least 17 pets dead inside a foreclosed and abandoned Granite Falls home.
Police Chief Dennis Taylor says he found 15 to 20 dead cats and two dead dogs at the home. He says the home is owned by Fannie Mae, which foreclosed on it in October. The property manager recently sent a locksmith to the home to change the locks, and he reported the odor coming from the home to police.
Taylor says some of the animals have been dead for months. Three emaciated cats survived and have been turned over to Pasado’s Safe Haven animal shelter.
A 65-year-old woman and her 36-year-old abandoned the home after it went into foreclosure. Taylor says they’re cooperating but have not been arrested.
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Note to prospective foreclosure home buyers: Check for dead animal smell inside before going through with any purchase.
At least 31 dead animals found in vacant home
Locksmith reports foul odor at foreclosed house in Washington state
By TONYA MOSLEY
updated 1/22/2011 9:16:43 PM ET
GRANITE FALLS, Wash. — Investigators found at least 31 pets dead inside a foreclosed and abandoned Granite Falls home after a locksmith reported a foul odor.
A team from Pasado’s Safe Haven is assisting the Granite Falls Police Department in removing the cats and dogs.
“Seems like everywhere you stepped there’s an animal. They literally did just lay down and die,” said Amber Chenoweth of Pasado’s.
Diane Cowling, the former homeowner, lived with the dead animals up until last month.
“I just shut down. I didn’t see it, I didn’t want to deal with it,” she said.
Cowling says she was diagnosed with breast cancer. Then her home went into foreclosure and no shelter would take her animals.
Cowling just moved out of the home last month. She says she just got overwhelmed and couldn’t afford to feed the animals.
“I spent as much money as I could feeding them, taking care of them, but there wasn’t enough money to go around,” she said.
…
No foreclosure before its time:
* January 21, 2011, 12:35 PM ET
Bad Hangover: Socialite Patricia Kluge Faces Foreclosure
Melissa Korn reports:
Talk about a hangover.
Winemaker and socialite Patricia Kluge, ex-wife of the late Metromedia founder John Kluge, is facing foreclosure proceedings on her Albemarle House in Charlottesville, Va. According to local paper The Daily Progress, Bank of America filed suit alleging Patricia—who got the house in her divorce—defaulted on nearly $23 million in loans on the 23,500-square-foot mansion.
A representative for Patricia Kluge wasn’t immediately available for comment.
The house had been on the market since late 2009, and Kluge chopped the asking price to $48 million from $100 million last February.
Sotheby’s International, which bills the property as “one of the most important residences created in the United States since the Golden Age,” now lists the home for a veritable steal: $24 million. The neo-Georgian house has eight bedrooms, 13 bathrooms, two half-baths and a helipad. Oh, and a wine cellar.
This isn’t Kluge’s first brush with foreclosure. She and now-husband William Moses saw Farm Credit Bank take over their Kluge Estate Winery & Vineyard for $19 million late last year.
The company, founded in 1999, provided the drink of choice at Chelsea Clinton’s summer 2010 nuptials and was trying to expand beyond its East Coast distribution base.
…
Faulty Foreclosure May Mean Massachusetts Buyer Isn’t Owner
By Thom Weidlich - Jan 20, 2011 9:01 PM PT
Claims of wrongdoing by banks and loan servicers triggered a 50-state investigation last year into whether thousands of U.S. foreclosures were properly documented during the housing collapse. Photographer: Jacob Kepler/Bloomberg
Massachusetts’ highest court will consider whether a home buyer can rightfully own a property if the bank that sold it to him didn’t have the right to foreclose on the original owner.
The state’s Supreme Judicial Court, which agreed last month to take the appeal, already ruled Jan. 7 that banks can’t foreclose on a house if they don’t own the mortgage. The lower- court decision now under review said the buyer of residential property in Haverhill, Massachusetts, never really owned it because U.S. Bancorp foreclosed before it got the mortgage.
“It appears to be the next step in the conversation,” Paul R. Collier III, who represented the borrower in the earlier case, U.S. Bank v. Ibanez, said in a phone interview.
…
Houses still cost too much.