Bits Bucket for March 19, 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.
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Name:Ben Jones
Location:Northern Arizona, United States
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NAR is a crime syndicate.
they sure are, the spin/propaganda machine is in full force here in MA. Boston Glob carrying realtor quotes about bidding wars (urban legend), shortgage of decent properties, “buy now before rates go up” BS, the usual…
It’s an echo chamber. Only the deluded, criminal NARscum hear it.
Realtors have lied so much that they don’t even believe themselves anymore.
What most of the members do is parrot what they are told. In my opinion, most of them are not qualified to guide people in the biggest transaction of their life. That’s just my opinion.
I’ve always thought the additional classes for a Brokers License should be Agent requirements. That would thin out the really dumb ones, and the glamour shot crowd.
“What most of the members do is parrot what they are told.”
All real estate ain’t local no more, ’cause first-time homebuyers EVERYWHERE face the opportunity of a lifetime!
Bawk! Polly want a mortgage?
First Time Buyers Face Opportunity of a Lifetime
First-Time Homebuyers Face the Opportunity of a Lifetime
First-Time Homebuyers Face the Opportunity of a Lifetime
First Time Buyers Face Opportunity of a Lifetime
First-Time Homebuyers Face the Opportunity of a Lifetime
Opportunity of Lifetime for First time Home Buyers
First-Time Homebuyers Opportunity of a Lifetime
First-Time Homebuyers Face the Opportunity of a Lifetime
First Time Homebuyers Opportunity of a Lifetime
First Time Buyers Face Opportunity of a Lifetime
First Time Buyers Face Opportunity of a Lifetime
…
“Bawk! Polly want a mortgage?”
No thanks. Not right now. Maybe in a few more years. Then again, maybe not.
I didn’t mean YOU, Polly!
“Boston Glob carrying realtor quotes about bidding wars (urban legend), shorage of decent properties, ‘buy now before rates go up’ BS, the usual …”
And the Boston Glob is doing this because …?
Because they get a log of advertising revenue from the realtors. They will not bite the hand that feeds them.
Newspapers are already in enough financial trouble. Most have gone into survival mode. They are not about to trash an industry that hands over a bunch of money to them.
However … if all real estate is LOCAL, then the false news about real estate is also local. The truth may be found elsewhere.
Here in Southern California the L.A. Times pumps the L.A. area’s RE market and somewhat trashes Orange County’s RE market. (They don’t actually trash the OC market, they just tell a bit of the truth about the OC market, and it comes out as trashing.)
The Orange County Register does just the opposite.
RE: “Boston Glob carrying realtor quotes about bidding wars (urban legend), shorage of decent properties, ‘buy now before rates go up’ BS, the usual …”
And the Boston Glob is doing this because …?
Because they get a log of advertising revenue from the realtors. They will not bite the hand that feeds them.
The Beantown Glob is a bigger shill for non-existent rising market values and demand velocity than even the blatant propagandists at the NAR.
If any other industry produced the fabrications that this worthless rag throws out, they’d be investigated by the FCC, FDA, FDIC, or any other aphabet soup do-nothing Fed “consumer protection” agency for violations of product disinformation and misleading advertising, like the penis enlargement pill Enzyte crowd and other assorted rip-off miscreants.
Oh, wow…haven’t seen you in awhile, hd74man. Good to see you again.
Welcome back!
CA Renter
Thanks for the welcome back.
No matter what sources I’ve read over the years since Ben started this blog, the collective perspective of the regular posters here, remain the only commentary with any semblance of credibility pursuant to getting it all right relative to the real estate collapse and all the other financial travails which have emerged in this country.
SFGate aka San Francisco Chronicle is doing the same with pictures of the reasonably priced $1,000,000 home with a view.
Good thing there are so many rich folks around San Francisco who can easily drop the cash to snap up a $1m home.
MA prices are still beyond ridiculous….
http://www.redfin.com/MA/Belmont/329-Mill-St-02478/home/8454784
Charming all right…
http://www.redfin.com/MA/Belmont/8-Taylor-Rd-02478/home/8436832
Holy cow… I would NEVER spend that much for a house with only a one-car garage, especially in a snowy state.
There’s a new Realtor TV ad showing little Johnny giving a book report at show & tell about how home ownership strengthens communities. Barf. Now they’re trying to appeal to FBs through their kids…. Just like those sucky SUV ads with little Lord Fauntleroy smugly being shepherded around by his cowering parent. Some kids wear the pants in families these days.
“Some kids wear the pants in families these days.”
And the parents are wearing adult diapers and acting like 16 year olds.
“Some kids wear the pants in families these days.”
I’ve have noticed this especially with families that only have one child. It seems that they have put all their hopes that someone will care about/for them in old age that the kid pretty much runs things. I have also seen single children that are quite happy/smug to be so as there is no sharing and they presume they will just take over their parents lifestyle when they get old. I wonder how many of those parents will end up in a nursing home and be visited once a month just to make sure their inheritance is secure.
In the grand scheme, NAR is but one part of the ponzi / Madoff scheme to support higher and higher growth in the size of governments at all levels. The average congressional representative, including “liberals” who profess to be all about the economically downtrodden, is a multi millionaire. Gabrielle Giffords, who I admire, she is a multi millionaire.
Government officials at all levels profit from prices of real estate going up and up. They profit from stable families, captive to pay those higher property taxes to support the pensions of government employees (police, fire departments).
When people are captive - mortgage slaves, they cannot easily move to another county or state without a trace if taxes go up. They are like frogs in a pot when the temperature gradually increases.
At the micro level, if they lose their jobs, they seem to feel as though they only have to look for work in the same community.
At some point people will realize that home ownership, while having low net worth, is enslaving and not a way to save for retirement. When they start focusing on building up savings while renting, the government will greatly increase taxes on savings, whatever the asset class (stocks, CDs, TIPS, treasuries).
The battle against this Real Estate scam is not a battle yet. That’s why I am far better off in savings in asset classes outside real estate. Government is focusing on victimizing the fish they caught in the real estate bubble.
My former “name” was still attached in this “safe mode” bootup. Wish I was in LA still, although I’m kinda enjoying Tampa.
‘NAR is but one part of the ponzi’
Looked at one way, the NAR is just a really big, powerful trade group. I don’t think they get together on weekends and devise ways to tie little old ladies to the railroad tracks. But we haven’t had a serious investigation into the causes of the housing bubble. If we did, one particularly blatant type of crime would be exposed; appraisal fraud.
Years ago, I wanted to do a series on this subject. (I didn’t have any funds, so it went nowhere). But I did talk directly with several appraisers. When it was mentioned that they were told to “hit the numbers”, this often came from either a UHS or a loan officer. (Loan officers are also largely missed in the blame game, BTW).
Which brings up a point; why are there no serious efforts to shield the appraisal industry from this kind of pressure, even today?
This pressure to “hit the numbers” was no big secret to anyone who cared enough to look. The information was right there all along, just a few keyboard clicks away.
Which brings up the point of personal responsibility for one’s own actions. We are in the midst of the Information Age: Information concerning any subject imaginable is available to anyone who takes the trouble to do a bit of looking. But a lot of people - millions of them - don’t bother.
They don’t bother to read - or even glance over - papers that they sign that legally commits them to paying out over time hundreds of thousands of dollars.
‘no big secret to anyone who cared enough to look’
It was widely known in the industry:
‘Who Knows What We Don’t Know’ About Appraisals
June 7, 2006
‘Lew Sichelman at Realty Times looks at appraisal fraud. “A faulty or even fake appraisal is said to be at the basis of every fraudulent mortgage transaction. But not every appraiser is at fault, or at least willingly so. James Blaydes (owner) of a Peru, Ill., appraisal firm says that in many cases, appraisers can’t stand up to pressure put on them by mortgage brokers.”
“Either they ‘hit the numbers’ as instructed, he said at the Mortgage Bankers Association’s National Fraud Issues Conference in Chicago recently, or they are blackballed. If an appraiser refuses to inflate a valuation, Blaydes said, he won’t be getting any more business, at least from that particular broker.”
“Speaking for the Appraisal Institute, which has been calling on lawmakers to address mortgage fraud since 1981, when the problem was believed to be in its infancy, the Illinois appraiser said there are plenty of ways to fudge a valuation besides packing the final number.”
“Among other things, appraisers can ignore the best comparables, or use properties in better neighborhoods as comps, he said. They also can mis-describe a property. Or they can fail to mention physical problems.”
“But appraisers aren’t the only ones who commit such flagrant fouls, Blaydes told the conference. Sometimes loan brokers do their own dirty work. They have been known to alter an otherwise honest appraiser’s work by changing the values of each comparable, he said, deleting noted physical issues or other undesirable influences impacting the subject property or even forging their own appraisal reports.”
“The AI spokesmen said, lenders can help themselves by separating the appraiser selection process from loan origination and by preventing loan officers from having any contact with loan officers. ‘That’s something we can do ourselves,’ agreed Erik Stein, executive VP and director of fraud risk management at Countrywide Home Loans. ‘Loan officers shouldn’t get to pick the appraiser.’”
“Stein said faulty appraisals are ‘the single most important issues in collateralized lending.’ ‘All fraud is bad, but the reality is, if the house is worth what the appraiser says, if I have value in the collateral, I’m going to break even.’”
“Emblematic of the scope of the mortgage fraud problem throughout the country is what’s going on in Illinois, where three out of ten appraisals are found to be forged, according to Robert Gorman, an East Hazel Crest, Ill., appraiser. ‘That’s a significant number,’ he told the meeting. ‘And that’s only the ones we know of. Who knows what we don’t know?’”
“Gorman said in some cases, appraisers who have had their licenses lifted continue to make valuations using someone else’s identification. In other instances, he also said, the ‘appraisers’ were never licensed at all.”
“Gorman told of one crew of 13 fake appraisers who are working out of a factory on Chicago’s South side. The authorities would like to shut down this appraisal factory, he said, but they can’t. ‘They’re not licensed, so there’s nothing we can do,’ he said. ‘So they are still there.’”
http://thehousingbubbleblog.com/?p=823
Which brings up a point; why are there no serious efforts to shield the appraisal industry from this kind of pressure, even today?
You right Mr. Ben, but look, in (H’ssO) Hwy’ssimpleOpinion…it’s really just a “trade” job.
However, one’s ability to rectify DAMAGES (Afterwards) ain’t gonna follow along the same course of actions. For example:
Plumber
Electrician
Auto mechanic
RE appraiser
All of the above can apply an official self-adhesive sticker on their “bidness”. They can ink it on their “Professional” “Bidness” card. They can join an official trade group that has “Ethical” x9 mentioned in their “Mission” statement.
If a waste line mal-funtions a week after repairs…you can try and get it & (other resultant damages) rectified by negotiation or small claims court (your time + your efforts + your money $$$)
If a 200 amp panel mal-funtions a week after repairs & the house burns down (hopefully no one DIES) and the fire & Insurance investigation shows it was the cause of poor workmanship…again you or your Insurance can try and get it rectified by negotiation or small claims court (yours & Insurance time + yours & Insurance efforts + temporarily yours money $$$)
If your timing-belt replacement fails a month after repairs at the Good News car shop…again you can try and get it rectified by negotiation or small claims court (your time + your efforts + your money $$$)
But if you find deception/recklessness/fraud x6 months after you signed x36 Escrow papers for a $375,000 GS…What then??????…
get it rectified by “negotiation” with whom?????…
file a lawsuit in
small claimsState /Federal court????? (your time + your efforts + your money $$$)There is too much of this “untouchables” aspect to GS. It’s really is a “racket”. Crimes committed in this “Industry” should start at the highest misdemeanor level and GO UP from there. More than x2 convictions and then you are banned from ANY aspect of the “Industry” for life.
So, is this the reason why GoldenmanSucks & ET al., time after time always “settle” with the Gov’t and continually and continually and continually end up with this “verdict”: The acme xyz “_____________________ ” Bidness today paid a financially disastrous fine ( ouch!
) but then was allowed to publicly claim “they were not guilty of committing ANY CRIME!”
Under RICO, a person who is a member of an enterprise that has committed any two of 35 crimes—27 federal crimes and 8 state crimes—within a 10-year period can be charged with racketeering. Those found guilty of racketeering can be fined up to $25,000 and sentenced to 20 years in prison per racketeering count. In addition, the racketeer must forfeit all ill-gotten gains and interest in any business gained through a pattern of “racketeering activity.” RICO also permits a private individual harmed by the actions of such an enterprise to file a civil suit; if successful, the individual can collect treble damages.
When the U.S. Attorney decides to indict someone under RICO, he or she has the option of seeking a pre-trial restraining order or injunction to temporarily seize a defendant’s assets and prevent the transfer of potentially forfeitable property, as well as require the defendant to put up a performance bond. This provision was placed in the law because the owners of Mafia-related shell corporations often absconded with the assets. An injunction and/or performance bond ensures that there is something to seize in the event of a guilty verdict.
What the Hay, I’m headin’ out to the garden laughing…
Ho ho, hah hah, hehehehehehe, BwaHaHaAhHAHAHAHAHAHA!!! (Cantankerous Intellectual Bomb-thrower™)
Despite its harsh provisions, a RICO-related charge is considered easy to prove in court, as it focuses on patterns of behavior as opposed to criminal acts.
Although its primary intent was to deal with organized crime, Blakey said that Congress never intended it to merely apply to the Mob. He once told Time, “We don’t want one set of rules for people whose collars are blue or whose names end in vowels, and another set for those whose collars are white and have Ivy League Diploma’s.
The check and balance of the appraisal was absent during the
boom . Appraisers were blackballed from work if they didn’t hit the mark, and they had no support to combat this .
Appraisers are not in charge of the determination of the qualification of the buyer for the loan ,so if you have fraudulent qualifying it drives up the demand and prices . Appraisers
couldn’t go back and determine if a comp they were looking at was a fraudulent transaction or the byproduct of a Ponzi-scheme .But still appraisers ended up resorting to fraud to
hit the mark because of the pressure of the industry .
You could go into some study on what escrow companies did
to close their eyes to fraud they were seeing . Every check and balance system that is usually present in lending was not operational during the the boom and it got worse as time progressed .
I don’t doubt that appraisers got pay offs on the side and
things like that . We use to have some good appraisers that use to post here that where destroyed in their business because they refuse to go along with it ,and a group of appraisers appealed to Congress to no avail .
In some situations you had underwriters being threatened
by sales staff if they didn’t make the loan .
On the origination of loan level it was nothing but fraud and corruption from all aspects of the loan process . You had brokers going along with it ,you had realtors sitting up faulty transactions ,and of course loan agents doing what it took
to get a loan transaction passed . I have never seen such a break down of lending practice including the duty to prevent fraud . Than you go up to the King Pins and of course they breached all duty also for the profit motive . It was all about all sins will be covered up because “real estate always goes
up” . I have never seen anything like this in my life .
Why all liability for this historic crime wave has been covered up and even culprits have been the recipients of bail outs ,is
horrible . The moral hazard of this is off the charts ,and the transfer of the pain to innocent parties is a extreme violation and a obstruction of justice . It also prevent correction of the corruption . Now we have bogus defenses ,as if this crime wave could even be justified ,or as if the
culprits can excuse it by the BS they didn’t know they were cheating . And than to see FB’s who did commit loan fraud
want things like a free house now or a bail out is a joke along with the industry that wants to get off the hook for what they did and actually get rewarded ,when they belong in jail .
This transfer of the pain from the destructiveness of crime
has been a ongoing process now for a while . You can see that this is the course that has been chosen . So now you have parties simply picking who the winners and losers will
be . Not my idea of how this should of been handled .
RE: But not every appraiser is at fault, or at least willingly so. James Blaydes (owner) of a Peru, Ill., appraisal firm says that in many cases, appraisers can’t stand up to pressure put on them by mortgage brokers.”
Spoken like a closet “number hitter” more intent on maintaining his business than adherance to any sort of his own personal moral or ethical values.
Can’t stand the pressure of real estate broker and loan origination coercion?
Then you walk away like I did in 2006 after 23 years in the business.
The morning, a smarmy, smug C21, agent threatened me that I’d get no more appraisal work from their finance arm, Cendant Mortgage if I wrote anything derogatory about his listing; was the day, I mailed my license back to the state of Maine real estate board, telling them to take their worthless piece of regulatory paper and the thousands of dollars in continuing ed coursework necessary to jump thru their bureaucratic hoops and stick it all where the sun don’t shine.
And if anybody thinks the fraud has been cleaned up in the appraisal biz, I gotta bridge to sell ya in Brooklynn.
98% of home financing is now being done under the auspices of HUD/FHA.
One of the finer pieces of legislation to come out in the middle of the “bubble” was the ability of originators to pick their HUD/FHA own appraisers for their deals from an expanded list of incompetants newly licensed by the thousands by state real estate boards.
Hundreds of previous panel serving members marched in DC to protest the conflict of interest, and the fact that they had been “black-balled” by the newly invented system, which trashed those who were acutely professional, honest, and ethical.
Don’t think for a second anything’s changed. The fix is still in…HUD/FHA originators still pick their personal “number hitter” and you the US FEDERAL TAXPAYER, are the bag-guys for continuation of the whole rotten morass.
hd74man,
Good to see you post again. I appreciate your input over the years.
One obvious step that could be taken to eliminate appraisal fraud: Make all real estate transaction data public. This is a great example of where the government could easily outperform the private sector; look no further than NARscum’s MLS or DataQuack shills for your evidence of how badly the private sector can do in delivering public goods (real estate transaction data).
Hd74man …Hi …I was talking about you as one of the good guys who use to post here . Wow ….hope your doing alright .
‘Round here’, for the purpose of home mortgages, the appraisers are on a master alphabetical list, and when a appraisal is needed, the next one up on the list is automatically the appraiser. Given that it’s a random selection, there’s far less pressure to hit the numbers.
At least that’s what I’ve been told.
Millions of people in this country are still not connected to the Internet. Millions more are still on dial-up.
Do not assume everyone has push button access. They don’t.
HD!
Good to see you again– I’ve missed your updates and insights. Please stick around and keep us posted?
Not proud to admit it, but I do recall a time when as a buyer, I was reassured by the UHS that the appraiser knew the number that had to be hit to make the deal go through at the bank. Stooopid for sure, I was part of the conspiracy.
Don’t know what part of the housing cycle this was but for a while and sometimes still true today from my vantage point, as a buyer if you decided you wanted something you were very aware of completing the deal before other buyers moved in. The competition wasn’t so much getting the best deal as it was to find the gem before someone else did.
Don’t get me wrong but when I see other buyers moved into the house I loved but refused to go higher on, it does sometimes smart….at least until I think of the long term picture. It still feels better to be smart than the prize winner.
“Which brings up a point; why are there no serious efforts to shield the appraisal industry from this kind of pressure, even today?”
When it comes to the fixed and confusing game of buying and trading horses, houses and cars, the American cowboys and girls, are definitely ALL on their own.
mikey did you buy your house?
“mikey did you buy your house?”
Yeah SFBG…I bought that house, new furniture, a lawn tractor…I bought the WHOLE freakin’ catastrophe !
Exactly mikey. That was the first thing I realized when I first learned about RE.
It’s horse trading.
As for shielding anyone from anything, in the B2B world, the vendor is ALWAYS pressured, by EVERY means available, to drop prices and cut corners.
“I don’t think they get together on weekends and devise ways to tie little old ladies to the railroad tracks.”
I get the impression their focus is more on talking first-time homebuyer Rubes to catch themselves falling knives.
“(Loan officers are also largely missed in the blame game, BTW).
And I think this is just what it is, a blame game.
Everyone here and beyond has been pointing fingers at various groups for years about this fiasco. I don’t buy it.
In a rapidly moving market, the “valuations” are difficult to assess. For an appraiser, if you have a signed contract at a particular price, it’s strong evidence that the market is moving.
Perhaps he/she is a little “too conservative” given the rapidly escalating prices. If the appraisals were being used for straw buyers and rapid flipping, then I would say a case for fraud is clearly evident.
But I don’t fault the appraisers, or the realtors or the sellers or the bankers. I fault the BUYERS and only the buyers. They all decided the ridiculous price they were “willing to pay” and under the terms and conditions of the contract. If it was a bad deal, too bad.
I started blogging here a long time ago due to my consternation at the “bid wars” that had started here in Tampa when I was house shopping to relocate. Prices had already begun rapidly escalating and becoming overpriced, based on my assessment of historical trends and INCOMES. Interest rates be damned, they will only go up and prices will be held down as a result.
I REFUSED TO PAY THE PRICES BID. I am not “underwater”. I was not fooled.
Those who were have only their own FEAR and GREED to blame for buying into a grossly overpriced market. It doesn’t matter what the appraisal said, or what the banker was willing to lend.
Ultimately, someone signed a loan document that said they were willing to pay back xxxxx in monies, because they got what they wanted at a price they were willing to pay. I was not willing to pay, and missed out on those great opportunities.
I didn’t need a mortgage councellor to tell me the prices were way beyond reasonable. (I was watching the Vegas market for gambling trends, too. You’d expect houses in the desert to be very desirable).
Blame whomever you want. I fault the government pushing of mortgage loans and the cheap money mania as the leading factor, but ultimately, no one was forced to buy a house. They wanted the “equity” they could skim off and feared they would be “priced out forever”. Stupidity is unfortunate, but should not be my problem.
I play the markets regularly. When I make bad decisions and loose money, no one cries for me, and I haven’t tried to sue the investment houses for my losses. Why should housing be any exception? You make you choices and live with them.
Bad appraisals, bad advice, stupid loan terms, or insane buyers?
With the exception of appraisers that did knowingly commit fraud ,I would say that the appraisers had no way of knowing
which transactions were fraudulent and which weren’t in their process of reviewing comps . It’s the loan underwriting process
that is suppose to determine this . But we have had appraisers
on this blog through-out the years testify to the blackmail and
pressure the appraisers were under to “Hit the Mark.” Many old time appraisers knew that it was a mania market .
At some point in the boom some appraisers stopped deducting for minus factors in a home ,and no doubt some were taking comps from projects that were not really
good comps to justify the prices . I’m not so sure that
many a drive by wasn’t just made where the appraiser had
no knowledge if the house was gutted inside or not .
I think on refinance transactions it was common place for
a lack of update on the appraisal in which the house could of been burnt down for all they knew because the money was given out so easy .
“For an appraiser, if you have a signed contract at a particular price, it’s strong evidence that the market is moving.”
That’s the oldest appraiser’s excuse in the world: If there’s a willing buyer and a willing seller, then that’s the market setting a price.
Of course, following that logic, what the hell are we paying appraisers for?
Exactly.
My wife’s unit appraised for 440k; a big reason she paid 380k for it. The appraisal gave a 40k bump because it is on the periphery; therefore more private than other attached product in the same townhome community. 10% adjustment; and my wife pointed out the relative location to the appraiser! And she got 40k bonus points!
The broker kept my name out of it because my wife’s fico was a few points higher. Her assets, another house we owned in Utah, were noted on her loan application (not ponied up as actual collateral; but as an anecdotal factoid). Since she works as a lunch lady and grocery checker we have since blown through those assets anyways. Teaching school and 4 surgeries ate lotso funds; and we sold her asset, the Utah house, near Logan, for an 80k loss. (happy to get 300k for it; seems like the “benches” are crashing ever so slowly). It was our dream home but we did not fit in socially; had it paid for; but the kids were not happy in LDS country.
But regarding her townhome; the underwriting was based on appraisal plus fico score (plus other assets held instead of income figured in somehow). And 20% down helped I am sure. No income figures were used in the underwriters’ calculations on this “no doc” product. It was one of the last NINJs to push through (2007) and the loan officer told my wife NOT to pay an outstanding hospital bill as the action, although ultimately positive, could jar her fico and threaten the loan going through.
Question regarding her OR Bofa foreclosure. By not paying local municipalities’ fees, using MERS instead, while transferring the note, makes non-judicial foreclosures out of the question according to 5 judges here. I wonder what the bank’s intentions are with this group of MERS muddled loans. BofA can’t currently process via non-judicial route and auction the house. So they rescinded, oh, maybe several thousand, Recontrust auctions. Made the local news one day!End of story? Not for us.
Will they simply go the judicial route and foreclose on all of us in court? How long would that take? I am sure there is a relatively large group of people in this pool, left wondering how and when they will lose their house.
If the foreclosure does not go through by Dec 2012 I guess some tax law changes; Jane said something to the tune of “she will have to pay taxes on the deficiency”. How does this go; I am tax naive but this seems like a different issue than not paying property taxes(local money). Taxing the deficiency would be a federal IRS matter, no?
What should she be staying current on while waiting on the bank(don’t worry we have a lawyer to help us so I am simply asking for discussion’s sake)? HOAS, property taxes, homeloaners insurance? Also, many out of this group would have also stopped paying PMI; wife’s condo deal avoided this with 20% down.
Neighbor is advertising his unit for 365k; last sale in our building was 220k. denial still running strong. So asking prices for the same units run from 165k(bank owned sale) to 365k. Appraisals played a part of this terrible discrepancy regarding price discovery, somehow.
I wonder if new appraisals need to count distressed or bank owned in their comps? Cuz that is what is selling. One neighbor had the money to sell for 200k (they paid 370k). Now that new owner is trying to sell it for 230k. So its a flipping opportunity for some (whoever had the ties necessary to get it for 200k; which seems to be about 10% under current market as I see it). But since the market is so poor, few are looking at the available units that I can tell; even the flippers may not fare so well. Sorry for the novel…
BTW Also we are watching mansions go up while others built recently rot and are going to bank or being offered short sale. I guess folks with $$ want their house a certain way and someone else’s mansion wont do even if it is cheaper.
“My wife’s unit appraised for 440k; ”
I like my wifes unit but I don’t think it’s worth $440k. Your wifes unit must be nice!
“Jane said something to the tune of “she will have to pay taxes on the deficiency”. How does this go; I am tax naive but this seems like a different issue than not paying property taxes(local money). Taxing the deficiency would be a federal IRS matter, no?”
It is a different issue than the property taxes. Ultimately the property taxes are a lein that the lender will have to pay when they resell your property. I suppose the amount would be added to your deficiency. And yes, if your foreclosure completes after 12/31/2012, you will have to pay income tax on the deficiency, even though you will not have to pay the deficiency itself (being in a non-recourse situation). That’s why you want it to complete before 12/31/2012 - or pray that Congress changes the law.
Here in IL, a judicial foreclosure is about two years long, but that’s a recourse state, so foreclosures often occur suimultaneously with bankruptcy filings, so as to avoid the judicial judgement.
Have you (or your attorney) asked Recontrust if they will accept a “deed in lieu”? I don’t know why they’re delaying - if its because they can’t produce the note, the note was never properly registered, or their paperwork is bogged down. However, early in 2012, I would make the offer for a “deed in lieu” again. Perhaps by then it will be cheaper for them to take it in order to stem their bleeding.
“That’s why I am far better off in savings in asset classes outside real estate. Government is focusing on victimizing the fish they caught in the real estate bubble.”
Spot on, Bill. Like you, I am diversified outside of residential RE, which I am generally avoiding like the plague, though I am nibbling at a REIT, just in case real estate starts always going up again due to unforeseeable developments.
Yes, and posting this ad nauseam is not?
HBB Lesson Numero Uno:
Repetition is the mother of bubble popping.
Repetition is the mother of bubble popping.
First Time Buyers Face Opportunity of a Lifetime
First-Time Homebuyers Face the Opportunity of a Lifetime
First-Time Homebuyers Face the Opportunity of a Lifetime
First Time Buyers Face Opportunity of a Lifetime
First-Time Homebuyers Face the Opportunity of a Lifetime
Opportunity of Lifetime for First time Home Buyers
First-Time Homebuyers Opportunity of a Lifetime
First-Time Homebuyers Face the Opportunity of a Lifetime
First Time Homebuyers Opportunity of a Lifetime
First Time Buyers Face Opportunity of a Lifetime
First Time Buyers Face Opportunity of a Lifetime
…
This blog is like a radio station I think. There is a core of readers and contributors. Others tune in every so often. So repeat postings seem like a good idea, when the topic indicates.
The premise that F&F’s misuse of the government’s support to enrich shareholders and executives somehow led to the $135 billion in “cleanup costs” to the taxpayer (so far) doesn’t really make much sense, does it? There was a political decision somewhere along the line (circa fall 2008) to dump the cleanup cost onto broken Main Street American balance sheets. If those who were enriched by the scam also had borne the brunt of the cleanup costs, I guess the rest of us wouldn’t be feeling quite so hosed at the moment, would we?
Published Saturday March 19, 2011
Life after Fannie and Freddie
The New York Times
…
Life without Fannie and Freddie is the rare goal shared by the Obama administration and House Republicans, although it will not happen soon. Congress must agree on a plan, which could take years, and then the market must be weaned from dependence on the companies.
The reasons for the big change: Fannie and Freddie, created to increase the availability of mortgage loans, misused the government’s support to enrich shareholders and executives by backing millions of shoddy loans. Taxpayers so far have spent more than $135 billion on the cleanup.
…
IMHO underestimating of what was spent on the clean up .
Obama never met a government program he didn’t like. His whole life revolves around governmental controls and entitlement handouts.
I don’t believe he is for getting rid of governmental housing programs and financing schemes, except that these were supposedly NOT governmental programs.
If he is willing to jettison the two “quasi-governmental” programs, which were BIG contributors to Democratic candidates, I would expect he has plans for another bigger project to replace them.
I would suspect that the near-term goal is to get rid of them while passing all their losses onto the taxpayers. Has Franklin Raines gone to jail, yet? Did he give back all the millions he stole? NO?
Then, perhaps with a plan designed by Goldman Suchs and friends, they can devise a governmental/private banking business model that will benefit Wallsteet and all of Obama’s political cronies, too.
That would be the most probable outcome of any Obama housing solution.
I would expect he has plans for another bigger project to replace them. I would suspect that the near-term goal is to get rid of them while passing all their losses onto the taxpayers.
Reasonable conjectures, indeed.
“The premise that F&F’s misuse of the government’s support to enrich shareholders and executives somehow led to the $135 billion in “cleanup costs” to the taxpayer (so far) doesn’t really make much sense, does it? ”
No, it doesn’t. I’ve tried, without apparent success, to point out the difference between the F&F that were successful for decades, the F&F that were cash cows to the well-connected and somewhat a part of the RE bubble for the last decade, and the F&F that was and is being used to bail out the system now. Three very different entities.
I guess they’re destined to be both our bad banks, and our scapegoats.
‘destined to be both our bad banks, and our scapegoats’
But they aren’t banks. Years before wall street got into the securitization biz, these guys were bundling loans and selling them, with govt backing.
Scapegoats? Just how corrupt, criminal and disastrous does a corporation have to be to have failed the system, in your opinion? Do you consider that there are millions of people who can’t afford houses today because of these organizations? That there are millions of their customers in foreclosure?
You seem to jump to the defense of anything associated with govt. But these corporations were quasi-govt. We got the worst of both systems. And if ‘F&F…were successful for decades’, how ever did the rest of the world manage to do without them?
I think people use the corrupt shells that F&F became to tar their entire concept. Fannie was started in the 30s, and worked perfectly well for decades, being neither a bubble blower, nor a cash-cow for the well-connected. It was the dismantling of government safeguards that led F&F to become part of the problem, nothing inherent in their being.
People dismantled the safeguards, the contraption broke down on a grand scale, and the same people now claim the disaster was inherent in the system.
The breakdown was not inherent in the system, but in the dismantling of the safeguards. The system, until then, had been working quite well.
’started in the 30s, and worked perfectly well for decades, being neither a bubble blower, nor a cash-cow for the well-connected’
That doesn’t answer the question of why we need them, considering that no one else does. The only excuse I hear is that house prices would be lower.
‘tar their entire concept’
Like I said, millions of regular people can’t afford houses, millions more in foreclosure. Many billions in unfunded losses. I’d say that does tar the concept.
It tars the current concept, not the historic one. They worked well longer than they didn’t work well.
I’m ambivalent on whether or not we need F&F. It doesn’t seem to make much difference as far as RE bubbles go. Ireland et al seem to have imploded rather spectacularly without any GSE’s help. There are many RE bubbles still going strong in other countries without GSEs.
What would be different?
Have to agree with alpha on this one. It wasn’t until Wall Street went “all-in” on the housing/mortgage gamble that things started getting way out of line.
As to why we would like some sort of GSE-type financing…we might not have 30-year fixed rate mortgages without them. Also, I prefer to have some financing available to REAL owner-occupiers, as opposed to only having financing available to wealthy investors (who would get lower rates than most homebuyers, if they only had to rely on private financing).
That being said, GSE financing should ONLY be available for a **single, primary residence.** Also, the price should have realistic limits for “low income” buyers. The original limits were fine, before the bankers had the GSE price caps lifted…so they could shift their risk onto the GSEs’ portfolios and investors.
How many of these frequently-reported “all cash” buyers, who are snapping up U.S. residential real estate on the premise that a bottom is in place, are foreign investors? I’m curious about how much of the $135 bn (and counting) that has been forcibly funneled away from American households into helping F&F prop up housing prices is flowing out of the country.
* March 7, 2011, 5:21 PM ET
Report: First-time Buyers Fade From Market
By Matthew Strozier
There’s more evidence today that cash buyers and investors are dominating the housing market.
A report out today from Capital Economics says that cash buyers and investors together have driven 70% of the increase in existing home sales seen since last July, while first-time buyers have been responsible for just 6%. Favorable valuations “mean there is plenty of scope for housing to perform well in the medium-term,” the report, “U.S. Housing Market Monthly,” says. “But over the next year, weak demand, high supply and many more forced sales of foreclosed properties will push prices lower.”
…
If a foreigner brings cash to buy a property in the US, that funnels money out of the country through F&F just how?
“…that funnels money out of the country through F&F just how?”
“Taxpayers so far have spent more than $135 billion on the cleanup.”
On the other hand, if the game plan is to financially engineer a dead cat bounce in order to lure in foreign cash buyers, only to later pull the rug out from under them by killing off the GSEs, I’m on board.
Japan was crippled during the 80’s after buying into vast amounts of American commercial real estate which later went down some 30%.
I’m hoping a repetition of the financial bloodbath is in the cards for the all-cash foreign buyers who are currently crowding American end-users out of the residential purchase market. I find it especially egregious that the GSEs are being used to funnel our tax dollars into the effort to artificially prop up housing prices, handing infestors capital gains at the taxpayers’ expense. But if Fannie and Freddie get shut down sooner rather than later, precipitating an all-cash-investor meltdown and futile rush for the exits in a spectacular final collapse of the real estate bubble, perhaps I will feel in retrospect that suckering in a bunch of all-cash investors was a worth the tax dollars spent on the effort.
Got popcorn?
Perhaps these cash buyers can descend upon Nevada en masse, to snap up large quantities of the 167,564 vacant homes which litter the landscape. With one out of every seven homes vacant, 14%+ unemployment, and a declining population, the housing market in Nevada is in absolute dire straits.
“The Ackerly’s home is now among a swelling number of abandoned houses in Nevada. There were 167,564 empty houses in the state last year, according to newly released U.S. Census data, more than double the number in 2000. The number of vacant homes represents about one out of every seven houses across Nevada.”
http://www.msnbc.msn.com/id/42084625/ns/us_news/
* March 11, 2011, 5:01 PM ET
Debt Load Falls; Good for Housing?
Developments asked Stan Humphries, chief economist at Zillow.com, to weigh in on news that Americans cut their debt burden last year, in part by defaulting on mortgages.
By Stan Humphries
U.S. families shaved down their debt load in 2010 to the lowest level in six years, we learned Thursday. On the surface, that’s great news for the economy—households putting their finances on a more stable footing can set the stage for more stable, sustained spending in the near term.
But the reasons behind the decline in debt in 2010 should temper our expectations for a robust recovery, especially for industries like real estate that largely rely on consumers’ ability to borrow. While some of the debt decrease was due to families retrenching and paying down debt purposefully, consumers defaulting on mortgages and credit cards also played a big part. And in an environment with tighter lending standards, that’s going to make it difficult for many of these people to qualify for a loan and buy a house.
…
It is likely that the majority of those crushed by this market decline to the point of default/foreclosure will never get back in the mortgage game. My dad lost his equity on a house in Buffalo in 1960. He rented for the next 40 years.
Interesting. How’d that happen?
The construction of I190 cut through our block. Last time I checked, you could still buy a house there for half of what Dad paid in the 50s. They have all been upgraded with steel bars on the windows too!
Sounds like a taking which should have resulted in compensation, according to the Takings Clause in the Fifth Amendment to the United States Constitution.
Was your dad justly compensated?
PB,it cut through our block, not our yard. The house still stands on Warwick Ave. The “value” went from $10K to $5K overnight. Dad was transferred from Buffalo to NYC so he sold and we rented at the other end and never looked back.
“PB,it cut through our block, not our yard.”
According to the theory of hedonic valuation, it shouldn’t matter, provided the whole neighborhood’s values dropped as a consequence.
“He rented for the next 40 years.”
I’m leaning towards your dad’s approach, as thanks to your post, I am able to learn his lesson vicariously.
“households putting their finances on a more stable footing can set the stage for more stable, sustained spending in the near term….that’s going to make it difficult for many of these people to qualify for a loan and buy a house”
Conflict here! Getting more stable by dumping debt (housing mortgage/CC debt) will set stage for sustained spending and then qualify and buy a house/car to remove their disposable income over to servicing debt. Dah!!
Precisely, salinasron.
Ultimately, the only way out of this recession/depression will be the repudiation of debt.
* March 17, 2011, 2:45 PM ET
Orange County Housewives: Short-Sale Reality
By Dawn Wotapka
One of the Orange County Housewives’ real-estate woes are over. For now, at least.
The six-bedroom home Alexis Bellino shared with husband Jim and three young children sold for $3 million, a steep drop from November’s $5 million asking price, the Orange County Register reports.
Developments has chronicled the Bellinos’ near-foreclosure after they reportedly defaulted on the loan for their Newport Beach, Calif., mansion. That sent them spiraling toward foreclosure, but they were able to arrange a short sale, or selling the home for less than what’s owed, to avoid losing it to the lender. The Bellinos, who could not be reached for comment, have made it clear the drama is a business decision, not an indication of any financial woes.
…
What is the financial advantage of a short sale to the defaulter? Does it read better on the credit report? Can you check “no” on that box on the mortgage application that asks if you’ve ever been foreclosed on?
The stupid Orange County Housewives, their ilk and followers don’t hold or rate much importantance, space or even breathing room in mikey’s Big Picture of THIS Universe.
Except to “prove” that humor is to be found in a lotta
quackscracks in THIS universe!Daffy: “I’ve told you peons a thousand times not to starve on my property! It lowers the value!”
I had to look up more info behind the scenes. Husband and wife are a pair of scammers.
Husband and wife are a pair of scammers.
In…”The O.C.!” Oh, my my…
“…have made it clear the drama is a business decision, not an indication of any financial woes.”
Got it!
More proof the public sector is under paid:
“One of the most frequently criticized aspects of the lobbying profession is the so-called RevolvingDoor, whereby individuals move from serving in public office to being employed as lobbyists. According to conventional wisdom, experience in government allows former officials to develop a network of friends and colleagues that they can later exploit on behalf of their clients (Revolving Door Working Group2005, Burger 2006, Zeleny 2006, Johnson and Kwak 2010). The fact that lobbying salaries are typically several times higher than public sector salaries is regarded as evidence that former officials are effectively ‘cashing in on their government connections’ (Public Citizen 2005).
Our main fi nding is that lobbyists connected to US Senators suff er an average 24% drop in generated revenue when their previous employer leaves the Senate. The decrease in revenue is out of line with
pre-existing trends, it is discontinuous around the period in which the connected Senator exits Congress and it persists in the long-term. The sharp decrease in revenue is also present when we study separately
a small subsample of unexpected and idiosyncratic Senator exits. Measured in terms of median revenues per ex-sta ffer turned lobbyist, this estimate indicates that the exit of a Senator leads to approximately
a $177,000 per year fall in revenues for each affiliated lobbyist.
http://www.cnbc.com/id/42153649
..a government of the lobbyists, by the lobbyists and for the lobbyists.
Go Aztecs!
A world without Fannie Mae and Freddie Mac
SDSU professor gives insights into potential wind-down of mortgage giants
By Lily Leung, UNION-TRIBUNE
Friday, March 18, 2011 at 1 p.m.
The federal government should sunset Fannie Mae and Freddie Mac over five years, move to a privatized mortgage market and allow for federal help only as a last resort, said Michael Lea, director of San Diego State University’s Corky McMillin Center for Real Estate, at a research conference Thursday.
Lea, a past chief economist of Freddie Mac, led a discussion on the federal proposal to phase-out the mortgage giants at the Real Estate Research Council of Southern California’s quarterly meeting in Pomona.
…
“I don’t think we need government guarantees,” said Lea, in a phone interview after the conference. “No other developed country has the equivalent of Fannie and Freddie…the rest of the world does fine without government guarantees, and they have strong and better-performing mortgage markets than we do.”
…
‘No other developed country has the equivalent of Fannie and Freddie…the rest of the world does fine without government guarantees’
This is posted here from time to time, but no one mentions this fact to people like Shiller when he “warns” us about closing the GSEs. Like many govt programs, these companies took on a life of their own, becoming so powerful that they successfully lobbied congress over the head of their regulator.
What’s so bad about that? They did this at the time they were forging documents, etc, and when it would have been early enough for the regulators to have prevented a good deal of the loses. I encourage anyone to go back over the past few decades, and look at who was on the GSE boards of directors. These companies were just big cookie jars of money for politicians and lobbyist in DC.
We don’t need them, they were/are a corrupting influence, they never served the purpose of affordable housing. The GSEs played a big role in pushing the housing bubble as far as it went. And what’s worse, today politicians use these bankrupt corporate shells to manipulate this vast market to suit themselves.
“lobbied congress over the head of their regulator”
Is this feedback loop broken now?
That would be a good question to ask. So why doesn’t the financial media ask it? And if the GSEs have lost their lobby power in DC, just who is keeping them alive and why?
If you think about it, in this sorry state of affairs, who is to blame more, the lobbyist and their corporate clients, or the politicians that do their bidding? If, as some of us believe, the GSE/bank shadow inventory game is one of the largest market manipulation efforts in history, why are our elected representatives playing along? Why isn’t this exposed by the main stream media?
Because they are also invested neck deep in RE.
“Like many govt programs, these companies took on a life of their own, becoming so powerful that they successfully lobbied congress over the head of their regulator.”
That seems to be a key component of many government agencies’ business models these days. Imagine federal government agencies using tax dollars to hire lobbyists: Can this possibly be legal?!
Fed Intends to Hire Lobbyist in Campaign to Buttress Its Image
By Robert Schmidt - June 5, 2009 00:01 EDT
June 5 (Bloomberg) — The Federal Reserve intends to hire a veteran lobbyist as it seeks to counter skepticism in Congress about the central bank’s growing power over the U.S. financial system, people familiar with the matter said.
…
I guess it’s the private side of the Fed that’s hiring them.
Agree 100% with your post right above me Ben Jones .
OT
Can a bird spread radioactive material? or will it die before it can get far?
A bird’s metabloism is high and thus fragile thus birds die easily.
That’s why they use canaries in coal mines as an early warning device for toxic gas.
So, yeah, a bird that is exposed to a lethal dose of radiation will die before it can fly very far.
Did the quake shift the axis of the earth enough that birds now migrate from west to east in the spring?
Stop worrying about radioactive birds!
A heavenly gift to a starving man lost in the wilderness …
A goose that falls from the sky that is already cooked.
Such is the stuff of metaphor, combo. Most poetic!
“Stop worrying about radioactive birds!”
Start worrying about radioactive fish.
And cows, you might want to worry about radioactive cows.
Japan cites radiation in milk, spinach near plant
FUKUSHIMA, Japan — Japan said radiation levels in spinach and milk from farms near its tsunami-crippled nuclear complex exceeded government safety limits, as emergency teams scrambled Saturday to restore power to the plant so it could cool dangerously overheated fuel.
“FUKUSHIMA, Japan — Japan said radiation levels in spinach and milk from farms near its tsunami-crippled nuclear complex exceeded government safety limits”
I didn’t even know they had safety limits for radiation in milk and spinach. Which brings to mind, how much radiation is acceptable in a glass of milk?
BTW, given the amounts given the milk and spinach would be under the limits within two weeks given normal decay rates. Also even if they were consumed they would not create a major risk: “Edano said someone drinking the tainted milk for one year would consume as much radiation as in a CT scan; for the spinach, it would be one-fifth of a CT scan. A CT scan is a compressed series of X-rays used for medical tests.”
Yeah, Angry Birds are far more pressing!
“Stop worrying about radioactive birds!”
That has to be among one of the funniest “commands” ever made on the HBB.
And it’s a comment that one could never of predicted on this board they we would be debating the issue of radioactive birds and fish . I thought toxic loans, products ,and drywall were
going to be it .
Boy does this drama take many twist and turns ,some of which are really ironic .
You forgot the radioactive cows.
But you are right. I do not remember seeing 1 prediction for the year that mentioned radioactive birds, fish or cows.
Latest from Japan and continues to move in the correct direction: http://english.kyodonews.jp/news/2011/03/79674.html
The milk issue is serious, radioactive iodine is deadly. Good news is that radioactive iodine has a half life about a week so people will have to avoid milk from the area for only a short time.
I hope it moves in the right direction for those peoples sake. When I see pictures of what they are going through griping about house prices, Realtors and LLs not paying their mortgage, of which I am guilty, seems pretty trivial. My family has a roof over their heads, clean water to drink and several fully stocked grocery stores within a couple of miles. I hope all the people of Japan have that again soon.
Get back into the groove Giantsquid pro quo
What about radioactive black swans?
Wind energy will be the downfall of more birds.
WARNING: This is not pretty.
http://www.youtube.com/watch?v=jwVz5hdAMGU - 115k
How common of an occurrence is this? I guess like everything you have to weigh the negatives vs the positives.I support wind energy though I do realize some birds may be killed.
Its like roads.You like having paved highways at the expense of seeing roadkill once in awhile.Nothing is going to be perfect.
Screw the birds! They are killing deer!
We need more wind power or we won`t have any more deer.
http://www.youtube.com/watch?v=iSmgh2-VsYk - 113k -
Here is a win for the deer.
I wonder if this hunter and the camera man are still friends?
http://www.youtube.com/watch?v=nD5zjUbWpXY - 122k -
wtf why is the guy filming just watching it?
jimmyPain2121 1 day ago
the guy filming this was with the deer
mattcoops82 1 day ago
With… or without a coconut?
Democrat plan: Kill F&F, but extend-and-pretend long enough so The One is long gone from office by the time of the funerals.
Republican Plan to Kill Fannie and Freddie Hinges on Timing
Mar 18 2011, 1:35 PM ET
By Daniel Indiviglio
Government-seized mortgage companies Fannie Mae and Freddie Mac have been in Republicans’ cross-hairs for some time. Last month, however, we learned that the Treasury also has plans for winding down the entities. This week, House Republican Conference Chairman Jeb Hensarling re-introduced legislation to shutter the firms. In some sense, it’s not far off from what the Treasury plans. The differences mostly involve timing.
First, let’s talk about the similarities. Both plans intend to wind down Fannie and Freddie. They each hope to do so by increasing guarantee fees and lowering the size of mortgages that they can back. They also both want to end the companies’ affordable housing goals. The two plans also agree that the size of the companies’ portfolios should shrink gradually.
So where don’t Republicans and the Treasury line up? The general principles may be the same, but the details differ mostly along timing. The Treasury’s plan appears to allow this process to take around ten years. The Republicans hope to end the firms’ conservatorship in just two years and to be completely privatized within five years.
…
Gaddhafi to Obama: Get Bent.
The typical underemployed, financially strung out US citizen(majority) to the world: Nobody give a $hit.
I haven’t been reading the blog as regularly lately. Is “Realtors Are Liars” the new handle for “Exeter”?
Yes.
“Get bent”.
I haven’t heard that phrase in a long, long time. It was very popular in the mid ’70s.
Bubba,
Was thinking the same thing, one of my personal favorites back in the day….
Gaddhafi has no choice but to fight to win. For him it has to be all or nothing. He has too much unsavory history behind him that will bite him on the butt.
True dat. He also has a couple of pretty powerful weapons. Oil, and hordes of people yearning to flee to Europe. Most likely he’ll start loading up every watercraft he can find and point ‘em toward Italy. Much like Castro’s Mariel boatlift. On steroids.
In any case, this is something we should stay well out of. But The Marketing Construct is sure putting on his game face.
Rumor has it Europe is pitting its shants right about now. First waves of refugees hitting Malta and Lampedusa (Italy). Hence the UN resolution.
lol, good, let the euros take care of it.
The Italian government should move all of its citizens off Lampedusa and then declare to the world that it is no longer part of Italy.
“Much like Castro’s Mariel boatlift.”
Hmmm. Maybe more than one parallel here. I was thinking that the “rebellion” sort of resembles a Bay of Pigs operation. Hence the emergency UN meeting in Paris today.
The old joke was that the French were victorious only when led by a foreigner (Napoleon) or a teenage girl (Joan of Arc). Well now they are led by another foreigner (Sarko), and I’m sure the Italian PM can loan them a teenage girl from his harem.
I keep thinking of Robin William’s old skit about Gaddhafi’s “Line of death”.
“You cross this line, you die. (After said line is crossed), okay, you cross THIS line, you die.
* BUSINESS
* MARCH 19, 2011
Fannie and Freddie Probe Faces a Snag
By NICK TIMIRAOS
The Securities and Exchange Commission’s probe into whether Fannie Mae and Freddie Mac properly disclosed their growing exposure to riskier mortgages between 2006 and 2008 could also spotlight the oversight role of the firms’ federal regulator, which approved those disclosures.
So far, four current or former officials of the firms have said they received Wells notices and could face civil charges from the SEC, including Daniel Mudd and Richard Syron, the former chief executives of Fannie Mae and Freddie Mac, respectively. Several other executives are believed to have received the notices as well.
The potential defendants have indicated they plan to respond in writing to the Wells notices, which are formal notifications the SEC intends to pursue enforcement action. In statements, Mr. Mudd and a lawyer for Mr. Syron have argued the agency shouldn’t bring charges, in part because their disclosures about subprime mortgages were reviewed by the Federal Housing Finance Agency, the firms’ federal regulator.
“It very much complicates the government’s case,” said Mark Calabria, director of financial-regulation studies at the libertarian Cato Institute. Mr. Calabria said the SEC would nevertheless have a strong case if it had evidence that Fannie or Freddie executives misled not just investors, but also the FHFA, about the quality of their loans.
…
Um, AFAIC, the GSEs were told to increase their loan portfolios and take on riskier loans in order to give the private banks a place to off-load their toxic holdings (through refis or sales to the GSEs).
This was done INTENTIONALLY in order to put the risk on the taxpayers’ shoulders. Anyone who was paying attention knew that the GSEs would become the toxic dump for these loans. It’s funny that they are now trying to pretend that “nobody saw the downturn coming.”
March 17, 2011, 5:00 am
Who’s Afraid of Elizabeth Warren?
By SIMON JOHNSON
Simon Johnson, the former chief economist at the International Monetary Fund, is the co-author of “13 Bankers.”
The next big political battle in Washington -– whenever the budget debate is declared over –- is likely to feature the Consumer Financial Protection Bureau and whether Elizabeth Warren will become its first official head.
But will this fight feature a classic left vs. right set-piece confirmation showdown in the Senate? Or it will it be resolved with cloaks and daggers closer to the White House – with Treasury Secretary Timothy F. Geithner working to prevent Professor Warren’s nomination, or her confirmation if she were nominated?
…
Geithner backs covered bond bill for mortgages
By Corbett B. Daly
WASHINGTON | Tue Mar 15, 2011 5:26pm EDT
WASHINGTON (Reuters) -Treasury Secretary Timothy Geithner on Tuesday backed efforts by U.S. lawmakers to create a new market for financing mortgages that would help wean the $10.6 trillion U.S. mortgage market from government support.
Geithner said he backed efforts to create a market for covered bonds, which are securities issued by banks and backed by pools of loans. The loans underlying covered bonds remain on the issuer’s balance sheet.
That is different from the current U.S. mortgage system, where lenders sell many of the loans they make to Fannie Mae and Freddie Mac, which then repackage them as securities for investors.
“We would support legislation that would help create better conditions for a covered bond market,” Geithner told the Senate Banking Committee in response to a question from Senator Charles Schumer.
…
The man is another A-hole housing inflationista. Here’s a novel approach you mofo’s; GTFO of the way and let prices fall thus limiting 3rd party involvement.
I got an idea, how about tying dividend payouts to crap mortgage buy backs.
The Federal Reserve’s plan to let some big banks open the spigot on dividends is great news for their CEOs and other major investors in the companies. For everyone else — notably taxpayers — it’s a troubling development.
The nation’s 19 largest banks have been restricted in making payouts to shareholders since 2009, after the government rescued the institutions during the financial crisis. Bankers argue that many of these firms are now healthy enough to again issue dividends. They also claim that the dividend limits hurt banks’ performance by hindering their ability to raise money, which in turn curbs lending and slows the U.S. economic recovery.
Who will benefit most from the Fed easing limits on bank dividends? Certainly bank executives, who are among the largest bank shareholders and much of whose compensation in in stock, will do well. JPMorgan chief executive Jamie Dimon could earn an estimated $6 million a year in dividend payments.
http://www.bnet.com/blog/financial-business/how-bank-dividends-help-wall-street-8212-and-hurt-almost-everyone-else/12021
On December 27, 2010 Ally Financial (the old GMAC) announced that it would pay $462 million to settle buy back claims of $292 billion in loans it sold to Fannie. Yes – you read those numbers correctly! GMAC, a significant purveyor of low and no doc loans, settled with Fannie for .16% of the loans it sold to that entity; the delinquencies on which are at least in the 11% range (today’s national average). Who do you think is going to shoulder the rest of the losses? Yes, you’re correct – the taxpayer who continues to fund billions monthly in Fannie and Freddie losses.
Soon thereafter (January 3), Bank of America announced, without any fanfare, that it, too, had reached agreement with Fannie and Freddie for $2.8 billion, a settlement that Reuters said “was far less costly…than many analysts had feared”. Reuters added that “some analysts had reckoned the banking industry could lose between $50 and $100 billion from such settlements”. Fannie and Freddie had asked for $6.8 billion in buy back value, so, on these particular loans, they received 40% of their requests, with the taxpayer picking up the difference, about $4 billion.
Strange, how so? seems like par for the course..
From these volumes, it seems highly unlikely that a $2.8 billion settlement (1.7% of nonprime, and .13% of total originations) would be adequate, especially given the current delinquency and foreclosure rates on some of these loans (approaching 50% for ‘06 and ‘07 nonprime originations). Worse, the agreement with Freddie is “final” meaning that Freddie cannot put back any more loans to BOA. This is a strange outcome (and extremely favorable to BOA) since the agreement with Fannie only covers the specific loans Fannie had attempted to put back
Did anybody doubt that settlements would be favorable to the TBTF . Its a joke .Business as usually ,the taxpayers are the bag-holders .
Home market isn’t on rebound yet
Mar 11, 2011 10:42 EST
A vacant house for sale is pictured at the Green Valley Ranch neighborhood in Denver, Colorado July 26, 2007. REUTERS/Rick Wilking
Are we there yet? Is the U.S. home market on the upswing?
As Alan Greenspan would say, “there are shoots,” although a true spring in housing is still hampered by a chilly economic climate throughout most of the country.
…
Most of what’s for sale in my market are huge homes I wouldn’t want even if I thought spending that type of money made sense. Many of them look no different than the 2500 sq footers in my price range….just massively larger. Same Home Depot kitchen cabinets and baths. Same cookie cutter layouts that often don’t make traffic flow sense. Many of them are just large or in the desired location but in terrible shape or in need of a look beyond 1974. I don’t have a lot of hope for spring. I’ve come to understand the inventory in this town is just nothing I want to sink our wealth into. I’m serious. Even if our income was twice what it is or prices dropped in 1/2 I don’t know if I’d be into these homes.
Thinking about building. DH was a builder before so when I say building I mean GC and doing some of the work himself. Something we’re proud to own but mamimally efficient.
“Something we’re proud to own but mamimally efficient.”
Big time. I’d say 90% of the total inventory(and there is alot of it) I wouldn’t want to own, even if it were free. The 60’s ranchers without mechanical and electric updates are out, the 70’s-80’s guinea ranches were hideous then and and more so now, the 90’s capes aren’t suitable for people over 40 years old and the 2000-2007 mcmansions are ____(fill in the blank with every negative word imaginable).
It’s difficult to find a recently built ranch less than 2000sq ft without faux junk, excess gingerbread, on the right sized lot in the right location at a reasonable price.
Our inventory is also bad on the west coast.
Tons of ugly McStucco boxes that linger on the market. So few nice, custom homes…and when they do come on the market they get mutiple bids (for real), and many go for over asking price.
For how many years now have we collectively worried about the Asians selling off U.S. debt? I’ve lost track after a few decades of this discussion.
Japan catastrophe could make U.S. debt costlier
Mar 14, 2011 17:50 EDT
By Agnes T. Crane
The U.S. Treasury market could feel financial aftershocks from Japan’s tragic earthquake. Offloading some of the Asian giant’s $1 trillion of foreign reserves could raise cash to help rebuild after Friday’s disaster. Meanwhile, the Federal Reserve is due to end its Treasury bond-buying program in June. If Japan, the second-biggest foreign holder, starts selling that’s another support gone — with the potential to make borrowing more expensive for the U.S. government.
…
Having the Arabs unload their dollars was part of the PM hype of the 70s.
Hey the G7s on it. I’m sure all will go smoothly.
Question for those pimping used houses(I know you’re reading):
How rough must your life get before you admit the criminality of your “trade” and find legal work?
4 + 4 = 10 Huh? Suzanne!!!
Realtors expect to revise home sales downward
March 17th, 2011, 10:48 am
by Jeff Collins
The California Association of Realtors’ statewide home sales numbers may be inflated by as much as 6% to 12% and may need to be revised as far back as 1990, a Realtor economist said.
Robert Kleinhenz, the association’s deputy chief economist, said revisions are needed due to the association’s reliance on U.S. Census figures to bolster its data. Those numbers need to be adjusted at the end of every decade after new figures come out.
Kleinhenz told reporters about the revisions when asked about problems the National Association of Realtors is having with its home sales figures.
CoreLogic, a Santa Ana-based real estate data firm, produced numbers showing that the NAR’s popular measure of existing home sales is overstating U.S. transactions by 15% to 20%.
http://lansner.ocregister.com/2011/03/17/realtors-expect-to-revise-home-sales-downward/103401/ - 96k -
I looked at a derelict commercial property here last week. It was a potential workshop to be shared with my son. Price was right.
Fortunately for me, I checked into the environmental history of the property with the NY DEC through their FOIL office. My son got a hint from talking to the owner of the bordering property. Surprise surprise! There was a spill and the bank that has the property in foreclosure knows about it. By NY law, the bank in posession does not have to do the ordered cleanup. The DEC is waiting for the property to change hands, then they will enforce.
The Darlin of a Realator knows all about it, but couldn’t say. She only gave an uh-huh when I told her I found out about it. I suppose it is “ethics” that prevents her from revealing this legacy to prospective suckers.
heh, good work.
I suppose it is “ethics” that prevents her from revealing this
All that’s needed is to attach “Professional” and she’s TOAST.
Realtors Are Liars
I hope that wasn’t addressed to me?
My license was/is mandatory for my career in Shopping Center Mgmt, which looks like is a former career.(No positions)
Try dealing with Realturds when you know to look up natural hazards (cut vs. a fill lot), get area and property crime info, ask for a CLUE Report (Homeowners Ins. claim background-can screw you), upfront. They want you emotionally attached, then you’ll be likely disregard caveats. They hate me.
Not at all.
Thank you for the reply. There are times when we view a home, and an Agent and client are there at the same time, that I want to pull their client aside and wake their arse up to their Agent’s script from a sales class. (I’ve taken them-know your enemy). I could be sued, so I keep my pie-hole closed.
FUKUSHIMA, Japan – Japan said radiation levels in spinach and milk from farms near its tsunami-crippled nuclear complex exceeded government safety limits, as emergency teams scrambled Saturday to restore power to the plant so it could cool dangerously overheated fuel.
The food was taken from farms as far as 65 miles (100 kilometers) from the stricken plants, suggesting a wide area of nuclear contamination.
So far tests indicate the American food supply has not been effected. Radiation levels of the McChicken® sandwich and the Taco Supreme have not exceeded federally allowable levels…
Meanwhile back in Florida
“Nearly 20% of Florida homes are vacant”
http://money.cnn.com/2011/03/18/real_estate/florida_vacant_homes/index.htm
“If you’re buying in Florida for retirement,” said Winzer, “maybe you buy next year when prices will be near the bottom. If you’re buying for investment — don’t.”
I know a bunch of people that bought during the boom. The typical 1 million $$ home now goes for around 600-700K. Those folks put $200K down, now they are $100+K under water, gotta hurt. Real estate was all the rage back in the days. My co-workers all thought I was weird for not buying. Now nobody talks about real estate anymore. “Hey I am $200K under water on my mortgage, how ’bout you?”
The typical slum shack went for 200-300K, now you have a hard time giving them away. I’ve seen several of those selling in the 20-40K range.
“Investment” condos costing their owner to the tune of $4000/month (2100 mortgage + 1000 association + 700 taxes + 200 insurance) renting out for $2300/month IF you can find a tenant that actually pays the bills.
Man, I am glad its them and not me.
Florida: We’re #1, We’re #1! In vacant homes..
http://money.cnn.com/2011/03/18/real_estate/florida_vacant_homes/index.htm
Got a note on my apartment door here in New Tampa, less than one week after I moved in last month. It said my apartment unit, among others, is up for sale as a condo, but my seven month lease is honored.
I’m not afraid. They probably have been posting the same note on all new tenants’ doors within a week after moving in
- a ploy to get people interested in becoming mortgage slaves in an ever declining market.
I love my new apartment. I am very lucky to have a place I like. It makes me very happy and I feel as though I’m on vacation whenever I am here in this apartment. Sun coming through right now, my sliding glass door open on my screened-in porch, I can still hear the birds chirping from the nearby preserve. Morning is still cool.
” Morning is still cool.”
Enjoy it while you can. Stifling humidititty is but a few weeks away.
Got A/C and ceiling fans. 8-pack of coca cola in the fridge - will take me through September, as I hardly ever drink soda.
“Who’s buying homes? The rich
The vacancy problem is more dire in Florida than in any other bubble market: In California, only 8% of units were vacant, while Nevada, the state with the nation’s highest foreclosure rate, had about 14% sitting empty. Arizona had a vacancy rate of about 16%.”
California Housing Statistics
Total housing units 12,214,549
8% * 12,214,549 = 977,164
There is no shortage of vacant California units for rich buyers to “snap up”!
Well that’s true.
California has a combination of climate, universities, great coastal cities with great restaurants, and modern attitudes about personal liberty (as opposed to Bible Belt attitudes).
But the taxes - that’s okay, rich people don’t care. They have some of their money overseas, some in short term municipal bonds, some in stocks they never sell (never incur a capital gain), and some in US treasuries which are not taxable at the state level. With such a combination, a rich person can keep his income tax percentage at the state and federal level below the average middle class tax rate.
Or how about Roth IRAs, a lot of people have them - they can pay the taxes on the Roth conversions for the 2011 and 2012 tax year, say, while working in Florida (which is what I’m doing), and then move back out to Taxifornia. Sorry - Roth gains no longer touchable by the California tax man. Of course, a person is wise not to count on any one tax haven, in case legislation abolishes it.
Bad Chile, checking in…
(Sorry if this comes through twice - the internet here is not good).
The family completed the move back to New England from the Southwest. While sad to leave a place so dear to my heart, I’d rather have a job that is stable and be able to find another job in the same area. I never thought I’d say that, but with a family now; my needs are different.
I noticed soon after returning to the Northeast that I was a happier person: I had more time for mini-chile, that I could play with him more instead of wondering if “tomorrow…” would be the day I’d be out of a job. So I’m back in my old job.
Which led me to Amman for the past two weeks. As I look out the window I see half-finished apartment blocks and a gleaming high-rise surrounded by cranes that haven’t moved during my stay. The “financial crises”, I’m told, has meant these projects have been on hold for over two years. There is little acknowledgement amoung expats that Jordan is a country without a middle class. In a city where I can spend 15JD for a fine dinner (approximately $23US); my counterparts may see that as half their day’s salary. Coworkers regularly let furnished apartments for 10,000JD for a year, when that would be the entire yearly salary for their Jordanian equivilant.
Some of these buildings, like thousands before them in this city, will never be finished: they’ll dot the landscape as an arcane legal system and the “wink-nudge” of local finance practice refuses to admit what is obvious as an outsider: there is no need for these properties. Yet, somewhere some financial wizard thought that a city with no water, broken infrastructure, little tourist appeal, and no reason to exist (it was a simple farming village in 1923 when it was chosen as the home of the capital of the new country) other than housing refugees and embassies could support New York style condos and contemporary urban flats.
Anyway, thanks to the HBB for the past few weeks: you’ve kept me company in the evenings while away from the family, and as an old-time poster (2004, methinks) I promise I’ll try to check in more often.
PS: The Popeye’s Chicken in Amman is known around the expat community as the best fried chicken on the planet, and I’m happy to say they’re right about this. Utterly strange that is the case, but after two weeks of local food I think I’ll hit it up again.
Popeye’s, eh?
Cool post, Chile. Thanks!
As some were pointing out the other week, stability and security are key to feeling content.
You’re right about kids changing your perspective. All of a sudden, that “security and stability” thing become your #1 priority (because your family is your #1 priority).
Glad to hear you are back at your old job, and that you are happy in your old hometown.
Enjoy your time with your family, as that is the most valuable thing one can ever have, IMHO.
I’m thinking of registering http://www.realtorsareliars.com. I imagine NARscum central would be sending me cease and desist orders.
Thoughts?
Realtors Are Liars
Absolutely I bad idea, but I can relate to the frustration. You might want to find a Broker (the person they hang their license with) to work w/ you. That was our solution, and they seem to be a better chioce. At least they have more liability and watch their actions/words more.
Maybe you’re misunderstanding me. I don’t need a realtor.
Gosh,I’m sorry. Trade lives w/us! LOL
Concerning RE sales people ……you always have to do your own homework because you can’t trust a sales person . I’m sure there are some honest sales people out there ,but you can’t assume that you have one of those . Sales people have been known to deprive you of information they know about and just don’t rely
on them being in your camp .Your lucky if you get a good sales person who also has enough knowledge to write up a protective contract that doesn’t compromise you .
I am sad that the real estate people went full speed ahead to take advantage of this faulty lending cycle ,and you remember the point they were all walking around like zombie saying the same talking points . I’m sure sales people say ,”Not my fault
I didn’t make the loan .” But if your a sales person you know you were setting up fraudulent transactions by the very fact that you took people to properties that you knew they could never qualify for and you referred them to a slick loan agent
if you were being honest about how your contributed to the crime wave . Sales people also would blackmail appraisers that they won’t get any more business if they don’t come in on the appraiser . The real estate people applied their pressure and were contributory to the crime wave ,not to mention they were the parties with the faulty sales pitches
that lured people into leverage buying on toxic loans ,as well as loan agents were . RE people were the cheerleaders for
projecting real estate gains being a given ,when a projection of future gain is not something they should of done ,or ability to get a loan in the future is something they should of never assured the public was a given . RE people were doing double escrows ,writing up duel contracts ,one for the lender ,another for escrow ,engaging in side contracts that they deprived the lender knowledge of and all kinds of cheap
shots .What parties do you think were involved in the cash back fraud crime wave ,don’t doubt that the RE agent had full knowledge of it ,might of even suggested it .
You have to have all these parties working together for this
to happen as it did IMHO .
http://memegenerator.net/Foghorn-Leghorn/ImageMacro/887752/Foghorn-Leghorn-boy-i-say-boy-I-think-yer-on-to-something.jpg
Might attract a few vultures…
Realtors are salespeople.
I rate them pretty much in this order better to worse
New Car Sales People
Furniture Sales People
Used Car Sales People
Mattress Store Sales People (near the lowest form of life)
Real Estate Sales People
Telemarketers
Door to Door Sales People (lowest form of life)
So if you think about it while there are worse forms of life than Realtors, well you get the idea…
Is the NAR too big to fail?
Nar.
Here is one that falls into the NS category.
Homes bought five years ago the hardest to sell
By Paul Owers, Sun Sentinel
10:36 a.m. EDT, March 17, 2011
Homeowners who bought or refinanced in 2003, 2004 and 2007 also may be underwater, though not as far as those who bought or refinanced closer to the peak of the boom.
Borrowers who owe more than their homes are worth suffer from what analysts call a “negative wealth effect.” The homeowners feel poor and are less likely to spend money fixing up their homes or helping to revive a still-soft economy.
Bankers insist there’s little they can do to help people who bought at the height of the housing market. Ultimately, buying a house involves risk, just like any other investment, said Alex Sanchez, president of the Florida Bankers Association.
http://www.sun-sentinel.com/business/realestate/fl-unlucky-2005-homes-20110316,0,949688.story - 182k
Buying a house involves risk ,but people were deprived of the knowledge
that the lending market was one big crime wave ,and that’s a risk
that could not be determined ,unless you where a party to the crimes .
Looking at the long term foreclosure rates of the secondary market ,no
one that was deprived of knowledge of the practices that had taken over
could of predicted this level of foreclosure rate as a byproduct on the Ponzi-scheme fraudulent lending market . A innocent party would naturally assume that parties qualified for the loan and they were competing with “willing and able borrowers ” in arms length
transactions with non-fraudulent appraisals .
So ,enough of this BS that people weren’t deprived of the knowledge of the true risk by fraud .
I think this is wishful thinking, many people who bought during the bubble didn’t care if they were paying a crazy price or getting a freaky loan, they were just hoping to scalp the next buyer in line. And look at the posters who brag about their windfall selling at the peak. Their defense is, hey, I know this is a bubble, and I’m smart, and I’m cashing out. Look at ME, I’m a winner. They now tsk tsk that the new buyer is underwater and facing foreclosure, since they were a Sucker.
Sure there was a certain percentage of borrowers that didn’t care
if they were paying crazy prices and their intent was to just flip
or sell to a greater fool and it was not relevant to them that a lot of fraud was taking place ,they probably committed fraud themselves .
This sort of buyer that your describing was very involved in the investment scheme of it all . Some of those buyers got caught
holding the bag because they didn’t get out soon enough . That
different than a buyer who qualified and really planned to be a long term end user of the property and believed the market was on the up and up and thought the appraisals were true and had no knowledge they were competing against unqualified buyers . Believe it or not there were a lot of people like that .
“Their defense is, hey, I know this is a bubble, and I’m smart, and I’m cashing out. Look at ME, I’m a winner. They now tsk tsk that the new buyer is underwater and facing foreclosure, since they were a Sucker.”
Sounds like DennisN, who bragged about scalping a lowly tradesman on the sale of his San Jose home at more than 10 times income, which promptly ended up in foreclosure, then had the audacity to say that he wished the guy would end up in prison for lying on his mortgage app. Of course, DennisN had no problems spending a portion of his windfall cash on a paid for home in Idaho, with the remaining several hundred thousand parked into a savings account which he chronically bitched about the low rate he was getting. Sick indeed, and not surprising that he was an attorney. My apologies to you, Polly, you’re a gem in a sea of sleaze.
“So, enough of this BS that people weren’t deprived of the knowledge of the true risk by fraud.”
People did not believe what their very own eyes were telling them so they decided to believe strangers instead.
The believed from strangers that a strawberry picker could and should buy a six-hundred thousand dollar McMansion in Fresno, that is was nifty and neat that his income would not be verified.
They believed that housing prices would go up ten to twenty percent forever even though a few minutes at a computer would show them that this feat has never happened before and was not about to happen now.
They believed that Price equals Value, that the higher the price the higher the value and fundmentals such as supporting incomes meant absolutely nothing.
Your assuming that these borrowers had knowledge that a 15 dollar a hour strawberry pickers was getting a 700k loans . You had a percentage of honest borrowers that got lured in by the chant
that you have to buy now or be priced out forever (the fear factor ) How would they know that the demand was fake by faulty lending.
Real estate agents know how to treat different borrowers differently and what different sales pitches to give the different
borrowers differently . They find out what the objectives are of the client . What they do to first time buyers is a crime in terms of
mis-information . A lot of times those first time buyers are trusting souls that have no clue they are being led to the
slaughter by the nice lady that smiles a lot and seems to have their best interest at heart .
I am going to jump to another subject in order to make a point:
As of this very day investment seminars are being set up with investment advisors advising potential retirees to turn over to them (the advisors) all the money that they can get hold of - to cash out their pensions in the form of lump sums, to cash out their Roths, and to cash out their 401Ks - and in return they will get to enjoy a ten- percent-plus return on their money for the rest of their lives, plus they will have plenty left over to leave to their kids after they die. This return, of course, is after some rather hefty management fees.
Ten-percent-plus returns. This is a CONSERVATE figure, they are told; if they want a higher return they will have to take some risks.
People come back from these seminars with stars and dollar signs in their eyes.
Reason means nothing to these people. History means nothing. Articles about investments mean nothing.
The information they need is right there for anyone to see, but they choose not to see it.
I would like to add ,not everybody is corrupt . There are still a lot of nice people running around in this World that are simply
victims of forces more powerful than them . There are still a
lot of good people left in this world that have simply been
mislead . You really have to protect yourselves these days ,its a jungle out there .
Just the other day I got a scam letter in the mail . It was a clear scam to me ,but I can envision a unsuspecting person getting lured into it . You wouldn’t believe how unsuspecting a lot of the older people are .
“You really have to protect yourselves these days ,its a jungle out there .”
It takes concerted effort to avoid getting swept away in a tsunami tide of officially tolerated, rampant fraud and corruption.
combotechie ……Regarding your above post about the investment seminars . Remember when they had all the real estate seminars during the real estate boom ?
I just don’t know how people could be sucked into the new wave of BS investments . People desperate for yields I guess to the point that they bite . They most likely don’t read the small print on whatever they are signing either .
Desperate or greedy people do stupid things I guess . It doesn’t help that you have these sharks luring them in . If you have ever watched these guys ,they are good at selling .
“Desperate or greedy people do stupid things I guess. It doesn’t help that you have these sharks luring them in. If you have ever watched these guys, they are good at selling.”
The best way to ward off the sharks, IMHO, is with accurate information - Truth, in other words. And this Truth thing is out there in abundant supply. All one needs to get at it is a keyboard.
“It takes concerted effort to avoid getting swept away in a tsunami tide of officially tolerated, rampant fraud and corruption.”
And there you have it. The root cause of our SNAFU/FUBAR.
combo,
The truth was not really available during the bubble. I know that many of us were Googling “housing bubble” daily, just looking for any information that would help us make some sense of the housing market. The internet was void of any real information.
Also, I asked all over the place — realtors, lenders, etc., trying to piece together what was going on. Everyone shrugged their shoulders and said, “we’re running out of land,” and “all the rich people are coming.”
I’m an extremely skeptical person, and it’s this skepticism that kept us from buying into the mania. I wasn’t until after we had sold to rent that some blogs finally started to pop up with better information (Patrick’s, Piggington, and Ben’s sites were some of the first, IIRC).
Not only that, but most of the posters here probably have well above-average I.Q.s. You have to remember that half the population has an I.Q. at or below 100. Most of them (and many who have high intelligence) are going to trust “the experts.”
“Homes bought five years ago the hardest to sell”
Does this simply mean that owners who bought five years ago can’t afford to sell, because their mortgages are underwater? It’s not like the homes are really harder to sell; it’s just that the owners can’t afford to price them at current market value without selling short.
Is this supposed to be news?
“The homeowners feel poor and are less likely to spend money fixing up their homes or helping to revive a still-soft economy.”
Sounds like homeownership supported by unaffordable loans is bad for property upkeep. By contrast, we have saved so much money over the past five years that we have generously taken it upon ourselves to save our landlords some home maintenance costs by incurring the expenses to do it ourselves (e.g., painting, repairing broken doors, etc).
Last night Ben posted
‘On Thursday, the Census Bureau revealed that 18% — or 1.6 million — of the Sunshine State’s homes are sitting vacant. That’s a rise of more than 63% over the past 10 years.’
I said they have done a masterful job of keeping the price of decent houses in decent neighborhoods artificially high. Although if someone wanted a less desirable place in a less desirable neighborhood they could pick one up for mid 80`s prices. Here is one in Palm Beach Gardens.
Today
9265 BIRMINGHAM Dr
Orig. LP $100,000
List Price: $ 66,000
DOM: 201
County records
Location Address: 9265 BIRMINGHAM DR
Aug-2010 23982/1607 $47,100
CERT OF TITLE DEUTSCHE BANK NATL TRUST CO TRS
Nov-2005 19563/1076 $250,000
WARRANTY DEED MORVAN LESCO &
And just for kicks this “homeowner” took another $110k out of this fine investment B4 they stopped paying. Here is the 2nd one.
Type: MTG
Date/Time: 1/17/2007 11:56:37
CFN: 20070024802
Book Type: O
Book/Page: 21310/1066
Pages: 7
Consideration: $60,000.00
Party 1: MORVAN MALINE
MORVAN LESCO
Party 2: JPMORGAN CHASE BANK
Just saw a commercial saying JPMORGAN CHASE saved 250,000 peoples homes since 2009 and this is how recoveries start. How come they couldn’t save Lesco?
Just because he was $300k upside down and was not paying?
Have seen several million dollar priced homes with “under contract” signs in northern va. Good times for the rich I guess.
The recession is long over for the rich.
Throwing a couple of trillion dollars at their mistakes tends to fix things…. for them.
So I did some “research” last night and the housing stock in the Pittsburgh area is unbelievable. Wow. Crossing my fingers… I should know within the next month. The only thing is, there is no guarantee of a job for my wife, but the upside is we’d break the two income trap.
Does this every end, or should I expect to be thinking about $ and housing my entire adult life?
growin up in pittsburgh in the 60’s and my mom had to work.
liven was cheap but not easy.
Articles like this one sure put me in the mood for snapping up a California McMansion during the red-hot summer sales season at the bargain-basement price of $500K+.
Worries about a big earthquake jolting California have shoppers stocking up on survival supplies
Preparing for the Big One, anxious Californians go shopping for first-aid kits, gas masks and other survival supplies.
By Alana Semuels, Los Angeles Times
March 18, 2011, 5:09 p.m.
The people want gas masks. Also flashlights, batteries, iodine tablets and machetes. And Ovi Lalo is their reluctant supplier.
Lalo has run California Surplus Mart in Hollywood for 34 years, and he said he always sees a bump in customers right after earthquakes and other natural disasters.
…
Earthquake fears not good for real estate sales . Nuclear fallout fears not good for real estate sales . Job loss insecurity not good for real estate sales .Reneging on Pension obligations ,not good for real estate
sales . Instability in general not good for real estate sales .
Aside from those easily-ignored factors, First Time Buyers Face Opportunity of a Lifetime.
Read more: First Time Buyers Face Opportunity of a Lifetime | REALTOR.com® Blogs
So long as the fiat money presses are working well, real economy concerns like those raised in this article are no cause for concern.
Japan Auto Industry Hit Hard By Quake
by RagingBull
It’s almost too obvious to write: Japan’s auto industry, the third largest in the world (behind China and the U.S.) has been ravaged by the disasterous earthquake that hit the nation last weekend. But there is a story in just how bad the industry has been hit both in Japan and around the world.
All seven of Japan’s automakers–including the Big 3 of Honda, Nissan and Toyota–were forced to close down their operations earlier this week in the wake of the earthquake and the damage that it created. And while certain plants are back up and running, the majority of industry operations remained shut down until next week, if not later, according to the Washington Post. And even when they do get back up and running, ongoing issues with parts suppliers and a damaged power-supply infrastructure are expected to cause continued delays stretching for weeks and months.
As it stands, cars are not rolling off production lines; facilities and cars themselves have been destroyed; parts are not being made or shipped; damaged roads and transportation infrastructure have complicated things further; and the industry is all but frozen. Estimates indicate that the auto industry is bleeding as much as $150 million per day.
While you might think that the damage to Japan’s automakers would benefit U.S. automakers–U.S. consumers’ main choices have long been divided between American and Japanese vehicles, after all–it may have just the opposite effect. Even cars that are built and sold here rely on Japanese parts, and hundreds of auto-part makers were located near the center of the earthquake, cutting off supply channels to U.S. automakers. GM has already been forced to shut down a Louisiana plant that builds two truck models due to parts shortages. More shutdowns are likely.
…
Perhaps Buffett should have done less bloviating and more reading on the Housing Bubble Blog.
Buffett Didn’t “Fully Realize” Housing Bubble Until September, 2008
Mar. 19 2011 - 8:56 am
By ROBERT LENZNER
Don’t feel so badly if you didn’t see the market meltdown of September, 2008 coming.
Neither did the Oracle of Omaha, the iconic investor of our time, Warren Buffett. I’m pretty amazed myself, because I had been writing that Citigroup, Merrill Lynch, Lehman , Fannie Mae, Freddie Mac and Wamu were all insolvent. I even recommended going short Citigroup at $29 on January 8, 2008. in my Streettalk column, and was met with a barrage of complaints by Sandy Weill.
…
I really don’t believe Buffett . Remember this is the guy that made the
quote long before 2008 about the “Financial Weapons of Mass
Destruction”. Also he owns part of a credit rating company . It really wouldn’t look good if he said he understood it but didn’t do anything about it in a timely fashion .
Perhaps I am beating a dead horse by mentioning this, but the obvious solution to an excess supply of vacant homes is to stop federally funding the effort by Fannie Mae and Freddie Mac to artificially prop up U.S. housing prices. An artificially inflated market does not clear. I would be willing to conjecture (without having ever opened any of them) that this topic is even covered somewhere in one of Bernanke’s undergraduate economics text books.
20% Of Florida Homes Vacant: ‘Toxic Waste’
by Mike Baron
Florida might have gorgeous beaches, plentiful sunshine and a palace where fairy princesses live, but what they don’t have are people living in homes, thanks to oversupply and a plummeting housing market.
According to a new survey released by the Census Bureau, nearly 20 percent of all homes in the state of Florida are currently vacant. That’s right, 20 percent — that’s approximately $1.6 million houses — empty.
The situation seems grim for the sunshine state, thanks to an overzealous investment wave that took the state by storm. The number of vacant homes have gone up dramatically in the last decade with a staggering increase of more than 63 percent - and the oversupply is only crushing sales more with every additional vacancy.
…
“$1.6 million houses — empty.”
Does anyone else besides me find that statistic puzzling?
Yeah. Looks like serious brain fart.
Get the
Fed and the Treasury DepartmentGSEs out of the housing price support game, and the supply glut will vanish. Most ironically, the used home sales business would see a recovery, labor market mobility would be restored, and housing market liquidity would thaw, if the taxpayer-funded GSE-engineered unaffordable pricing program were brought to an end.This reminds me of a question I have raised here from time to time, for which nobody has ever yet provided a satisfactory answer:
Is price fixing legal, if the federal government is behind it?
WSJ Blogs
Developments
Real estate news and analysis from The Wall Street Journal
* Rowhouse Rehab: Rescuing Our Floors From Cat Pee
* March 18, 2011, 7:28 PM ET
Boom Hangover: Empty Homes Pile Up
By Dawn Wotapka
The housing boom’s overbuilding has left plenty of empty houses nationwide, yet another problem to be solved before the battered residential market can heal.
Take the Sunshine State, which doesn’t seem so sunny these days. On Thursday, the Census Bureau revealed that 18% — or 1.6 million — of the state’s homes are empty. That’s a stunning spike of more than 63% over the past decade, CNNMoney.com reports.
Some of the state’s counties show deep pain. Collier County has a stunning 32% of homes empty, while Sarasota comes in at 23%, the site reports.
To be sure, Florida is hardly alone. Arizona’s rate is about 16%, Nevada’s comes in at 14%.
Don’t expect relief anytime soon. “Housing went from being the preeminent investment of choice to toxic waste,” Richard DeKaser, an economist with the Parthenon Group, is quoted by CNNMoney.com as saying. “It will take about eight years just to put the vacancy numbers back into the single digits.”
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PB …I really think price fixing can be challenged as not legal ,but its done so much these days ,(look at how much the Big Monopolies are doing it ). All standing law has been compromised to the problem of
fixing the housing bust .
With so millions upon millions of vacant homes to choose from, why would anyone in their right mind willingly buy a cat lady’s former home?
* March 18, 2011, 3:34 PM ET
Rowhouse Rehab: Rescuing Our Floors From Cat Pee
By S. Mitra Kalita
By now, I have Googled “cat pee” more than myself.
We always knew we were buying a cat lady’s house but we never anticipated the extent of the stain and stench. Two days after closing, we peeled back the red shaggy carpet in the third-floor room that was to be my office.
More than half the hardwood floor was black. We thought removing the carpet would help the smell, not make it worse.
That night, as my husband scrubbed radiators at the house and my daughter lay sleeping next to me in our sublet a few blocks away, I began my Google obsession with cat urine. “Mix hydrogen peroxide and Dawn and baking soda,” I texted him.
Then I found another chat room that raved about a pet-odor product called Nature’s Miracle.
I texted again: “Just ordered something from Amazon. Miracle promised.”
It arrived two days later and I got to work. After spraying, the odor pervaded my office, my clothes, my soul. I ran downstairs.
“I can’t do it. You try it. One of us should live.”
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I’ve had to rehab one of those.
With a concrete subfloor/slab, you just scrub the bare concrete and throw out all toe/shoe molding. Air for a week and then new carpet and yer done.
With wood floors, you’re screwed if it’s been years and heavily soaked. You can only scrub the surface, but this will not affect the soaked wood.
Rip-n-replace is all you can do.
People really ought to be publicly flogged for allowing their pets to use the house as their toilet. It IS a health code violation in every city in this country.
Geithner seeks swift foreclosure pact with banks
A vacant home for sale is pictured in Yonkers, New York, October 26, 2010. REUTERS/Mike Segar
By Dave Clarke and Rachelle Younglai
WASHINGTON | Tue Mar 15, 2011 5:31pm EDT
WASHINGTON (Reuters) - A comprehensive settlement between U.S. authorities and banks over alleged mortgage servicing abuses needs to be reached quickly to help the housing market heal, Treasury Secretary Timothy Geithner said on Tuesday.
Geithner said such a settlement will help dispel legal uncertainty that has been plaguing mortgage lenders and clogging the foreclosure process.
“It is very important that we try to bring this to bed as quickly as we can,” Geithner told the Senate Banking Committee. “I think all parties, not just the servicers, but the state AGs and the federal agencies have a strong stake in doing that.”
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“It is very important that we try to bring this to bed as quickly as we can…”
Wouldn’t it make far more sense to figure out which banksters committed felonies and send them to federal prison to pay for their crimes? What’s the big rush?
Dumb question of the day: Is there a threshold level of proximity to the top circles of the federal government which provides blanket immunity from fraud prosecution?
PB …Bringing something to bed as quickly as we can sounds like
Justice not served to me .
Look at how Hank Paulson got immunity from Congress for whatever he was going to do ,and that had to be part of the deal .
If they didn’t get Mozillo ( a big KIng Pin ) ,they aren’t going to get
anybody high up IMHO . They are going for this bogus small fines
nonsense .
Nothing to do with proximity and everything to do with “who you know.”
I SO want a system where criminals are brought to justice, regardless of their proximity (or knowledge) of those in the inner circle of power.
Thoughts on how to achieve this?
I note that back in the 1970s, when Nixon was brought down by Watergate, our country was collectively appalled by the crimes committed at the top. Nowadays, news of rampant fraud and corruption are greeted with a shrug. WHAT WENT WRONG, AMERICA?
What went wrong was “disaster overload”.
“Shock and Awe” economics is the application of this syndrome.
It’s the same technique that let the Nazis rise to power. Too much bad news destroys a person’s ability to think critically. Combine with some violence, and it works every time.
“WHAT WENT WRONG, AMERICA?”
We were told government is the problem, and greed is good.
We believed it, and acted accordingly.
Why should racketeering charges against Megabank, Inc be summarily dismissed? I would far prefer to see any executives guilty of committing a crime wearing orange jump suits, than to see a hasty summary dismissal of charges in the interest of promoting a housing recovery. If the housing market has waited since 2006 for recovery, it can wait a few more years until fraud perpetrators are brought to justice.
Lawsuit: Fraud, ‘Robo-Signers’ Used To Process Foreclosures
POSTED: 5:39 pm EDT March 18, 2011
INDIANAPOLIS — Bank of America is in the bull’s-eye of a proposed class-action lawsuit filed in Marion County.
The complaint accused the bank of racketeering mortgage documents in order to crank out mass foreclosures, 6News’ Rafael Sanchez reported.
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Isn’t fraud at the levels Megabanks committed it a felony? If so, why aren’t any felons going to prison for it?
Anonymous Uncovers Details on Bank of America Fraud, Establishes Way for Employees to Get Story Out
By Kevin Gosztola (about the author)
Anonymous, the hacktivist group known for supporting WikiLeaks and mounting actions in cyberspace in defense of freedom of information and transparency, launched “#BlackMonday” at midnight. Emails between an Anonymous user and an employee with Balboa Insurance, whose work is connected to the operations of Bank of America, were posted.
The employee claims to have worked for the company for the last seven years. He writes, “Many of you do not know who Balboa Insurance Group (soon to be rebranded as QBE First by Australian Reinsurance Company QBE according to internal communication sent to all Balboa associates) is, but if you’ve ever had a loan for an automobile, farm equipment, mobile home, or residential or commercial property, we knew you. In fact, we probably charged you money”a lot of money”for insurance you didn’t even need.”
Emails from the employee allegedly affirm suspicions that banks like Bank of America have been engaged in rampant fraud. But, the bigger story here is Anonymous has made contact with an employee at Balboa Insurance and opened up a conduit for getting information out to the world. He appears intent to push others to blow the whistle of Bank of America fraud.
In an email sent on March 11, 2011 at 7:06 pm, the Balboa Insurance employee writes about a key strategic issue that Anonymous faces in its campaign to take down Bank of America for its disingenuous and fraudulent dealings (particularly a campaign that began when the bank announced it would cease to process donations to WikiLeaks).
…
“In fact, we probably charged you money”a lot of money”for insurance you didn’t even need.””
Damn janitors and their union wages!
Oh wait…
‘Foreclosure King’ shuts his practice
Posted: March 9, 2011 - 1:00am
By RICHARD PRIOR
David J. Stern, the one-time “Foreclosure King,” is leaving about 750 foreclosure cases behind in St. Johns County as his law practice shuts down in Plantation, but his absence will barely cause a ripple in the process.
“It may delay individual cases a little bit, maybe a month or two,” St. Johns County Circuit Judge J. Michael Traynor said Tuesday. “But most people have made (court) appearances and moved on.”
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Bank of America Hacked, Accused of Mortgage Fraud
Posted in Financial News, Foreclosure, Mortgage Rates
March 14, 2011
Bank of America (BAC) has had a hard time fighting off bad press recently. After locking thousands of customers out of their accounts when Bank of America Online went down, BofA is now combating rumors that e-mails just leaked by hacker organization Anonymous are evidence of mortgage loan fraud.
Mortgage Loan Information Leaked in E-Mails
The classified e-mails were originally leaked by a former employee of Balboa Insurance, a subsidy of Bank of America, which was acquired when BofA purchased Countrywide Financial in 2008. Among the e-mails was correspondence from Balboa employees requesting permission to have loan numbers and other data tracking information removed from mortgage loan documents, making it impossible to connect the mortgages with their insurance accounts.
This would supposedly allow the bank to improperly foreclose on clients without the necessary documentation, a practice for which many major mortgage providers are under investigation for doing.
These e-mails were then made public on the internet through the website bankofamericasuck.com and tweets by @OperationLeakS, which is the Twitter handle used by Anonymous. The organization, along with the ex-employee, claims these e-mails are proof that BofA has attempted to cover up instances of improper foreclosure proceedings.
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BOA will get a 50 dollar fine and they will move on .
Wells Fargo’s New “Overdraft Fee” Racket: Fraud Still Going On?
Published: March 18, 2011Posted in: Commentary, Featured, News
By Jane Stillwater
Last week the Berkeley branch of Wells Fargo bank started going all ballistic on a friend of mine’s telephone. Night and day, robo-dialers attacked her phone, reminding her over and over again that her account with Wells Fargo was now in collection, that she now owed Wells Fargo a whole bunch of money and that if she didn’t pay up, then her credit would be totally ruined. “Totally ruined!”
How did things come to such a sorry pass? I’m not sure, but I think it may have involved Wells Fargo breaking both local and federal laws — again.
…
This is the sort of activity Megabank, Inc. engages in, while spending millions on TV commercials to paint themselves as saints who are helping millions of people in day to day life. In fact, has anybody seen that commercial, either by JP Morgan or Morgan Stanley- I can’t recall, with the sweet music and scenes right out of a Norman Rockwell painting which touts how much they’re helping people with the tag line saying “this is what recovery looks like?” GAG.
Goldman Sachs Engaged in Fraud, Korean Insurer Claims in New York Court
By Andrew Harris - Mar 17, 2011 3:15 PM PT
Goldman Sachs Group Inc. (GS) hid from the South Korean Heungkuk Life Insurance Co. that it had bet against the viability of a collateralized debt obligation the bank sold as safe, according to a lawsuit filed in New York.
The insurer seeks more than $47.3 million in damages from the New York-based banking firm according to its 56-page complaint accusing Goldman Sachs of fraud and negligent misrepresentation.
“Goldman had utilized its specialized knowledge of the subprime mortgage market to make a massive, concealed bet against the very CDO that it sold to Heungkuk,” the insurer said in its complaint.
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Finally the lawsuits are coming . Maybe the pension funds will sue also .
Still a civil lawsuit doesn’t get you jail time .
The U.S. provides south Korea’s security; nothing will come of this lawsuit.
Charges: In major banks, ring of fraud
Prosecutors charged a dozen individuals in Minnesota, California and New York in connection with a ring that allegedly stole more than $10 million.
By DAN BROWNING and CHRIS SERRES, Star Tribune staff writers
Last update: March 9, 2011 - 9:52 PM
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I just love it when they catch these inside job criminals .
Goldman Sachs axe falls on 2,000 jobs as banking downturn gathers force
By Simon Duke
Last updated at 10:10 PM on 18th March 2011
Goldman Sachs is axing nearly 2,000 jobs as the downturn in the investment banking industry gathers force.
The Wall Street giant is slashing its 35,700-strong global workforce by 5pc - with 1,785 highly paid staff set to lose their jobs.
The controversial firm, which paid £340m to settle a US fraud lawsuit last summer, suffered a 52pc profits plunge in the final three months of 2010 after the eurozone crisis rattled its clients.
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If things are so bad, why the big bonuses?
Well you see, it’s just like state deficits; you can’t give tax breaks to big companies without firing some people.
Can $47 Really Turn Into $6795? We Investigated…
Daily News 1 Investigates Online Work at Home Programs…
We investigate the Story about a woman who is making over $6,000/month from home
Are There Any Legit Work At Home Programs?
With unemployment numbers extremely high, everybody is looking to make a few extra bucks these days. Many people are turning to work at home programs… But, which ones are REAL and which ones are SCAMS?
We just had to find out… So we set out to do some research ourselves. We came across a blog by Jessica Holcomb of San Diego, CA.
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Sounds like a rehash of the old make money stuffing envelopes from home etc sales pitch.
My feeling is that while some of these may be real, almost all of these are scams with few if any winners…
“I will tell you this News 10 report is NOT a real news website, it’s nothing more than an advetorial to try to get you to sign up for automaticprofitsystem.com.”
http://richinwriters.com/news10reports-scam/
Also, lots of interesting comments attached to the article in the above link.
“Are There Any Legit Work At Home Programs?”
Pretty much, no.
There ARE some phone answering jobs out there that are legit, but unless you are running your OWN business, the answer is, no.
You know PB with so much fraud being discovered ,even post crash of the
financial markets ,is there any question in peoples mind that our financial institutions/investment houses committed a lot of fraud leading up to the crash .It’s just so insulting that these bastards have the power they do .
So much fraud and corruption, so little time to document all of it with our HBB posts…
It’s ALREADY there, but nobody IS READY to punish the MegaInc. ANYBODY’s
Despite its harsh provisions, a RICO-related charge is considered easy to prove in court,
as it focuses on patterns of behavior
as it focuses on patterns of behavior
as it focuses on patterns of behavior
as it focuses on patterns of behavior
as it focuses on patterns of behavior
as it focuses on patterns of behavior
as opposed to criminal acts.
It’s WAY past insulting. It’s mortally dangerous.
This is on yahoo right now: http://finance.yahoo.com/news/First-Person-Losing-Big-65-ac-2690070448.html?x=0
Blaming buying a home on the wife seems to be common.
Latest on Egypt: http://www.vancouversun.com/technology/Hundreds+Islamists+stone+Egypt+ElBaradei/4471305/story.html#ixzz1H3vdHFUw
Why this adminstration is determined to bring Islamists to power, first in Egypt and now in Libya, I will leave to other people to speculate.
Boca home invasion victim arrested for growing pot
By Pat Beall Palm Beach Post Staff Writer
Posted: 3:21 p.m. Saturday, March 19, 2011
BOCA RATON — Home invasion was just the beginning of Dana Carvello’s troubles.
The 34-year-old Carvello was arrested today after officers arriving on the scene of a forced-entry robbery at his Boca Raton home found a marijuana “grow house” in the garage.
Jewelry and a Nintendo Wii were taken. Carvello, who sustained head and face injuries, was treated at Boca Raton Regional Hospital.
It was when police were searching the home that they stumbled onto the garaged pot plants. Carvello told the police the pot was only for personal consumption, but the officers were unimpressed: They arrested Carvello and charged him with cultivation of marijuana and child neglect.
http://www.palmbeachpost.com/news/crime/boca-home-invasion-victim-arrested-for-growing-pot-1332789.html - -
Woo Hoo!
One more war. Gotta love this country and its leaders. Always thought Gerald Celente was a little over the top for me. If all fails, war is the only solution. This is not the end I am afraid, this is just the beginning.
Back to NCAA tourney……..
will we need more QE now?
March Madness rules!
BofA, Othe\r Banks Agree to Special Master for Foreclosures in New Jersey
By Sophia Pearson - Mar 18, 2011 4:09 PM PT
Bank of America Corp. (BAC) and five other mortgage servicers agreed to the appointment of a special master to examine foreclosure procedures in New Jersey, a court- appointed lawyer said today.
A blanket suspension of foreclosures in New Jersey isn’t necessary in light of the settlement, which subjects the banks to a performance review for a year, the lawyer, Edward Dauber, said in a letter to Superior Court Judge Mary Jacobson, posted on the court’s website. Dauber’s law firm, Newark, New Jersey- based Greenberg Dauber Epstein & Tucker, was appointed to present arguments supporting a foreclosure suspension.
Given these protections any order of suspension “would serve no purpose,” Dauber said in the letter. “To the contrary, an efficient and normalized foreclosure process is essential to the health of the New Jersey housing market.”
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Court appointee to review tens of thousands of N.J. home foreclosures
Published: Friday, March 18, 2011, 9:23 PM Updated: Saturday, March 19, 2011, 10:36 AM
Sarah Portlock / The Star-Ledger By Sarah Portlock / The Star-Ledger
A court appointee would review whether banks properly foreclosed on tens of thousands of New Jersey homeowners and whether mortgage lenders have changed how they go about repossessing homes, under a settlement announced today.
The centerpiece of the agreement between a state-designated attorney and six of the country’s biggest mortgage lenders, is the appointment of retired Superior Court Judge Richard Williams, who will determine whether banks have in place a process to ensure their foreclosure proceedings are based on personal knowledge and accurate business records of the loans they are servicing, state-designated attorney Edward Dauber said.
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The financial institutions and their home loan servicing divisions are Bank of America, Citibank, GMAC, JPMorgan Chase, OneWest Bank and Wells Fargo Bank.
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It sux to live in New Jersey, AND to be facing near-term foreclosure, once Megabank, Inc gets its act together.
I note that Ben Bernanke lived in New Jersey before he became Emperor of the Fed.
Foreclosures ahead: Housing woes hang on
2:51 PM, Mar. 19, 2011
BRIDGWATER — First-time foreclosure filings in New Jersey dropped 5.2 percent last year compared with 2009. Good news? Hardly.
“It’s a false read,” said Jeff Otteau, a housing market analyst whose East Brunswick-based Otteau Valuation Group calculated the number.
There are not fewer people in danger of losing their homes, according to Otteau. In fact, 70,598 New Jersey homes were repossessed by banks last year, according to RealtyTrac, which predicts a repeat performance this year.
What’s happening, Otteau said, is that more banks, facing claims of careless documentation, are deciding to hold off on starting foreclosures. They’re not filing against delinquent homeowners until they get their own houses in order.
Foreclosure filings are, in a word, stalled in the proverbial pipeline. The problem likely will linger longer in New Jersey than in other states for two reasons, according to Otteau, who pointed out the Garden State lost 33,000 private and government jobs last year.
“The country gained 900,000 private and government jobs in 2010,” he said. “If New Jersey had moved at the national pace, it should have seen a corresponding gain of 27,000 jobs in 2010. But it didn’t. When people are continuing to lose their income in our state, there’s no reason for foreclosures to improve.”
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FRAUD!
Even Kenneth Harney gets it, and that’s saying volumes!!!
Attorneys general try to rein in lenders’ shabby behavior on modifications
By Kenneth R. Harney, Friday, March 18, 7:20 PM
When you take out a home mortgage, do you expect to be treated fairly and competently by your bank or loan servicer?
Most likely you do. But the widely publicized “robo-signing” and foreclosure scandals suggest that for thousands of homeowners, fair dealing and competence have not been routinely available at some of the largest mortgage servicing operations in the country.
According to witnesses at recent congressional hearings:
* Borrowers with on-time payment histories who sought loan modifications frequently were told they needed to stop payments for two to three months before they would be eligible to even discuss possible changes to their loan terms. When they applied for modifications, they were sent foreclosure notices because they were in default.
* Major lenders and servicers often put borrowers on a “dual track” system — negotiating loan modifications and trial payment plans under federal programs while simultaneously initiating foreclosure procedures.
* Servicers pyramided late fees and other penalties, swelling borrowers’ debts to the point where they were so large that foreclosure became inevitable. According to Diane E. Thompson, counsel to the National Consumer Law Center, $30,000 in fees were added to one homeowner’s principal balance by a bank during the seven months it took to process her modification request.
* Servicers’ sloppy documentation in loan files often has led to unjustified foreclosures and high fees. Some of the most blatant errors involve property insurance records. In one case in Maine, a homeowner was informed that his hazard insurance policy had lapsed and the bank “force-placed” a policy of its own for two years. The force-placed policy required premium payments of $8,500 a year, despite the fact that the homeowner had a valid insurance policy providing superior coverage at a premium of just $550 a year.
Reported abuses such as these have led to hundreds of lawsuits against banks and servicers that are clogging court calendars nationwide. But now state attorneys general have banded together in an effort to negotiate a broad, national settlement with the 14 biggest banks and servicers.
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“Shabby behavior?” That’s like saying Jack the Ripper had bad manners.
Here’s a chart showing real wages contracting:
http://caps.fool.com/Blogs/us-real-wages/559590
Deflation is at hand. Cash is king. Debt sucks.
My nominal wages and real wages contracted. But I can’t complain — they didn’t drop nearly as close to zero as they did in the early-90s recession.
Welcome back HDMan.
And may God damn all realtors.
Regards,
Exeter aka Realtors Are Liars
Lawyer guilty in mortgage fraud scheme
By Tom Harvey
The Salt Lake Tribune
First published Mar 18 2011 07:27AM
Updated Mar 18, 2011 11:30PM
A federal jury found disbarred Salt Lake City attorney Jamis Melwood Johnson guilty Friday night on 27 federal charges related to a mortgage fraud scheme that used false loan documents and straw buyers to strip millions of dollars from lenders.
The jury returned the guilty verdicts after about eight hours of deliberation that started shortly after noon, following closing arguments of a two-week trial before U.S. District Judge Clark Waddoups.
The judge ordered Johnson taken into custody after the verdict was returned and set sentencing for July 18.
Johnson was found guilty of conspiracy, money laundering and wire and mail fraud. His court-appointed attorneys declined comment on the verdicts.
Johnson, 59, was indicted in March 2009, along with Ronald W. Haycock Sr., 62, of Bountiful, and Lyle Smith, 45, of Roy.
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So many pending mortgage and financial fraud cases, so few orange jumpsuits to show for them. Hurry and put them to bed so America can get back down to business!!!
FBI chief defends mortgage fraud efforts
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By Jeremy Pelofsky
WASHINGTON, March 16 (Reuters) - FBI Director Robert Mueller defended on Wednesday the Obama administration’s efforts to prosecute Wall Street executives responsible for the U.S. mortgage meltdown amid criticism from some lawmakers that not enough has been done.
The agency has more than 3,000 open investigations into mortgage fraud alone, with 94 task forces and some 340 agents assigned, Mueller told the House of Representatives’ Judiciary Committee.
Michigan Representative John Conyers, the committee’s top Democrat, questioned whether the FBI was responsible for the lack of prosecutions related to financial and mortgage fraud and if anyone has been held responsible for the meltdown.
“I would have to strongly disagree with that portrayal of our efforts,” Mueller said. “We have had takedowns about every six months, persons arrested for mortgage fraud, securities fraud, corporate fraud. There are ongoing trials in that arena.”
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