The Housing Bubble

The Wall Street Journal
FEBRUARY 7, 2012, 3:35 P.M. ET

More US states to join foreclosure-abuse deal
Associated Press

WASHINGTON — Arizona and Florida will join a nationwide settlement over foreclosure abuses, officials with direct knowledge say. They will join more than 40 other states in approving a deal to provide relief for many Americans who lost their homes or can’t afford their mortgages.

Formal announcements could come within a week, according to the officials, who spoke on condition of anonymity because they weren’t authorized to discuss the settlement publicly.

Arizona and Florida’s involvement buoys hopes that a full 50-state deal is imminent.
…

Europe’s Debt Crisis
Greece facing ‘dramatic dilemma’
Ben Rooney @CNNMoneyMarkets February 7, 2012: 3:14 PM ET

Greek Prime Minister Lucas Papademos meets with officials from the nation’s main political parties to hammer out reforms needed to secure more bailout money.

NEW YORK (CNNMoney) — Officials in Greece are under pressure to reach agreement on more austerity measures, as the threat of a default hangs over the country and protestors take to the streets.

Prime Minister Lucas Papademos and the leaders of Greece’s governing coalition need to hammer out the details of a package of job and salary cuts, as well as pension reforms and other measures to reduce public spending.

Papademos was set to meet with party leaders Tuesday evening, but talks have now been pushed back to Wednesday, according to the Prime Ministers office.

It was the second delay since the leaders agreed Sunday on the “main elements” of the program, including a plan to reduce public spending by 1.5% of gross domestic output this year.

Meanwhile, Greek labor unions held a daylong strike Tuesday to protest the reforms, which they see as being foisted on them by foreign creditors.

The reforms are needed for Greece to receive a second bailout worth €130 billion from the European Union, International Monetary Fund and European Central Bank.
…

Amid Debt Crisis, A Trail Of Broken ‘Promises’
by NPR Staff
Listen to the Story
Morning Edition
[4 min 20 sec]
February 7, 2012

Financial writer Philip Coggan traces the current global financial crisis to the 1970s, when the U.S. went off the gold standard.

“Up till then, every form of money had some link to precious metal: gold or silver,” Coggan, author of a new book, Paper Promises: Debt, Money and the New World Order, tells Morning Edition’s Renee Montagne.

Coggan, who writes about finance for the Economist magazine, explains that before that time, the U.S. used gold to back the dollar; other countries could exchange their currency for American gold. But when President Nixon went off the gold standard, “essentially you had no limit on the amount of money that could be created and no limit on the amount of debt that could be created.”

The result, he says: asset bubbles.

Debt was used to buy assets, which rose in price and then burst. He points to Black Monday in 1987, when global financial markets crashed and the Dow Jones industrial average fell more than 20 percent. Those same factors, he says, led to the dot-com bubble of the 1990s and the more recent housing bubble. When bubbles burst, central banks stepped in and cut interest rates to keep the system afloat.

“The result of all that was that it was kind of a one-way bet for speculators: Keep borrowing money to keep buying assets; central banks will always bail you out,” Coggan says. “And that’s why we ended up in this mess that we are in … with lots of debts and central banks creating money to try and prop the whole system up.”

Today, governments are trying different approaches to get themselves out of debt.

Greece, for example, is negotiating with the European Union and the International Monetary Fund on a $170 billion bailout to avoid a default in March on its bond repayments. The Associated Press reported Monday that the bailout also depends on talks with private bondholders to forgive more than $131 billion in Greek debt, along with new bonds worth 50 percent less than their original face value.

In the United States, meanwhile, the Federal Reserve launched massive bond-buying programs in 2008 and 2009. It said last week that it will hold its benchmark short-term interest rates near zero at least until late 2014. The Fed has also bought $2 trillion in government bonds and other securities to keep long-term interest rates low.

Coggan is pessimistic that such efforts will work.
…

Remember back before there were McMansions in a bygone era when the actually wealthy (vs wanna bes) built actual mansions? Well one local charity has found a use for this one. The program is called Adopt a Room for Veterans. Friends of mine in Boston did work for homeless Viet Nam vets in the Boston area with the David Mamet play and other fundraisers for shelters in the 90s. I worry we’ll have a similar selection of people who can’t adjust as they return from Afghanistan and Iraq. I hope this idea in Auburn catches on nationwide.

http://photos.syracuse.com/post-standard/2012/02/adopt_a_room_for_veterans_at_c_1.html

In this photo series you’ll see pictures of rooms already adopted and renovated at first but later in the series you’ll see unfinished rooms and understand how this 30,000 sq foot behemouth had just been laid fallow for years.

“The historic Case Mansion in Auburn has over 30,000 square feet with 65 rooms, including 15 bedrooms. A non-profit ministry is getting people to adopt bedrooms in the mansion and then restore them to provide housing to veterans. The mansion was the home of Theodore Case, inventor of the Movietone sound-on-film system.”

Re-posted from FL thread:

“APOLLO BEACH — Bulldozers have started pushing dirt again at Waterset, a huge development in southern Hillsborough County that ultimately could boast 6,700 homes.”

http://www.tampabay.com/news/business/realestate/article1214399.ece

http://www.bloomberg.com/news/2012-02-07/banks-paying-homeowners-a-bonus-to-avoid-foreclosures-mortgages.html

Banks Paying Homeowners to Avoid Foreclosures

By Prashant Gopal - Feb 7, 2012 12:00 AM ET

Banks, accelerating efforts to move troubled mortgages off their books, are offering as much as $35,000 or more in cash to delinquent homeowners to sell their properties for less than they owe.

Lenders have routinely delayed or blocked such transactions, known as short sales, in which they accept less from a buyer than the seller’s outstanding loan. Now banks have decided the deals are faster and less costly than foreclosures, which have slowed in response to regulatory probes of abusive practices. Banks are nudging potential sellers by pre-approving deals, streamlining the closing process, forgoing their right to pursue unpaid debt and in some cases providing large cash incentives, said Bill Fricke, senior credit officer for Moody’s Investors Service in New York.

Losses for lenders are about 15 percent lower on the sales than on foreclosures, which can take years to complete while taxes and legal, maintenance and other costs accumulate, according to Moody’s. The deals accounted for 33 percent of financially distressed transactions in November, up from 24 percent a year earlier, said CoreLogic Inc., a Santa Ana, California-based real estate information company.

Realtors are biggest campaign givers to Californians in Congress

By Jim Puzzanghera, Los Angeles Times
February 7, 2012, 4:54 p.m.

Reporting from Washington— The National Assn. of Realtors is the largest campaign contributor to members of Congress from California in recent years, according to a watchdog study that depicts the nation as a sort of United States of Special Interests.

The Realtors group contributed a total of $497,000 to California House members from July 2009 through last June and to the state’s two senators from July 2005 through last June.

http://www.latimes.com/business/la-fi-campaign-contributors-20120208,0,2890599.story - -

Maybe this will put a dent in the D.C housing bubble.

House panel to consider pension contribution hike for federal employees

Federal employees, including members of Congress, would contribute 1.5% more toward their pensions under legislation to be considered Tuesday by the House Oversight and Government Reform Committee.

The bill, introduced by Rep. Dennis Ross, R-Fla., would change the formula for calculating pension benefits to the average of the highest five years of salary from three years and require new hires to contribute 4% of their pay into the Federal Employees Retirement System in order to receive a match in the Federal Thrift Savings Plan.

http://www.pionline.com/article/20120206/DAILYREG/120209903/house-panel-to-consider-pension-contribution-hike-for-federal-employees

http://www.nytimes.com/2012/02/08/world/middleeast/united-states-planning-to-slash-iraq-embassy-staff-by-half.html?_r=2&hp

‘Less than two months after American troops left, the State Department is preparing to slash by as much as half the enormous diplomatic presence it had planned for Iraq, a sharp sign of declining American influence in the country. After the American troops departed in December, life became more difficult for the thousands of diplomats and contractors left behind. Convoys of food that had been escorted by the United States military from Kuwait were delayed at border crossings as Iraqis demanded documentation that the Americans were unaccustomed to providing.’

‘Within days, the salad bar at the embassy dining hall ran low. Sometimes there was no sugar or Splenda for coffee.’

What, no Splenda? Not the Splenda! Noooo….

The Iranians must have hired Colin Powell as their chief military adviser.

Iran has capability to hit U.S. forces round world: report

MOSCOW (Reuters) - Iran is capable of hitting U.S. military forces around the world if attacked by the United States, Russia’s Interfax news agency quoted the Iranian ambassador to Moscow as saying on Wednesday.

“The Americans know very well what Iran is like and what our potential is,” Sajjadi was quoted as saying. “Iran is in a very good position to deliver retaliatory strikes on America around the world … An attack on Iran would be suicidal for them.”

http://news.yahoo.com/iran-could-hit-u-forces-anywhere-attacked-report-121438932.html

Is Iran considering fighting us here so we don’t fight them there?

BLOOMBERG

The world’s largest consumer-products company rolled back prices after an 8 percent increase lost the firm 7 percentage points of market share. Kimberly-Clark Corp. started offering coupons on Huggies after resistance to the diapers’ cost.

I’m surprised Kimberly Clark doesn’t coordinate it’s price increases with the two other players.

Companies can’t raise prices because wage growth remains stunted, even though unemployment has started to recede. Average hourly earnings rose 1.9 percent in January from a year earlier, the smallest increase since April, and down from 3.2 percent in 2008 and 3.7 percent in January 2009, the Labor Department said Feb. 3. The jobless rate fell to 8.3 percent in January, the lowest level in three years, compared with a high of 10 percent in October 2009.

Comment
It should be pointed out that workers are also facing dramatic increases in costs, as states decrease services and increase fees, companies pass more medical cost to worker, and most of the inflation that is happening is happening in needs not wants.

“This recovery has not been a great recovery with regard to income gains, and income gains are a function of both growth in wages and jobs,” Jeffrey Rosenberg, the chief investment strategist for fixed-income at BlackRock Inc., the world’s biggest money manager, said in a Feb. 1 interview in New York. “Why can’t you pass price increases through to consumers? It’s because consumers aren’t seeing income gains.”

http://www.bloomberg.com/news/2012-02-06/huggies-price-cut-shows-why-bond-market-backing-bernanke-considering-qe3.html

Student loan debt approaches 1 trillion and the balloon gets bigger and bigger and bigger and ……….

Bloomberg

Comment by Darrell_in_PHX
2012-02-07 17:43:16

Let me ask this a different way, Darrell.

In the examples that you gave, the Fed is buying debt, but presumably it is debt that is purchased on the secondary markets. In other words, that debt ALREADY existed before the Fed bought it.

Where is the NEW debt corresponding to the dollars injected?

Or to put it a different want: where would the debt be if the Fed created $1T out of thin air and bought gold bars with it?

I think the “all dollars have matching debt” argument is flawed. Maybe it is true in most cases (banks creating dollars through loans), but not true in the case of direct Fed actions.

House committee passes quickie foreclosure bill
by Kim Miller
A bill that would hasten Florida’s foreclosure process while reducing the time banks could pursue a homeowner for loan debt won a tepid approval from the Florida House Economic Affairs Committee this morning.

The proposal, HB 213, is derided by homeowner advocates who fear it will leave borrowers with less defenses against bank repossession. But supporters claim it would only allow quickie foreclosures in cases where homes are abandoned, when the action isn’t challenged, or when a judge rules the homeowner has no legitimate reason to block a bank takeover.

Rep. Kathleen Passidomo, R-Naples, is sponsoring the bill. She defended it Wednesday against critics who claim it takes foreclosures out of the judicial system.

“Firstly, and let me put everyone’s mind at rest and contrary to the e-mails and calls you’ve been getting, this bill is not a non-judicial foreclosure bill,” Passidomo said. “This bill expedites the judicial process while at the same time guaranteeing the rights of citizens.”

Florida’s courts have a backlog of about 368,000 foreclosure cases, according to State Courts Administrator Lisa Goodner, who expects hundreds of thousands of additional cases to add to the log jam in the next few years.

According to a report released Wednesday by real estate analytics firm CoreLogic, nearly 12 percent of Florida’s homes with mortgages are in foreclosure, ranking it tops in the nation for foreclosure inventory. An estimated 17 percent of Florida home loans are 90 days or more behind on payments.

While the committee approved the bill in a 12 to 4 vote, members grilled Passidomo about protections in the bill for homeowners and voiced concerns about how a home would be determined abandoned.

The bill says a process server can determine a home is abandoned if two of a handful of conditions are met, such as windows and doors are boarded up or broken, trash or debris has accumulated, the home is deteriorating and interviews with at least two neighbors indicate the home is abandoned. The court must also contact utilities companies to find out if there is service going to the home.

“It doesn’t say to what level trash or debris needs to have accumulated,” said Rep. Evan Jenne, D-Fort Lauderdale. “I have some folks in my district that if you walked into their house right now there would be a pizza box, a dozen beer bottles and some chip bags.”

Homeowner advocates also oppose a provision that requires a borrower to quickly put up a defense as to why the foreclosure shouldn’t proceed. A judge rule whether the defense is legitimate or not. If not, the judge could immediately enter a final judgment.

“We are concerned about the burden of proof being put on the homeowner,” said Alice Vickers, an attorney with the Consumer Action Network. “It places a homeowner in the position of trying to try a case as if it is a final trial within 20 days of service of process.”

The bill does require banks to have all of their paperwork in order, including information on the note and assignments of mortgage, before a foreclosure is filed. It also would give banks only two years, instead of the current five, to file for a deficiency judgment against the borrower.

Wednesday’s approval sends the proposal to the House Judiciary Committee for a vote. A similar Senate bill, SB 1890, is being sponsored by Sen. Jack Latvala, R-St. Petersburg. His proposal, however, has stalled in the Senate Judiciary Committee.

Man, it seems I’m always doing my part to help the economy.

Screen on my laptop went on the fritz last night. I think I can get it fixed under warranty, but it’s already 4 years old. Ordered a new MacBookPro this morning.

Hope that makes you happy, Darrell. That’s ‘legal tender’ coming out of my savings…and going straight to China….

I liked her a lot, she was a scrapper. Her parent$ & $iblings, as “family” … Wow!, & Yike$!

Sanchez Vicario says $60M in career winnings gone:

3 hours, 15 minutes ago / Yahoo News

“I never doubted that my father would manage my assets in the most efficient and beneficial way,” she wrote.

She retired in 2002, and after “breaking free” of her parents’ influence, “the surprise came. Then, the disappointment. The surprise of finding myself without resources after a career full of successes and therefore winnings.”

She added: “They left me with nothing and I owe the tax authorities.

“How can it be that everything I achieved has vanished, that it does not exist?”

Sanchez Vicario won three French Open titles and the U.S. Open. She added 10 more Grand Slam doubles or mixed doubles titles.

She helped Spain win the Fed Cup five times, and was the first Spanish woman elected to the International Tennis Hall of Fame in 2007.

In December, she became Spain’s Fed Cup captain.

Back from DFW. Uncle passed away last week,services were on Monday-Tuesday. Aunt and Uncle were married 60+ years, did everything together. She’s not looking too good. Another aunt passed late last year.

On the way down, got a call. Oldest daughter’s father in law died sometime Sunday night or Monday morning. Not unexpected, but he has minor kids. No life insurance, can’t get it with pre-existing conditions. Services on Friday.

Also found out yesterday that they are having a memorial for (what’s left of/what they could identify by DNA testing) my sister’s mother in law (killed at the Reno Air Race crash). Aircraft impacted 10 feet in front of their seats. I’m guessing she was up out of her seat, visiting with the “neighbors”….which would be typical. She was the “friendly neighbor” type. Hopefully, it was a “never knew what hit her” sort of thing.

Being in the -fixr”s immediate family isn’t too healthy a place to be right now. It’s getting to the point that I’m thinking “Who died?” when I see a cousin’s name come up on the caller ID.

Note to self: Arrange to have yourself cremated. (Preferably after death)

You don’t want any pallbearers having a heart attack or getting a double hernia schlepping your big azz around.

I know this was posted recently, but I only just got around to watching it.

It’s awesome, must-watch material.

William K. Black pulls no punches. He says exactly what we have been saying here for years. Where are the perp walks? Why are the same failed leaders still leading the failed banks? Why does the government want to whitewash all of the fraud that occurred?

Nothing that he says will shock long-time readers here, but I still found it shocking that he is out saying it in public. I salute him for doing so.

I highly recommend watching it…

http://www.youtube.com/watch?v=Rz1b__MdtHY

The churchiest murderer you’ll see in a long while:

http://wbal.com/article/86435/2/template-story/City-Police-Arrest-Two-Men-For-Murdering-Teen

OK I`m looking at a house that I looked at back in 2008 in Jupiter Fl. The asking price is $229,000 with a Price Reduced on Realtor.com I won`t be offering that much. Status: Contingency but deal not going through. The house was completed in early 2002 and purchased by who I will call V1 (you figure it out) V1 paid $259,000.00 for the house brand new. I will just show a few of V1`s refis and his LP

Feb-2002 13490/0118 $259,000 WARRANTY DEED CLARK DONALD J &

Type: MTG
Date/Time: 12/23/2003 12:27:01
CFN: 20030787300
Book Type: O
Book/Page: 16353/747
Pages: 6
Consideration: $47,500.00
Party 1: CLARK DONALD J
CLARK KELLIE J
Party 2: WACHOVIA BANK NATIONAL ASSOCIATION
Legal: LOXAHATCHEE PINES L4 L

Type: MTG
Date/Time: 9/23/2005 08:46:51
CFN: 20050601837
Book Type: O
Book/Page: 19292/1287
Pages: 17
Consideration: $375,000.00
Party 1: CLARK DONALD J
CLARK KELLIE J
Party 2: BANK OF AMERICA NA
Legal: LOXAHATCHEE PINES L4 L

Type: MTG
Date/Time: 11/16/2005 11:13:42
CFN: 20050707060
Book Type: O
Book/Page: 19539/735
Pages: 5
Consideration: $50,000.00
Party 1: CLARK KELLIE J
CLARK DONALD J
Party 2: NATIONAL CITY BANK
Legal: LOXAHATCHEE PINES L4 L

Type: LP
Date/Time: 4/3/2007 12:07:14
CFN: 20070159800
Book Type: O
Book/Page: 21581/409
Pages: 1
Consideration: $0.00
Party 1: WELLS FARGO BANK NA
Party 2: CLARK DONALD J
LOXAHATCHEE PINES HOMEOWNERS ASSOCIATION INC
NATIONAL CITY BANK
CLARK KELLIE J
Legal: LOXAHATCHEE PINES L4 L

Enter V2

Jun-2008 22803/1174 $294,250 WARRANTY DEED CALDER GLENN &

Type: D
Date/Time: 8/11/2008 15:06:58
CFN: 20080298772
Book Type: O
Book/Page: 22803/1174
Pages: 4
Consideration: $294,250.00
Party 1: WELLS FARGO BANK NA
Party 2: CALDER RENEE
CALDER GLENN
Legal: LOXAHATCHEE PINES L4 L

Type: LP
Date/Time: 8/23/2010 15:53:28
CFN: 20100313961
Book Type: O
Book/Page: 24029/231
Pages: 1
Consideration: $0.00
Party 1: PNC BANK NATIONAL ASSOCIATION
Party 2: CALDER RENEE M
CALDER GLENN A
Legal: LOXAHATCHEE PINES L4 L

Being a V, V2 gets some goverment cheese to get caught up but alas V2 didn`t stay caught up which is amazing because according to the neighbors V2 had the place rented out. I know I`m shocked too, how could V2 take the cheese not pay and collect rent. Oh wait, we did that story a couple of weeks ago with the lady in the PB Post who was getting the Hardest Hit $ and did it too.

Type: MTG
Date/Time: 1/31/2011 16:43:09
CFN: 20110037272
Book Type: O
Book/Page: 24340/569
Pages: 6
Consideration: $33,643.46
Party 1: CALDER GLENN A
CALDER RENEE M
Party 2: USA SECRETARY HOUSING & URBAN DEVELOPMENT
Legal: LOXAHATCHEE PINES L4 L

Type: LP
Date/Time: 12/13/2011 11:29:04
CFN: 20110462789
Book Type: O
Book/Page: 24903/1443
Pages: 3
Consideration: $0.00
Party 1: NATIONAL CITY MORTGAGE
PNC BANK NATIONAL ASSOCIATION
Party 2: CALDER RENEE M
CALDER SPOUSE
BANK OF AMERICA NATIONAL ASSOCIATION
USA SECRETARY HOUSING & URBAN DEVELOPMENT
LOXAHATCHEE PINES HOMEOWNERS ASSOCIATION INC
MIDLAND FUNDING LLC
CALDER GLENN A
Legal: LOXAHATCHEE PINES L4 L

Anyway this house was built in 2001-2002, bought in early 2002 by V1, refied to the moon, Deadbeated in for a couple of years, taken back by WELLS FARGO, resold at the bargain price of $294,250.00 by V2 (which was probably at least $200k short of what was owed by V1) Rebeated, bailed out by HUD, rented out after that without the mortgage being paid or Super Deadbeated and is now back on the market. The GD house is only 10 years old!

I think I am going to try to buy this house so I can see if late at night I can hear the ghosts of Deadbeats past.

the good old days are here again ?

Banking during Roman times was different from modern banking. During the Principate, most banking activities were conducted by private individuals, not by such large banking firms as exist today; almost all moneylenders in the Empire were private individuals because anybody that had any additional capital and wished to lend it out could easily do so.[5]
By the 3rd century, acute currency problems in the Empire drove them into decline.[7] The rich who were in a position to take advantage of the situation became the money-lenders when the ever-increasing tax demands in the last declining days of the Empire crippled and eventually destroyed the peasant class by reducing tenant-farmers to serfdom. It was evident that usury meant exploitation of the poor.[8]

Wikipedia

You guys wanna see sweet dump in DE?

http://www.trulia.com/property/3071890418-1513-Briarbush-Rd-Magnolia-DE-19962

Slick huh? Hip and gable, distressed brick, keystone arch and rowlocks at windows, real masonry chimney, etc. Marginally too large but manageable….. grossly overpriced for sure.

Like tobacco money another big cash infusion to shore up its pension obligations

“California received a guarantee its struggling homeowners would receive around $8 billion in relief, two people familiar with the negotiations said. The state itself would receive around $430 million for foreclosure prevention and other housing efforts.”