May 26, 2012

Bits Bucket for May 26, 2012

Post off-topic ideas, links, and Craigslist finds here.




RSS feed

108 Comments »

Comment by palmetto
2012-05-26 05:00:43

Yesterday I posted the story about the man in Indiana taking hostages at a real estate office. Here’s a little more info:

“Mack Elliott, an agent at the brokerage, wasn’t in the office at the time but said he spoke with agents who were there and believed the incident stemmed from a dispute over a real estate transaction.”

I look for more of this sort of thing to happen, and not just in real estate. People are going to have to learn that they’re not immune when they cheat or lie or whatever. Real estate doesn’t always go up. And no matter what the NAR says is “legal”, maybe disclosing defects or difficulties with a property is a good idea. It’s the right thing to do. I don’t know the whole story here, but when desperate people are pushed to the limit, sh*t happens.

Maybe it’ll happen with a Facebook investor.

Comment by The UNKNOWN TENANT
2012-05-26 05:42:03

Realtors are hostages?

 
Comment by X-GSfixr
2012-05-26 06:10:15

This is what the lawyers don’t understand.

The law has nothing to do with “fair” anymore. It is used as a money extraction device. Everyone knows that you can get away with just about anything criminal, if you spend enough on your legal team.

While in civil court, you are a loser, (due to attorney’s fees) even if you nominally “win your case”.

Some people and businesses know this. I’m currently involved in a pizzing contest over supposed “damage” done to an apartment one of the kids was renting. The problem is, do I waste 2-3 days of my time to dispute a $350 bull$hit invoice?

Of course, the answer is “no”. So I’ll just go ahead and write the check, knowing that these guys have essentially stolen $350 bucks from me, but I’ll need to invest another $1000 to have a 50-50 chance to recover the $350. Local governments are practicing the same money extraction plan, by issuing a blizzard of fines and traffic tickets for minor infractions.

As this seems to be the latest fad running with about every business you can name, the frustration level of this sheeple with this state of affairs is getting progressively worse. Multiply this by 150 million people, many of whom are not mentally stable

The short version? Another step toward the US Banana Republic. The courts will be for those with the money. The rest of us will get to exercise free market principles, and take the law into our own hands. Good thing we have all of these guns laying around to make sure everyone has equal access to “justice”.

Comment by scdave
2012-05-26 07:13:03

+1 X-GSfixr…I agree with everything you say here…

 
 
Comment by Jess from upstate SC
2012-05-26 06:11:44

Facebook produces nothing of value ,wastes a lot of time , and spams up the computer. I am sorry for all the ordinary folk who lost $$ on it .Not so sorry for all the Smarty investment firms that are taking a bath on it .

Comment by Carl Morris
2012-05-26 07:29:49

Facebook produces nothing of value

I don’t agree with that, but I don’t think it produces anything that can be monetized.

Comment by Cantankerous Intellectual Bomb Thrower©
2012-05-26 07:38:38

“…don’t think it produces anything that can be monetized.”

What is your definition of “monetized”? After all, wasn’t the FB IPO valuation hyped to be near $100 bn?

(Comments wont nest below this level)
Comment by Carl Morris
2012-05-26 08:02:05

Well, they were certainly able to monetize the company itself :-), I just mean that I don’t think they’re going to have much luck using Facebook to sell goods or services to people. Why they are still able to sell millions of shares for $30+ a share in spite of that is a mystery to me.

 
Comment by Arizona Slim
2012-05-26 08:07:32

I just mean that I don’t think they’re going to have much luck using Facebook to sell goods or services to people.

You’re not the only skeptical guy, Carl. Take a gander at what branding expert Rob Frankel has to say about the business side of social media.

Money quote: While there’s no question social media links people together 24/7, it really only does it for social reasons. Keeping up with your boyfriend, your Uncle Ned, the Class of 2006 — whatever — is perfect for sites like Facebook, Vimeo and Picasa. But when marketing people try to leverage social media for business, the results aren’t quite so good. Sure, you’re going to hear a lot of advertising and marketing people hawk the virtues of social media, but if you look really, really closely at their claims, you’ll see why it’s called social media and not business media.

One of the first myths about social media is the benefits of linking people together. Yes, social media certainly does connect people, including those you thought you’d never have to hear from again. But it’s a major mistake to assume linkage of people translates into actions of people, which is what I hear a lot from social media experts. Don’t get me wrong, I’m a branding guy and getting more people to evangelize my brand is a good thing. On the other hand, having a million people “like” my brand’s Facebook page doesn’t add anything to the bottom line.

And that, in my humble opinion, can be a huge waste of resources.

 
Comment by ahansen
2012-05-26 10:27:58

Jess,
Do not underestimate the value of FB to the governments and security apparatus of national interests, multinational corporations, policy institutes….

 
 
Comment by skroodle
2012-05-26 09:25:05

The FBI/CIA/NSA/TSA disagree with you Carl.

(Comments wont nest below this level)
 
 
 
Comment by SV guy
2012-05-26 06:16:33

There was a guy in SF who went bananas around 20 years ago. He went to 101 California Street packing serious heat.

Apparently he didn’t like being bent over.

https://en.wikipedia.org/wiki/101_California_Street_shootings

 
Comment by In Colorado
2012-05-26 06:24:50

And no matter what the NAR says is “legal”, maybe disclosing defects or difficulties with a property is a good idea.

FWIW, it’s required in California. When we sold a property there about 20 years ago the Realtor was adamant that we disclose them all.

Comment by scdave
2012-05-26 06:54:10

Disclosure laws in California are “over-the-top” you might say…You have a family in the neighborhood who’s kid has a drum set in the garage, you better disclose it…Made some improvement no matter how minor without a permit, you better disclose it…

Comment by Awaiting
2012-05-26 14:28:25

scdave
I think barking dogs, garage bands, ex-cons, radiaiton accidents in the 50’s in the area (passed on a home), etc…, everything that could ruin your quality of life or your health should be disclosed. I LOVE those types of laws.

Permit disclosures are for insurance issues. God-forbid the unthinkable happens, you don’t want to take the loss because records don’t match. I hate the permit money grab myself, but I understand the yin-yang.

(Comments wont nest below this level)
Comment by Muggy
2012-05-26 15:25:44

Another interesting point, and these were among my darker days of bubble-sitting.

We signed a lease on a house in Seminole, and the whole while I kept asking the guy about the weird flag pole in the backyard. Turns out it was a disguised cell tower. I told him there was no way I was moving my kids in and we both got stupid and started threatening to sue each other.

It ended when we agreed on one month’s rent to kill the deal.

He disclosed all kids of silly schnit, so of course he was distracting me from the real issue.

 
Comment by Bill in Carolina
2012-05-26 17:45:17

Legally-required disclosure should be limited to defects in your home and the property. Mold behind the walls, wiring added without permit or inspection, basement floor drain prone to backing up, etc.

A garage band next door, being under the approach path of the airport when the wind is blowing a certain way, a registered sex offender across the street are not defects. I can’t imagine a homeowner anywhere having to disclose such things. For example, how far away does the garage band or the sex offender have to be before you DON’T have to disclose? What if the seller is hard of hearing and never hears the garage band?
How about a roll-out basketball backboard and games that last well after dark? A neighbor’s loud motorcycle? A dog that’s kept outside and can start barking anytime day or night? A mockingbird nesting in your neighbor’s cedar tree that’s 30 feet from your bedroom window?

 
 
 
 
Comment by Arizona Slim
2012-05-26 07:21:08

I look for more of this sort of thing to happen, and not just in real estate. People are going to have to learn that they’re not immune when they cheat or lie or whatever. Real estate doesn’t always go up.

There was a case like this in Tucson. Hitman walked into a Chik-fil-A restaurant and popped a guy.

The case is still unsolved. But the guy used to be in the mortgage business, the company was shady, and it got shut down by the state.

After he left the employ of the state of Arizona and went into private practice, a lawyer working on the mortgage company case described the Chik-fil-A murder victim as his prime witness. And the word he used to describe the hit was “assassinated.”

 
Comment by Anon In DC
2012-05-26 11:06:36

I don’t see it happening more cause of bad RE deals. But it surprises me that more divorce lawyers don’t find themselves at the wrong end of a gun. Also suprised that no one did in Bernie Madoff or John Corizone.

Comment by Arizona Slim
2012-05-26 13:39:20

But it surprises me that more divorce lawyers don’t find themselves at the wrong end of a gun.

True story from the Arizona Slim file: I used to date a divorce lawyer. And he was very insistent on having his son sleep in a bedroom that didn’t face the street. Reason: That wrong end of the gun problem.

He also was a big believer in the 2nd Amendment. He carried just about everywhere he could. Of course, the county and state courts looked down on such things, so he kept his weaponry locked in his truck whenever he had to go Downtown.

Comment by Muggy
2012-05-26 15:22:23

“having his son sleep in a bedroom that didn’t face the street”

I thought about this when I once lived in the community of the school where I worked and tangled with some bona fide gang bangers.

(Comments wont nest below this level)
 
 
 
Comment by Itsabouttime
2012-05-26 14:07:53

Why should it happen with a FBI (Facebook Investor)? Since when did buying a stock guarantee capital gains? Why are these people whining, they got in on the ground floor–time will tell if the price sinks to the basement, sub-basement, or bedrock or, instead, rockets into the stratosphere.

No more of this “Heads I win, Tails I also win.”

IAT

 
 
Comment by Beer and Cigar Guy
2012-05-26 05:57:30

Hey! Great news everybody! Former foreclosure “victims” are now able to buy new homes with FHA loans! Moral hazard has been vanquished and Happy Days are here again!

http://articles.orlandosentinel.com/2012-05-25/business/os-new-home-construction-20120525_1_metrostudy-metro-orlando-brad-hunter

“Orlando new-home sales, home construction are up

7:46 p.m. EST, May 25, 2012|
By Mary Shanklin, Orlando Sentinel

Business has picked up from last year for Orlando-area homebuilders, and at least some of their new customers are an unlikely group of buyers: former foreclosure victims.

It has been three years since foreclosures peaked in Orlando, and that is the time period foreclosed homeowners have to wait before they can try qualifying for a new mortgage backed by the Federal Housing Administration…
Sean Strickler, vice president of sales in North Florida for PulteGroup Inc., the nation’s largest homebuilder, said it’s difficult to quantify the number of homebuyers today who faced foreclosure just a few years ago, though some of them are beginning to get loans and purchase new homes.”

Comment by Diogenes (Tampa, Fl)
2012-05-26 14:48:46

The government at work: putting parasites in NEW houses with fresh new money printed by the FED, and getting out of their old used house. Brilliant. Moral Hazard run amok in america.
It’s pervasive.
I was in Home depot just yesterday and was talking with one of the clerks. He asked if the stack of wood I had on my cart was for a home project or work. I told him my “foreclosure repair project”.
He bragged that he, too, has been in a state of foreclosure since 2009 and hasn’t made a payment since that time. He says he saved
$45,000 in payments.
How did he do it?
the mortgage company tried to raise his payment by $300 per month, which was probably under the terms of the contract, so instead of paying the increase he hired a lawyer to see if he could get out of the deal.
He claimed the lawyer found 18 deficiencies with the “paperwork” and has had the foreclosure tied up since then.
So much for MERS. I said all along that this would lead to a total disaster.

I guess the bank hasn’t been hurt by the non-payment, though. I am sure the FED will print up all the money they need for the lack of payment receipts. I finally understand that NON-payment is the new rich. Default and stay in the house you are squatting in.
the new american road to riches……….
It’s sickening. What amazes me most is the number of people on this site that think being a free-loader is morally and ethically fine, it’s just whatever you can legally get away with……..that’s all that matters. I understand certain groups have always felt this way, but the concept seems to be spreading like a virus.

Comment by sleepless_near_seattle
2012-05-26 17:27:15

And when they finally do kick him out, he’ll have a nice little down payment to put down on the next place.

This was my concern about this mess. That I’d be competing with these tools all over again. I wonder what part they are now playing in areas where prices are now rising due to bidding on what’s available. We already know they play a part in any rise in prices due to the houses they are living in not coming up in inventory for sale.

 
 
Comment by nickpapageorgio
2012-05-26 18:30:24

“an unlikely group of buyers: former foreclosure victims”

Should have seen this coming when I first saw the word “victims” being used to define those in foreclosure. The only time the word “victim” and “foreclosure” should be used in the same sentence is when you describing someone who may have been a victim of circumstances that led to foreclosure, like sudden job loss, illness or death in the family.

If they are victims, I guess the only word I can use to define the more responsible in our society would be suckers.

Comment by Realtors Are Thieving Pukes®
2012-05-26 20:19:21

The “victim” is the lender. They provided the capital, agreed to the payment terms and the borrower didn’t.

 
 
 
Comment by MaaacDoc
2012-05-26 06:03:27

—I look for more of this sort of thing to happen, and not just in real estate. People are going to have to learn that they’re not immune when they cheat or lie or whatever.—-

Nah. Isolated events happen in all sorts of settings, and are not predictive of general trends. We just have a habit sometimes of reading causation into correlation. Next we’ll here that we’ve had (and will have more) armed bank robbery because “the Banksters need to be taught a lesson”

Comment by Arizona Slim
2012-05-26 07:25:26

Next we’ll here that we’ve had (and will have more) armed bank robbery because “the Banksters need to be taught a lesson”

I once heard a presentation by a local historian who touched on this very topic. The occasion was Dillinger Days, an annual celebration of the 1934 Tucson apprehension of bank robber John Dillinger and his gang. It’s a big deal here.

Any-hoo, the historian asked the audience for the names of various bank robbers from the 1930s. Well, no problem! We were on it! Audience members rattled off names like Dillinger, Bonnie and Clyde, Machine Gun Kelly, and Pretty Boy Floyd.

Next, he asked us why these outlaws are still remembered. The reason was that, in the 1930s, they were regarded with a mixture of fear and admiration. In their own twisted little way, they were folk heroes because they were literally sticking it to the banksters.

Comment by MaaacDoc
2012-05-26 07:34:46

Verily.

But, that is something of a tangent, on the issue of correlation vs causation, meaning… it is not… predictive, which was the suggestion of the original poster.

 
Comment by Spook
2012-05-26 10:05:20

Don’t forget Jesse James stickin it to the RR companies!

http://www.youtube.com/watch?v=5TJCjYxvPOY&feature=related

 
Comment by alpha-sloth
2012-05-26 13:11:04

Bonnie and Clyde. ‘We rob banks’.

http://www.youtube.com/watch?v=1ats-PgJLtg

 
 
 
Comment by Cantankerous Intellectual Bomb Thrower©
2012-05-26 06:36:22

Op-Ed Columnist
Egos and Immorality
By PAUL KRUGMAN
Published: May 24, 2012 758 Comments

In the wake of a devastating financial crisis, President Obama has enacted some modest and obviously needed regulation; he has proposed closing a few outrageous tax loopholes; and he has suggested that Mitt Romney’s history of buying and selling companies, often firing workers and gutting their pensions along the way, doesn’t make him the right man to run America’s economy.

Wall Street has responded — predictably, I suppose — by whining and throwing temper tantrums. And it has, in a way, been funny to see how childish and thin-skinned the Masters of the Universe turn out to be.

…let me take a moment to debunk a fairy tale that we’ve been hearing a lot from Wall Street and its reliable defenders — a tale in which the incredible damage runaway finance inflicted on the U.S. economy gets flushed down the memory hole, and financiers instead become the heroes who saved America.

Once upon a time, this fairy tale tells us, America was a land of lazy managers and slacker workers. Productivity languished, and American industry was fading away in the face of foreign competition.

Then square-jawed, tough-minded buyout kings like Mitt Romney and the fictional Gordon Gekko came to the rescue, imposing financial and work discipline. Sure, some people didn’t like it, and, sure, they made a lot of money for themselves along the way. But the result was a great economic revival, whose benefits trickled down to everyone.

You can see why Wall Street likes this story. But none of it — except the bit about the Gekkos and the Romneys making lots of money — is true.

For the alleged productivity surge never actually happened. In fact, overall business productivity in America grew faster in the postwar generation, an era in which banks were tightly regulated and private equity barely existed, than it has since our political system decided that greed was good.

What about international competition? We now think of America as a nation doomed to perpetual trade deficits, but it was not always thus. From the 1950s through the 1970s, we generally had more or less balanced trade, exporting about as much as we imported. The big trade deficits only started in the Reagan years, that is, during the era of runaway finance.

And what about that trickle-down? It never took place. There have been significant productivity gains these past three decades, although not on the scale that Wall Street’s self-serving legend would have you believe. However, only a small part of those gains got passed on to American workers.

So, no, financial wheeling and dealing did not do wonders for the American economy, and there are real questions about why, exactly, the wheeler-dealers have made so much money while generating such dubious results.

Those are, however, questions that the wheeler-dealers don’t want asked — and not, I think, just because they want to defend their tax breaks and other privileges. It’s also an ego thing. Vast wealth isn’t enough; they want deference, too, and they’re doing their best to buy it. It has been amazing to read about erstwhile Democrats on Wall Street going all in for Mitt Romney, not because they believe that he has good policy ideas, but because they’re taking President Obama’s very mild criticism of financial excesses as a personal insult.

Comment by Arizona Slim
2012-05-26 07:27:35

Think about this column for a minute. It’s in The New York Times, which is a pretty mainstream publication. Time wasn’t too long ago when such things would never get an airing in the newspaper of record.

Say what you will about those Occupiers, but I think they’re having an effect. And quickly.

Comment by X-GSfixr
2012-05-26 08:05:05

At what point did a review of Romney/Bain Capital’s record of vampire squidding morph into becoming an “attack ad”?

“I don’t give them Hell. I just tell the truth about them, and they think it’s Hell.”……..H.R. Truman

Comment by skroodle
2012-05-26 09:29:09

Ye shall know the truth, and the truth shall make you mad. ~Aldous Huxley

(Comments wont nest below this level)
Comment by michael
2012-05-26 13:23:02

I don’t know what’s worse…having an ex-venture capitalist as a presidential candidate or having a current president who thinks it’s his job to make sure everyone gets a “fair shot”.

 
Comment by Itsabouttime
2012-05-26 14:15:01

So, you think the President such happily preside over the Unfair States of America? Shouldn’t someone in such power do something about that, like, for example, enforce the law? I mean, even Reagan prosecuted some S&L swindlers.

IAT

 
Comment by Itsabouttime
2012-05-26 15:29:20

such=should

iat

 
Comment by Itsabouttime
2012-05-26 15:30:27

such=should for the first such, that is

iat

 
Comment by Muggy
2012-05-26 15:47:41

“I don’t know what’s worse…having an ex-venture capitalist as a presidential candidate or having a current president who thinks it’s his job to make sure everyone gets a “fair shot”.”

You have to be kidding me. Romney will loot this country into oblivion. Imagine schools being run by Goldman Sachs kind of thing.

 
Comment by alpha-sloth
2012-05-26 15:56:08

such=should for the first such, that is

The first such should say should. Say it three times fast.

 
Comment by sleepless_near_seattle
2012-05-26 17:29:30

I mean, even Reagan prosecuted some S&L swindlers.

Reagan was a better Socialist than the current Socialist.

 
Comment by nickpapageorgio
2012-05-26 18:45:49

“You have to be kidding me. Romney will loot this country into oblivion. Imagine schools being run by Goldman Sachs kind of thing.”

Obama is in the pocket of Goldman Sachs and other wall street banks. The looting has already taken place, Obama’s administration is behind the new FHA rules which are are reflating the bubble as we speak, and he willfully stands by as the FED hands printed money to bankers all over the world. Is that fair? Does that make things more equitable for you and I? You see, social justice hurts when you are on the a$$ end of it.

 
Comment by Itsabouttime
2012-05-26 20:51:04

No, it is not fair. But Michael said:

“I don’t know what’s worse…having an ex-venture capitalist as a presidential candidate or having a current president who thinks it’s his job to make sure everyone gets a ‘fair shot’.”

It would be GREAT if we had a president who thought it was their job to make sure everyone got a fair shot. We haven’t had such a president in a long time.

It’s kinda like this — if I serve you a cowpie, and call it ice cream, you’d be a fool to claim “I don’t want ice cream!” You’d be better to say “Give me ice cream, dammit, not this s**t.” Moral of this story — don’t confuse labels with reality. Obama is not seeking to assure everyone gets a fair shot. And THAT’s why his administration has failed. (And the SAME goes for shrub. And will go for Romney, should he have an administration).

IAT

 
Comment by Cantankerous Intellectual Bomb Thrower©
2012-05-27 00:00:03

“Romney will loot this country into oblivion. Imagine schools being run by Goldman Sachs kind of thing.”

Would he do it knowingly, or obliviously, as one of Wall Street’s clueless minions?

 
 
 
 
 
Comment by Cantankerous Intellectual Bomb Thrower©
2012-05-26 06:44:00

What are the long-term implications of a rush of underwater borrowers into low-interest refis? Is the presumption that home prices are going to eventually appreciate to levels where these folks are no longer underwater?

And what are the implications for the future operation of the U.S. mortgage finance system of all the mid-game rule changes that have taken place since the onset of the financial crisis?

Your Money
Hope and Frustration in New U.S. Effort to Help Homeowners
Peter Wynn Thompson for The New York Times

Terrence Janas at his condo in Illinois, which is worth less than he owes on his mortgage. Several big lenders denied his mortgage application
for aid under the new federal HARP 2.0 program.

By TARA SIEGEL BERNARD
Published: May 25, 2012

As mortgage rates have hit one record low after another, millions of homeowners have been forced to watch, longingly, from the sidelines. They haven’t had the option of refinancing because sliding home values pushed their mortgages underwater, meaning they owe more than their homes are worth. The banks would just not work with them.

Yet many of these borrowers are gainfully employed, have solid credit histories and have never missed a mortgage payment. And they want to stay in their homes — even if those homes are worth substantially less than they paid. These are the families that President Obama and other political leaders like to call “responsible” homeowners.

The government’s initial effort, back in 2009, to ease refinancing rules to include them was underwhelming. Now, though, there may be reason for some guarded optimism, as the machinery for a new and improved government refinancing program is finally up and running. And this glimmer of hope for underwater homeowners — as well as borrowers with only a small sliver of home equity — has resulted in a rush of loan applications (even if they are unlikely to secure the lowest, rock-bottom interest rates).

Comment by DF
2012-05-26 08:52:27

I knew that guy from college. He works for the Chicago Mercantile Exchange as an HFT software developer, and is a big Ron Paul supporter.

Comment by sleepless_near_seattle
2012-05-26 12:44:43

“As mortgage rates have hit one record low after another, millions of homeowners have been forced to watch, longingly, from the sidelines. They haven’t had the option of refinancing because sliding home values pushed their mortgages underwater, meaning they owe more than their homes are worth. The banks would just not work with them.

Yet many of these borrowers are gainfully employed, have solid credit histories and have never missed a mortgage payment. And they want to stay in their homes — even if those homes are worth substantially less than they paid.”

Wait a second…what are these people asking for? They can afford it, but are entitled to have the American taxpayer fund their mortgage reduction plans?

“HARP was designed to help people in my situation,” said Mr. Janas, who has been trying to refinance for more than a year. “So why was I unable to take advantage of it?”

If he is a Paul supporter, perhaps the better question is how can he ask that out loud with any shred of integrity?

 
 
Comment by Muggy
2012-05-26 15:50:05

“These are the families that President Obama and other political leaders like to call “responsible” homeowners.”

Would do these people call us?

Comment by Carl Morris
2012-05-26 22:01:55

Same thing the credit card companies call us?

Comment by Cantankerous Intellectual Bomb Thrower©
2012-05-27 00:02:05

Plankton?

(Comments wont nest below this level)
Comment by Carl Morris
2012-05-27 07:53:51

I was thinking “deadbeats”.

 
 
 
 
 
Comment by Cantankerous Intellectual Bomb Thrower©
2012-05-26 06:53:46

Can anyone who thinks they understand kindly explain why a bank should want to make a low interest mortgage loan of $237,000 on a property now worth $150,000? It seems like the bank stands to lose $87,000 if the guy walks, with no risk premium in the lending rate to insure against the risk of a walkaway.

I’m very sorry the software geek overpaid on his condo purchase, but where is the upside for the bank (or is it the U.S. taxpayer) in this “deal” to underwrite the risk in Mr. Janas’s cut-rate refi?

some homeowners and mortgage brokers are telling another story: one of frustration and still more obstacles. They say they’ve found that the program’s rules on paper don’t necessarily translate to the real world.

One of them is Terrence Janas, a 31-year-old software engineer, who bought a two-bedroom condominium in Oak Park, Ill., in 2008 for $280,000. Two virtually identical units recently sold for $150,000; one was a short sale. That has pushed his $237,000 mortgage far underwater; it’s now 158 percent of what his home is worth. He has a healthy income, a credit score of about 760, and simply wanted to reduce his 6 percent mortgage rate.

“HARP was designed to help people in my situation,” said Mr. Janas, who has been trying to refinance for more than a year. “So why was I unable to take advantage of it?”

Comment by combotechie
2012-05-26 07:30:03

“HARP was designed to help people in my situation.”

HARP was designed to extend hope to people in your situation so you wouldn’t walk.

And it appears to have worked.

Comment by Cantankerous Intellectual Bomb Thrower©
2012-05-26 07:42:27

Cargo cult financial engineering seems to be working great!

Comment by combotechie
2012-05-26 08:28:52

If they are dumb enough to be sucked in then they are probably dumb enough to stay sucked in.

This will work until all the sucker money has been sucked out.

Then … things will tend to become Very Interesting.

(Comments wont nest below this level)
 
 
Comment by DF
2012-05-26 09:06:01

I know the guy, he’s not going to walk, because he’s afraid of getting sued for the difference.

 
 
Comment by Arizona Slim
2012-05-26 07:31:00

Down the street and ’round the corner from me, a very plain and simple 2/1 got reverse mortgaged for almost $300k.

No way was that house ever worth that much, not even during the bubble mania. And this reverse mortgage happened in late 2006, when the housing market was already in trouble.

Long story short: Owner fell, broke a bone in two places, and could no longer live in the house. Family had it remodeled, then put it on the market. It didn’t sell.

Family let the place go back to the bank, Wells Fargo, which foreclosed. Place was sold in early 2010 for (wait for it) the low $80s.

Nice haircut, Wells Fargo.

Comment by Diogenes (Tampa, Fl)
2012-05-26 15:05:30

It sounds really bad for Wells Fargo, but they are part of the FED.
They never lose.
Ever.
So, Uncle Ben will take the Bad debt papers minus the sales price and develop a new “lending” program that gives WF the balance, and then some as loanable money to new suckers.
Everytime I drive by a WF the parking lot is FULL. No problem selling loans.
And best of all for W@F: The money is FREE. That’s right, it’s FREE.

 
 
 
Comment by polly
2012-05-26 06:54:57

Facebook’s Brilliant Disaster
By JOE NOCERA

http://www.nytimes.com/2012/05/26/opinion/nocera-facebooks-brilliant-disaster.html?hp

tease:

But let’s be honest. Were there really any long-term investors in Facebook that first day? Judging by the torrent of criticism that has rained on Facebook and Morgan Stanley, it sure doesn’t appear that way. Instead, what the Facebook aftermath suggests is that we’ve all become brainwashed into believing that, when it comes to I.P.O.s, up is down and down is up. A successful I.P.O. is one where the company gets hosed by Wall Street. A failed I.P.O. is one where the company’s interests, not those of Wall Street speculators, are served. It’s Alice in Wonderland goes to Wall Street.

Comment by Cantankerous Intellectual Bomb Thrower©
2012-05-26 08:01:26

Is the Wall Street investment banking business model basically to hand the smart money crowd the financial equivalent of sheers, while simultaneously luring the dumb money sheeple to line up for the sheering of a lifetime?

Isn’t that special?

Short-sellers find friends in banks

TECHNOLOGY
May 24, 2012, 8:39 p.m. ET

Short Sellers Find Friends in Banks
By TOM LAURICELLA, JENNY STRASBURG and JONATHAN CHENG

As traders at Morgan Stanley (MS -0.45%) were frantically trying to shore up Facebook Inc.’s (FB -3.39%) share price following the company’s initial public offering, other managers on the deal were helping short sellers bet that the newly minted stock would fall.

Last Friday, at least 25% of trading volume in Facebook shares—more than 143 million shares—were short sales, according to data from exchanges that handled 94% of Facebook’s total trading volume over the first four days

Trading desks at Goldman Sachs Group Inc. (GS -0.17%) and J.P. Morgan Chase (JPM -1.38%) & Co., two of the firms that helped Morgan Stanley underwrite the IPO, were among those lending out Facebook shares that hedge funds needed for short sales, according to people familiar with the matter.

The role of the firms in enabling short sellers in Facebook’s stock shines a light on a long-standing Wall Street business that has the potential to create conflicts of interest. Even as one arm of a brokerage firm is getting paid to drum up interest in a stock, another part of the firm could be earning big profits by helping bet that the stock will fall in price.

“In general, Wall Street has conflicts of interest, and conflicts of interest are profitable,” said Daylian Cain, a Yale School of Management professor of business ethics. “It’s hard to navigate them when there are millions of dollars at stake.”

Comment by michael
2012-05-26 13:28:15

God’s work.

 
 
Comment by shendi
2012-05-26 08:07:27

What about CA budget assumptions that they will collect whopping amount on taxes? Don’t the newly minted millionaire FB employees have to wait for 3 years before unloading their shares. I hope that these guys truly bought options on their shares.

Comment by Cantankerous Intellectual Bomb Thrower©
2012-05-26 08:12:28

“I hope that these guys truly bought options on their shares.”

I’d be curious to know whether the founders bought put options from Wall Street investment banks to profit when the stock sold off in the subsequent days to the IPO.

 
Comment by skroodle
2012-05-26 09:42:11

Don’t forget that lots of FB insiders sold prior to going public.

Remember Morgan Stanley offering private FB shares only to non-US citizens?

 
 
Comment by oxide
2012-05-26 17:02:42

The Facebook IPO reminds me a lot of a the opening weekend of a bad movie. The execs know full well the movie is a dog, so they hype up for the opening weekend to get people in the seats. Even if the everybody hates the movie, hey they got the money.

It’s one reason I don’t go to movies.

 
 
Comment by Cantankerous Intellectual Bomb Thrower©
2012-05-26 06:57:35

Another bank run, another bailout…gets old after a while, no?

MARKETS
Updated May 25, 2012, 8:22 p.m. ET

Spain Pours Billions Into Bank
Revived Fears of Greece Contagion Prompt Government Injection; S&P Downgrades 5 Institutions

By CHRISTOPHER BJORK and JONATHAN HOUSE in Madrid and SARA SCHAEFER MUÑOZ in London

MADRID—Spain will pump €19 billion ($24 billion) into troubled lender Bankia SA, BKIA.MC -7.43% the bank said Friday, effectively nationalizing the country’s third-largest bank in a dramatic effort to assuage concerns about the stability of its financial sector.

Worries about Spain’s banks, which are saddled with billions in toxic real-estate loans, have heightened in recent weeks as Greece’s political crisis has intensified and investors contemplate the knock-on effects of a potential Greek exit from the euro.

A man protesting Thursday outside the headquarters of Bankia in Madrid.

Sentiments darkened Friday as Standard & Poor’s cut its ratings on the credit-worthiness of Bankia and four other Spanish banks. S&P also revised its assessment of Spain’s economic risk, saying it believes the country is entering a double-dip recession that will lead to a large increase in troubled assets.

The news from Spain helped push the Dow Jones Industrial Average down 74.92 points, or 0.6%. Investors fled to the safety of U.S. Treasurys, sending the yield on the 10-year Treasury note to 1.740%, near its historic lows.

Though a capital injection for Bankia had been expected for days, the scale of the government’s action went beyond what most analysts had predicted. The bailout would be the largest in Spain’s history, doubling what Spain has so far spent to clean up a banking sector in the wake of the collapse of the country’s housing bubble.

Word of the move came late Friday after Europe’s markets closed, so it isn’t clear whether the government’s action will have the intended effect or simply harden doubts about the integrity of the country’s banking system.

Bankia’s Spain-wide operations and exposure to the country’s troubled property market have made it a barometer of the health of the entire Spanish banking system. Bankia has been a particular focus after the International Monetary Fund raised questions about its health in a recent report and it was forced to restate its earnings.

Comment by scdave
2012-05-26 07:21:57

Uh-Oh….

 
Comment by Arizona Slim
2012-05-26 07:34:38

Having spent a summer in Spain, I’ve had some personal experience with the banks in that country.

To put it politely, they didn’t seem to attract the most motivated members of the Spanish population. It seemed to me that a bank job in Spain was something one did to pass the time.

Contrast that with England, which I also visited that summer. To say that the Brits took their banking seriously was an understatement. You told yourself to be on your A-game before you even went to the bank. And that’s “you” as the customer, not the employee.

Comment by Cantankerous Intellectual Bomb Thrower©
2012-05-26 07:47:26

“To say that the Brits took their banking seriously was an understatement. You told yourself to be on your A-game before you even went to the bank.”

Gringotts bank

 
 
 
Comment by SV guy
2012-05-26 07:14:26

An interesting story on the economist Keynes.

http://www.zerohedge.com/news/guest-post-keynesianism-eugenics

 
Comment by Cantankerous Intellectual Bomb Thrower©
2012-05-26 07:17:47

WSJ dot com

HEARD ON THE STREET
Updated May 25, 2012, 10:59 a.m. ET

Steeling for a Chinese Slowdown
BY LIAM DENNING

Ever tried eating steel? It is pretty tough to swallow. But that won’t stop Chinese exporters trying to force-feed it to you.

China’s steel industry has churned out more than two million metric tons a day so far this month. That is 749 million metric tons on an annualized basis, or almost 10% above the country’s prior peak output, according to Steel Market Intelligence.

Yet China doesn’t need it. With the economy slowing, there is excess supply and prices are dropping. SMI’s Advance/Decliner Index for Chinese steel prices just recorded a zero reading for the third week …

 
Comment by Cantankerous Intellectual Bomb Thrower©
2012-05-26 07:25:54

Maha Atal, Contributor
I write about political economy and foreign affairs.

ForbesWoman
5/26/2012 @ 2:27AM
Grexit: It’s a question of how, not if, Greece will leave the euro

The smart money’s concluded that Greece is leaving the euro. There’s a run on the Greek banks, including by the European Central Bank. European officials openly acknowledge they are working on a contingency plan for a ‘Grexit,’ and Christine Lagarde says the IMF is considering it too. Tonight, she told the Guardian that Greece has run out her patience:

It sounds as if she’s essentially saying to the Greeks and others in Europe, you’ve had a nice time and now it’s payback time.

“That’s right.” She nods calmly. “Yeah.”

And what about their children, who can’t conceivably be held responsible? “Well, hey, parents are responsible, right? So parents have to pay their tax.”

This should come as no surprise to readers of this* blog. When I profiled Lagarde in August 2011, she pledged the IMF to a program of strict “fiscal consolidation, which I think is right.”

She knows this is a tough sell. “You first have a period [after making cuts] where growth takes a hit and goes negative”—and with that come unavoidable human costs in lost jobs and social services. Political feuding over controversial cuts will only make the pain worse. How should ordinary people cope? She pauses. “It takes courage.”

Anyone shocked that she’s now ready to call Greece’s bluff hasn’t been paying attention. If, as is widely expected, a left-wing, anti-austerity government comes to power in Greece, eurozone leaders will waste no time showing them the exit.

It will be difficult. Some legal scholars even believe it’s impossible, because the euro was launched without any constitutional provisions made for a country to leave it. As I wrote in November, I think rich European countries are overhyping these concerns in order to pressure Greece to comply with the austerity program. If they decide to push Greece out, they’ll invent a way to do it.

*For the context-challenged, that refers to the ForbesWoman blog, not the HBB.

 
Comment by MaaacDoc
2012-05-26 07:33:00

—-I call foul. Here’s the reality:

Between 1945 and 1973 productivity increased, and wages increased. From 1973 to 2012 productivity increased, but wages did NOT increase. So, in the “last 30 years” the credit has been average earners effort to stay even.——–

Between 1945 and 1973 we were a manufacturing powerhouse. The last four decades… not so much. Hmmm….

Comment by Carl Morris
2012-05-26 08:05:20

Between 1945 and 1973 we were a manufacturing powerhouse. The last four decades… not so much. Hmmm….

We didn’t suddenly stop being a powerhouse in 1974 and start declining because we had no manufacturing. It seems that something else went wrong first that caused our manufacturing to decline…

Comment by MaaacDoc
2012-05-26 08:08:10

—-We didn’t suddenly stop being a powerhouse in 1974 —-

Don’t believe I asserted such at thing.

–It seems that something else went wrong—

Not sure this is helpful. Usually when something goes wrong… something… went wrong.

Happy to hear your hypotheses as to what went wrong.

My thesis is that economies in decline tend to see fighting over the impending carcass

Comment by Carl Morris
2012-05-26 08:22:37

Well, what changed in the 1970s?

For one, the Germans and the Japanese were finally fully back online as mfg powerhouses themselves. That might have looked like something went wrong for us when it actually it was something going right for our competitors.

Also OPEC got it together as a cartel and started sticking it to everyone to the extent that they could.

Then, as people here like to talk about, Reagan decided that borrow and spend was a great alternative to tax and spend, and unions had too much power…for better or worse.

Probably lots of other important things…I’m no expert. I just thought your last statement was assuming that the wages failing to increase was a result of mfg decline and I’m not sure we can assume which was cause and which was effect.

(Comments wont nest below this level)
Comment by MaaacDoc
2012-05-26 08:42:28

Ahhh, so then— assuming you are correct— you do recognize that external forces and global paradigm shifts can have massive impact on core national economic assumptions that contributed to middle class stability pre 1973.

Perhaps, then, the notion of a comfy stable middle class in the USA was more anomaly than standard fare, and now we begin to return to the standard.

So it goes.

 
Comment by Carl Morris
2012-05-26 08:53:10

Perhaps, then, the notion of a comfy stable middle class in the USA was more anomaly than standard fare, and now we begin to return to the standard.

I agree, except to me the new standard looks uglier than the old standard (but maybe that’s just because I’m naive about the old standard).

 
Comment by MightyMike
2012-05-26 11:00:57

I think MaaacDoc was talking about returning to the America before 1945. It was pretty bad. Even before the Depression, the majority of the population had a standard of living that would today be considered to be pretty close to poverty.

 
Comment by BetterRenter
2012-05-26 13:01:26

MightyMike said: “Even before the Depression, the majority of the population had a standard of living that would today be considered to be pretty close to poverty.”

Although literally true, I take great exception to what that remark implies. People today are financially irrational. They went insane with borrowing, hence lived greatly beyond their means, hence a rational life lived within self-capitalization WOULD look like “poverty” to them.

I get backlash from this all the time. Talk today to people about growing their own food gardens and hanging out the washing (since it dries for free, and doesn’t get destroyed to boot), and they still look at you like you’d just climbed out of the ghetto. Americans still have a long way to “fall”, and they deserve it.

 
Comment by michael
2012-05-26 13:37:44

When did the U.S. hit peak oil?

 
Comment by Arizona Slim
2012-05-26 13:42:58

Talk today to people about growing their own food gardens and hanging out the washing (since it dries for free, and doesn’t get destroyed to boot), and they still look at you like you’d just climbed out of the ghetto.

I have neighbors who do both. And, gasp! Their clothesline faces the street! Where people can see their underwear!

And you know what? They couldn’t care less.

They also have a flock of chickens and are very avid gardeners.

Me? I don’t have a dryer either. I dry my laundry by air. And I’m making a nice big batch of compost for my monsoon garden. Right now, I’m growing basil in pots, and the pot that’s mostly compost is growing the biggest plants.

 
Comment by Arizona Slim
2012-05-26 13:44:22

When did the U.S. hit peak oil?

For domestic production, the peak oil year was 1970. Reference: Ken Defeyes, who was a protege of W. King Hubbert.

 
Comment by alpha-sloth
2012-05-26 14:02:13

Perhaps, then, the notion of a comfy stable middle class in the USA was more anomaly than standard fare, and now we begin to return to the standard.

That would be a good hypothesis, if other factors at that time has remained essentially the same. However, we elected a president at that time who significantly altered our tax structure, greatly lowering the taxes on the wealthy. And he began a deregulation of Wall Street and our banking system. Those factors are so obviously potentially tied to the downfall of our middle class that to ignore them when considering what caused the downfall is to appear to be quite unscientific, and more like a repeater of a worn-out talking point.

 
Comment by MightyMike
2012-05-26 15:04:36

If having vegeatable gardens was ever common among non-farm families, my guess is that the burden of making those gardens work probably fell on housewives. These days there are very housewives left and the typical married American woman works a lot more, with both a job and responsibilities in the home. The statistics also show that men are putting in more hours at work than they were 40 or 50 hours years ago.

 
Comment by MaaacDoc
2012-05-26 19:35:41

—Ken Defeyes—

Of Princeton? He was the Master of our eating club back in 1984. Nice fellow.

 
 
Comment by combotechie
2012-05-26 08:33:55

“Happy to hear your hypotheses as to what went wrong.”

Mine: The country morphed from a production economy to a distribution economy.

Those who were best at distributing won out over those who were best at producing.

(Comments wont nest below this level)
Comment by SUGuy
2012-05-26 19:26:07

My hypothesis is that we went from a manufacturing economy to a service oriented economy. I saw articles in the 80’s as magazine covers touting on a bar graph how people should open service businesses and that’s where the growth was going to happen. We did not have a choice and felt bad for ourselves and stuck to the manufacturing/ franchising model. It appears that we hve won.

 
 
 
 
Comment by skroodle
2012-05-26 09:46:38

The US is still the number 1 manufacturer in the world.

Comment by Itsabouttime
2012-05-26 14:23:51

I agree. We are very good at manufacturing “#1’s”, which many apparently need to have nearby to avoid realizing just how bad things are.

Remember: “We’re NUMBER 1 !”

IAT

Comment by rms
2012-05-26 19:55:27

Remember: “We’re NUMBER 1 !”

+1 LOL!

(Comments wont nest below this level)
 
 
 
 
Comment by Cantankerous Intellectual Bomb Thrower©
2012-05-26 07:34:08

Did y’all take the opportunity to “sell in May and go away”?

I note that a 30% drop in the stock market to “pay” for fiscal excesses might be a reasonable approach, as the impacts would land most heavily on those who can most afford it. Is there a way Uncle Sam could engineer a big investment payoff in case the fiscal cliff scenario plays out? I’m guessing the answer is ‘yes,’ in the form of ultra-low Treasury yields.

I suppose anyone who doesn’t like the prospect of losing 30% in stocks should have ample time to sell before the edge of the ‘fiscal cliff’ is traversed.

May 25, 2012, 5:52 p.m. EDT
Investors may be headed toward ‘fiscal cliff’
Portfolio moves to consider ahead of debt debate, ‘taxmageddon’
By Andrea Coombes, MarketWatch

SAN FRANCISCO (MarketWatch)—Investors are reeling from Europe’s deepening economic crisis, but they may soon find themselves battered closer to home as the U.S. economy closes in on another debt-ceiling debate and teeters toward the edge of a “fiscal cliff.”

Come 2013, tax rates are slated to skyrocket and mandated cuts will slash defense and other federal spending. Higher revenues and lower government spending might suggest good news for our grandchildren, but that cliff could represent bad news for today’s investors.

Some prognosticators see the stock market falling as much as 30% if lawmakers don’t grab the steering wheel and pull hard. That may be overstating the danger presented by higher tax rates ( read this WSJ blog for more ), but the Congressional Budget Office said Tuesday that if the scheduled tax increases and spending cuts occur, the economy will fall back into a recession.

On Friday, European leaders urged the U.S. to put fiscal reforms in place to avoid the “fiscal cliff.”

Still, Congress is widely expected to extend at least some of the tax cuts in the postelection lame-duck session or early in the new year. Though, given today’s political climate, you can’t be sure of that.

Meanwhile, the prospect of another debt-ceiling debate looms, similar to the one that hammered stocks in the summer of 2011.

Comment by Carl Morris
2012-05-26 08:07:32

Some prognosticators see the stock market falling as much as 30% if lawmakers don’t grab the steering wheel and pull hard.

I see it falling more than that if we stop propping everything up. And TPTB have been pulling hard for years…all they need to do is lose their grip for just a moment…

 
Comment by Bill in Los Angeles
2012-05-26 15:30:59

This is a good reason to be 30 percent in government securities. The bad years ahead of us (in terms of stock market performance) will be good years to continue dollar cost averaging. I look forward to buying more shares for the same amou t of investment.

 
 
Comment by Cantankerous Intellectual Bomb Thrower©
2012-05-26 08:07:47

Such intrusive regulation would be unnecessary if too-big-to-fail banks were systematically busted up into non-systemically-risky parts. Let the wealthy gamblers eat their gambling losses, and leave the U.S. taxpayer out of it.

May 25, 2012, 3:17 p.m. EDT
Now it’s more than just a bad bet for Dimon
Commentary: Criticism anew about risk controls at J.P. Morgan
By MarketWatch

NEW YORK (MarketWatch) — Have a good weekend, Jamie Dimon.

Because on Tuesday you’re going to be back in the hot seat.

That was the message from Washington, Wall Street and the media Friday as fresh reports surfaced about decision-making at Dimon’s bank, J.P. Morgan Chase & Co.

Dimon is being called to appear before the Senate Banking Committee on June 7. He is being asked to address what caused the $2 billion or more loss at J.P. Morgan that was disclosed earlier this month. See full report on Dimon being called to testify.

“Wall Street continues to need better risk management, vigorous oversight and unyielding enforcement,” committee chairman Sen. Tim Johnson, (D., S.D.) said in a written statement provided to The Wall Street Journal.

Separately, Bloomberg reported Friday that J.P. Morgan had named a museum chief, a CEO of a company that makes, among other things, work boots, and a billionaire’s grandson to its risk committee — a group that corporate governance and finance experts assailed as inadequate. The Journal also reported that bank is considering shaking up its risk panel. Read full story on J.P. Morgan’s risk committee .

And finally, the WSJ revealed Friday that the unit responsible for the “London Whale” trade made other risky bets on such companies as LightSquared Inc. and is committed to other investments that might be outlawed by the Volcker Rule.

Note that none of these developments is directly related to the “whale trade.” They are all indirectly related, but the new narrative appears to be that J.P. Morgan’s problems with risk may run deeper than just one big, bad trade. It could be the people, and there could be more.

 
Comment by alpha-sloth
2012-05-26 16:20:27

USDA Is a Tough Collector When Mortgages Go Bad
The Wall Street Journal

Charles Ward fell behind on his mortgage in September, just as his late wife began a losing battle with lung cancer and her medical costs soared.

His lender seized his $2,958 federal tax refund and has taken a $131 bite from each of his last four monthly Social Security checks.

“What little money I had saved up has just disappeared,” says Mr. Ward, a 71-year-old former truck driver who bought his $128,000 home in Nelsonville, Ohio, in 2008. He receives about $200 a month in food stamps and takes on odd jobs to make ends meet.

Mr. Ward’s lender isn’t a bank. It is the U.S. Department of Agriculture’s Rural Housing Service, which provides mortgage loans to rural homeowners and guarantees loans made by banks. It accounted for at least a third of all mortgages issued in 2010 in sparsely populated areas such as Morton County, Kan., and Sioux County, Neb., according to data reported under the Home Mortgage Disclosure Act.

Unlike private firms, the USDA doesn’t need permission from a court to start collecting on unpaid debts. It can in some cases seize government benefits and tax refunds before a foreclosure is completed. After foreclosure, the USDA can go after unpaid balances, even in states that limit such actions by private lenders.

A USDA spokesman says the agency follows all federal and state laws.

http://finance.yahoo.com/news/usda-is-a-tough-collector-when-mortgages-go-bad.html

Comment by Muggy
2012-05-26 17:06:49

Ha! I’ll be sure to share this with my wife’s cousin.

 
 
Comment by Muggy
2012-05-26 17:05:11

“Real estate investors have discovered a formula t

In Hillsborough County last year, 242 homes were bought and then resold within just one day. Another 113 sold the same way in Pinellas. To be clear, that’s not a seller finding a buyer in one day and entering into a contract that closes weeks later. It is a property bought and sold in one day, start to finish. hat transforms Tampa Bay’s housing crash into quick and easy profits.”

http://www.tampabay.com/news/business/realestate/article1232013.ece

 
Comment by rms
2012-05-26 17:47:06

I was talking with a guy earlier today who bought an REO foreclosure house in Detroit, MI., about five years ago for $170k, which was roughly half what the previous owner had paid; today he is $30k upside-down. He found a government program that will refinance his place, from a 6.5% rate to 3.6%, but it will cost him nearly $10k in fees. He has good credit, and he afford the mortgage. He had to leave Detroit for another job, and the home has been occupied by a renter, so he is breaking even on cash-flow.

Unfortunately, the renter called indicating that he also lost his job, so he’ll be moving out. The rents are falling too, so he’ll likely be adding money to the rental income to pay for the mortgage unless he takes the refinancing deal, but he doesn’t want to pay the $10k in fees. He asked for my advice. I told him I didn’t know the area other than what I see in the news, but I did say that things will likely deteriorate until living expenses drop closer to actual household income.

IMHO, he has three choices, none of them good: continue with the current mortgage, spend $10k to refinance into lower monthly payments, or jingle mail the keys. What does the HBB brain-trust have to say?

Comment by Itsabouttime
2012-05-26 17:59:54

I don’t get this “he doesn’t want to pay the $10k in fees.” Is there anyone who waltzes into a deal, everything is arranged, and then just says, out of the blue, “Okay, everything’s fine. But, I want to pay $10k in fees.”?

Nobody wants to pay the cost of doing business. But, you either pay the cost of doing business, or you don’t do business.

IAT

Comment by sleepless_near_seattle
2012-05-26 18:48:40

Agreed. WTF do people think are owed to them?

Sorry little Johnny. Your team lost the baseball game. No post game ice cream for you.

 
Comment by rms
2012-05-26 19:10:18

Nobody wants to pay the cost of doing business. But, you either pay the cost of doing business, or you don’t do business.

I suppose since he has been making the payments, and he has a good credit rating that he figures he (could/should) get a better deal. I’m not sure, but I did remind him that the lender, which is probably backed by the taxpayers, are lending *above* the value of the house.

 
 
Comment by Prime_Is_Contained
2012-05-27 00:45:10

IMHO, he has three choices, none of them good: continue with the current mortgage, spend $10k to refinance into lower monthly payments, or jingle mail the keys.

I agree with your summary, rms.

I would recommend that he figure out the pay-back period on the $10K refi option, and figure out whether he is seriously committed to not walking away during that time period.

Refi’ing will reduce his carrying costs (and thus also reduce the amount he can rent the property for without losing money). But he should be honest with himself about the fact that Detroit is a depressed area that shows no signs of becoming less depressed. The odds that he is even further underwater in 5yrs are fairly high, IMHO.

But it is probably also worth pointing out to him that if he is going to end up walking away, the sooner he walked, the better. If he walks in 5yrs, for example, he will take the credit hit then; if he walks today, the credit hit will be mostly gone by then.

Comment by rms
2012-05-27 07:11:20

Refi’ing will reduce his carrying costs (and thus also reduce the amount he can rent the property for without losing money).

The bank wasn’t interested in any short sale options whatsoever when I asked, and you’re correct about the refinance lowering the carrying costs and rent payment.

He said the rentals in the area were in bad neighborhoods, so he bought to get into the better schools for his kids; yeah, there’s the kids thing again.

 
 
 
Comment by The UNKNOWN TENANT
2012-05-26 18:59:33

Naked man shot dead by Miami police was eating a man’s face, witnesses say

BY DANIELA GUZMAN AND JULIE K. BROWN
jbrown@MiamiHerald.com

One man was shot to death by Miami police, and another man is fighting for his life after he was attacked and his face allegedly half eaten, by a naked man on the MacArthur Causeway off ramp, police said.

The bloodshed began about 2 p.m. when a series of gunshots were heard on the ramp, which is along NE 13th Street, just south of The Miami Herald building. Witnesses said a woman saw the two men fighting and flagged down a police officer who was in the area.
The officer, who has not been identified, approached and saw that the naked man was actually chewing the other man’s head, according to witnesses. The officer ordered the naked man to back away, and when he continued the assault, the officer shot him. The attacker continued to eat the man, despite being shot, forcing the officer to continue firing. Witnesses said they heard at least a half dozen shots.

Miami police were on the scene, which was just south of The Miami Herald building on Biscayne Boulevard. The naked man who was killed lay face down on the pedestrian walkway just below the newspaper’s two-story parking garage. Police requested The Herald’s video surveillance tapes.

The other man was transported to the hospital with critical injuries, according to police. Their identities were not released.

The incident, which came as crowds descended upon South Beach for the annual Urban Beach Week hip-hop festival, snarled traffic on the causeway for several hours.

http://www.miamiherald.com/2012/05/26/2818832/naked-man-shot-killed-on-macarthur.html#storylink=cpy

Comment by rms
2012-05-26 19:52:16

Youtube link? ;)

 
 
Name (required)
E-mail (required - never shown publicly)
URI
Your Comment (smaller size | larger size)
You may use <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong> in your comment.

Trackback responses to this post