Easy money “won’t cure the bust.”

From Bloomberg:

Fed Isn’t Boxed in by Open Windows or Dry Powder

Eons ago, when Alan Greenspan was running the Federal Reserve and transparency was something between him and favored journalists, there was a lot more excitement about policy meetings and changes in interest rates.

For example, in the early 1990s, the U.S. economy was slow to respond to the steep decline in the Fed’s benchmark rate from 9.75 percent to 3 percent. As the rate approached what turned out to be a generational low, economists protested that the Fed couldn’t cut again because it had to “keep its powder dry” — presumably to defend against some future attack.

Another market metaphor was the “open window” (not to be confused with Frederic Bastiat’s “broken window”). The Fed was thought to have a small window of opportunity to raise or lower interest rates, after which the economic news would preclude any adjustment because it would be unpalatable to Mr. Market. Which makes you wonder why a change was advocated in the first place.

Then there’s the Fed-in-the-box routine. Sometimes external events would conspire to keep policy makers’ hands tied, according to this line of thinking. The Asian financial crisis in 1997 created an international deterrent to the Fed’s raising rates. Greenspan couldn’t tighten because the rest of the world needed monetary sustenance. By the time Russia defaulted in 1998, Greenspan had to calm financial markets with three rate cuts rather than minister to the booming domestic economy.

Dissecting the Fed’s post-meeting statements in the hope of finding signs of a shift to a more neutral stance has been fruitless. Despite a word change here or there or a shift in emphasis, the Fed remains firmly in the camp that the risks lie with the failure of inflation to moderate.

And maybe that’s how it’s supposed to be. The Fed’s dual mandate — maximum sustainable growth and price stability — is fine for public consumption: It keeps members of Congress off its back. But as far as policy makers are concerned, price stability is both an end in itself and a means to that end and therefore commands the upper hand.

The idea that a central bank can produce faster growth by tolerating a little more inflation has been “entirely discredited,” Bernanke said last week in a speech to the National Bureau of Economic Research’s Summer Institute in Cambridge, Massachusetts. “Policies based on this proposition have led to very bad outcomes whenever they have been applied.”

If the Fed is worried about the housing slump, increasing subprime loan delinquencies and home foreclosures, deteriorating credit conditions and a ticking time bomb in the derivatives market, there is no sign of it just yet. Or, more correctly, there is no indication policy makers are ready to move off the bench and provide some juice to the economy.

To the extent that easy money created the housing bubble, easy money won’t cure the bust. In an ideal world, the Fed would let the air come out of the housing market and some of the sting out of inflation without doing anything.

Should conditions deteriorate enough to put economic growth at risk, all bets are off. The Fed will ride to the rescue with interest-rate relief, unconstrained by any boxes, windows or dry powder.

This entry was posted in Economics, Housing Bubble, National Real Estate. Bookmark the permalink.

156 Responses to Easy money “won’t cure the bust.”

  1. James Bednar says:

    From the Herald News:

    Clifton’s changing face masks resentment

    Weeds growing wild. Litter blowing down the streets. Music blasting from cars and homes.

    Clifton’s not like it used to be.

    That’s the refrain of many residents who fear the city may not be doing enough to stop the spread of “quality-of-life” problems — litter, weeds in front yards, noise, graffiti and public misbehavior.

    They say the problems are concentrated in the east side of the city, which borders Paterson and Passaic and is growing more diverse, poor and populated at a faster rate than the rest of the city.

    Some blame the problems on a rising number of foreigners, while others say quality-of-life problems are increasing but they just don’t quite know why. Still others say the city is clean, the annoyances aren’t worth complaining about and that diversity is good.

    City resident Ray Mattera said he thinks some people use “quality of life” in Clifton as a code word for feeling uncomfortable with the recent influx of nonwhites and “foreigners” to the city. Some say they want old-time Clifton back, such as the days when neighbors treated each other with more respect. When people didn’t litter so much.

    “It seems to be lots of people have got on this quality-of-life bandwagon and they want to try to mold the city into what they want,” said Mattera, who has called Clifton home for 31 years. Noisy parties seem to be reported more in the city’s less affluent, less white neighborhoods, he said. Residents in one of the city’s most upscale neighborhoods, Montclair Heights, throw parties every weekend. But people rarely complain, said Mattera, who lives near Montclair Heights on Valley Road.

    “Nobody complains because they’re, oh, us,” he said.

  2. Clotpoll says:

    I guess we’ll have Bloomberg to turn to for real news once Rupert Murdoch starts putting naked women on Page 6 of the WSJ.

  3. thatBIGwindow says:

    graffiti is definately a quality of life issue. If you see graffiti you immediately think “gangs”

    Simply seeing graffiti changes perception of a town.

    Personally, if I caught anyone graffiting my property they would have that can of paint put you know where.

  4. x-underwriter says:

    Some funny reading on another blog for Monday morning

    You Know You’re Subprime When?


  5. bairen says:

    I stopped in one open house yesterday in Basking Ridge. I got there around 4 PM and was only the 5th visitor. As I signed the sheet I recognized the first name on the list, it was the agent we used to find our rental. The agent at the open house claimed she wrote the name to show people how to sign in.

    Right. 4 hours. 5 names. at least 1 bogus, maybe another 1 was too (handwriting on the first was similar to another 1) Mine was pure curiosity. 2, maybe 3 serious lookers for a nice house in Basking Ridge.
    I thought everyone wanted to move here?

  6. lostinny says:

    3- I think that depends on what town it is. Maybe it’s different where I am but I’ve seen plenty of graffitti in middle class towns and the first thing I thought was “idiots”.

  7. thatBIGwindow says:

    #6: Yeah, I suppose. If you drive up Rt 17 North (towards Allendale) there are sound barriers on the opposite side of the highway covered with graffiti. There is even graffiti in Franklin Lakes.

  8. James Bednar says:

    From MarketWatch:

    Countrywide fundings rise, but firm says defaults climbing

    Mortgage lending giant Countrywide Financial Corp said its total loan fundings in June rose, but that the housing market continues to soften amid rising defaults. The firm said mortgage loan fundings for June totaled $45 billion, a 4% gain from June 2006. Commercial real estate funding volume for the month was $814 million, up 75% from June 2006. “Market conditions became increasingly challenging throughout the second quarter of 2007,” said David Sambol, Countrywide’s chief operating officer. “The housing market continues to soften, and delinquencies and defaults continue to rise,” he added.

  9. still_looking says:


    thank you! (you know why)


  10. BC Bob says:

    “Ignoring the lessons of 1929”

    “The similarities of the lead-up to the great market crash to today’s economic environment are obvious. Don’t say you weren’t warned.”


  11. still_looking says:


    I saw that! Made me want to sell of the remainder of my portfolio.


  12. still_looking says:

    sell OFF

  13. still_looking says:

    sell OFF, not sell of

  14. James Bednar says:

    From Bloomberg:

    New York Federal Reserve’s July Factory Index Rises

    Manufacturing in New York state unexpectedly expanded this month at the fastest rate in a year as orders climbed and employment rose.

    The Federal Reserve Bank of New York’s general economic index rose to 26.5, the highest since June 2006, from 25.8 the prior month, the bank said today. Readings greater than zero signal expansion.

    Companies in the region are expanding production and hiring more workers to meet increasing demand from overseas as well as domestically. A rebound in manufacturing and rising exports will help the economy overcome slower consumer spending and the slump in housing, economists said.

    “Firms appear to have worked off unwanted inventory, allowing them to boost production,” Drew Matus, senior economist at Lehman Brothers in New York, said before the report. “Manufacturing production should continue to edge higher.”

    Economists forecast the New York manufacturing index would fall to 18, according to the median of 45 estimates in a Bloomberg News survey. Projections ranged from 4.5 to 28.

  15. essex says:

    history??? wats dat???

  16. UnRealtor says:

    “Nobody complains because they’re, oh, us,” he said.

    Right, just adjust your perspective — learn to enjoy graffiti and garbage blowing in the wind.

  17. James Bednar says:

    From Bloomberg:

    Rising Food Prices May Give Bernanke, Central Bankers Heartburn

    Rising prices for food, from yogurt in the U.S. to steak in South Africa, are causing heartburn at the world’s most powerful central banks.

    The fastest increase in food-commodity prices in at least a decade has already led monetary authorities in England, Mexico, Chile and South Africa to lift borrowing costs. It is also sowing doubts about the U.S. Federal Reserve’s focus on core inflation, which excludes food and energy, and about China’s gradual approach to tightening credit.

    As Fed Chairman Ben S. Bernanke prepares to deliver his semiannual report to Congress this week, central-bank officials worldwide are anxious that climbing costs may trigger consumer concerns about faster inflation. To keep them from being self- fulfilling, some of the biggest economies might have to push interest rates higher.

    “Central banks are more conscious than they’ve ever been of the danger of allowing inflation expectations to become unmoored,” says Louis Crandall, chief economist at Jersey City, New Jersey-based Wrightson ICAP LLC, a unit of ICAP Plc, the world’s largest broker for banks and other institutions that trade in financial markets.

    An unprecedented surge in global demand is behind the 23 percent rise in food prices that the International Monetary Fund recorded during the last 18 months. “We haven’t seen anything on this scale before,” says Martin von Lampe, an agricultural economist in Paris at the Organization for Economic Cooperation and Development.

  18. essex says:

    *yawn* — if you need some other person to ‘tell you where to live’ you are way worse off than I thought.

  19. Bloodbath in Winter 2007 says:

    Hope everyone out there is still being patient … buyers will prosper this winter, people. Don’t let agents steer you toward a buy … just remember that anything you buy today probably will be worth $30,000 or more (depending on the area) this December.

    Asking prices in NJ are dropping 6k and in some places $10k … don’t catch that falling knife!

    We don’t love our rental situation now, but we’re willing to be patient for another six or so months. Or will things continue to trend downward well into 2008?

    Also, i missed seeing Troll’s listing, so if anyone remembers it, I’d love to see a link

  20. SG says:

    essex: If you pooh-pooh the research, you are ignoring the market reality and objectivity.

    If you look at the places list, you can see that there are places much affordable then NNJ or CNJ, offering better amenities and may be decent job options.

  21. James Bednar says:

    Closely following the mainstream media is instrumental to understanding the mindset of market participants.

    We all know these “best”-lists are largely biased bunk, but that doesn’t mean the general public does. In fact, I might argue that, in some respects, it doesn’t matter if there is any basis in them all. The fact that they appeared in a mainstream media outlet legitimizes them to the point where that basis is irrelevant.


  22. john says:

    Franklin Lakes, N.J.
    Population: 10,800
    Median household income: $155,439
    Median home price: $1,337,877
    Amount spent on vacations/yr: $10,639

    Many of New York’s top professional athletes pick this Bergen County suburb as the place to hang their caps and helmets when they’re not on the field of play. Mets manager Willie Randolph and others in uniform enjoy the conservative town’s rural character and easy access to all the metropolitan area has to offer. Say hello to Kelly Ripa as well if you see her walking the town’s well-manicured streets or shopping at the well-known Urban Farms Shopping Center.

  23. James Bednar says:

    Top 100

    13. Montville, NJ
    23. Hillsborough, NJ
    29. River Vale, NJ
    33. Marlboro, NJ
    45. Berkeley Heights, NJ
    47. Sayreville, NJ
    58. Readington, NJ
    78. Moorestown, NJ

  24. BC Bob says:

    John [23],

    What’s your point? How does Willie and Kelly save this bust. I get it, Rickey is now in town. Start buying.

  25. pigpen says:

    Wow. great article about clifton. Good to see that the residents are taking a stand. NHopfully, they will enact change and save the town, instead of fleeing.

    On a RE market note – I met my agent at a open house she was doing to discuss another property that I put a bid on. 2 people came the entire day. Anyway, my agent is very honest, and because I had no interest in the open house property, I ended up in a very candid conversation with her and the seller. We were discussing the overall weakness in the market, etc. This was the second time the house was listed – this time, 50k lower than last, and it was an estate sale. The seller said something to the effect of “I don’t get it – who wouldn’t want this house at a 50k discount???” Typical seller mentality. This guy is of the mindset the he is discounting the property. Absolutely no clue what the word “market” really means.

  26. gary says:


    Thank you so much for #382 on the weekend thread.

  27. James Bednar says:

    From Dealbreaker:

    Just How Desperate Is James Cayne To Win At Something, Anything?

    Forget about the fact that Jimmy Cayne’s had some trouble re: Bear Stearns’s minor subprime hedge fund crisis … None of that comes close to the JC awesomeness we’re about to throw your way: the Hollywood Country Club (Deal, NJ) is investigating allegations that the Bear CEO used some creative scoring techniques that allowed him to win the club’s July 4th tournament. Yes—James Cayne (possibly) cheats at golf.

  28. lina says:

    Can anyone tell me if the following homes sold, and, if so, how much they sold for? Thank you!

    24 Orchard Road, Maplewood NJ
    96 Union Street, Maplewood NJ
    32 Orchard Road, Maplewood NJ

    Thanks again!

  29. James Bednar says:

    24 Orchard

    MLS# 2105994
    OLP: $459,000
    LP: $439,000
    DOM: 71

    MLS# 2311203
    OLP: $429,000
    LP: $429,000
    DOM: 34

    MLS# 2325230
    OLP: $409,000
    LP: $409,000
    DOM: 25

    MLS# 2334923
    OLP: $409,000
    LP: $409,000
    DOM: 132
    SD: 5/30/07
    SP: $390,000

    96 Union Street

    MLS# 2300137
    OLP: $469,000
    LP: $419,000
    DOM: 62

    MLS# 2328520
    OLP: $399,900
    LP: $399,900
    DOM: 32

    MLS# 2392560
    OLP: $399,900
    LP: $379,900
    DOM: 72
    Under Contract

    32 Orchard Road

    MLS# 2301080
    OLP: $395,000
    LP: $370,000
    DOM: 266
    SD: 5/17/2006
    SP: $355,000

  30. bergenbuyer says:

    These lists are worth something, and everyone’s tastes are different. But seeing Nanuet, NY as the #24 best place to live shows me this list doesn’t have the same point of view as me.

  31. James Bednar says:

    That first listing is a great example of why quoted MLS statistics are misleading..

    Looking at 24 Orchard, the MLS statistics would say that it sold in 132 days for 95% of asking price. In reality, it took double that time, approximately 260 days, and sold for 85% of asking.


  32. NJGator says:

    I grew up in Marlboro. I don’t know if I would rank it within the top 33 places I wanted to live in NJ, much less America.

  33. pretorius says:


    Why not?

  34. NJGator says:

    I commute to NY – so no train is a big deal. It’s a long bus ride and the closest NJ Transit train is Matawan. I used to have to leave my house 30 minutes before the train and then the ride was about an hour into Penn. My commute was almost 2 hours door to door.

    There’s no town center, and Rte 9 is pretty much stip mall hell. If you want a decent restaurant that is not Chinese, Italian, Deli or Diner, you are pretty much out of luck.

    Taxes, while quite reasonable by Northern NJ standards, are rising pretty quickly (if I recall correctly they are one of the fastest in the state). My parents are paying about 9,000/year for their 1970’s colonial.

    Schools are pretty good though.

  35. pretorius says:

    Marlboro seems like dozens of exurban New Jersey suburbs. Expensive, long commute, lack of genuine town feel. People live there because its cheaper than Westchester, Bergen, and Nassau, but features similar quality schools.

  36. DoughBoy says:

    Meh, you can keep your North Jersey. I love being shore trash.

  37. James Bednar says:

    From Reuters:

    Dominion Bond Rating cuts 94 RMBS, may cut others

    Dominion Bond Rating Service cut the ratings of 94 classes of residential mortgage-backed securities (RMBS) on Monday citing increasing delinquency levels relative to credit enhancement supporting the securities.

    In addition, DBRS said it placed 15 RMBS classes under review for possible downgrade while raising the ratings on 17 classes noting their high level of credit support.

    DBRS said the downgrades and reviews were due to an increase in the pipeline of delinquencies on subprime mortgage loans of 90 days or more.

  38. 3b says:

    #22 JB: Oh so true.

  39. James Bednar says:

    ABX continues to deteriorate.

    NEW YORK(Dow Jones)–Even with the absence of negative subprime-related headlines that have roiled the markets in the past few weeks, the index based on subprime mortgages is hitting new lows on Monday.

    The riskiest tranche of the current index, the BBB- of the ABX.HE 07-1, touched 45 cents on the dollar in morning trade, according to Alex Pritchartt, a trader at UBS.

    “The stuff is a lot softer,” Pritchartt said. “Sellers want to offset risk and sell the stuff.”

    A new index, based on loans made in the first half of 2007, is due to launch on July 19.

    “The 07-2 will trade below par on July 19,” said Andrew Lahde, managing partner of Lahde Capital Management, a hedge fund in Santa Monica, Calif. “The single-A tranche is trading at about 70 cents on the dollar whereas it had been 90 cents on the dollar just a month ago.”


  40. James Bednar says:

    From the Jersey Journal:


    Show us the jobs!

    That’s the demand at least one group is making before Jersey City officials grant Goldman Sachs a 20-year tax abatement for a proposed 30-story office tower to go just north of the company’s 30 Hudson St. headquarters on the waterfront.

    “It is not only a sin, but a crime for the city to continually give out tax abatements to those who give nothing to the city in terms of hiring,” Rex Reid, second vice president of the Jersey City branch of the NAACP, fumed this week about the abatement, up for final adoption on Wednesday.

    “We are against Goldman Sachs getting another abatement because they didn’t keep their first ‘good faith’ agreement,” Reid added.

    Reid is referring to the “Project Employment & Contracting Agreement” Goldman signed with the city on June 21, 2000.

    The pact, which concerns construction as well as permanent jobs at 30 Hudson St., called upon Goldman to make a “good faith effort” to hire 51 percent Jersey City residents, of which 50 percent would be minorities, and 6.9 percent women.

    According to Goldman’s latest report to the city, covering October 2006 to March 2007, 220 of Goldman’s 2,567 employees at 30 Hudson St., or 8.6 percent, are city residents.

    Of these 220 employees, 57 percent (147) are minorities, and 33 percent (85) are women.

  41. Bloodbath in Winter 2007 says:

    Perfect example of patience:

    JB’s two examples in Maplewood above.
    459k asking
    390k sold
    I don’t have the exact dates of how long it was on the market, but in the end, the house sold 69k less than asking.

    Can you imagine if someone had scooped this in December 2007? It could probably be down at 350/360k by then.

    And the other one:
    469k asking
    379k sold
    That’s a staggering 90k off the asking. Again, no date on time on the market … but prices are totally coming down.

  42. lurkerA says:

    #32 – Bergenbuyer – out of curiousity, what is terrible about Nanuet? i dont live there, nor am i from there, but I’m very familiar with the area. while i certainly wouldn’t put it at the top of my list, the schools are very good, it’s close enough to NY with a train, etc.

  43. James Bednar says:

    Predatory lending or simply reckless spending?

    Fisher: Mortgage mess snares savior of East Palo Alto community

    For more than 50 years, Onedia Branch has handed out clothing, food, hope and prayers to needy people in East Palo Alto, operating her own community charity from her house on Farrington Way.
    But these days Mother Branch, as everyone calls her, is the one asking for hope and prayers. Less than a year after she refinanced her house and put herself on the hook for loan payments she couldn’t afford, the 88-year-old woman is in danger of losing her house and becoming yet another casualty of the subprime mortgage market that targets the elderly, the naive and those with poor credit.

    “Pray for me, darling,” she said last week. “I don’t know what I’ll do if I lose my house.”

    Her original home, purchased in 1958 for $18,500, burned down 10 years ago and was rebuilt. Today it’s worth more than $500,000. But over the years she has tapped into the equity in her house to meet her living expenses, support her charity and pay off credit cards. She once helped her son, Nate, a retired professional basketball player, start a business that failed.

    Two years ago, she got a $309,000 reverse mortgage – a loan that can help seniors to live off their equity without having to sell their homes or make any payments.

    Redwood Financial found a 30-year, $422,000 loan that would allow her to pay off the old mortgage and other debts, including Nate’s child-support bills, and still have $21,000 in cash. The initial interest rate of 11 percent was fixed for two years. After that, the rate could go up to 14 percent and then would be adjusted every six months to a maximum of 18 percent.

    Even for the subprime market, those terms weren’t great. And there were $13,000 in commissions and fees and an $18,000 prepayment penalty if she refinanced within three years.

    The most glaringly obvious problem was the monthly payment: $4,066.71. Even with Nate co-signing the loan, their combined income was less than $5,000 a month.

    I asked Nate Branch how he ever thought they could make those payments.

    “The guy told me if we used that $21,000 we got in cash to make the first few payments, then our credit rating would be better and we could refinance at a lower rate,” he said.

  44. bairen says:

    Did anyone see Boght & Sold last night on HGTV? It had a couple that was being transferred to Texas. they bought their Mcmansion in NNJ last year and had to sell it. They wanted 1.2 mill, agents advised 1.095m (about what they bought it for last year). Received an offer for 960k, wound up selling for 995k. I calculated at least 100k hit for them, maybe even 180k. Doubt relo package would help them too much, maybe costs of commission (60k). Still, at least 50k gone. At least they didn’t throw their money away on rent. instead 50 to 180k of their money simply went poof and disappeared off the face of the earth.

    I think they got off lucky. Another year the house would go for less then 900k at the rate prices are dropping.

  45. fanshawe says:


    Prices are coming down, but still, these Maplewood houses are right next to Newark and Irvington.

    $400k for the privilege of living right at the juncture of Maplewood/Newark/Irvington does not sound very exciting.

  46. DoughBoy says:

    #46, I flipped it on real quick when they were deciding what to list it for, on the phone and telling them that they’d like to get 1.2

    Interesting. Any ideas on when it was filmed?

  47. James Bednar says:

    Just an interesting coincidence..

    Who’s willing to make the first move?

    The psychology that homeowner Lynn Bednarz sees is endless house hunting and procrastination.

    She has been trying to sell her Wauwatosa 1920s-era brick house since last fall. She has dropped the price to $345,000, moved out most of her things, replaced the carpeting, and now is throwing in a brand new car, all in an attempt to convert just one foot-dragger to a contract-signer.

    Her broker, Pam Jerzak, with Homesale Realty in Waukesha, says the market is stuck in both directions.

    “A lot of people I know want to sell,” she says. “But they say, ‘Because the market is in the tank, I don’t want to buy, because I can’t afford two mortgages.’ They might let their dream house go by.”

    Bednarz vows that when her longtime home finally sells, she will be buying in a warmer climate, answering the prayers of some stressed seller.

    Or maybe not.

    “There’s a lot out there to look at,” she says. “I might wait. I guess that makes me one of the people I’m complaining about.”

  48. Lincoln78 says:

    >>> That’s the refrain of many residents who fear the city may not be doing enough to stop the spread of “quality-of-life” problems — litter, weeds in front yards, noise, graffiti and public misbehavior.

    I don’t think it’s foreigners. Sounds like a bunch of good for nothing renters to me…


  49. bairen says:


    not really sure. The agents had some kind of end of the year party and gave out awards for most improved, sales, yada yada.

  50. DoughBoy says:

    “She has been trying to sell her Wauwatosa 1920s-era brick house since last fall. She has dropped the price to $345,000, moved out most of her things, replaced the carpeting, and now is [b]throwing in a brand new car[/b], all in an attempt to convert just one foot-dragger to a contract-signer.”

    Funny when you remember a few weeks ago someone joking about throwing in an S-Class as a perk.

  51. James Bednar says:

    From the AP:

    Alliance Bancorp Files for Bankruptcy

    Residential mortgage lender Alliance Bancorp has filed for Chapter 7 bankruptcy and will liquidate its assets.

    Alliance Bancorp, formerly United Financial Mortgage Corp., specialized in lending to so-called Alt-A borrowers – mortgage borrowers with credit between those of prime and subprime borrowers

  52. john says:

    Now if you throw a car in does the person have to pay taxable income on the value of the car, does the person pay sales tax when it is registered? Sounds like I would like the cash off, even better with the cash off I could grieve my taxes if purchase price is lower than appraised price. With the car gimmick I am getting nailed all over the place.

  53. RentinginNJ says:

    Did anyone see Boght & Sold last night on HGTV? It had a couple that was being transferred to Texas

    Did you see the look on the woman’s face when the offer came in at $960k? She was shocked.

  54. Bloodbath in Winter 2007 says:

    47 – I admit that I know very little about Maplewood. I just ran a zillow and it looks a bit urban for my liking. If I’m looking for something urban-ish like that, I’ll just stay in New York. But hey, that’s just me.

    But the house on Orchard Road didn’t seem to be rubbing up against Newark. Then again, I didn’t look up crime stats. Overall, the point was that prices are falling, and in some places and ranges, faster than others.

    Homebuyers that can wait until December could find a housing steal under the tree.

  55. bairen says:


    Everyone looked shocked. Looked like someone farted while shaking hands with the pope.

  56. skep-tic says:

    the money mag list is a joke, obviously.

    Eastchester is the best place to live in Westchester County? It’s ok, but I would put it in the bottom half of Westchester towns in terms of desireability.

    And Trumbull is the representative for southern CT? Makes me think that whoever wrote this has never actually been to CT.

  57. bairen says:


    I meant #55.

  58. fanshawe says:


    It’s hard to tell on a map unless they have the outline of the Newark border on it, but the Ivy Hill section of Newark borders the NE side of Maplewood.

  59. RentinginNJ says:

    “The guy told me if we used that $21,000 we got in cash to make the first few payments, then our credit rating would be better and we could refinance at a lower rate,” he said.

    Very common subprime sales pitch, “go ahead and take the 2/28 ARM. You will never actually pay the higher rate, because by the time the teaser rate expires, your credit will be fixed and we can refinance you into a prime fixed rate loan”.

    Of course, in most cases, the borrower doesn’t actually improve their credit and now they are stuck with higher payments.

  60. bergenbuyer says:

    #44- I can easily think of 24 places that I’d prefer to live before Nanuet and I’ve only been to about 10 States in my life, so naming it #24 in the US makes their point of view different than mine.

    A reason why I think so, drive down Rt 59 and tell me that’s a place you’d like associated with your town. I don’t know if Stilettos, Lace, T&A’s etc are in Nanuet or in another town, but it’s close enough for me to prefer to put it further down my list of “best places to live.” Not saying that I’ve never been, I just wouldn’t want to live there.

  61. lurkerA says:

    #62 – fair enough. i wasnt trying to defend the town i was just curious about your comment. i guess i can just think of many other places to put down. in my mind, nanuet isnt terrible at all – the schools are good, housing is somewhat affordable for the area, etc.

    btw, not all the strip clubs are in nanuet, but i totally get your point.

  62. bergenbuyer says:

    Got it, I really don’t know the “town” either, so I may be missing the good parts. If you’re willing to deal with the less desirable aspects of the area, you may get a decent bang for your buck in housing and schools, i really don’t know. Raising a family there could be nice…as long as you keep your daughters off the pole.

  63. lurkerA says:

    64 – other than the fact that there is one strip club in town, there aren’t any bad areas at all in nanuet. driving down route 59 gives you a very different picture of the actual town part of it. it’s like judging all of new jersey by what you see when you’re driving down the turnpike.

    you might be thinking of what you see when you drive through spring valley on route 59. which is not at all nanuet.

  64. lurkerA says:

    btw, im not saying it deserves to be that high up on the list, i just dont think it’s a terrible place either.

  65. James Bednar says:

    From Bloomberg:

    Treasuries Rise on Speculation Subprime Losses Are Deepening

    .S. Treasuries rose for a second day on speculation mounting losses in securities backed by subprime mortgage loans will fuel demand for government debt.

    Indexes based on the value of securities backed by the mortgages fell, with some making new lows. The benchmark 10-year note’s yield last week touched a one-month low amid speculation the losses will eventually prompt the Fed to cut interest rates for the first time since 2003.

    “Left to its own devices the market is looking for another shoe to drop” in mortgage-backed bonds, said James Collins, a futures analyst in Chicago at Citigroup Global Markets Inc.

  66. James Bednar says:

    From Reuters:

    Toll Brothers’ debt outlook now negative – Moody’s

    Moody’s Investors Service on Monday changed its outlook on Toll Brothers Inc. to negative, from stable, indicating the company’s debt ratings are likely to be lowered over the next 12 to 18 months.

    The negative outlook reflects concerns that the luxury home builder will be unlikely to be able to reduce its housing inventory in fiscal 2007, Moody’s said in a statement.

    Toll’s cash flow is also going to be sharply negative in fiscal 2007 due to capital spending on high-rise projects in New York City, Moody’s said.

    “Given the continued build out of the mid- to high-rise towers that are currently under construction, it may be challenging for Toll Brothers to begin generating significantly positive cash flow in fiscal 2008,” Moody’s added.

  67. James Bednar says:

    More like trading soybeans in a drought, going home long over the weekend and out of the blue, the skys open up. Rain makes grain. Soybeans limit down. This rain, upon us now, will blow the RE market out of the water, the biggest bust of all time.

    Corn, Soybeans Plunge as Rains May Aid Crops Hurt by Dry Spell

    Corn plunged the maximum allowed on the Chicago Board of Trade and soybeans fell from a three-year high on speculation rains will help to replenish Midwest soils after two months of dry weather.

  68. Orion says:

    “…endless house hunting and procrastination.”
    I’ve the $ means and yet, that pretty much describes me right now.

    BTW, Bloomberg TV is having a special “Subprime Shockwaves”, Wednesday July 18, 7pm & 11pm.

  69. James Bednar says:

    From Blown Mortgage:

    Option One Eliminates the 2/28 Subprime ARM Loan

    In an amazing development Option One has eliminated the 2-year fixed subprime ARM loan from its lending portfolio. The 2/28 as it’s known in the industry was the staple of subprime refinance options during the recent run-up in housing.

  70. James Bednar says:

    From the Option One press release linked in the article above:

    The latest news impacting our industry, which we received this past Friday, is that the rating agencies have made significant changes to their loss coverage assumptions on subprime 2/28 ARM loans. The net result of this is that subprime 2/28 ARMs lost a great deal of their economic value over the last five to 10 business days. The loss in value is significant enough that we made the decision that the best thing for us to do is to eliminate our 2/28 ARM product and give you and your borrowers the benefit of longer fixed periods on ARM loans, with no extra cost to you or your borrower.

  71. lurkerA says:

    I think i asked this sometime last week, but I can’t remember if anyone responded (I apologize if anyone did)….

    for all of those people with mortgages with these subprime lenders that closed up shop – what happened to their mortgages? are the subprime lenders not really lenders but brokers?

  72. NJGal says:

    “Eastchester is the best place to live in Westchester County? It’s ok, but I would put it in the bottom half of Westchester towns in terms of desireability.”

    Yeah, can you say “eew”? I guess I don’t see the charm of many of the southern westchester towns outside of their great commutes. And out of all of them, Eastchester would be nowhere on my list.

  73. par4156 says:

    Re #56 & 60,
    Orchard is close enough to be a problem for residents without urban “street smarts”.

  74. Tom says:

    Please Help..Help…in trouble with Builder

    Hi Friends

    I have been reading your very useful blogs for past few months. Thanks for all the precious advice. I have got into a situation where i really need your help.

    We signed up for a new home with a very reputed builder 3 months back. Few days after the original contract was signed, we were told that the construction would begin. But few more days after that builder sent some more papers requesting us to sign which were addendums to the original contract and which authorized them to make major construction changes to the exterior of the home. They said they would pay for the changes.

    The changes would have altered the look of the home totally, so we told them we do not aggree with the changes and they should deliver the home as signed in the contract or they should cancel the contract and return deposit ($25k) + 10% downpayment promissary note cancelled back to us asap. They said they cannot deliver the home as per the original contract because of the township restrictions and they refused to cancel the contract. so I had my Attorney send them the cancellation request letter. To our surprise, Builder’s Attroney replied claiming that one of their sales agent had explained orally to us the upcoming changes before the contract we signed the contract. We told him that we are 100 % sure that none of these changes were discussed with us before and nothing regarding this was written in the original contract and the contract clearly states “Oral Promises are void”.

    Last Friday after exchange of few letters, Builder’s Attorney sent our Attorney an intimidating letter mentioning that we are in Material Breach of contract and if we do not aggree to take the home with changes in 7 days they would cancel the contract, keep our $25k deposit + enforce 10% down payment note and sell the lot/home to other buyers !!!

    I met our Attorney today and explained to him that we are not in breach of contract and would take the home if delivered as per the original contract. I was bit disappointed with my Attorney because although he says our side is very strong but he says they have a lot of money to fight and we don’t. I told him I am willing to litigate to get justice, he says he is willing to work on it only if its hourly wage. I told him I can work with him for flat rate or a % of returned deposit but only if he gives in writing that he gets paid only if
    we get our deposit back + 10% downpayent note cancelled. He says the litigation could take forever and in the mean time he needs to take care of his family and cannot afford to work on my flat / % conditions but would fight for a hourly wage.

    Friends, I have following questions for you guys
    1>. I am bumped and not sure What can i do ?
    Is there any government agency who would look at my case and tell the builder they cannot make people’s life difficult and destry dreams just because they have so much more money they have earned during the boom. Can DA or AG office help ?

    I am not a rich person and cannot really afford big Attorney fees. I am not sure what my options are at this point.

    2>. Can anyone please recommend an NJ Attorney who will be willing to look at my case and if necessary litigate it for a flat fee or a % of deposit money. But winning should be a part of the deal because I read online that if
    they get paid hourly then they would not work hard to win the case.

    3>. If we find an Attorney who would litigate our case, any idea on how much they charge (what % or flat fee). Money in question is $ 25k deposit and cancellation of 10% downpayment promissary note.

    Please help.
    Thanks so much.

  75. Richard says:

    lina’s back looking for information with nothing to offer in return.

  76. Richard says:

    >>Perfect example of patience: JB’s two examples in Maplewood above.

    patience? do you even know what you’re talking about? that block is nasty. know 2 people who were mugged one block over.

  77. commanderbobnj says:

    RE: A lot of interesting opinions about Nanuet NY—-Actually, about Rockland County in general–One insurance agent that I had known long ago had an opinion about that area: “….Once you go over the NJ/NY border into Rockland, It’s like going into a different country…”
    This past saturday, I had gone on an estimate in Pearl River, NY—Just north of Montvale NJ…The main street looks downtrodden–movie theatres closed and literally no one walking on the sidewalks….My (new) customer was telling me that the older mall on route 59 (Nanuet Mall)was like a ghost town because of the success of the giant Palisade Mall by routes 59 and 303 in West Nyack
    In Nanuet and New City,I have found that the homes (1960-thru-1980’s era) tend to be of cheaper construction:–Using (Thin)1/2″ roof sheathing (plywood) boards;— (Noisy) ABS(black) plastic waste pipes for DWV (waste water) plumbing instead of better-quality & less-noisy PVC (white) plastic;—-very cheaply-made metal windows, etc.
    What seems to be a very strange thing up there is the use of ‘strings’ of traffic lights hanging over the main roads–one could sometimes count twenty or (usually) more dangling overhead !!—–When we (the family & kids) would head up there in Rockland on route to a hike in Harriman/Bear Mt. Park, I would refer to the lights as a ‘traffic light collection’……
    Of course, The county has some unique areas like Piermont, Nyack and Upper Nyack; But then there are Spring Valley and Haverstraw … Hmmmmmmmm..

    Also In New City and Nanuet there are many homes to NYC police and fireman who have to live within NY State if they want to work for New York City..

  78. James Bednar says:

    First Franklin has also cut out the 2/28.


  79. Richard says:

    >>Got it, I really don’t know the “town” either, so I may be missing the good parts. If you’re willing to deal with the less desirable aspects of the area, you may get a decent bang for your buck in housing and schools

    who wants to live in a town where you have to avoid certain parts of it?

  80. Richard says:

    #76, yikes you have a tough situation on your hands. the builder is obviously trying to strong arm you. if the details are not in the contract it’s not void plain and simple. they can drag this out in court which is going to cost you $$$. i don’t know your RE attorney but i think if this proceeds you need to find someone else, he/she doesn’t seem up to the task.

    i doubt you’ll find someone who will take anything but hourly. if your case is strong (and it sounds like it is) you’ll have to lay the money out and sue the builder to cover your court costs. i’m not expert but i know some people that went through a similar situation.

  81. lurkerA says:

    79 – new city and nanuet are very different towns, just look at the stats included in the money magazine article (on money.cnn.com) for the two areas.

    and if you want to talk about areas to avoid, much of nyack falls into that (though I agree a lot of it is very nice).

    also, id just like to repeat that nanuet doesn’t have a ‘bad area.’

    ok, im done defending rockland, im pretty sure this is a new jersey discussion.

  82. Cant afford in BC says:

    Need advice…

    saw a home in Glen Rock over the weekend…offered at 570000 – 3bd 1.5bth ~1800sqft on a decent size plot….what would be a good initial offer price? 10% off? 15% off? we like the area but the does need some updating…also the set up of a split level is kinda awkward but it is what it is…i wonder what it would cost to expand over the living room?


  83. Tom says:

    Hi Richard

    Thanks for the information.

    Any info on what hourly rate Attroney’s charge ?
    I am assuming your friends won in court.
    Can you please provide me with some Attorney names that your friends used.

    Tough part is this could take a long long time and builder is holding my precious money!!!

    — Tom.

  84. Clotpoll says:

    reech (81)-

    Like Westfield?

  85. James Bednar says:

    what would be a good initial offer price? 10% off? 15%

    Depends on the comps. Could be priced aggressively, or it could be aggressively overpriced.

    Is it on a street that starts with “G”?


  86. pretorius says:

    Kushner selling apartment portfolio for $1.9 billion. 25,000 unit portfolio located predominantly in New Jersey.

    Buyer is Morgan Properties out of Philadelphia. Morgan Properties initial yield is only 4.9%. This means the buyer plans to increase rents dramatically in order to generate an acceptable return for this class B apartment portfolio.

  87. Cant afford in BC says:


    YUP…with the G.

    what do you mean by ‘depends on the comps’? i am not familiar with this term…

  88. James Bednar says:

    What comparable homes are selling for.


  89. par4156 says:

    Re: #76. Maybe a “personal injury” lawyer would be interested in this case? many of them use some sort of “pay after recovery” compensation and the case sounds straightforward (to a layman like me at least).

    btw – can anyone say if $2200 for Title search, title insurance and lawyers fees sound appropriate for a $400-500,000 mortgage in NNJ??? …and…why are these fees explained differently by every company that works in the field. There seems to be absolutely no standard!

  90. Cant afford in BC says:

    jb..i figured thats what you meant…

    my realtor send me comparable sales in the area and he said it averaged around 630K…to me 630K average is just insane…

    you think this is priced aggresively? cause we are really interested…

  91. Cant afford in BC says:

    jb et all,

    also, any idea what it will cost to expand (addition) over the living room in a split level? 50K? 100K?

    and do you know of any website that will calculate the tax benefits of owning a home? i keep hearing that you can deduct prpty taxes, insurance, closing costs – bottom line – what do i get back based on my income level?


  92. James Bednar says:

    I’ll need to pull up the history and pull comps for the neighborhood before I can say whether or not I think it’s priced appropriately or not.

    If you me an email, I’ll see what I can do.


  93. 2010 Buyer says:

    #73 Lurker A

    If you have already closed on the loan, more than likely the lender has sold the loans to other investors. So there are no issues other than possibly finding documents if there are any dispute between the borrower and the servicer of the loan.

    For the most part, the mortgage companies that have closed are not portfolio (actually hold and service the loan like BOA, Well Fargo, etc.) lenders but mortgage lenders that dispose of their loans by selling to investors or securitization. In its simplest sense, a lender actually has their own money (via warehouse lines) to lend to borrowers and a broker fills out the paper work and needs someone else (lender) to actually fund the loan.

  94. lurkerA says:

    #95 – thank you for the explanation! i was reading something last week (cant remember what it was) that made me realize i had no idea what happened to all those people and their mortgages.

  95. ADA says:

    I live in bronxville which is eastchester. It has one of the best school systems in the state, beautiful older homes, a lively walkable downtown, and a 28 minute train ride into GCT.

    “eew” is not how most people would describe it. I’m not sure what your criteria is for desireability.

  96. BC Bob says:

    JB [69],

    Between rain makes grain and the loonie, they were thoroughly confused on that H-boken site. Too bad the moderator locked it.
    Maybe I should be a weatherman.

  97. ac says:

    I’m not sure if this got posted before, but here goes:-

    Subprime mortgage collapse: why Bear Stearns is just the start


  98. 2010 Buyer says:

    RE: lawyer fees.

    At my old company, when I realized I wanted to purchase a home, as part of our benefit package we could enroll in a Legal Plan that was like $12 a month. It was like the same as Health Care insurance but for lawyers (real estate, divorce, small claims, etc.). They however did not include criminal lawyers. It may be worth looking into if available; $144 is a lot cheaper than what you would pay for an attorney. And there were plenty of lawyers in the network.

  99. commanderbobnj says:

    #93—Can’t afford in BC asks:
    “…also, any idea what it will cost to expand (addition) over the living room in a split level? 50K? 100K?…”

    My Opinion: Split level homes are one of the toughest homes to raise-up (‘We’ mean the lower roof NOT the ‘highest’ roof) and still look “good”. You will have to locate a stairway on that 3-bedroom/bathroom level to accomadate the new area above the kitchen/LR/ and dining room level..And once you start planning your original project, well, While ‘we’ are ‘at it’– What about updating the kitchen ? (Stainless Steel/granite etc..)…Can the heating/AC systems handle the increase in the square-footage living area ?—-Can the siding MATCH the old or do we reside the whole house ??–Do ‘we’ have to upgrade the electrical system to 200 amp ?? ETC. ETC.—-Pretty soon you are OVER $ 100,000 And the MESS of re-construction while you are living there !
    My advice would be to call in a “Shell Builder” –A contractor who is experienced in ‘Raising’ the roof—get his prices First instead of a General Contractor. In order to make that lower attic into a living area, you would have to ‘sister’ the 2X6 floor joists to 2X8’s to ‘meet’ building code….The shell builder can usually get his part of the job over quickly…..Then you can GC the job on your own or call in the pro’s………If you are dealing with a ‘friendly’ Building Department (They do exist–believe it or not..) they can give you a lot of help..

    I hope this helps you


  100. Bloodbath in Winter 2007 says:

    Guy who’s looking in Glen Rock – we, too, have had our eye on that home. But 570k is a bit crazy for now.

    Plus, 1.5 bathrooms? That’s it? Suppose you could up that to 2.5 once you finish the basement.

    I’m one of the patient buyers, and seeing as how asking prices are falling all over the place, i’d wait on this.

    I’d be willing to guess – simply a guess – that if this house was still on the market in Dec 2007, you could get it for $520k.

    But sadly, that doesn’t mean you can bid 520k now and make a deal happen. But what’s the worst than can happen if you DO bid 520k? It’ll get rejected. Well if they have no other takers in a few months … they might call YOU back to see if the offer still stands …

  101. ac says:


    Do you know where that couple in Bought and Sold were selling? Thanks.

  102. James Bednar says:

    and do you know of any website that will calculate the tax benefits of owning a home? i keep hearing that you can deduct prpty taxes, insurance, closing costs – bottom line – what do i get back based on my income level?

    Do you do your own taxes? If so, redo the last year’s taxes with some assumptions based on what you think you’ll be paying out.

    I’d also suggest not factoring this into your affordability calculations. Assume no benefit.


  103. Read my Lips:Carnage of 2008 says:

    Just heard a radio ad from realtors. One realtor was quoting that this has been “the best buying opportunity in the last 10-15 years.”


    I cleaned up in the early 1990’s when prices were sane. Even with the current price drops houses are overinflated.DEMAND LARGER PRICE DROPS.





  104. James Bednar says:

    Looks like a bomb hit the AAA ABX.

    WTF is going on in the ABX Markets?

  105. DebtVulture says:


    There are no natural “buyers” for that product. Much of the flow is one way.

  106. James Bednar says:

    Much of the flow is one way.

    I just want to know who was on the wrong side of the trade..


  107. 2010 Buyer says:

    A better question is trade happening? The lenders either sell the loans in whole loan form or securitize them. They may not like the levels they are seeing with either one of those options. These guys are bleeding money originating the paper…

    DebtVulture…you into distressed assets? What’s behind the name?

  108. chicagofinance says:

    grim: care to comment that someone is doling out legal advice on your blog?

  109. Pooch123 says:

    What legal advice is being doled out? I read the thread and didn’t find any…

  110. Pooch123 says:

    Apologies, I must’ve glazed over Richard’s post, it so vague though, as to qualify as “barely legal” if you will…

  111. bergenbuyer says:

    #76- …authorized them to make major construction changes to the exterior of the home…They said they cannot deliver the home as per the original contract because of the township restrictions and they refused to cancel the contract.

    Why don’t you talk to the town. See what exactly was wrong with the initial plans? If the builder has a legitimate issue where they can’t build the home because of zoning, who was the designer/architect of the home? If it needed to go before a zoning board, who was going to present to the town. There are a few background issues here that need to be answered.

  112. James Bednar says:

    From Reuters:

    S&P may cut CDOs with exposure to downgraded RMBS

    Standard & Poor’s on Monday said it may cut its ratings on various classes of 19 collateralized debt obligations (CDOs) that are backed by residential mortgage securities that were recently downgraded by the rating agency.

    Standard & Poor’s on Thursday cut 498 classes of residential mortgage-backed securities (RMBS) supported by first-lien subprime mortgage loans, affecting $5.7 billion of securities. For details, see [ID:nN12376541].

    S&P may now cut its ratings on CDOs that are exposed to the affected RMBS, the rating agency said in a statement.

  113. James Bednar says:

    From Bloomberg:

    ACA Shares Fall 22 Percent on Subprime Debt Holdings

    ACA Capital Holdings Inc. shares had the biggest drop since the seller of credit derivatives went public in November, after the company disclosed that it could lose money on contracts tied to $4.5 billion of subprime mortgage securities from 2006 and 2007.

  114. Can’t afford in BC says:

    commanderbobnj – great advice, thanks! i guess it will be tough to make the house look ‘nice’ if you only raise the lower roof! i hope your remodel comes out well. good comments about the HVAC and electrical systems – i really dont know if they can handle the extra load! any idea what it costs for a shell builder just to raise the roof?

    again thanks!

  115. Can’t afford in BC says:

    Bloodbath in Winter 2007 – i too am a very patient buyer..been looking for well over a year now…looking into both Fair Lawn, Glen Rock
    the 1.5 bath is just one of the reasons why we havent put an offer in for that house yet.
    maybe you and i can bid for that home and have the home go for more than asking! like the good ol’ days!!!
    Good Luck

  116. James Bednar says:

    grim: care to comment that someone is doling out legal advice on your blog?

    Good point, as always.

    I simply can’t allow legal advice or anything that can be misconstrued as such to be posted here.

    As a real estate licensee, I’m expressly prohibited from offering legal advice. Since this is my site, I’m sure someone might argue that I should be held responsible. This puts me in a postition that I’d rather not be in.


  117. t c m says:

    i think you are a bit off base on nanuet. while i don’t think it should be #24, to say that you wouldn’t live there because of Lace etc. doesn’t make sense. not sure about the other clubs, but Lace is on Rt. 303, which is a pretty major hwy not near neighborhoods and i believe it’s in W. Nyack anyway. it’s kind of like saying i wouldn’t live in short hills, because there’s a strip club on the Morris Tpke or Rt. 22.

    as far as rockland as a whole, there are so many different towns, to make a blanket stmt. is not helpful to anyone looking for something a little more affordable. (ie- all of essex is newark) someone said that piermont and nyack are good, but, while they have artsy and pretty sections, they also have rough areas too(that goes for sparkill also). if you are looking in rockland, you may want to try Tappan, Orangeburg (not as pretty), blauvelt – pretty middle class, and good schools. i believe the taxes are more affordable than Westchester and NJ also – unless that has changed.

    i grew up in rockland, and moved out after working in nyc for a year. the reason i moved is because the commute stinks. it took me an hour an 45 min. to get to my desk on Wall St. (people like to say it’s only an hour, but it’s not true )- and the trains run infrequently and not on weekends. but, if you work in bergen county, or perhaps westchester, you may want to take a look.

  118. James Bednar says:



    Take a look at Figure 2 (Page 4). This is the traditional Originate-To-Hold model. Figure 3 (Page 5) illustrates the Originate-to-securitize model.


  119. Marito says:

    Tom #76,

    I would advice that you get some info from the Civil Court first. I’ve dealt extensively with the NJ Superior Court (I’m a Court Interpreter) and all Civil Parts are supposed to have info centers for people either filing or responding to a lawsuit. The staff in those offices usually deals with simpler matters (95% of lawsuits are for less than 3K, what is called ‘small claims’) but they should at least try to get some info for you or point you in the direction of NGO’s government agencies that may want to help you.

    I don’t know if the people in the Courthouse would want to get involved if your case is still hypothetical (meaning if you haven’t sued or being sued yet). In terms of jurisdiction, I guess it should be the Superior (County) Court the ones who handles a case like yours.

  120. Marito says:

    sorry for typo “NGO’s or Government Agencies”

  121. Frank says:

    Forget the ABX index, have you seen the prices for whole loans these days? Good luck trying to get a subprime mortgage these days. There are none available.

  122. Pooch123 says:

    The following is a link to the NJ Courts site about representing yourself:


    The link you probably want is “How to File a Complaint in the Superior Court of New Jersey – Law Division – Civil Part”

    Representing yourself will be a lot of work and there’s a steep learning curve but its definitely possible, if you can’t find a decent lawyer willing to work within your fee constraint.

  123. bairen says:



    Sorry, missed the name of the town. Just checked hgtv’s website. Looks like that was the last episode for the season too.

  124. Richard says:

    #84, 3br, 1.5ba in glen rock needing some updating is about the current market rate. best you could probably do is get them to fix some stuff. maybe $5-$10k if no major problem are found during home inspection. don’t wait for $520k like winter suggests you’ll never see it.

  125. Richard says:

    >>Apologies, I must’ve glazed over Richard’s post, it so vague though, as to qualify as “barely legal” if you will…

    i was giving you my opinion based upon a couple of friends who went through something similar. i won’t recommend people to use (though i do know two very good RE attorneys). hopefully that satisfies the self appointed know it all watch dog.

  126. Richard says:

    >>There are a few background issues here that need to be answered.

    sure but not as it relates to the contract terms unless there are contingencies.

  127. Richard says:

    >>I simply can’t allow legal advice or anything that can be misconstrued as such to be posted here.

    you’re getting into muddy waters jb. define legal or misconstrued as such? not sure you can without further mud. people come here for advice and to limit that will reduce the usefulness of your blog. straight cut rules like no public solicitations and the like would make it easier to understand the do’s and don’ts.

  128. Rachel says:

    Tom #76

    It sounds like your builder may have engaged in consumer fraud. I would contact the state attorney general’s office and see if they will investigate. Additionally, you may be entitled to treble (triple) damages and your attorney’s fees if they did commit consumer fraud, and a law suit is necessary.

    P.O. Box 45029, 124 Halsey Street, Newark, NJ 07101 (Directions)
    PHONE (973) 648-3070 / FAX (973) 648-6835

    Lorraine Rak – Chief, Deputy Attorney General
    Vacant – Assistant Chief, Deputy Attorney General


  129. chicagofinance says:

    aaahhhhhhhhh kannekt

    “Otteau is a wacko. The NAR (National Association of Realtors) contradicts him.”

  130. Tom says:

    Richars / Marito / bergenbuyer / Pooch123
    # 76…authorized them to make major construction changes to the exterior of the home…They said they cannot deliver the home as per the original contract because of the township restrictions and they refused to cancel the contract.

    Thanks for all your help.
    This is a long story. This is a very large builder who is building about 150 homes in the township.
    It all started like this. When we started choosing our lot and model, this builder made us move lots in the name of Township ordinances. This is our first experience so I thought its normal process. Some of the ordinances they mentioned looked suspicious but I gave them the benefit of doubt. When we got to the situation I explained before in # 76, I got suspicious of them and asked them a copy of township ordinance. The project manager refused to give me the copy of ordinance saying that its very confusing for me to understand. Eventually after 4 weeks I approached their corporate office who investigated the matter and I found that the project manager was gone in two days. I am assuming they found many irregularities and hence they fired him.
    After reading through the ordinance I found that
    1>. They used to deliberately deceive all buyers by telling wrong ordinance rules resulting in pushing buyers to buy higher priced homes in the community.
    2>. The ordinance rule they are using to change my construction actually reads in my favor but builder claims township wrote it wrongly (“its wrong english” in builder’s words). Builder is saying township does not mean what they wrote in ordinance and if they really go by what is written then he will not get a permit !!! Now is this my fault ? I think builder is trying to cover his ass as he has 2 homes on the same development to which they have applied the changes which they want me apply to my home ( which clearly violates the written ordinance ) but surprisingly they have some people living in them already !!! I am thinking by not following what is written in ordinance, builder is violating the ordinance. If the ordinance was wrongly written, Builder should have got it corrected.
    I gave him two options
    1>. Give me the home i signed for
    2>. give my deposit back and cancel the 10% deposit promissary note.
    He is holding my money for past 4 months and now says If I do not agree to his changes, I will not get my deposit nor the house !!! His defence is they had mentioned these changes orally. I do not remember anyone showing me ordinance or these specific rules before i signed the contract.
    Now, I am in need of a good lawyer who is willing to fight this at a flat rate or a % of deposit. Please help.
    Can DA or AG office help in this. Because I have proof that the builder was deceiving other buyers by telling them wrong ordinance rules resulting them in buying higher priced models. To me this is a very big scam.

  131. Pat says:

    I saw that. Bob’s a loonie and Otteau is a wacko.

    Lovin it.

  132. Pat says:

    JB 120. Fannie Mae did a really nice little promo educational presentation about the benefits of securitization…maybe back in 2003. But I can’t find it.

    2+2=7 stuff.

  133. dreamtheaterr says:

    It seems the guys in the ‘other’ forum (never been there, don’t plan to either) definitely live is a world diskannekted from reality.

  134. Pat says:

    Well, if you ever need to know anything about dog poop, it IS the place to learn.

  135. Clotpoll says:

    Wait a minute…best I remember, plenty of people here looked to lob brickbats at “wacko” Otteau after his June release wasn’t deemed bearish enough for the bunker-dwelling contingent.

    This guy can’t win either way.

    However, the Kannekt gang may be the only people in the US who believe anything that comes out of NAR. A friggin’ race of superdolts.

    Any truth that Kannekt is hosted and moderated by Toll Bros?

  136. Clotpoll says:

    Pat (134)-

    2 + 2 isn’t 7?

  137. Clotpoll says:

    The throughput in my blackbox indicates 2 + 2= 7.

    Therefore, all is well.

  138. Clotpoll says:

    I am now offering credit default swaps in the event 2 + 2 does not equal 7.

  139. Clotpoll says:

    I am offering you a handsome return of a heavily-discounted cash flow that will run unabated forever, as no one can ever prove that 2 + 2 does not equal 7.

    You can’t lose on this one.

  140. Pooch123 says:

    Tom – it certainly can’t hurt to complain to the consumer fraud division. The Jersey AG’s Consumer Fraud division has a really solid track record for going after big companies that do bad, for example, 2 years ago they took down Blockbuster in a massive class action suit for engaging in fraud re their “no late fee” guarantee. Obviously your situation is very different but you should definitely complain.

  141. Pooch123 says:

    And if you want a copy of the consumer fraud act, to see if your situation actually falls within its scope [I have not read it, and of course, no legal advice allowed], its publicly available at the NJ Attorney General’s website:


  142. chicagofinance says:

    Reech: As usual, you could not give a damn about anything else but the dreaded Reech-o-meter, which obviously is missing a restricting modulator for tone deafness.

    Just as some birdbrain started yakking about 6 weeks ago about some offhand investment advice offered by clot in passing, unless you are of emu intelligence [oh sorry], you will certainly recognize the issue here.

    While investment advice offered on a real estate blogs could easily fall under some clear “safe harbor”, legal advice relating to REAL ESTATE on a REAL ESTATE blogs is not so clearly dismissed.

    Regardless of how informal this environment may seem, we are all ostensibly anonymous. As such, you have no idea what any person will do with such information. As grim stated, he is a licensed real estate professional, and as moderator, editor and principal funder of this site, he can be construed as almost wholly responsible for the content. I commented not for your benefit, but his.

  143. Emu Preservation Society says:

    We are writing NJRE today to protest the offensive comments made regarding our membership intellect and general reputation.

    Emus have a long and storied history of providing insightful advice on a number of timely topics, and have served as consultants to homeowners in select top-tier towns. In addition, we have published numerous articles including such noted pieces as
    “Renters & the Destruction of Family Values”
    “Slippery Slope: Rent, Crack and Meth”
    “Emu Meat – Not as Tasty as You Think”

    While we wholeheartedly support the mission of NJRE community, we find recent intellectual comparisons to be dangerously close to impuning our Australian brothers.

    Thank you for your consideration.

  144. chicagofinance says:

    Is this some type of Geico commercial? :(

  145. chicagofinance says:


  146. chicagofinance says:

    by the way…..high quality

  147. bairen says:


    Classic. Is Steve Colbert in the house?

  148. Steve says:

    Ahh, might be a bored late-night regular after one too many sangrias…

    Not that I’d admit it, of course


  149. Steve says:

    How depressing

    NEWS CORP. REACHED a tentative agreement to buy Dow Jones at its original $5 billion offer price, although the Bancroft family remains divided. The deal will be put to the full Dow Jones board on Tuesday. 11:39 p.m.

  150. Pat says:

    Not me, that one didn’t have any Wilkes-Barre grammar tossed in for spice.

  151. lurkerA says:

    #120 – jb, thanks for the link. I’ll check it out later today.

  152. lurkerA says:

    #119 – t c m – you said it a lot better than i did in my posts. i have no idea why rockland was getting knocked around so badly yesterday.

  153. 3b says:

    #126 Ricahrd: Now you are an expert on Glen Rock too? Is that Brigadoon north.

    There is every possibility that he could see 520K or lower come winter.

    Inventory is still rapidly growing in all of Bergen county, including the so called premier towns.

    The new listings I am following in the last 2 weeks are significantly lower in asking price than what has in many instances has been languishing on the market since the Spring and before. Lower asking prices and more house than many of the old stale listings.

    There you go again,with your absolute blanket statements, “you will never see 520K”, because Richard says so.

  154. DebtVulture says:

    #108 – I would like to know too. I can see where more dealer desks and hedge funds would be taking the other side of the trade now, hoping to go bottom fishing, but I don’t know who was doing it when the 6-01 BBB- index was in the 80s.

    #109 – Yes, I work for a distressed debt hedge fund. Been boring the last couple years until recently.

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