Tue 8 Apr 2008
From the AP:
Pending Home Sales Hit New Record Low
The National Association of Realtors says pending U.S. home sales fell to the lowest reading on record in February, signaling the housing market distress is not yet over.
The Chicago-based group’s seasonally adjusted index of pending sales for existing homes fell to 84.6, which was 21 percent below year-ago levels.
Wall Street economists surveyed by Thomson/IFR had predicted the index would inch higher.
An index reading of 100 is equal to the average level of sales activity in 2001, when the index started.
From Bloomberg:
February Pending Home Resales in U.S. Fall More Than Forecast
The number of Americans signing contracts to buy previously owned homes declined more than forecast in February, indicating the U.S. real-estate recession will extend into a third year.
The National Association of Realtors’ index of signed purchase agreements decreased 1.9 percent to 84.6, the lowest reading since records began in 2001, the group said today. The drop follows a revised 0.3 percent increase in January.
Falling property values and stricter lending standards are prompting prospective buyers to delay purchases, a sign the housing slump hasn’t touched bottom. Mounting home foreclosures and related losses at financial firms may keep the Federal Reserve cutting interest rates to soften the downturn.
“Conditions are bleak in the housing market,” Celia Chen, an economist at Moody’s Economy.com in West Chester, Pennsylvania, said before the report. “The housing correction is contributing directly to job losses and the recession.”
Economists had forecast the index would fall 1 percent from an unchanged reading previously reported for January, according to the median of 29 estimates in a Bloomberg News survey. Projections ranged from a decline of 1.5 percent to a 1.5 percent gain. Compared with a year earlier, the measure was down 21 percent.
From the Hartford Courant:
Home Sales Prices Decline In State
Connecticut’s declining housing market showed no signs of improvement in February, with the median sales price of single-family homes dropping by $15,000 compared to a year ago — the third month in a row that prices have fallen.
Sales of single-family houses also plunged in February, the sixth month in a row that the number of home sales in Connecticut dropped by double-digit percentages, according to a report released Monday by The Warren Group.
Local observers of the real estate market said that it will probably get worse before it gets better.
“I think it’s really going to be a slow market for housing in Connecticut. This is not the kind of thing that is going to turn on a dime and start to improve,” said Steven P. Lanza, executive editor of The Connecticut Economy, the University of Connecticut’s economic publication. “It’s a weak market and it is going to take time to work our way out of it. We’re just not seeing signs that the market is even beginning to work its way out.”
From the WSJ:
Philadelphia Works on Plan
To Help Avoid Foreclosures
By MICHAEL M. PHILLIPS
April 8, 2008; Page A4
With a judge looking over their shoulders Monday, mortgage companies and consumer advocates in Philadelphia opened talks intended to achieve an agreement to allow thousands of cash-strapped homeowners in the city to avoid foreclosure.
In a closed-door session, President Judge C. Darnell Jones II of the Court of Common Pleas of Philadelphia told lawyers for the two sides to spend the next week or so hammering out a streamlined process to make loans more affordable for homeowners who want to keep their houses but can’t keep up with their current payments.
“If there are people in dire straits, for whatever reason, who would be amenable to a [loan] modification, we want to keep those people in their homes, and it’s clear to me that the lenders want to do that, as well,” Judge Jones said after the meeting.
The judge’s intervention is the latest in a series of aggressive steps by states and localities to stem the foreclosure crisis, and it is another sign that they are growing impatient with federal efforts that rely largely on the industry to voluntarily ease up on borrowers. Nationwide, as many as two million borrowers are expected to enter foreclosure this year.
From the New York Daily News:
Justice on side of loan victims
For years, the rapid judgments in favor of banks by Queens judges led housing activists and lawyers to grimly dub the process a “foreclosure mill.”
Even if the lenders were fly-by-night operations, borrowers rarely showed up in court to challenge them, said Josh Zinner, co-director of the Neighborhood Economic Development Advocacy Project.
“The judges never looked carefully at these loans,” Zinner said. But with new attention on the subprime lending meltdown, victims of shady mortgage brokers are more likely to see favorable judgments, advocates said.
“The way the courts are seeing it right now, if there’s fraud involved, you’re in a repairable situation,” said Peggy Morris, director of Jamaica Housing Improvement, an advocacy group.
“If you have some money, you can stand your ground,” said Morris, who has steered many homeowners to private attorneys. Morris said owners are in a better position than ever to get sympathy from the courts.
(cont)
Morris sent him to foreclosure attorney Howard Sherman, who discovered that the Jamaica realty firm Dream Homes Realty had duped him into buying a home for $352,000.
“They told us we could afford it,” Stallworth recalled, even when he and his wife insisted they were on a budget. “They said, ‘We’ll take care of everything.’”
Dream Homes also falsified his loan application and declared Stallworth’s income as $5,000 a month, Sherman found.
After a judge heard Stallworth’s case, the bank settled and agreed to toss his past debts and the bad mortgage, as well as to erase negative credit reports.
“I can walk away clean,” Stallworth said.
From BusinessWeek:
WaMu Ditches the Wholesale Mortgage Biz
Troubled thrift giant Washington Mutual (WM), once one of the biggest players in residential mortgages, will stop making loans through independent mortgage brokers—what the industry calls the “wholesale” side of the business. Instead the company will focus on loans through its 2,200 retail bank branches.
Mitch Ohlbaum, chief executive of Legend Mortgage, an independent mortgage broker in Los Angeles, says he was told by a WaMu representative that Apr. 10 will be the last day to submit new loan applications. The wholesale business is considered risky because lenders have to offer very competitive terms to win business over dozens of rivals. Wholesale lenders are also relying on independent brokers to accurately provide borrower information.
grim (4)-
“I can walk away clean,” Stallworth said.
The above quote may end up being the catchphrase of the year for 2008.
grim (5)-
Of course, WaMu had such a stellar record in wholesale lending…
Their subprime wholesale unit, Long Beach Mortgage, was one of the first subprime victims. They lost money even in the boom years.
U.K. House Prices Fall the Most Since 1992, HBOS Says
http://www.bloomberg.com/apps/news?pid=20601087&sid=aktDymERL_dU&refer=home
All mainstream U.K. lenders have now withdrawn their 100 percent mortgage offers. More than 20 banks offered loans equal to the value of a home at the beginning of March, the Financial Times said today.
From HousingWire:
Washington Mutual to Exit Wholesale Lending: Sources
Housing Wire has learned that Washington Mutual allegedly informed industry participants of its decision to exit wholesale mortgage origination on Monday evening, according to numerous sources.
HW received a copy of an email allegedly sent to some brokers informing them of the move. “[C]onsistent with the company’s retail focused strategy, WaMu has made the very difficult decision to exit the Wholesale lending business,” the email said.
Washington Mutual did not immediately respond to a request seeking comment.
Sources suggested to Housing Wire that the move is likely tied to a pending $5 billion dollar investment into the bank by private equity firm TPG. The Wall Street Journal broke the story Monday that TPG was nearing a deal involving both a common and preferred stock offering at the Seattle-based bank, as it continues to reel from exposure to residential mortgages.
“TPG is requiring that WaMu walk away from wholesale and retrench its retail mortgage operations as part of its investment,” said one source close to the deal, who asked not to be identified.
Is the broker model dead?
From the Record:
Housing slump forces 84 Lumber to close 30 stores
The steep drop-off in new home construction caused building supplies retailer 84 Lumber to close 30 stores nationwide, including two in New Jersey, the company said Monday.
84 Lumber, which is named after Eighty Four, Pa., the town where its headquarters are located, is closing its stores in Lafayette and Burlington. The chain’s stores in Oakland and Rockaway are not affected by these closings.
The company sells primarily to contractors and it rode the housing boom in the late 1990s and the first half of this decade to expand to close to 400 stores with $4 billion in sales. But the severe slowdown in housing starts has hit the company, along with other retailers linked to new home sales.
From the AP via the Daily Record:
Economists predict more job losses
Hospitals, schools and the assembly line at an airplane factory look like pretty good places to be with a recession looming and unemployment rising. Construction workers, real estate agents and auto workers aren’t expected to fare as well.
The startling news that the economy lost 80,000 jobs last month and nearly a quarter-million over the last three months is the starkest signal yet that the country has probably fallen into a recession, with things on the job front expected to get worse.
“All the indicators suggest that we will see even larger job declines in coming months. Businesses are getting nervous and pulling back,” said Mark Zandi, chief economist at Moody’s Economy.com.
From the Record:
Restaurants are hungry for customers
The Babylon restaurant seems to have everything going for it: good reviews, reasonably priced food, a pleasant atmosphere and plenty of parking.
All it lacks is customers.
Like many North Jersey restaurants, Babylon in River Edge is struggling, a victim of an economy tumbling toward a possible recession and a public eating out less often, trimming back on their orders and trading down.
“We should be packed,” Babylon owner Sam Aydin said as he looked over a room in which two of 22 tables were occupied at the height of the lunch hour one day last week. “Today, nothing.”
Clot,
When a homes is listed as a short sale, do they run the list price past the bank first? Or do they throw a number out there and hope it sticks. Does subject to third party approval mean there is a chance they will accept that figure?
Thanks
“Bank holding companies including Citigroup Inc., Bank of America Corp. and Wells Fargo & Co. have the thinnest safety cushion against losses in seven years.”
“The margin may erode further in coming weeks. Credit ratings on $704 billion of bonds have been cut this year following the collapse of the U.S. housing market. Sheila Bair, chairman of the Federal Deposit Insurance Corp., said last week that the downgrades may compromise bank capital ratios enough that some of the largest institutions will no longer be considered well capitalized.”
“This is a nightmare for the country,” said William Isaac, who was chairman of the FDIC from 1981 to 1985. Banks will “raise what capital they can, then they’ll slow down their growth and stop lending, and what should be a mild recession becomes a much more serious one.”
http://www.bloomberg.com/apps/news?pid=20601109&sid=ay.wksrAwOGI&refer=home
From Bloomberg:
U.S. Small-Business Optimism Index Sank to 28-Year Low in March
Confidence among U.S. small businesses fell in March to the lowest level in 28 years, prompting owners to scale back hiring and spending plans.
The National Federation of Independent Business Optimism Index declined to 89.6, the lowest reading since the second quarter of 1980, from 92.9 in February, the Washington-based group said.
Companies are cutting back as sales and profits deteriorate, signaling the economic slump may worsen. The report also showed the slowdown may not help alleviate inflation as more respondents planned to boost prices to cover rising costs.
“These are recession readings,” William Dunkelberg, chief economist at the NFIB, said in a statement. “The sharp decline in job creation plans does not augur well for economic growth in the near term.”
The Widening Web of Fraud.
From NYT:
http://homefinance.nytimes.com/nyt/article/mortgage-column-by-bob-tedeschi/2008.04.04.mort/?ref=realestate
re: (10) Grim.
“Is the broker model dead?”
The NAMB (National Association of Mortgage Brokers) has been very busy lobbying down in DC.
Seems they don’t want Federal Reserve Board to change Regulation Z, which implements the Truth in Lending Act and the Home Ownership and Equity Protection Act.
If the Fed goes ahead this month and amends Regulation Z mortgage brokers will no longer be allowed compensation if they do not disclose who is paying them and how much.
The FED may also may implement a few novel ideas like prohibiting lending without considering a borrower’s ability to repay the loan and prohibiting low-documentation or no-documentation lending.
There are other changes brewing as well, such as prohibiting mortgage brokers from charging excessive or undocumented “yield spread premiums”.
Read about it here.
http://www.namb.org/namb/Default.asp
Subprime students?
From Reuters:
Big US student loan guarantor files for bankruptcy
The Education Resources Institute Inc, which calls itself the largest not-for-profit guarantor of U.S. private education loans, on Monday filed for Chapter 11 bankruptcy protection, saying rising defaults and credit market problems have damaged liquidity.
The company, known as TERI, filed for protection from creditors with the U.S. bankruptcy court in Boston, where it is based. It has more than $1 billion of assets, and between $500,000,001 and $1 billion of liabilities, court papers show.
TERI said it has more than $17 billion of outstanding loan guarantees, and has since its founding in 1985 guaranteed more than 2 million loans totaling in excess of $20 billion, without ever defaulting.
But a March 26 downgrade by Moody’s Investors Service to “junk” status caused a bank to demand that TERI set up a reserve to support its guarantees, a move that would hurt TERI’s cash position and liquidity, Chief Executive Willis Hulings said in a court papers.
He also said a slowing economy caused defaults to increase, while the disappearance of investor demand for bonds backed by student loans caused a “significant” decline in revenue.
Word travels fast..
First Marblehead Seeks Loan `Alternative Guarantor’
First Marblehead Corp. said it is seeking an “alternative guarantor” of the company’s private student loans after the current, exclusive backer filed for bankruptcy protection.
First Marblehead fell $3.34, or 43 percent, to $4.36 at 8:30 a.m., before the start of regular trading in New York.
First Marblehead, of Boston, made the comment in a Market Wire statement today after the Education Resources Institute, a non-profit guarantor of private student loans, said yesterday in a Chapter 11 filing it had debt of as much as $1 billion. The institute, known as Teri, helps students fill the funding gap between government-backed loans and the costs of college.
grim/richnj:If one of you guys get a chance, can you please check on the sale price of 725 Center Avenue in River Edge. Thanks.
3b,
Closed at $355k.
Jim Rogers interview.
From Money Morning:
http://www.moneymorning.com/2008/04/08/exclusive-interview-investment-guru-jim-rogers-predicts-more-pain-for-the-greenback-and-the-failure-of-the-federal-reserve/
http://www.bloomberg.com/apps/news?pid=20601103&refer=us&sid=aK6fhJY95tPg
i thought the number of houses on the market were increasing and not diminishing? i am confused…is Greenspan looking at the same data we are?
Greenspan is desperately trying to maintain credibility.
Ritholtz takes a stab at him this morning.
http://bigpicture.typepad.com/comments/2008/04/greenspan-reput.html
Re: #24
There is no way possible to absorb the current amount of house inventory by early 2009.
What is delusional Greenspan smoking?
He must have read Fleckenstein’s new book..
http://www.amazon.com/Greenspans-Bubbles-Ignorance-Federal-Reserve/dp/0071591583
23#, i recall this jim roguers was very bullish on mainland chinese stock markets and even considered to move there and marry with chinese women.
#28- bi
Jim Rogers moved to Singapore with his family awhile back.
25#, what would you do if you were in his position after 9/11? raise interest rate?
#27-Grim
Have you read it?
kl (14)-
Lenders are usually mum on listing prices- or giving any kind of advance guidance at all- on proposed short sales. They just tell you to put it out there and to start feeding them info when you have offer-and-acceptance. At that point, they will want a copy of the listing, the listing history and supporting financial statements from the seller. Finally, they will want to review a prelim HUD-1, to understand the full extent of the potential loss. They will also order an appraisal, to make sure money’s not being left on the table.
I’ve heard that some lenders are becoming more proactive in potential short sale situations. I’ve even heard some are reaching out to borrowers and agents and proposing short sale scenarios, but I haven’t experienced it first-hand yet. I hope I will…
Didn’t Jim Rogers dump his NYC townhouse earlier this year?
…and move to Singapore?
[28,29]
Didn’t the same story on Rogers report that he had completely divested US securities (or planned to)?
If I’m not mistaken, Jim Rogers dumped all his US real estate assets.
From MarketWatch:
Washington Mutual sees Q1 loss of $1.1 billion
Washington Mutual sees Q1 loan-loss provision of $3.5B
Washington Mutual to cut quarterly dividend rate to 1c/share
Yes, he moved to Singapore.
From MarketWatch:
Total losses from credit crunch could top $945 bln: IMF
The total potential losses in the United States from the credit crunch could top $945 billion, the International Monetary Fund estimated on Tuesday. Losses tied to the housing market could top $565 billion, with the remainders coming from credit cards, commercial real estate and corporations, the IMF said. The current market turmoil reflects weak balance sheets and a general lack of capital. As a result, the effects are likely to be “broader, deeper, and more protracted.” The U.S. remains “the epicenter” of the crisis, but financial institutions in other countries have been impacted. Some emerging markets remain vulnerable, although so far most have been resilient, the IMF said, in a new report on global financial stability.
IMF is getting very close to that $1Trillion loss call.
From Bloomberg:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aBCSyLv7HQmU&refer=home
bi (30)-
“…what would you do if you were in his position after 9/11? raise interest rate?”
Jeepers! I think you’ve finally got your meds calibrated.
I totally agree. Have we all just core-dumped the memory of what an abyss the economy was looking into back then? Greenspan- and the Fed in general- certainly made mistakes during his run, but actions taken in the face of an overwhelming emergency deserve a pass, IMO. In an emergency, action must be decisive AND be short-term oriented. It’s just not the time to think “what if” about unintended consequence.
In retrospect, were rates subsequently kept too low, too long? Sure. But, we can’t fault the initial action taken.
grim (38)-
“The total potential losses in the United States from the credit crunch could top $945 billion.”
They should just go ahead and round it up to a trill. What’s 55 billion in hyperinflated dollars?
Chump change.
#22 grim: Thanks
Wamu closed my credit card because they said I didn’t use it enough. Should I care? Boo f@(*ing hoo!
“The total potential losses in the United States from the credit crunch could top $945 billion.”
Nouriel was right. As usual.
From the Star Ledger:
Commission holds hearing on municipalities merging
The commission formed to ask voters to merge towns to attempt cutting the nation’s highest property taxes will hold its first meeting in Trenton today.
The 22-member commission plans to ask voters annually to merge municipalities to try to cut local government costs. The commission was approved last year as part of legislative efforts to control property taxes that average $6,800 per homeowner, or twice the national average.
New Jersey has 566 municipalities, the most per square mile of any state.
History shows voters often balk at mergers.
Voters in South Orange and Maplewood have rejected studying whether the two Essex County municipalities should merge, while Princeton Borough and Princeton Township voters rejected a merger three times.
The state has had only two town mergers since 1952, when Vineland and Landis merged.
Pahaquarry and Hardwick merged in 1997 simply because Pahaquarry was down to seven residents and couldn’t run a government.
SEATTLE (AP) — Washington Mutual says it will receive $7 billion in new capital from an investment group led by private equity firm TPG.
The new investment will boost the Seattle-based bank’s capital at a time when it has been hit hard by rising delinquencies and defaults among mortgages. The bank said it will lose $1.1 billion during the first quarter and take a provision for loan losses of $3.5 billion.
In an effort to further shore up its capital position, Washington Mutual (WM, Fortune 500) will cut its quarterly dividend to 1 cent from 15 cents. It will also no longer purchase mortgages from brokers and close all its freestanding home loan offices.
Anyone have any good sites to find reasonable apartments somewhere between Highlands/Middletown and Piscataway? Doesn’t have to be big, but I’d like a washer/dryer and a decent area (where my truck isn’t going to get broken into). Not really more than 1250-1300.
“The total potential losses in the United States from the credit crunch could top $945 billion.”
It’s just not true. Tell them Bi. Tell them it’s not true. Tell them you would be able to pick winners but there is this guy Margin harrassing you on the phone and you can’t concetrate.
WaMu closing all it’s stand-alone retail mortgage outlets in addition to eliminating warehouse lending? Well, that doesn’t make sense at all.
Whoo hoo?
WaMu to Strengthen Capital Position, Raising $7 Billion Anchored by a TPG Capital Investment
Last year, WaMu took steps to realign its home lending business primarily into its core retail banking network and to reduce the size of its other home lending operations. Today, the company announced plans to further its retail-focused strategy by:
Investing in and growing its retail bank branch and call center production;
closing all of its freestanding home loan offices; and
exiting wholesale lending – its loan broker channel.
The company expects the closures of its freestanding home loan offices and wholesale channel to be completed by the end of the second quarter.
re: (40) Greenspan -
His speaking fees must have diminished significantly since the credit crisis began, and Andrea hasn’t worked in years ever since she pushed for the Scooter Libby pardon and he book didn’t do well . I bet the bills are piling up and Greenspan may need to short sell a couple of his rediences to keep his head above water. :)
U.S. investment bank Merrill Lynch does not plan to raise further capital as it has already raised more than it has lost, Chief Executive John Thain said on Tuesday.
Why would any IB rasie capital when the Fed is giving it away for cheap. Thain said the he does not need any more money but he was in a rush to explain cause he was on his way to go bust the window.
Ben has put in a new meaning to the term Window Shopper!
“Conditions are bleak in the housing market,” Celia Chen, an economist at Moody’s Economy.com in West Chester, Pennsylvania, said before the report. “The housing correction is contributing directly to job losses and the recession.” Ms. Chen based her analysis on the increase of negative views towards housing as revealed during a recent poll of yips fortune cookies.
From MarketWatch:
U.S. Feb. pending home sales index falls 1.9%: NAR
From MarketWatch:
Pending home sales index falls 1.9% in February: NAR
An index of sales contracts on previously owned U.S. homes fell 1.9% in February from the prior month, the National Association of Realtors reported Tuesday. The index, which is considered a leading indicator of existing home sales, was down 21.4% from the February 2007 level. By region, February’s pending home sales index fell 9.8% in the West, while the South had a 5.5% drop and the Midwest experienced a 3.7% decline. In the Northeast, the index rose 3.2%. January’s level was revised slightly higher
40#, kept low interest rate for too long? arguably it is less than 8 months. but if he did reducing, increasing, and reducing again too frequently, you would label him as a day-trader.
From the NAR:
http://www.realtor.org/Research.nsf/files/PHS.pdf/$FILE/PHS.pdf
Pending home sales in the Northeast down 25.4% year over year.
Pending home sales in the Northeast down 25.4% year over year.
And the asking prices are still absurd.
Gary: try closter
wait till you see them over their
You must have missed this one yesterday.
71 Primrose Lane, Closter NJ
Purchased: 12/19/2006
Purchase Price: $580,000
MLS# 2800974
Original List Price: $655,000
Currently asking: $499,000
The Chicago-based group’s seasonally adjusted index of pending sales for existing homes fell to 84.6, which was 21 percent below year-ago levels.
Wall Street economists surveyed by Thomson/IFR had predicted the index would inch higher.
Bi said there would be no more writedowns. Perhaps there is a job available for him as a Wall Street economist after all?
Waaa mu - Which of these gets closed?
1] HAMILTON FINANCIAL CENTER
2] FLEMINGTON CIRCLE FINANCIAL CENTER
3] MONROE FINANCIAL CENTER
4] SOMERSET FINANCIAL CENTER
grim: i saw that one, but so many are overpriced in that town …
Mark,
I’m well aware of it. The sellers are nuts and the potential buyers are insane for letting the sellers dicate.
more on 62..
5] SPARTA FINANCIAL CENTER
6] JEFFERSON TOWNSHIP FINANCIAL CENTER
grim [60],
That’s the booyaa one. We need about 10,000 more just like it.
“CAIBC Says:
April 8th, 2008 at 9:07 am
i thought the number of houses on the market were increasing and not diminishing? i am confused…is Greenspan looking at the same data we are?”
CAIBC,
What data are you looking at?
The data I’m looking at shows that supply, measured as month’s supply of existing houses for sale, peaked earlier this year at 11 months of supply. However, this recent peak could be a blip, and inventory might rise again and go higher than this peak. I need to see a few more months of supply declines before I believe the trend is for real.
This supply info is for the United States, not New Jersey. It is calculated by a consulting firm using NAR data.
Some context:
In 1985, supply peaked at 14 months, measured using the same metric. In 1991 and 1992, supply peaked at 10 months. So the most recent peak is consistent with peaks seen in previous housing cycles.
It took about 2 years for supply to normalize to 5 to 7 month range following the previous supply peaks.
Here’s a post at The Big Picture that’s good enough to share:
http://bigpicture.typepad.com/comments/2008/04/yet-another-sur.html
For the record, the definition of the word surprise is:
1: to attack unexpectedly; also : to capture by an unexpected attack
2 a: to take unawares (police surprised the burglars in the store)
b: to detect or elicit by a taking unawares (sometimes surprised a tragic shadow in her eyes — Willa Cather)
3: to strike with wonder or amazement especially because unexpected (his conduct surprised me); to cause astonishment or surprise (her success didn’t surprise)
Which leads me to these truly frightening comments:
“Boston Federal Reserve Bank President Eric Rosengren said the delay in a rebound of U.S. home sales continues to “surprise.”
“People have been expecting a recovery in housing much sooner than it has occurred and that’s continued to surprise on the downside,” Rosengren said in a telephone interview with Bloomberg News.
Rosengren said it’s “confounding” that housing shows little sign of recovery after the Fed’s six interest-rate reductions since September. Fed officials are in the eighth month of a credit crisis that began with rising delinquencies on subprime mortgages.
“The housing market is still weaker than we would like and that has contributed to some of the financial problems as well,” Rosengren said.”
Surprise? Really?
I find it disturbing to see a fundamental lack of comprehension from a regional Fed President as to what the root causes of the Housing problem actually are.
Hey guys! Here’s a clue: It ain’t high interest rates . . .
Morgan Stanley holders reject exec compensation advisory
Forgot the best part of the “surprise” post:
You keep using that word. I do not think it means what you think it means.
-Inigo Montoya
70
Inconceivable!
i was looking at craigslist. any homes for
sale in jersey city? jes.,,,,
lost (43)-
“Wamu closed my credit card because they said I didn’t use it enough. Should I care? ”
Send it back to them & tell ‘em to sit on it and rotate.
Grim (49)-
“WaMu closing all it’s stand-alone retail mortgage outlets in addition to eliminating warehouse lending? Well, that doesn’t make sense at all.”
WaMu’s pioneering a new business: shareholder dilution.
Time to update the reality list!
To keep things interesting, I’ll post the new info next to what I posted on 3/15.
Gold >$1,000 - $923
Oil >110 - $109.25
Foreclosures >60% - Same
3 straight months of declining employment - Same
Inflation >12% - same
Mortgage rates >6.5% - Same
Dollar at 1995 levels against Asian currencies - Now 1997 levels
Other NEW economic stuff
LEH, UBS, WM all required capital influx
Pending home sales at record low and steepening
Fed now calls recession likely
IMF calls U.S. subprime loss totals to be 1 trillion.
GS ups their subprime loss estimate to 1.2 trillion.
Alcoa earnings drop 54%.
Significant layoffs announced at Schering/AMD/Yahoo (non mortgage related)
FED Intervention
FED Discount Rate down 2.75 - now 2.5
FED Funds Rate down 2.25 - same
200 billion in 28-day loans
300 billion in loans to banks w/ poop for collateral - now 350.
New FED Intervention - 29 Billion BSC bailout
ECB Intervention
500 billion in loans to banks w/ poop for collateral
Results of FED and ECB Intervention
S&P down 9.11%/ down 2.97%
Dow down 7.5% / down 2.02%
Nasdaq down 10.14% / down 3.82%
In my humble opinion, the economic changes in the past 3 and a half weeks do not justify the recent rally. Unless of course, you feel the original drop was overdone.
Is $600 in your pocket really gonna provide enough stimulus to turn the economy around?
Greenspan’s next bathtub?:
http://tinyurl.com/6oqnf2
#54 grim: In the Northeast, the index rose 3.2%. January’s level was revised slightly higher.
Any thoughts on that? Perhaps early Spring market?
make (51)-
“Ben has put in a new meaning to the term Window Shopper…”
More like “smash-and-grab”.
#75 Stu: All true;somebody please tell the sellers.
bi (55)-
It was nice to witness your five minutes of lucidity for today. Sadly, it seems to have passed:
“…but if he did reducing, increasing, and reducing again too frequently, you would label him as a day-trader.”
Word to bi: YOU are the day-trader.
patient (68)-
The virus is loose and the general population is infected.
These guys can’t admit what they now know. If they do, it’ll be a 1929-style panic.
patient (68)-
And, if the guys at the controls are truly so stupid that they can’t understand the current situation, I shudder to think how bad it will get.
3B (77),
In the Northeast, the index rose 3.2%
Compared to January. I’ll predict March will be higher than February.
But it’s Y-O-Y that matters and it’s down 25.4%
WaMu lays off 3,000 at home-loan centers: report
RE: Family Leave Act
Corzine is quite the spending cutter.
He asked us to hold him accountable during his inauguration. What is his address? I would like to send him an invoice.
Coming from a good source?
“Japan says U.S. banks may need bailout”
“The collapse of a mortgage bubble has so starved some U.S. banks of capital that the government may have to step in if private investment does not work, said Masaaki Shirakawa, deputy governor and acting head of the central bank said before a G7 meeting this week.”
“First of all, it should be efforts by the private sector. But if the efforts by the private sector are not enough, a public capital fund injection, among various options, may become necessary,” Mr. Shirakawa, the government nominee to head the BOJ, told a parliamentary hearing considering his candidacy.”
http://www.reportonbusiness.com/servlet/story/RTGAM.20080408.wg70408/BNStory/robNews/home
30% off is the new lowball. 20% was so 2007.
Any thoughts on that? Perhaps early Spring market?
3b,
Given the fact that Northeast sales are down more than 25% on a year over year basis, the monthly increase is still noise at this point. We would need to see a trend develop over a number of months before we could use this data to confirm a bottom. Ideally, I would like to see a few months of positive increase on a year over year basis.
Even the NAR says so, read the methodology notes at the end of the release.
There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons.
Like they said, the year over year relationship is stronger than the month over month.
#88 griM: Thanks for the read.
74 clot
“WaMu’s pioneering a new business: shareholder dilution.”
That’s been pioneered a couple of times already in the last few months.
3b,
We saw a number of month over month increases in the Northeast that did not at all indicate a bottom.
May 2007 saw a MOM increase of 2%
June 2007 saw a MOM increase of 2%
October 2007 saw a MOM increase of 8%
February 2008 saw a MOM increase of 3%
However, over this period, contracts were down 25.4%
The MOM data is simply too noisy.
#83 Rich: Compared to January. I’ll predict March will be higher than February.
And yet March in our area was the wrost (or one of the worst ) months on record.
Grim was kind enough earlier to provide we with the sales price on a listing in River Edge (725 Center Avenue) iw ould have though this hosue weould have sold at around 315/320K,and yet it just closed at 355K.
Dead cat bounce I guess, bu there are still deals getting done at what I consider to be still very high prices.
Also 672 Cnter just went under contract , last listing price was 444K, if that hosue sells even close to that number, than I will be shocked.
Is prestigious River Edge bubble wrapped?
92 3b
I looked at houses in upper BC for about six months at the end of last year, and out of curiosity, have been watching the Buyinginbergen.com site to see the closed sales since then, since I toured so many of the houses.
I am shocked at the prices that most of them sold for. Houses that we left after our visit, in total shock at the prices, have ended up selling for roughly 50,000 more than I would have ever paid.
http://online.wsj.com/mdc/public/page/2_3021-peyield.html?mod=topnav_2_3000
Check out this P/E ratio’s in WSJ.
95 make
What’s that giant flushing noise????
94#, ann, we discussed here last winter regarding housing nearby plainsboro. i was surprised to see following update:
“My husband and I started looking at homes recently with a specific interest in the Princeton Collection. We noticed that recent listings have asking prices that have skyrocketed to the upper 500s and low 600s. Our research show recent sales in the Fall ‘07 and Winter ‘08 were in the high 400s to low 500s. Does anyone know if oil or gold mines were suddenly discovered under Parker Road???!!! Are these prices realistic or should we expect to knock off an immediate 100 grand from any offer?”
From MarketWatch:
Washington Mutual to cut 3,000 home loan jobs
Washington Mutual Inc. has closed 186 of its home loan centers and notified 3,000 employees on Monday that they would lose their jobs soon, The Wall Street Journal reported Tuesday on its Web site. The reports follow Washington Mutual’s announcement it will sell $7 billion in equity securities to TPG Capital and other investors. Shares of Washington Mutual fell 8.4% to $12.04 in recent trading.
I’m working with a move up buyer that has sold their home in Paterson. I have no doubt that the vast majority here would have derided the house, calling it a shack in the ghetto.
That’s exactly th eproblem with many buyers here they feel like the best houses colonials in thebest towns must become affordable. Why not buy a multifamily in a so so town, live there rent out the rest and live mortgage free for ten years or so.
By the times your children are 10yrs old or so sell the house, all the money you saved over the years not paying a dime in mortgage and buy your one family dream house and move to a good school system.
We all know that up to ten yrs old we teach spelling and arthimetic at home and a great schooling is vertually absolete.
Can anyone pull any info on 17 excelisor place in butler 07405?
Thanks
That’s exactly th eproblem with many buyers here they feel like the best houses colonials in thebest towns must become affordable. Why not buy a multifamily in a so so town, live there rent out the rest and live mortgage free for ten years or so.
So so town - please list some safe towns where you can cash flow positive property - lets say with 80% vacancy rates… The problem right now is that all of NJ prices are wayy high for rental property as they are for prime residenccies. I can buy right now a house in Newark, Irvine or Patterson, easilly, but i won’t. My safety, my child and wife safety is worth a lot more to me.
An I am not talking of even coming close to golden - PITI is 50% of total rents rule
- this one in NJ is a fairy tale -
it is more like PITI is about 75% of rents so you will have to rent out your property fully and also pay extra to subsidize your tenants.
Small landlording is nearly impossible right now.
Al,
Maybe not 50% of PITI, but this is close.
MLS# 2486403 - 66 Mission, Montclair NJ
Asking $349,000
Two units, a 2/2 and a 2/1.
Owner is saying the rents are $1450 and $1150. I doubt that, but I doubt they’ll get asking too, so we’ll just use the numbers as is.
Purchase Price $349,900
Down: $69,980
Mortgage: $279,920
Property Taxes: $7,600
Insurance: $1,000 (just a guess, no idea)
PITI: $2,395
Assuming 80% vacancy on the smaller unit, at $1,150/mo throws off $11,040 a year, at 90% we’re talking about $12,420 here. Those break out to $920/mo and $1,035/mo.
We’re talking about approx. 40% of PITI being covered by the rental income.
Lots of pros:
Montclair
Walking distance to Bloomfield Ave
Close to the train line
Fixer-upper
Gentrification?
Cons:
Worst section of Montclair
You won’t impress your Upper Mtc friends.
Note, if you rent out the larger unit at $1,450 and live in the smaller unit, you can push this even closer to 50%.
Grin -I guess i was not clear - the golden rule is that if you are landlord you are going to have extra expences… A lot of them. (Just think of 6 month to evict a deadbeat tenant and the damage he will do to you place)
So PITI should be 50% of collected rents to make landlording profitable.
In your example: rents collected are 2600$/month. PITI - 2400$
or 92%.
very small safety net, with 100% occupancy (in two unit building 1 empty unit puts you at 50% occupancy). Any problems with tenants and such puts you instantly in negative, while you are forgiving any interest on 70K downpayment…
In addition check mortgage rated for non-owner occupied homes…. (7.5% i think is the best case. Insurance is higher, you will need landlord’s liability insurance as well)
Don’t forget about depreciation, mortgage interest, property tax, and multifamily improvement deductions.
Have you guys heard about this PHEV?
http://www.aptera.com/
Promises 230 miles/gallon at steady-state 55 mph.
Bring it on Peak Oil?
But i guess, you now need to figure out where to get the electricity from..
Al,
I’m not talking about slumlording here, I’m talking about alternative options for first time buyers. This case certainly needs a little bit more emphasis on the “alternative” portion.
grim Says:
April 8th, 2008 at 1:02 pm
Don’t forget about depreciation, mortgage interest, property tax, and multifamily improvement deductions.
I have my excel spreadsheet which I update - I try to include all the parameters. It is not easy especially once you start getting in complicated areas of a tax code, primary residence vs. 2-4 families deductions, appreciation vs. depreciation and taxable capital gain. My main problem: I am not sure I want to be a small landlord. Stories I heard from small landlords - successful or not kind of turning me off the idea.
The idea of buying a duplex, living in one unit while renting the other is attractive until you get into an issue of lawsuits and tenant getting hurt on property. It might wipe out everything you have (not only your house), so liability insurance and LLC owning are must have. Lawyers are always hungry.
“Lawyers are always hungry.”
When’s lunch?
I thought this building was interesting too.
MLS# 2450377 - 209 Glenridge Ave, Montclair
Nice building, very close to downtown.
Asking is $849,000
4 apartments in total, 2 retail.
2 studios
1 1br
1 2br duplex
2 retail storefronts
Owner says the net operating income is $44,936 a year.
Would be interesting if you could get FHA/HUD commercial financing and a purchase price closer to $800k.
It is close enough to downtown (right near Bloomfield and Church) that it might be a good candidate for some refurbishment (and higher paying tenants).
Grim,
Why stop at a Two Unit? Why not look at a 4 unit?
Then you piti will pretty much be covered by the rents and not to mention all the tax deductions you can have if your tennants pay cash!!!!!
PPT in rare form…
“Washington Mutual Gets $7 Billion From Bonderman-Led Group, Slashes Payout
Morgan Stanley’s Mack Sees “Difficult Year” as Debt-Market Crisis Spreads
IMF Forecasts $945 Billion in Losses Stemming From U.S. Mortgage Turmoil
U.S. Home-Sale Index Falls More Than Estimated as Slump Enters Third Year
Stocks in U.S. Decline on Earnings Results, Led by AMD; Europe, Asia Fall
Simons, Mandel Post Biggest Losses as Hedge Funds Hit by Markets’ Shakeout
Fannie, Freddie Shares Should Be Sold, Goldman Says; Lehman Rates Them Buy
Citi, Wells Fargo May Fuel Recession by Slowing Lending After Downgrades”
The 2br duplex unit also has a new rooftop deck that looks pretty nice. Owner says it’s got NYC views.
Like I said, interesting alternatives.
A 3 bed 1 bath starter home just listed on my Westchester Rivertown street for $399k. Now we’re making progress… only $150k to go.
A little more info I have on the Butler house, its listing number is 2746755. Is that the same as an mls#?
For sale signs came down today.
First time buyers should not be looking to be landlords unless they completely understand the implications… It’s not as easy as just rent out the units and live on the income, you need to be aware of your tenants and keep up with the maintenance.
Also, insurance for rental buildings is considerably higher then a single family home..
Looks like montclair has a bunch of multi-unit buildings for sale.. the pickings are getting better everyday..
-R
schab,
NJMLS shows the listing expired on 4/8.
96 bi
Interesting. Sounds like new sellers are coming on the market in Princeton Collection high? I’m sure those houses are will sell in the 500’s somewhere, but Plainsboro does have some unique market dynamics going on, so who knows?
Rob, what do you know about Hastings?
Hastings reminds me in positive ways of a little New England town I used to live in. Has a nice commute to Midtown, too.
Stu and I are landlords in Montclair. The taxes will kill you here. If you’re not looking to be an owner occupier, where your rental income will simply defray your monthly costs, you will have difficulty breaking even on anything that had less than 3 units.
We bought our 2 family in 2004 at least 100k less than current “market” prices. We still are not 100% sure that our place will be break even after we move out in the next year or 2.
Interesting article for all you folks who are stockpiling and getting ready for the worst.
Duck and Cover, The New Survivalism
http://www.nytimes.com/2008/04/06/fashion/06survival.html?_r=2&pagewanted=1&ref=fashion&oref=slogin
NJMLS shows the listing expired on 4/8.
Two basically identical houses built side by side. The first one(the bigger one) sold last summer for $495k, the second one has had an open house every weekend since September.
The last listed price was $468k I believe. Has the first house lost 50k or so already?
Ann, like your post and the way you think. Just wanna get your opnion about the importance of dead end house. I am interested on a 20 year old house that is not on a county road or any road with number, but my wife insists on quiet street in some development area. Is it a big deal? Thanks
Can someone with GSMLS access let me know what happened to the listing for 40 Christopher St in Montclair. It was a multi-family listed for 799k I think. I don’t see it on GSMLS. I’m wondering if it was withdrawn or sold. If it sold, can you let me know the SP?
Thanks!
gat,
Withdrawn
122 ledward
Depends what you want!
Cul-de-sacs or dead ends are very nice, especially if you have kids and especially when they start riding trikes and bikes.
Then again, I’ve been in friends’ homes that are on streets that I would not have considered as I thought they were too busy, and been pleasantly surprised.
As long as it is far back enough from the road, they can be lovely too. Some of these houses, that aren’t in “developments,” will actually end up having nicer backyards and with a good fence, you end up with a nicer outdoor setting overall in the back of the house.
Fed Minutes: Some Worry About Deep Recession
http://www.cnbc.com/id/24014616
Methinks those who are predicting a shallow and short recession are letting hopes overcome analysis.
http://www.wttw.com/main.taf?p=46,3,5,1&pl=Part%20One
PBS on Retirement
“A floor trader who served on the board of the New York Mercantile Exchange agreed to serve five months in prison Tuesday after pleading guilty to fraud and evidence tampering related to commodities trading.”
http://www.cnbc.com/id/24014533
Perhaps the time has come to slap in jail: Fed chairs who lie, administration officials who mislead, and members of congress who abdicate their oversight role. They all take more than any stick-up artist.
From MarketWatch:
Fear of severe slowdown dominated FOMC on March 18: minutes
FOMC majority saw contraction in first half of ‘08
Fed staff slashed 2008 growth outlook prior to March meeting
FOMC majority still sees price gains moderating later in ‘08
Inflation expectations did edge higher in March, FOMC says
Two Fed dissenters saw rising inflation expectations as risk
Plosser: Already too late if inflation expectations rise
#125, exactly. We are DINK, and no plan to have kid. The house is 40 feet from road side.
Another concern is that a total 64000 ft commercial complex with four one floor buildings is going to built at the corner, which is 1000 feet away from the house. The zoning officer told us that are going to be doctor office and some retail stores. So neighbor houses in development might cut through the street for pizza of dental office. Do you think this somehow depreciates the house value?
Hi everyone,
Hoping to get people’s thoughts on Lyndhurst & Rutherford, as I’m thinking about moving there when my lease is up May 31.
My understanding is that Lyndhurst is mainly blue collar, but safe and a little boring. Rutherford is a bit nicer but a bit more expensive.
I’m renting and a single 29 year old, so taxes, schools, etc. aren’t a big deal. Travel to & from NYC is.
Thanks
Lincoln,
If travel to NYC is a big deal, then why not live in a neighborhood that offers a quicker, one-seat ride?
Lincoln78,
Your assessment is about right. I used to live in Lyndhurst. Was in the same situaiton as you and I found it just fine. Either the train or bus from lyndhurst isn’t bad depending on where you need ot go. The bus is actually quicker (straight shot down route 3 via Lincoln Tunnel bus lanes)
more balance
Data from Countrywide Financial (”CF”) provides further evidence that the overhang of REOs (bank owned homes) could disappear by this summer. CF was the nation’s largest mortgage originator and has the nation’s largest inventory of REOs. CF nationwide inventory or REOs totalled 14,413 homes in March, down 7.8% from a peak of 15,624 homes in January. CF’s inventory is clearing fast because the company continues to slash its asking prices. In March, the average asking price for a CF REO was down 27% year-over-year in California, 16% year-over-year in Florida, and 29% year-over-year in Nevada. In the latest week, the average asking price of a CF REO fell 1.3% in California, 4.3% in Florida and 2.5% in Nevada. The aggressive actions by CF combined with observations in California suggest the housing market may bottom earlier than most market participants expect.
#134
that is some interesting data. prices do appear to be dropping rapidly in certain areas. I wonder though whether you could simply view this as the initial big drop brought about by lack of liquidity whereas the more fundamental (and slower) drop will follow (brought about by more general economic weakness)
More balance
Recent models suggest that the worsening food shortages occurring around the globe may actually have a positive effect.
Rice hits a record high for the 4th day in a row:
The Rice Shortage and agricultural policy:
Wheat supplies projected to decline:
Thousands march in Haiti seeking food:
Indian wheat harvest projected lower than expected:
Half of all Pakistanis risk Starvation according to WFP:
As the global community sees an increasing rate of food shortages around the world, this humanitarian disaster may yet be boon for the powerless industrialized nations of the world who have been unfairly exposed to the merciless rise of commodity prices to such an extent that milk now costs as much as $3.15 per gallon when as early as a year ago the same could be found for $2.00 or less.
Mr Bergabe of the US federal Reserve has been quoted as saying that “These rouge commodity traders have artificially driven up the price of commodities throughout the world markets. Increased death rates due to starvation and malnutrition may help to ease commodity prices by the end of the third quarter and at that point the FED is hopeful that the US public will realize that inflation in the US is well under control and housing prices will once again begin to rise as the financial pressure due to this commodities bubble will be taken off of the banks allowing them to once again offer 100% LTV and other such innovative loan products to the american public.”
{EXCESSIVE SARCASM OFF]
Bush not going for the bailout. You can’t be wrong all the time.Odds are you will get it right once in a while
From CNBC
President Bush cannot support a homeowner rescue bill drafted by U.S. Senate lawmakers because it contains too many costly and extraneous elements, his spokeswoman said Tuesday.
Specifically, the White House rejects provisions that would give a tax break to buyers of foreclosed homes and provide other tax breaks, said White House spokeswoman Dana Perino.
“We have serious concerns that these elements and others would do little to help homeowners avoid foreclosure or reduce housing inventory,” Perino said.
The legislation is being debated in the Senate this week and could face a vote on Tuesday or Wednesday.
The bill was a compromise between Democrats and Republicans who are facing pressure to staunch the flow of home foreclosures that could be pushing the national economy into a recession.
RELATED LINKS
Senate Rejects Bankruptcy Part of Housing-Aid Bill
Senate Leaders Agree on Aid for Homeowners
Mortgage Rates Climb as Housing Grasps For Recovery
The U.S. House of Representatives is due to take up its own version of a housing aid bill in coming days.
If the president opposes the measures drafted on Capitol Hill, lawmakers will need more votes of support to override any veto.
from FT:
The board of the International Monetary Fund voted to cut 15 per cent of its staff and sell about $11bn in gold reserves in one of the biggest shake-ups of its funding since it was founded
hmmm, effect on gold prices???
“Bush not going for the bailout.”
even if a bailout could go into effect after Bush, how effective would it be? payment shock and inability to refinance/sell is happening now.
#134 Castle:more balance
More balance, or more whistling in the dark.
The sellers would see this as a sign of hope for the market & keep their prices high. People here know it will not work, not the general public. Perception is everything.
Countrywide has every reason to be slashing prices on their REO’s they are already BK and are trying to get as much cash on their books as possible.
Clot,
Thanks for the response. I asked because of my post late last night
rhymingrealtor Says:
April 7th, 2008 at 9:45 pm
I went to see a house 2 years ago almost exactly it was april 06, it was listed at 309,000 it had been reduced from 349,000 this was an attached house it was the last one in a row so it was attached on one side only. I know I have stated I like row houses, I like blocks with row houses… anyway I even went as far as to take my husband with me. We both liked it alot, open floor plan new hardwood floors throughout, sections of brick showing nice kitchen full basement new bath w/jacuzzi skylights full high dry basement.
Anyway although we liked it, there was no way I was buying, too high. It closed in june of 06 for the 309,000 asking, which I did’nt think would happen, so I questioned myself on the market again. I thought there was no way it would sell at that price. I was wrong, or was I too early with that thought. That house went on the market today for $219,000 of coures subject to third party approval. I would have posted this earlier except at my age it takes a long time to get off the floor when I fall off my chair.
KL
There are not too many in our field in our are that I find have any experience in this at all, the house I mention above is listed with an out of area Remax.
KL
A very special video to agents, courtesy Dick Gaylord (yes, that’s his real name), NAR President.
Sit back, and enjoy this heartwarming family classic:
http://tinyurl.com/5gwnz2
“hmmm, effect on gold prices???”
kettle [138],
June gold is $918.70, electronic trading. Why the question? You have a position/looking to take a position?
grim (106)-
The problem is, slumlording is the way to max out your return.
What an excellent solution for the buyer who has the scruples of a rabid badger.
BC
Really just looking to spark a little conversation on the subject. maybe i am behind the curve, or out of the loop, but that seems like a noticeable event to me.
I still stick to the thought that gold is going to continue going up in the intermediate term.
vodka (147)-
The IMF action today is nothing, compared to our gubmint’s gold-leasing/shorting shenanigans…or its wholesale secret shipments of chunks of Fort Knox to China.
kettle [147],
It’s been in the market for the past 3-4 months.
clot 148,
I am familiar with our governments gold shenanigans, but i have not spent the time to try and dig up what the magnitude may be. From what i have read, i suspect it is fairly serious, but i couldnt even guess at what magnitude.
Just my ignorance gentlemen.
As always appreciate any corrections, always happy to learn something new.
Bring him back.
“April 8 (Bloomberg) — Former Federal Reserve Chairman Paul Volcker questioned the central bank’s decision to rescue Bear Stearns Cos. with a $29 billion loan, saying it was at “the very edge” of its legal authority.”
“The Federal Reserve has judged it necessary to take actions that extend to the very edge of its lawful and implied powers, transcending in the process certain long-embedded central banking principles and practices,” Volcker said in a speech to the Economic Club of New York.”
“Volcker said the modern financial system has “failed the test” of the marketplace. When asked whether he predicts a “dollar crisis,” he said, “you don’t have to predict it, you’re in it.”
http://www.bloomberg.com/apps/news?pid=20601087&sid=aPDZWKWhz21c&refer=home
“you don’t have to predict it, you’re in it.”
Damn..
I get a resume dropped in my lap in response to my “help wanted” ad…
2005-2008 First ******* Corp
Operations Assistant
Ordered 1st & second mortgage and bankruptcy chapter 7 and 13 payoffs
reviewed title
requested mortgagee clause changes
comiled disclosure packages
ordered judgement (sic) payoffs
(And I’m in a COMPLETELY unrelated field…)
You’d think this person still had work to do?
Maybe Bi is right. There will be no more writedowns :)
Greenspan on CNBC now.
“you don’t have to predict it, you’re in it.”
JB [152],
And this is an administration that supports a strong dollar. Can you imagine the depths of the crisis when their sentiment turns?
The pundits will tell you the cheap dollar is a godsend for our exports. Well, manufacturing continues to lose jobs, month after month. If we can’t create manufacturing jobs in this environment, what is the next step? Very troubling.
“Greenspan on CNBC now.”
Sports page to the john.
This is doing wonders for Wall Street jobs:
LBO Freeze Cuts First-Quarter Fees to Wall Street by 75 Percent
http://www.bloomberg.com/apps/news?pid=20601109&sid=at6oLFppL7G0&refer=home
BC,
Isn’t it odd that Volcker is backing Obama. Maybe he’s really looking to come back in some capacity.
He doesn’t just back a nominee for no reason you know.
make [158],
If tall Paul comes back, dump your gold/currencies immediately. I will be marching down Broadway with reinvestor 50.5, waving my flag. Of course with dollars.
Volcker back for a repeat?
From MarketWatch (Audio)
Sunday drivers scarce
Real-estate editor Steve Kerch says there remains little motivation for would-be home buyers to hit the open houses, let alone make offers.
Home buyers still staying away, hurt by lending problems
Pending home sales dropped almost 2-percent in February with most regions showing declines. Only the Northeast saw a rise in sales. But MarketWatch real estate editor Steve Kerch tells John Wordock buyers continue to stay away. Many consumers, Kerch says, continue to have trouble getting mortgages, especially jumbo loans.
WOW GSMLS - 34,743
I remeber it peaked at 36k last summer
It went up 250 houses within 8 hours
BC Bob Says:
April 8th, 2008 at 4:37 pm
make [158],
If tall Paul comes back, dump your gold/currencies immediately. I will be marching down Broadway with reinvestor 50.5, waving my flag. Of course with dollars.
Happy to dump the Swiss Cheese and Gold and join you and reinvestor but chances of this happening are about the same as Ron Paul being the Republican Nominee.
“Volcker back for a repeat?”
WS/Cramer would be waving the white towel.
Citi may write down another $17 billion for Q1, research firm says
http://www.financialweek.com/apps/pbcs.dll/article?AID=/20080408/REG/32470639/1036http://www.financialweek.com/apps/pbcs.dll/article?AID=/20080408/REG/32470639/1036
CreditSights estimated that Citigroup will likely report the biggest write-downs for Q1. The write-downs could range from $15.2 billion to $16.8 billion, CreditSights reckons, depending on whether valuation reserves related to financial guarantors are included in the tally. The bulk of write-downs would still be in collateralized debt obligations made of asset-backed securities.
“Volcker back for a repeat?”
WS/Cramer would be waving the white towel.
First day on the job, The Fed as just announced an emergency rate increase to 12.5% on the FFR. The market is expecting another 500 basis points increase next month.
And at the local bar you see the NJREREPORT fellow bloggers buying beer that once again costs $1 USD.
re: Ron Paul.
There may be a coup in the works.
http://stcharlesjournal.stltoday.com/articles/2008/04/08/news/sj2tn20080322-0323stc-caucus0.ii1.txt
This is happen all over the country.
Lincoln78 Says:
April 8th, 2008 at 2:24 pm
Hi everyone,
Hoping to get people’s thoughts on Lyndhurst & Rutherford, as I’m thinking about moving there when my lease is up May 31.
Lincoln,
Neither town is going to provide a rowdy nightlife, but if you’re looking to transition to the burbs it can be a good area. I would say Rutherford is a bit nicer, and it has a nice downtown with some decent restaurants, train station, etc. It’s a dry town so all restaurants are BYOB and there are no bars. But, there are three bars about 20 feet on the other side of the train station in E. Rutherford. There are also a number of apt buildings very close to downtown if you’re looking to rent. Train is quick, even with the transfer in Secaucus. Bus is real quick without an accident on Rt. 3, otherwise bring a good book.
Sean,
(166)
The foundation has been set for next presidential election. This one is done my friend.
I gave Ron Paul my money too and went to the Boston Tea Party.
Obama to question General Petraeus,this should be interesting.
[120] Ann’s article link harkened back to my earlier thread that some of you “liked” (either you really thought it viable or you were being sarcastic). If you thought it a good idea, keep reading.
Though I don’t believe for one second in buying a bunker, the idea of having a rural property for self-sustenance, urban escape, and a cool place to go on weekends in the right season, I am finally floating my idea of assembling a small working group to jointly purchase farmland in Northeastern PA.
The idea is to have a multi-purpose property that would be self-sufficient from tenant farming or timbering, and provide space for garden plots, timber, and a rural retreat for weekend getaway or “just in case.” The reason for a group is to maximize utility–folks like me can’t (and won’t) pony up 400K for a farm that I will periodically visit, but 10 people putting up 40K each, and visiting frequently, means the building gets constant use and the maintenance gets shared.
The working group should be from various disciplines (tax, finance, r.e., tradespeople) and able to commit funds toward the selection and purchase of the property. Since site selection is all-important, some time commitment is also required, likely about the time spent on an outside hobby or board commitment. Eventually, the working group would be formed into a partnership or LLC (most likely a partnership) that would agree on the size of the group, draft an agreement, purchase the land, enter into farming arrangements, and divvy up the benefits and responsibilities.
The right “investors” will be in NYC or very close proximity thereto (Folks with 10 room houses in Bernardsville hardly need the retreat aspect and can’t put up the down payment anyway).
Serious inquiries only please (no nuts, jerks, or dilettantes). This isn’t intended to be a survivalist camp or money pit, but a an investment for our futures that will provide enjoyment, peace of mind, and a modest cash return, and preserve the same for our children. Some sweat (mental for now) will be required and I fully expect to make it an enjoyable process (I have zero interest in making this tedious or onerous–meetings will absolutely involve drinking). If truly interested, email me at nom_deplume@justice.com
re: (170) Nom Deplume
I would question the wisdom of having accountants,bankers,realtors and possibly lawyers on this farm.
Whould that not defeat the very purpose of the farm?
#170: It seems to me that what you’re talking about is cohousing: http://www.cohousing.org/
Fair point, but that is what the tenant farmer is for. Besides, the purpose is not simply farming. In fact, I envision doing no farming except for a small plot to grow some veggies to take back to the city or cook on fall weekends.
As for keeping everyone “friendly,” that is what a well-drafted agreement is for. And, ideally, the group members would be friends. After all, my time on this rock is too short for me to take on additional arguments.
Anyway, this is an idea for now–it may not fly and is purely voluntary so I am not inclined to defend it here. No offense.
Jill,
Yes, in a way, that is correct. Not exact, but close. In fact, cohousing groups would be a good source of ideas.
#167 Doyle,
Would you consider buying in Rutherford if you were planning on living there for 7-10yrs and putting 1-2 kids through the town’s public school system?
The last reports I saw in the Record showed that a lot of kids leave the school district, which I guess means the parents are often looking to trade up houses/towns or school districts…?
“What is fairly clearly the case from the data, is that if adjustable rate mortgages weren’t available, the purchases (of homes) still would’ve occurred,” he [Greenspan] said.
http://biz.yahoo.com/cnbc/080408/24016186.html?.v=1
>>
Greenspan is good!
Re: WaMu and Wachovia
This past Saturday morning, 4/5/08, over at implode-o-meter, bloggers were nervously discussing the wholesale shutdown at WaMu for the following Monday.
Today, they’re talking about Wachovia. Just sayin’…..
All disclaimers.
171 sean
You must be thinking of the well-known aphorism, “never have a lawyer on a farm.”
That will disappoint Nom de Guerre.
From MarketWatch:
S&P cuts ratings of four mortgage insurers on housing slump
Standard & Poor’s said late Tuesday that it downgraded four mortgage insurers because house prices are falling more than expected and unemployment in the U.S. is headed higher. The rating agency lowered the counterparty credit rating on MGIC Investment Corp. to ‘BBB’ from ‘A-’ and the counterparty credit and financial strength ratings of its mortgage insurance subsidiaries to ‘A’ from ‘AA-’. PMI Group, Old Republic and Radian Group were also downgraded, S&P said. The outlook on all four ratings is negative. Radian, which saw the ratings of its mortgage insurance unit cut to A from AA-, said it’s considering selling new shares or getting investments from outside parties to bolster its capital position. The company also said it’s also talking with banks that provide its credit facility to change some covenants.
From MarketWatch:
Freddie Mac requires Radian remdiation plan after downgrade
Freddie Mac requires PMI remediation plan after downgrade
bear [176],
Devious Al is correct. However, he should have explained further. In 2003, he sent Bernanke, now Bergabe, to meet with the BOJ. Lo and behold the carry trade was born, only after some arm twisting. The carry was the foundation for WS to slop into the mbs, siv, muck. They created the biggest credit bubble in our history.
New this week and soon to be very old:
http://www.realtor.com/realestate/roseland+boro-nj-07068-1098026184/
182
Gary that house looks like a giant allergy pit.
#182 Gary,
I’m guessing that house should be around 550k.
If the seller is lucky
182
That’s a great one. What’s up with Roseland? I’ve never heard of it. Is it that nice?
Anybody with access to Trend MLS? I’m looking for more info on 4965627 (2 Lenape Ct, Cranbury Twp). I’m mainly looking for previous listing data, as I believe I’ve seen this one for sale before. Thanx.
lost/bairen,
That house will linger for years. These people are really delusional. I mean… seriously, what is the listing agent thinking?
Ann,
That listing is for you, I knew you’d like it. :)
Roseland is exit 5 off of route 280. It’s wedged between Livingston and West Orange. It’s a nice little town but obviously suffers from chronic, prestigous fever.
#187 Gary,
Roseland is a nice little town. If we were moving to that area of NJ that would be on our list of towns.
I think that seller is way overpriced. I don’t understand why agents would even bother taking such a mispriced listing.
I don’t understand why agents would even bother taking such a mispriced listing.
Can I coin a new phrase?
Lottery ticket listing
Low odds of selling, but the payout is high enough that the agent takes the listing anyway.
All you need is a listing and a dream.
The term works just as well to describe the seller.
BC (151)-
This, from a guy who sure as hell knows what a dollar crisis is.
Another death chill rolls down my spine.
OT Mets
#1 Matt hooked us up….
#2 Matt texts his brother in the third inning….”…I’m sitting here with Maz, Straw, and Kingman…”
#3 Willie Randolph should be fired
#4 Regardless of what you might hear or read, this game was lost by Randolph and Delgado.
#5 For the record, Delgado’s home run was on an 81 mph fastball (according to the stadium gun) down the middle of the plate. Quoting Moyer “…my worst pitch of the year…”
#6 Beyond the error, Delgado also did the matador play on the tack on runs given up by Heilman.
BC (155)-
“If we can’t create manufacturing jobs in this environment, what is the next step?”
We all end up serving each other hamburgers?
SAN FRANCISCO (MarketWatch) — Citigroup Inc. is nearing a deal to sell some $12 billion in troubled debt to private equity firms for an average price of slightly less than 90 cents on the dollar, according to a report published Tuesday.
I forgot…quote of the day…I’m standing at the Press Gate trying to get to Gate C, and Gov. Paterson steps out of his limo/Navigator. The guy next to me says to his wife “…don’t bother waving, he won’t wave back…”
Re 177,
I guess Burger King isn’t the only home of the whopper
Clot,
I thought the BLS already reclassified short order cooks from “food service” to “manufacturing”.
[179] patient
Farms need fertilizer after all. What better source?
Ford says China sales up 47 pct in first qtr
DETROIT (Reuters) - Ford Motor Co (F) said on Tuesday it had posted a 47 percent gain in first-quarter sales through affiliates in China, with 90,791 vehicles sold. Ford said its passenger car joint-venture, Changan Ford Mazda Automobile, had increased quarterly sales by 58 percent to 61,789 units compared with the same period a year earlier.
make (158)-
A lot of econ-geeks will tell you that Volcker’s genius really lay in monetary policy manipulation. His fiscal policy work is less well-regarded. Much of his agreement with Obama is on the ground of fiscal policy.
#183 gary: I am joining you on the dark side.
tim (162)-
The blow-off top is nigh.
Ann, any comment on #130? Appreciate your advice.
clot: in your honor….
http://www.bloomberg.com/apps/news?pid=20601103&sid=awrtJVmkh5Og&refer=us
From S&P via Reuters:
S&P release on four U.S. mortgage insurers
The deterioration in the housing markets has also been worse than our expectations. Now, we believe median home prices will decline 20% from the peak in 2006.
plume of smoke (171)-
“Serious inquiries only please (no nuts, jerks, or dilettantes)…”
That pretty much eliminates us.
Ann (186)-
Roseland? More litigators per square mile than any town in NJ.
ChiFi (194)-
The live rat (with a collar that said “my name is Sue”) Kingman sent to that lady sportswriter named Sue is one of the funniest pranks in the history of the game.
That said, I’m surprised the Mets let Kingman into the park.
ChiFi (206)-
My love of Pez is nothing compared to my son. He’s gone out of control with it…
Clotpoll Says:
April 8th, 2008 at 8:51 pm
ChiFi (194)-
That said, I’m surprised the Mets let Kingman into the park.
Kong was the ultimate one-tool player….maybe only Rob Deer approached him in the years since, but at least Deer could field….
Roseland is a nice town, I usually keep an eye on the starter home segment there. Occasionally a nice starter will pop up with jaw droppingly low taxes (especially given the fact that it is in Essex County). Downside is always the same in Roseland, the place is small.
ChiFi (212)-
I think Kingman was a much better hitter than Deer. Kong could absolutely mash it.
If he was playing now, his SO’s wouldn’t even cause a raised eyebrow.
Just to throw up an example..
33 Cooper, Roseland NJ
Recently closed at $360,000.
3/1 expanded cape on a 100×115 lot.
2007 Taxes?
$4,755
While you could probably find a similar house for sale in West Orange (a few miles away) for $30k less, the taxes will probably be double.
Sure, you can probably get a significantly nicer house for the same purchase price, but you’ve got to factor the impact of property taxes on your PITI.
Purchase price is only a part of the story. You could probably argue that some portion of the higher prices you see in Roseland is a low tax premium. The reverse would be true in West Orange, entirely on the opposite side of the tax spectrum, the lower prices there represent a high tax discount.
LQQK someone is raffling off their townhome
http://newjersey.craigslist.org/rfs/635215118.html
Has anyone here watched the Mr. mortgage
video series on youtube?
http://www.youtube.com/profile_videos?user=markmti
217..they really want to sell 3350 tickets? what? are they for real? thats too funny….
217
That’s the third house raffle I’ve heard of recently.
What’s even funnier is that I dated a guy for a few weeks who lived in Foxmoor. Different court, though.
Wow, that certainly brought back some scary memories of clubs in Trenton.
Thanks for the flashbacks, Arr Elle.
LQQK someone is raffling off their townhome
I think it might be a charity auction for ALS Association (Lou Gehrig’s).
I’m not sure, but I think it is illegal to raffle your own house off in NJ. I know that charities need to register with the Legalized Games of Chance Control Commission. If it is legal, I would expect that the owner would need to register and abide by the rules set by the commission.
Although I’m still not sure if real estate is allowable..
13:47-6.20 Prohibited prizes
(a) No licensee shall offer or award any prize consisting of real estate or any interest therein, onds,
shares of stock, securities or evidences of indebtedness, weapons, live animals (except a gift certificate
redeemable for live, edible seafood) alcoholic beverages, foreign or domestic coins (except collector pieces
or sets that are marketed as such and are clearly not intended for use as legal tender) tobacco products,
motor vehicle leases, or any merchandise refundable in any of the foregoing or as money or cash.
I almost wonder if those raffles are a scam.
Seems like a really easy way to dupe someone out of $100.
“If we can’t create manufacturing jobs in this environment, what is the next step?”
We all end up serving each other hamburgers?
Who says you still can’t be a flipper in today’s economy?
2005: Stainless steel & granite
2008: Secret sauce & pickles
I sure hope McDonalds and Burger King don’t start running credit checks on applicants.
From MSN/Money:
How bad credit can cost you a job
Government workers arent the only ones whose credit histories are being scrutinized. Anyone who has had trouble paying bills could find his or her finances endangered again as employers use credit information to help decide who to hire, fire or promote.
There are some indications such credit checks are on the rise. About 35% of the companies surveyed by the Society for Human Resource Management pulled the credit reports of current or potential employees last year, up from 19% in 1996.
Maybe somebody should just send the link to Foxmoor . org so the condopatrol can go check it out. They used to put their unit number, date and sales prices on that Website back in the early 90’s, but I see they no longer do that.
Maybe somebody should just send the link to Foxmoor . org so the condopatrol can go check it out. They used to put their unit number, date and sales prices on that Website back in the early 90’s, but I see they no longer do that.
#176 movinBC
Rutherford
Yes. It was Mrs PGC’s number 1 choice before we found the REO. We will move there at some point (her words).
PS Why I love Mrs PGC.
Our taxes came back from the CPA. One item he says we have to pay capital gains on part of the RE sale last year. Mrs PGC disagrees. CPA says that, as he is signing off on the taxes, he is not willing to risk an audit. Mrs PGC, starts researching, calls the IRS, calls city hall and ends up faxing CPA sections of the tax code and supporting documentation from the city. CPA backs down stating “Well, I couldn’t find any case law to back up your arguement, but you have shown a verystrong case.
The upshot is, that if there is no capitial gains, then there is no income, that backs us away from the AMT threasholds, this ramps back up the credits for items such as my Prius tax credit that diminish as you approach AMT. Overall she saved a chunk of change.
LOL lottery ticket listing, I like that.
227 early 90’s…yikes should be mid 90s.
I’m thinking they’d sell more tickets, using Clot’s pricing strategy, if they only charged ten dollars per ticket.
But I’m probably wrong.
PGC
So I hope Mrs.PGC asked for a discount for the hours of work it took to do his job
Roseland is looking at a 2009 tax reassessment.
Goodbye to jaw droppingly low taxes???
212 chi
The splits on Rob “runs like a” Deer were a bit more extreme, though. .193?
day late, but …
# Essex Says:
April 7th, 2008 at 1:14 pm
Fact is that not everyone can afford to live in Mountain Lakes, Westfield, Ridgewood…and I hear on the board is people whining about not being able to buy in those towns. Get over it.
I know a couple that cleared $220k last year, and they absolutely refused to buy in NJ because even though that salary qualifies as probably upper middle class, and could probably safely afford them a 600k house, they think it’d be insane to spent that much money on house and then pay 15 k in taxes.
So they moved to Pa
I know a couple that cleared way more than that and refused to spend $600k on a home….and likes it like that.
Goodbye to jaw droppingly low taxes???
Most likely
I’m in the midst of preparing an offer (first one). Should I involved a lawyer in submitting the initial offer contract, or wait till the sellers accept and the subsequent attorney review process?
I would like to include more detail about appliances included/window treatment etc. . ., appriasel contingency, reduce the amount that goes into escrow. Is it premature to involve a lawyer at this point? Would he have a standardized form that is more favorable to the buyers perspective?
Also is 5% of 500K offer price normal to include in the escrow?
Also is the attorney review usually only 3 days? that seems a bit quick?
Thanks