Loan standards continue to tighten

From the Financial Times:

Tighter rules dash hopes of end to squeeze

Banks expect to tighten lending standards for US households and businesses through to the end of the year and into 2009, damping any hopes of a quick end to the credit squeeze, according to a report by the ­Federal Reserve.

The Fed survey of senior loan officers is conducted every three months. Monday’s report was based on responses from 52 US banks and 21 US branches of internationally based banks in mid-July.

It highlighted that domestic banks had tightened standards in “all major loan categories” since the last survey in April, with consumer loans in particular becoming tougher to secure.

“Coming at a time when the cash flow from the rebates has dried up and the growth in labour income is slowing to a crawl, the restriction in lending to households underscores the challenges facing the consumer in the second half of the year,” said Michael Feroli, a US economist at JPMorgan.

The survey also pointed to a bleak outlook, with “large net fractions” of foreign and US banks expecting lending standards to tighten further in the remaining part of this year and “smaller, though substantial, net fractions” expected the stricter terms to continue next year.

“These days, you practically need the Jaws of Life [a hydraulic rescue tool] to pry open a banker’s wallet,” said Mike Larson, an interest rate and property analyst at Weiss Research.

“Overall, the longer the crunch ­lingers, the longer the economic slump could drag on.”

From Reuters:

Fed says banks broadly tighten U.S. loan standards

Banks in the United States further tightened lending standards in all major categories, especially for consumer loans, in the past three months amid a weakening economic outlook, according to a Federal Reserve survey released on Monday.

The survey added to evidence that a year-long credit crunch sparked initially by subprime mortgage defaults is far from easing as banks hoard capital and make it harder to borrow.

The tightness in credit is now being driven by broader weakness in the U.S. economy and is defying efforts by the Fed to boost liquidity in the banking system and keep interest rates low.

“It clearly is going to be difficult to get a loan. The Fed cutting rates doesn’t help a lot when you can’t get a lender to make a loan,” said Gary Thayer, senior economist at Wachovia Securities in St. Louis.

He said the tighter lending standards was typical in a weakening economy, and creates headwinds that will help delay recovery, along with a worsening housing slump and still-high fuel prices.

The tightening of credit was particularly pronounced in the consumer sector, where banks increased minimum credit scores required on credit cards and reduced card balance limits.

he housing sector got no relief in the past three months, as lenders further tightened standards all mortgage categories. The Fed said about 75 percent of U.S. banks tightened lending standards on prime mortgages — those given to customers with better credit histories — versus about 60 percent who said they tightened in the April.

However, 50 percent of the respondents said there was a lack of demand for such loans and 40 percent said there was a limited number of mortgage applicants at their bank who meet the Fannie Mae and Freddie Mac underwriting criteria for conforming jumbo loans, which require better credit scores and higher down payments.

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

155 Responses to Loan standards continue to tighten

  1. grim says:

    From MarketWatch:

    J.P. Morgan discloses $1.5 billion write-off

    J.P. Morgan Chase, in a filing to the Securities and Exchange Commission late on Monday, said it’s had to take a $1.5 billion write-off on mortgage-backed securities and loans. “Trading conditions have substantially deteriorated versus the second quarter,” the lender said. The Financial Times, which first reported on the write-off, cited unnamed sources as saying Merrill Lynch’s decision to sell mortgage-backed securities at 22 cents on the dollar to Lone Star prompted a fall in the prices of similar securities.

  2. NJl$ord says:

    First

  3. grim says:

    From Bloomberg:

    U.K. Inflation Reaches 4.4%, More Than Double Target

    U.K. inflation accelerated to more than double the central bank’s 2 percent target in July, making it harder for policy makers to cut interest rates as the threat of a recession looms.

    Consumer prices rose 4.4 percent from a year earlier, breaching the government’s 3 percent upper limit for a third month and the most since comparable records began in 1997, the Office for National Statistics said today in London. That exceeds the 4.2 percent median forecast of 38 economists in a Bloomberg News survey.

  4. grim says:

    From the Press of Atlantic City:

    Atlantic City casino revenue falls 6.6 percent in July

    t won’t be a blockbuster summer. It won’t be even a ho-hum summer. Barring a miraculous turnaround in August, it’s going to be one stinker of a summer for the casinos.

    The gaming industry’s summer slump continued in July, with revenue falling sharply in what is usually the most important month on the casino calendar.

    Altogether, the 11 casinos took in $438.7 million in revenue at the slot machines and gaming tables, representing a 6.6 percent decline compared with $469.6 million in July 2007, according to figures released Monday by the New Jersey Casino Control Commission.

    July’s decline followed an 11 percent revenue drop in June, suggesting a weak summer is all but certain, even if trends reverse in August. It also appears 2008 will mirror 2007 as another year of declining revenue overall.

  5. I found your site on technorati and read a few of your other posts. Keep up the good work. I just added your RSS feed to my Google News Reader. Looking forward to reading more from you down the road!

  6. tbw says:

    If this keeps up, I guess they won’t be turning Xanadu into a casino either.

  7. tbw says:

    But you know, Xanadu will be a great tourist attraction.

    Come on kids! Pack up the minivan, we are going to East Rutherford! Yay!

  8. max says:

    yes, we going to xanadu,, over on the turnpike,,, then we go over to jersey gardens for reduced sales tax..

  9. grim says:

    From the Daily Record:

    ig home, big stir in Lake Valhalla neighborhood

    “What’s so unusual is, if you were to take a canoe and go out on the lake itself, you couldn’t see a house,” McNally said. “It’s like you’re in the middle of Vermont.”

    But now a large, tall house is about to be built on a lot next door to McNally, and he and his neighbors fear it will shatter the view and the neighborhood’s ambience.

    The longtime owner of the undeveloped lot, Waldemar Ptaszek, received approval from the township zoning board last week to build a three and a half story, 5,700-square-foot home on the steep, forested property that is .43 of an acre.

    The site plan calls for the house to be built atop a two-story pyramid of dirt that will be supported by retaining walls.

    Ptaszek, who owns a home in West Orange, had two previous applications to build on the lot approved by the zoning board in 1979 and in 1988, said his attorney, Steve Schepis.

    “He’s owned (the property) for more than 30 years,” said Schepis. The Pine Brook-based attorney said his client chose not to build after both approvals because of personal reasons. Ptaszek did not return a call seeking comment.

    But with the passing of the third, and largest, application, Ptaszek’s neighbors are seeing red.

    They say the house will dwarf existing homes in the neighborhood, require massive terrain reshaping and change the character of Lake Valhalla that has endeared area residents for nearly 100 years.

    “Some are calling it the Tower of Babel, frankly,” said Bob Mareiniss, who lives below Ptaszek’s property on Lake Shore Drive.

  10. grim says:

    From Bloomberg:

    Wall Street Losses Cut Tax Bill, Sap New York Revenue

    Wall Street’s mortgage losses have grown so large that some firms may pay little or no taxes for years, widening New York City and state deficits and challenging their ability to provide services, Mayor Michael Bloomberg said.

    Some companies are seeking refunds from the city on taxes they prepaid, saying losses have cut their tax liability to zero. The banks pay tax on 110 percent of earnings in advance as a “safe harbor,” protecting against penalties for underpayment.

    “I think it will be a number of years before Wall Street starts paying taxes again,” the mayor said at a press conference yesterday in Manhattan. “They will carry forward all of those losses.”

  11. reinvestor X says:

    Russia has decided to cease offensive operations after they have grabbed everything they want. There’s no telling what the EU had to promise these commies to get them to do that. Sarkosy is another Neville Chamberlain type pantywaist. As a matter of fact, all of the french are a bunch of pantywaists in need of a testosterone injections and backbone implants.

    Tell you what, Russia should not be allowed to get away with this. There have been a number of color revolutions to free people in the former Warsaw pact from the commie tyranny and it might be time for a color revolution in Russia itself. The people have to be chafing under this little runt, Pukin.

  12. BC Bob says:

    “40 percent said there was a limited number of mortgage applicants at their bank who meet the Fannie Mae and Freddie Mac underwriting criteria for conforming jumbo loans, which require better credit scores and higher down payments.”

    Not comforting news for NNJ sellers.

  13. Firestormik says:

    RE:tard101
    Yesterday you and the other 2 biggots were screaming about Russia coming to Tbilisi and destroying Georgia. Now you are telling Russia already grabbed whatever it want, ceased fire and came nowere near Gori. 2 different stories? Get your brain replaced

  14. Stu says:

    ChiFi/Clot (was too busy yesterday to respond):

    I did not buy SKF nor have I ever owned it. I bought more of something else short. ;)

  15. Young Buck says:

    From CNN Money:

    The next wave of mortgage defaults
    More borrowers with good credit are defaulting on their home loans, and that’s going to make it even harder for the staggering housing market to recover.

    http://money.cnn.com/2008/08/12/real_estate/prime_defaults_price_drops/index.htm?postversion=2008081206

  16. rob says:

    reinvestor, this is just Bosnia/Kosovo coming back to bite us. Remember that wonderful precedent? Major powers are allowed to intervene on behalf of breakaway provinces. Oops, Bill Clinton did it again.

  17. njpatient says:

    More writedowns?!?

    That CAN’T be true!!! bi (and S&P) said there would be no more writedowns!!!

  18. BC Bob says:

    [15],

    That’s THE storm. The subprime was a convenient scapegoat. This bust encompassed all spectrums. The next wave to hit, 2009-2011 resets, will be the ultimate tsunami.

  19. njpatient says:

    Tbw
    “If this keeps up, I guess they won’t be turning Xanadu into a casino either.”

    What – you don’t think we’ve seen the bottom in the gambling market?

  20. NJLifer says:

    reinvestor X

    You should get out into the real world. I was in the Ukraine last month and to a man, everyone said that their orange revolution was a complete failure. Politicians fighting one another and nothing ever gets done. Most said they would prefer to get closer to or even merge back together with Russia, because at least Putin has balls and gets things accomplished.

  21. grim says:

    From Bloomberg:

    Many U.S. Homeowners Owe More Than House Is Worth, Zillow Says

    Almost one-third of U.S. homeowners who bought in the last five years now owe more on their mortgages than their properties are worth, according to Zillow.com, an Internet provider of home valuations.

    Second-quarter home prices fell 9.9 percent from a year earlier, giving 29 percent of owners negative equity, said Zillow, the Seattle-based service that offers values for more than 80 million homes. For those who bought at the 2006 peak of the housing market, 45 percent are now underwater, Zillow said.

    Negative equity and declining prices are making it difficult for homeowners to sell property for a profit. Almost one-quarter of U.S. homes sold in the past year were for a loss, Zillow said. That contributes to the foreclosure rate because some homeowners can’t absorb the loss and end up surrendering their homes to the bank that holds the mortgage, said Stan Humphries, Zillow’s vice president of data and analytics.

    “For homeowners who need to sell, this is a gravely serious situation,” Humphries said in an interview. “It can also be harmful to communities where the number of unsold homes adds more to inventory and puts downward pressure on prices.”

  22. chicagofinance says:

    Stu Says:
    August 12th, 2008 at 8:15 am
    ChiFi/Clot (was too busy yesterday to respond):
    I did not buy SKF nor have I ever owned it. I bought more of something else short. ;)

    Stu: John’s schlong?

  23. BC Bob says:

    “For homeowners who need to sell, this is a gravely serious situation,” Humphries said in an interview.”

    Gravely serious? It just sounds like a loss to me.

  24. chicagofinance says:

    reinvestor X Says:
    August 12th, 2008 at 7:42 am
    Sarkosy is another Neville Chamberlain type pantywaist. As a matter of fact, all of the french are a bunch of pantywaists in need of a testosterone injections and backbone implants.

    RE: I know these types of jokes are 5 years old and probably told too many times. Anyway…

    Did you see the ad for the WWII French Army Rifle on eBay?
    Description: like new, never fired, only dropped once….

  25. tbw says:

    It is funny, Oradell residents are complaining about a Walgreens being built on Kinderkamack road to replace a restaurant. The funny thing is, the current restaurant used to be a biker bar/hang out called Haglers. Oradell residents used to complain about having such a thing in their neighborhood, even though the bar was there long before the complainers made the town seem prestigious. Now they dont want a Walgreens there, I say put a high rise housing project there to meet the COACH obligations for Oradell and see how the residents react.

  26. Nom Deplume says:

    [24] chifi

    In times past, soldiers wore colors that accentuated strength and minimized weakness. The british wore redcoats in part because they would not show blood.

    Guess that was why the french army wore brown pants.

  27. still_looking says:

    grim,

    Ignore the message… :)

    – I guess it wasn’t the ISP.

    sl

  28. Stu says:

    I guess your service provider must be French!

  29. was_looking says:

    at last, was going into withdrawl…

  30. 3b says:

    #21 can also be harmful to communities where the number of unsold homes adds more to inventory and puts downward pressure on prices.

    It can also be quite beneficial to communities. Declining prices and tightening lending standards will bring in stronger and more qualified buyers, to replaqce those who never should have purchased in the first place.

  31. kettle1 says:

    whoa! cant have all this down time….. need my NJReReport fix!!!! i think i was starting to get the shakes

  32. Chuchundra says:

    I hope Grim didn’t try to upgrade to WordPress 2.6. I did that the other day and it horked my site up, but good.

  33. #32 – i think i was starting to get the shakes

    Seriously. I almost had to actually do my job. We can’t have that happen!

  34. lostinny says:

    It’s back! Wow withdrawl sucks.

  35. NJLifer says:

    23 BC Bob,

    “Gravely serious? It just sounds like a loss to me.”

    My mother-in-law tells me about how her family lost their home in Clifton during the great depression. Her father never recovered. He started drinking heavily and died in his 50s, a broken man. I know we tend to put things into dollars and cents here, but for many, this will not be about just taking a loss on a depreciating asset, but a lasting pain they will be telling their great-grandchildren about. So I think that for many, ‘Gravely serious’ is the way it will be remembered.

  36. bairen says:

    #21 “Negative equity and declining prices are making it difficult for homeowners to sell property for a profit.”

    How does someone with negative equity in a house ever sell for a profit? They must have gone over that in Accounting101 the day I was out sick.

  37. NJLifer says:

    Grim, I thought they pulled the plug, and the first thing I thought was…”I never got to say Thanks”. So thanks for this site.

  38. grim says:

    Power supply failure!

    Hat tip to the guys over at WiredTree for resolving the issue quickly. They are, without a doubt, one of the best hosting companies out there.

  39. 3b says:

    #25 tbw: Oradell is insane if they turn Walgreens down, especially in this environemnt.

  40. 3b says:

    #36 NJ: For many of them they never should have owned in the first place.

    If you put or little money down, than where is the pain.

    If you sucked out all of your equity with additions,renovations, vacations and expensive cars, than where is the pain?

  41. twice shy says:

    And here I thought 3b’s reported connection probs had migrated to me. Whew.

  42. kettle1 says:

    the real US tax rate?? 40%

    MSNBC
    In a study for the National Bureau of Economic Research, Boston University economists Laurence J. Kotlikoff and David Rapson have found that our all-in marginal tax rate is 40%, give or take a bit. Yes, you read that right: 40%.

    Most workers will pay about that much on each dollar of income when all taxes — federal and state income taxes, sales taxes, taxes for benefit programs, etc. — are considered.

    As a consequence, a 30-year-old couple earning only $20,000 a year has a marginal tax rate of 42.5%, while a 45-year-old couple earning $500,000 pays at 43.2%. There are some exceptions: A 30-year-old couple earning $50,000 a year, for instance, pays 24.4%, and a 60-year-old couple making $150,000 a year faces a tax rate of 47.7%.

  43. NJl$rd says:

    On the bright side, more good news from Olympic:

    In winning the 200-meter freestyle Tuesday, Phelps ran his career Olympic total to nine golds and avenged his only individual loss in Athens four years ago, when a 19-year-old Phelps took on the 200 free just so he could compete with Ian Thorpe and Pieter van den Hoogenband

    http://sportsillustrated.cnn.com/2008/olympics/2008/08/11/phelps.200free.ap/index.html?eref=T1

  44. ben says:

    there is no crisis with people losing their homes. They don’t own them. They own 0% as they put no money down and paid off little if any of the principal. Many people owe more on their mortgage than their house is worth. They would be relieved if they “lost their home”. What’s that? What about their credit rating? Umm, it will go down to where it rightfully belongs.

  45. AntiTrump says:

    I thought a posse of failed real estate agents had attacked the data center that hosts njrereport.

  46. Clotpoll says:

    3b (41)-

    According to the Tard Theory, it is Americans’ birthright to live a live free of the consequences of bad decisions.

  47. Clotpoll says:

    Anyone else have bullet points to add to the Tard Theory?

  48. bairen says:

    On the bright side for renters there seems to be nicer homes for rent, not just the 1950’s pos that have all original appliances and have the stench of a swamp wafting out of the basement.

  49. NJLifer says:

    3B & Ben,

    I completely agree 100%. I’m just saying that for many, losing a home has more of an emotional loss than an economic loss. Kind of like that time I got rejected by that cute blonde in 3rd grade. I didn’t lose any money, but boy did it hurt!

  50. 3b says:

    #47 Clot: Exactly. This never used to be the case, or at elast I do not remember it to be.

    I bought at the height of the last real estate bubble, 20% down and all the rest.

    The bubble burst, and if we had asold it when we wanted to,we would have taken a huge loss;us and many others.

    We sucked it up and stayed, and paid the thing off. There were no sob stories, and all this other nonsense that we see and hear now.

  51. bairen says:

    #48 Clotpoll

    Tard is the Chevy Chase of this blog.

    Mildly amusing at first, now a painful nuisance that won’t fade away. (At least Chase quit making movies.)

  52. Stu says:

    Add to the REtards bill of rights:

    It is your patriotic duty to own real estate even if one can not afford to. The writing of a rent check is the equivalent of an act of terror. And most importantly, toilet paper should always be purchased and never stolen.

  53. reinvestor X says:

    Resolving quickly??? They had the site down for 3 damn hours and I couldn’t post. I was starting suspect a conspiracy to limit my free speech.

    Someone should have gotten their azz fired for this shlt.

    grim Says:
    August 12th, 2008 at 1:14 pm
    Power supply failure!

    Hat tip to the guys over at WiredTree for resolving the issue quickly. They are, without a doubt, one of the best hosting companies out there.

  54. 3b says:

    #55 to limit my free speech

    Yep you speech is free alright.

    Free of any facts, Free of any substance, Free of any coherency,Free of any maturity etc etc.

  55. kettle1 says:

    you have to give Re101 credit. I honestly dont think i could troll at that level for as long as he has been trolling here. It takes a truly dedicated individual to maintain this level of troll for so long. Most trolls get bored after a while and go away….. not Re101

    Re101 bill or rights addition:

    The Great and Powerful USA shall do what ever it feels like in order to ensure the fulfillment of its glorious manifest destiny

  56. bairen says:

    #56 kettle1

    Just wait till he hits puberty, then he might go away.

  57. kettle1 says:

    NEW YORK — Bank of America Corp. revealed Thursday that it has received subpoenas and requests for information from various state and federal regulators regarding its sale of auction-rate securities.

    According to the SEC filing, four purported class action lawsuits have also been filed against Bank of America on behalf of purchasers of auction-rate securities. The cases relate to the sale of the investments between May 2003 and February 2008 and allege that the bank violated certain securities laws in regards to its marketing and sale of the securities.

  58. Sybarite101 X says:
  59. From the WSJ via CalculatedRisk;WSJ: Freddie Mac to Stop Buying NY Subprime Mortgages
    .
    Seriously, they’re going to stop on Sept 1.

    What with sub-prime being sub-prime weren’t they never supposed to have been buying this in the first place?

  60. Hard Place says:

    Thanks to those who gave a reply on my question about security deposit on a vacation rental.

    I’m not overly worried, since I’ve got my deposit. Just a nuisance, makes me think twice about getting a vacation rental instead of a hotel room.

  61. Sean says:

    After November Retardx will surely end up with Battered Republican Syndrome and we will have to all chip in for his rendition his real homeon inaccessable island where there are no internet tubes and no commies to rant at.

    http://tinyurl.com/58alxq

    We can rent a plane for about $30k and an old miltary parachute with holes in it costs about 60 bucks on ebay.

    Who’s in?

  62. NNJJEFF says:

    Question for the board:

    If you are buying a house in the 600K range, would you put around 200K as down payment and get a lower interest rate conforming loan, or put minimal 20% down, take a non-conforming loan of higher interest rate and save for rest for renovations.

    TIA

  63. Cindy says:

    I never thought I would post something written by George Soros but this appeared at Financial Times – ft.com 8/11 “A Danish fix for the US mortgage crisis.”

    “The problems in the banking system have left the two GSEs as the only game in town in the mortgage market. Their market share of new mortgages has doubled over the past year and is now close to 80 per cent. Much of the balance is accounted for by the Federal Housing Administration, a fully guaranteed government agency. As the two companies fight for survival and try to reduce their need for new capital, the availability and cost of mortgages in the U.S. suffer. Coming at a time when the supply of houses is swollen by a rising tide of foreclosures, this is a recipe for disaster. House prices have already fallen sharply and will continue to fall unless mortgages are made available on more favorable terms to a broader group of people.”

    “This compromise, or stalemate, practically ensures that house prices will overshoot on the downside. That, in turn, renders the policies of the GSEs self-defeating as lower house prices increase their losses and push them further into insolvency. The GSE crisis has merely been postponed, at a cost of making the housing crisis more severe.”

    “Confidence in GSE-backed bonds has been shaken. The stocks remain under pressure. Markets are forcing officials to come up with a better solution. We need to recognise that the business model of the GSEs is fatally flawed. They are public/private partnerships in which the risks are borne by the public sector while profits accrue to the private sector: management and shareholders. The companies have been plagued by accounting problems and other irregularities; their management have spent enormous sums lobbying Capitol Hill. This is not a business model that deserves to be perpetuated.”

    “Fortunately, alternatives are available. Hank Paulson, the Tresaury secretary, has suggested the use of covered bonds, a mortgage-financing vehicle popular in Europe. I would recommend the system of mortgage credit used in Denmark, where loan-to-value ratios and underwriting standards are strictly enforced by a single, strong regulator. These mortgages are transformed into instantly tradable bonds. Cover for the bonds is provided by both the mortgages and the credit of the financial institutions issuing them. The mortgages remain on the balance sheets of the issuers, eliminating the moral hazard inherent in the US system, which is based on earning fees from selling them on to the market.”

    The standardisation of mortgages in the Danish system promotes transparency and liquidity. Householders can prepay their mortgages at any time by buying the bonds. Since house values and bond prices tend to move in unison this arrangement reduces the danger of householders’ equity falling into negative territory. For the issuing banks, owning these bonds carries lower capital requirements so the bonds sell at a premium to ordinary covered bonds. This system has survived and provided affordable home mortgages since its creation shortly after the great Copenhagen fire of 1795.”

    “I pioneered the introduction of the Danish system in Mexico with the support of Paul O’Neill, when he was Treasury secretary. With modification, it offers a long-term solution to providing affordable mortgages in the US.”

    (Sorry that was so long….) Has anyone ever heard of these vehicles? Is this anything that might work here?

  64. kettle1 says:

    the BofA thing is old but i dont remember it coming up here.

  65. Doyle says:

    NNJJeff,

    I would find a property that I could live with as is for a while, and put down the $200k and go conforming. Then I would start saving up all over again and pay for renovations in cash in the coming years. I would also make sure I had some spare change after putting that $200k down just in case… ya never know.

    That’s my plan at least.

  66. Chuchundra says:

    #60 toshiro_mifune

    That’s a common misconception. There’s nothing wrong with sub-prime mortgages per se. Sure, they’re higher risk for the lender, but as long as they’re priced properly, there’s nothing wrong with them

    The problem was a combination of sub-prime borrowers with crazy ARM loans, no down payments, no income verification, cooked appraisals, etc. etc.

    Standard 30 year fixed, full doc, sub-prime loans aren’t defaulting at any greater rates than they have in the past.

  67. kettle1 says:

    Not old,

    Morgan Stanley Rating Cut by Moody’s on Risk Controls (Update2)

    By Yalman Onaran

    Aug. 11 (Bloomberg) — Morgan Stanley had its long-term credit rating lowered by Moody’s Investors Service, which cited the second-biggest U.S. securities firm’s failed risk-management practices.

  68. chicagofinance says:

    grim unmod

  69. reinvestor X says:

    Guess what? The one thing that’s very apparent about you young one is that you never learned to respect your damn elders. Don’t make me have to do what your daddy should have done and teach you some damn manners.

    Moreover, most people, save for 3bonehead, do buy and use toilet tissue. Most reasonable people advocate that. Of course, we always have the jokesters and unreasonable sorts like 3bonehead who like to handle these sorts of matters “unconventionally”. As if that weren’t bad enough, he’s got the EPA after him for fouling the air with his noxious “methane emissions”. If anything, you should be upbraiding him for his behavior and leaving me alone.

    Stu Says:
    August 12th, 2008 at 1:35 pm
    Add to the REtards bill of rights:

    It is your patriotic duty to own real estate even if one can not afford to. The writing of a rent check is the equivalent of an act of terror. And most importantly, toilet paper should always be purchased and never stolen

  70. 3b says:

    #71 rediaperwipe: Yeah but at least I handle it myself. Who changes your Depends?

  71. chicagofinance says:

    So Brian Hunter gets a f%%%ing $6.6B Mulligan? …..I am just not living the right life :(

    http://www.bloomberg.com/apps/news?pid=20601103&sid=a_IUPuaY0gnM&refer=us

  72. #67 – That’s a common misconception. There’s nothing wrong with sub-prime mortgages per se. Sure, they’re higher risk for the lender, but as long as they’re priced properly, there’s nothing wrong with them

    My problem was not with sub-prime. My problem is with GSEs purchasing sub-prime. They were explicitly not supposed to do this.
    The term sub-prime means loans that don’t meet FNM lending standards. Why are they purchasing these?

  73. Stu says:

    I was bouncing the idea of holding a poker GTG in our screened-in gazebo (in Montclair) one of these cooler summer evenings. Do any of you gentlemen and ladies fancy a game of low-stakes poker?

  74. reinvestor X says:

    Handle it yourself? Look, you need to stop handling anything and adhere to civilized practice. It’s your “handling” that causes all the damn problems like corn shortages, people swooning in your presence and etc. The damn EPA has declared you to be one of the single greatest sources of “greenhouse gases”.

    Look, I’m all for every man being free to do as he pleases, until he infringes on the rights of others. You are infringing on the rights of your fellow citizens with your boorish behavior.

    3b Says:
    August 12th, 2008 at 2:48 pm
    #71 rediaperwipe: Yeah but at least I handle it myself.

  75. Clotpoll says:

    Cindy (64)-

    “Has anyone ever heard of these vehicles? Is this anything that might work here?”

    Hard to see it working here. The potential for generating excessive fees through fraud, sketchy underwriting and extrusion into a secondary market of unwitting victims seems pretty limited.

    [sarcasm off]

  76. Stu says:

    I figure it would be a cheap night out for most of us and we won’t have to compete with a jukebox when discussing the end of the world.

    We could order some pizza or grill some burgers or dogs (or vege burgers or vege dogs).

  77. 3b says:

    #76rediaprwipe:WOOF, WOOF!!!

  78. reinvestor X says:

    What the hell is with this “we” buying pizza and burgers? Since “you” are inviting everyone over, how’s about “you” buying the damn food and drinks?

    Yeah, I know, this is a little cheapskate scam. You figure you’ll invite everyone over, get them to buy the damn food, and leave the leftovers for you to eat over the next week so you don’t have to buy some damn groceries.

    You’re as bad as 3bonehead.

    Stu Says:
    August 12th, 2008 at 3:04 pm
    I figure it would be a cheap night out for most of us and we won’t have to compete with a jukebox when discussing the end of the world.

    We could order some pizza or grill some burgers or dogs (or vege burgers or vege dogs).

  79. chicagofinance says:

    Stu Says:
    August 12th, 2008 at 3:02 pm
    I was bouncing the idea of holding a poker GTG in our screened-in gazebo (in Montclair) one of these cooler summer evenings. Do any of you gentlemen and ladies fancy a game of low-stakes poker?

    can I load-up at Alexus first?

  80. Stu says:

    Short Stocks: Bets build against regional banks

    http://www.reuters.com/article/marketsNews/idINN1150089420080811?rpc=44&pageNumber=1&virtualBrandChannel=0

    ” The following stocks saw increased interest from short sellers, who bet that a certain stock’s price will fall. The data reflect short trades with a settlement date of July 31, 2008.

    WASHINGTON MUTUAL (WM.N: Quote, Profile, Research, Stock Buzz)

    WACHOVIA CORP (WB.N: Quote, Profile, Research, Stock Buzz)

    KEYCORP (KEY.N: Quote, Profile, Research, Stock Buzz)

    NATIONAL CITY CORP (NCC.N: Quote, Profile, Research, Stock Buzz)

    WELLS FARGO & CO (WFC.N: Quote, Profile, Research, Stock Buzz)

    REGIONS FINANCIAL (RF.N: Quote, Profile, Research, Stock Buzz)

    Short interest rose sharply in shares of banks not included in the U.S. Securities and Exchange Commission’s emergency rule to curb abusive short-selling. Shares of these banks have been under pressure because of worries related to the credit crisis and the housing slump.”

  81. gary says:

    Stu,

    I’m in. I’ll just drink and watch you guys play, though. :)

  82. Stu says:

    “can I load-up at Alexus first?”

    It depends on which orifice you plan to stuff. You do know the history of Alexus don’t you?

  83. Stu says:

    And REtard:

    You are so so very lame.

    “You figure you’ll invite everyone over, get them to buy the damn food, and leave the leftovers for you to eat over the next week so you don’t have to buy some damn groceries.”

    Now had you added that I would have taken you all for your poker antes, besides stocking the fridge with leftovers, then it might have shown some signs of originality.

    Instead, just more lameness.

  84. Stu says:

    ChiFi: (85) E.coli

    This single example is why we MUST continue to increase the minimum wage.

  85. Sybarite101 X says:

    Gary,

    I’m with you. I’ll bring the brews and we can watch them play and heckle them.

  86. Stu says:

    Gary/Sybarite:

    We will need a dealer ;)

  87. Stu says:

    I’ll throw some dates out there after I have my prerequisite discussions with the Gator.

    Nice thing about poker is that it is a very social game.

  88. Sean says:

    re: # 73 Toshiro – Dickie Syron blamed Congress, HUD, OFHEO and anyone else but himself.

    http://www.boston.com/business/articles/2008/08/06/syrons_side_of_the_story/?page=1

  89. #80 – I wonder how long the property tax deferments will last if the city is short on cash. Those deferments were a big selling feature in Brooklyn and Queens.

    #91 – Tanta at Calculatedrisk had an interesting defense of Syron following the NYT piece last week. I won’t link to it, it’s easy enough to find if you want.
    Suffice it to say, as detestable as he is, Syron isn’t the sole bearer of FRE’s failings.

  90. tom says:

    It looks like the bottom has been reached ,will this be a V or a L recovery ?http://biz.yahoo.com/rb/080812/usa_housing_prices.html

  91. morpheus says:

    Ok, ok, ok, boys and girls:
    be nice to reinvestor X. I may disagree with practically everything he says, but he does have a right to express his opinion. His posts are becoming more civilized, i.e., he has not called anyone a housing terrorist in quite a while.

    However, reinvestor X, please stay on topic. This blog concerns real estate not “kill a commie for mommy”

    Grim: glad your site is back up. I too was going through withdrawl pangs!

    Reinvestor X: you crack me up. I liked the comments about “methane”. I still diagree with a lot of what you have to say, but we do need to hear other points of view on this board. Now, if you can use data to back up your views on real estate, I would be happy.

  92. gary says:

    Gary/Sybarite:

    We will need a dealer ;)

    Ok, I’ll bring the blow and the weed.

  93. All Hype says:

    Syron added the cause of Freddie’s problems isn’t those loans, but a deep and extended housing downturn, spreading into the broad mortgage market. US home prices are falling for the first time since the Great Depression, and the economy is weakening, affecting even creditworthy borrowers.

    ________________________________________________

    What he is saying is that the terrorists stopped paying thier mortgages and so housing prices dropped. If only they were patriotic and paid their mortgages and stopped paying all other bills, we would not have this problem.

  94. #96 – If only they were patriotic and paid their mortgages and stopped paying all other bills, we would not have this problem.

    No freedom fries for them !

  95. Sybarite101 X says:

    95

    Shaping up to be quite a party!

  96. #95 – I’ll bring guns and hookers and fire trucks.

  97. Sybarite101 X says:

    Stu,

    Scared yet?

  98. kettle1 says:

    well,
    between gary and tosh, i will be making an appearance! just watch thought, i have to admit, i dont know how to play poker.

  99. NJLifer says:

    Anyone have the latest affordability versus price ratios? Haven’t seen any updated ones in a while.

  100. kettle1 says:

    stu,

    I can bring a few IED’s to compliment tosh if you like, or whip up a batch of lysegic acid for clott and anyone else ;)

  101. Sybarite101 X says:

    sweeet

  102. 3b says:

    #94 tom: Says who? The decline is just really getting under way in the north Jersey area.

  103. kettle1 says:

    cHIfI 80

    so WE CAN EXPECT MANHATTAN TO BECOME GOTHAM CITY ONCE AGAIN OVER THE NEXT 5 – 10 YEARS THEN? sHOULD MAKE TRIPS INTO THE CITY MORE INTERESTING

  104. kettle1 says:

    sry, CAPS off

  105. PGC says:

    #74 Stu,

    Myself and Mrs PGC would love to, but it would depend on the rugrats. Number three is still too little to be away from her mother for more than an hour or so between feedings. Everytime number one gets left over at grandmas, he thinks he is going to get another sister and he has too many already.

  106. Tom says:

    Toshiro,

    2002 is when Freddie and Fannie started considering entering the subprime market. Before that they were only purchasing conforming loans.

    In 2007 they bought $20 billion in subprime mortgages. The recent housing rescue legislation bails them out.

    It looks like the deal was to get more failing mortgages into the GSE’s because it would be easier to bail them out. Just my opinion. The 2007 subprimes they purchased did really bad as has been posted on here before.

    In an interview I think the CEO of Fannie Mae had said something like What were we supposed to do? All the money was in nonprime. Were we supposed to put a sign on the door that said ‘Gone Fishing’?

  107. House Hunter says:

    to the realtors out there…just a general question. If a home has septic, and it obviously is either not passing inspections or borderline passing, why do most sellers try to make the buyer pay? a few years ago my brother received money in escrow, and in other cases I have not heard of the buyer fixing that kind of thing. I have two examples lately of people that say 1) I refuse to fix it, that is why the house is priced so low (not really) 2) I will pay for half…now come on, last quote I heard was for $42,000. How would someone come up with the down payment and the po*per as well. I suppose I feel this is an essential part of the home that the seller should be responsible for..

  108. Hobokenite says:

    Cost-Cutting in New York, but a Boom in India

    http://www.nytimes.com/2008/08/12/business/worldbusiness/12indiawall.html

    ….
    Wall Street’s losses are fast becoming India’s gain. After outsourcing much of their back-office work to India, banks are now exporting data-intensive jobs from higher up the food chain to cities that cost less than New York, London and Hong Kong, either at their own offices or to third parties.
    ….

  109. Sybarite101 X says:

    http://online.barrons.com/article/SB121849330474331403.html?mod=googlenews_barrons

    Housing Will Hit Bottom by Year-End

    Barrington says we are in an economic correction that began in 2006.

    ON THE SURFACE, the July stock market looked fairly dull, mixed and uncertain.

    The Dow Jones Industrial Average (up 0.2%) and the Nasdaq (up 1.4%) were up modestly among the majors but the S&P 500 (down 1.0%) was down along with the other large-cap indexes. On the other hand, the small-cap averages were significantly higher, led by the Russell 2000 (up 3.6%) and even the Russell Micro-cap (up 3.3%) index.

    But the first point to keep in mind about the July market is that it was two different markets, falling in the first half to a bottom on July 15 and rallying back in the second half. The Nasdaq, for example, fell over 5% in the first half of July but rallied over 11% in the second half. The rally following the July 15 bottom was not surprising. As we noted in our July 10 Market Strategy Review, (“A Contrarian Opportunity”), just about every technical indicator was blasting out oversold signals and the likelihood of at least a technical rally was fairly high. It was the worst June in the market since 1930 and worst first half since 1970; over 85% of stocks were below their 50-day moving average; every reasonably well-known investor sentiment metric was positive; trillions of dollars of potential equity money had moved to the sidelines and the market was reasonably valued.

    In short, the market was ready for a technical bounce.

    But we have also been saying that to sustain the rally beyond a short technical rebound, particularly in light of the slowing economic environment, we needed a reversal in the rising oil and commodity prices and a falling dollar that had been previously pressuring the market, along with improved sentiment on the credit crisis.

    That is exactly what we began getting in July with the trends much more obvious in the first week of August. So, the second point to keep in mind about the July market is that it also ushered in major changes that could potentially extend the rally at least up into the fall when investors will likely start worrying about the election.

    The 8% drop in crude oil prices in the week ended Aug. 8 brought the cumulative decline to over 21% from the peak. Natural-gas prices were down nearly 12% in the same week along with sharp declines in gold, other precious metals and base metals. At the same time, and partly responsible, the U.S. dollar had its best week in a long time, rising 3.3% on a trade-weighted basis as well as having its best week against the euro in more than three years. The British pound, Mexican peso, Canadian dollar and Russian ruble all had substantial declines as well, along with a number of other currencies. What we have is a virtuous cycle where concerns about global growth and demand drive down oil while helping the dollar, which in turn makes all global commodities more expensive to other countries driving down their demand and prices which in turn helps the dollar and so on.

    In addition, sentiment regarding the credit crisis has been improving, especially with the bailout of Fannie Mae (ticker: FNM) and Freddie Mac (FRE) and the passage of massive housing/mortgage bailout legislation.

    The third point we would make about the July market is the outperformance of the smaller stocks that continued into August. We believe that one implication, since individual investors tend to be more active in the smaller stocks, is the trickling in some of the huge individual investment on the sidelines.

    If sustained, these major changes can improve investor sentiment sufficiently for them to lose their recession fears for a while or at least give them enough confidence to look over the valley. They can even have an impact on the underlying fundamentals, taking pressure off the beleaguered consumer, for example, or easing commodity cost margin pressures on U.S. manufacturers, not to mention easing pressure on energy-dependent industries like airlines and truckers. It is difficult to tell just where these trends will go in the near-term or how investors will continue to react to them. We happen to believe they will carry farther than most currently expect and there may very well be a sea change in progress that can lure much more of the sideline money back into the stock market. For sure, we are no longer dealing with a technical market rebound.

    We are of course not ignoring the very real concern about a U.S. recession but, as detailed again in our last Monthly Economic Review (“Still Stalking the Elusive Recession”), we continue to believe that the U.S. is not facing another sharp downward leg in economic activity but is instead already in a mild but very long economic correction that began back in 2006 and will result in a shallow saucer-type bottom, including an extended period of below-average economic growth.

    There may or may not be some negative GDP growth in the second half of 2008, but if so, it will be of relatively modest proportions. If accompanied by a rising dollar and an extended even modest cooling in oil and commodity prices, it will be even less painful. Housing will hit bottom by the end of the year but the recovery will be very labored. The after-effects of the credit bubble will last for years but the peak impact on negative stock-market sentiment is likely past or nearly so.

    The stock market could resemble the economy with a bottom consisting of a number of bumps and grinds rather than one clear trough but, importantly, we believe we are already in a bottoming process and longer-term investors should be using this transition period for constructing portfolios for better times ahead. The risk in our scenario of a slow steady recovery in stock prices is on the upside depending on whether sidelined money re-enters the market in a trickle or a flood.

    Finally, remember that there may be major changes also in progress that may change portfolio strategy that was previously based on a falling dollar, rising energy prices, plunging financial stocks and broadly rising commodity prices.

    — Alexander P. Paris

  110. Nom Deplume says:

    Stu,

    I’ll bring guns and money. You already will have the lawyers.

    A good idea provided it is low stakes. I sucked at poker—if I wasn’t at a game, my friends had to take turns losing. At their college graduations, instead of thanking their parents, they thanked me.

  111. Cindy says:

    (76) Clot – “Hard to see it working here. The potential for generating excessive fees through fraud, sketchy underwriting and extrusion into a secondary market of unwitting victims seems pretty limited.”

    Yeah – pretty… un….American huh.
    It did give me a bit of respect for Paulson though. At least he had an idea…..

    (102) NJLifer – Some recent CA income to price data from Dr. Housing Bubble Blog:
    “10 Reasons Why CA is Years Away From a Housing Bottom.” He says reason #6 – prices are still too high.

    median income $53,770
    median price $368,250…. ratio 6.8

    Peak 4/07
    median price $597,640……ratio 11.11

    Sybarite – I also found out that San Fransico has only fallen between 20 -27%
    (depending on who you believe.) Did you know that 65% of the folks in SF rent?
    DQ News.com is reporting that the median price in the Bay Area dropped below
    $500,000 to $485,000.

  112. BC Bob says:

    “New York City financial firms expect to hand out some $18 billion less in pay and benefits this year than 2007, the largest one-year drop ever. Over all, United States banks will cut 200,000 employees by 2009, the banking consultancy Celent said in April.”

    Who was that guy that said WS would not be affected?

    It’s Mumbai, Shanghai, Dubai or Bye-Bye.

  113. BC Bob says:

    OOPS, my post, #114, is pertaining to the article in #110.

  114. chicagofinance says:

    Cindy Says:
    August 12th, 2008 at 4:29 pm
    Did you know that 65% of the folks in SF rent?

    C: Since about 20% of SF residents are the homeless, that leaves very few people who actually own I guess……..

  115. Sybarite101 X says:

    What % of NYC residents rent?

  116. Cindy says:

    (116) Chicago – Well there ya go then. The 67 people who own their homes aren’t selling. Well, one or two must have sold..lower…

  117. chicagofinance says:

    Stu Says:
    August 12th, 2008 at 3:15 pm
    “can I load-up at Alexus first?”
    It depends on which orifice you plan to stuff. You do know the history of Alexus don’t you?

    Indulge me….please….

  118. Hobokenite says:

    BC,

    I noticed that as well. Next thing you know, nobody will be buying luxury condos in Manhattan!

  119. lisoosh says:

    Hey guys. Just thought I’d drop in to say hello. On the second stop of my odyssey, Edinburgh Festival time, a little R&R with culture thrown in. Raining cats and dogs like always. Thought it would bother me less than it is, I don’t need heat but a patch of sun would be nice. Now I remember why the Brits are always heading off to Spain.

    Don’t recommend Manchester airport, provincial but without rustic charm.

    What’s up over there? Same old same old? Brits are whining about inflation and the rising price of eggs and milk. House prices here still extortionate. Pain has a long way to go on this side of the pond too it appears.

    Anyone ever hear again from Pret?

  120. chicagofinance says:

    My firm created a financial plan for a client 8 years ago….looked to be eh, sort of OK to retire in their mid-60’s unless they did something foolish. Nice house on a nice property was their strength.

    Fast forward to 2008. We never developed a full blown relationship with them, and they waltz in here this week.

    They have cashout/refied and bought cars equal to 90% of the value of their houese (being generous on house value). Wife wants to retire. Husband’s job is moving out of the state within the next 3 years.

    I have to sit in on this one, but my response to my colleague was WHY? These guys should go to F^&%&%$ hell.

  121. Sybarite101 X says:

    122

    They will, once reality sinks in.

  122. Cindy says:

    (121) Hi Lisoosh…You’ve been missed.

  123. BB says:

    Yikes…more to come???

    Gunman surrenders after standoff

    The son of a 88-year-old Saddle Brook woman whose house had been sold at foreclosure was arrested after pulling a gun on sheriff’s officers this morning.
    Two Bergen County sheriff’s officers eventually talked the man into giving up the weapon, and he was taken into custody.

    The homeowner, Beatrice Brennan, was walked out of the house and taken away by ambulance. Her son was placed in a sheriff’s department van.

    Brennan had lived on the Adriana Street cul-de-sac for decades, neighbors said. But the house had been refinanced and the loan couldn’t be paid, said a real estate agent at the scene who didn’t want to be identified.

    The home eventually was sold May 16 at a sheriff’s sale.

    The movers, Moving For Less of Union, showed up around 9:45 this morning and were told by two sheriff’s officers posted at the scene to wait until 10 o’clock, under the court’s order, said mover Anthony Shpilnan.

    Moments later, John Brennan emerged from the house.

    He pulled a .22-caliber handgun from his waistband, and the officers drew their weapons, said Ben Feldman, a spokesman for Bergen County Sheriff Leo McGuire.

    One of the officers approached Brennan, talking to him, while his partner moved off to the side, his weapon trained on him, said Shpilnan’s partner, Vitaly Filipchenko.

    But he still held onto it, moving the gun up and down, while the officers kept their firearms raised.

    After about five minutes, the first officer convinced the gunman to give up the weapon and go back inside, Flipchenko said.

    At that point, the shocked movers breathed sighs of relief.

    “I don’t want to have any more experiences like this again,” Filipchenko said moments later.

    Charges are pending, Feldman said.

  124. Hobokenite says:

    Anyone ever hear again from Pret?

    Does anyone know when his last post here was?

  125. chicagofinance says:

    Cindy: a little hospitality for you Californians…..East Coast style…..

    CVS Caremark Buys Longs Drug Stores
    Associated Press
    August 12, 2008 5:02 p.m.

    WOONSOCKET, Rhode Island — Drug-store chain CVS Caremark Corp. said it’s buying Longs Drug Stores Corp. in a deal the companies valued at $2.9 billion, including the assumption of debt.

    The $71.50 per share cash offer was announced after the end of trading Tuesday. It’s a 32% premium over Walnut Creek, Calif.-based Longs’ closing price of $54.04.

    Longs has 521 drugstores in California, Hawaii, Nevada and Arizona. It also operates Rx America, a prescription benefits management program that services more than 8 million members.

    Woonsocket-based CVS says the deal will give the nation’s largest provider of prescriptions significant inroads in fast-growing markets.

    It will also give the chain its first locations in Hawaii.

    The deal is expected to close in the fourth quarter.

  126. chicagofinance says:

    Brazilian Stocks:

    There are two PetroBras and Vale stocks. Does anyone know the details behind these positions?

  127. chicagofinance says:

    FYI – I don’t mean Bovespa versus ADR…

  128. Cindy says:

    (127) Chicago – Longs is where I get my photos developed, etc. – One is just around the corner from me. What’s more bizarre is CVS Caremark is where I mail my prescriptions – Palatine, IL. What a small world…

    Long’s is a well-run outfit. I had no idea they were that large. They are small around here compared to Walgreens – Walgreens is taking over the town.

  129. chicagofinance says:

    was this posted?

    WSJ
    MAIN STREET By WILLIAM MCGURN
    That’s Not Blight. It’s New Jersey.
    August 12, 2008; Page A19

    When one lives in New Jersey, one sets one’s expectations accordingly. We are a people, after all, whose two pro football teams still call themselves “New York.” Whose governor responded to the Sept. 11, 2001, terrorist attacks by appointing a man he later said was his lover to be the state’s adviser for homeland security. Whose most famous mayor — Jersey City’s Frank Hague — left office more than 60 years ago but is still remembered for having a special desk drawer he could push out like a bank teller, the easier for those sitting before him to deposit their cash. Whose . . . well, you get the point.

    The point is that these aren’t aberrations. These more or less represent business as usual in our beloved Garden State. So when the good guys actually win one, it’s big news.

    That’s just what happened last Thursday. In the latest of man-bites-dog rulings from the state courts, a three-judge panel of the New Jersey Appellate Division actually sided with ordinary homeowners over a greedy local government and developer.

    In their ruling, the judges unanimously reversed a lower-court decision giving the city of Long Branch a green light to pursue its redevelopment plan. That has put a serious crimp into the city’s hopes for taking the homes of about a dozen longtime residents — and turning them over to a developer to put up luxury condos in their place.

    One of these homeowners is Lori Ann Vendetti. Lori owns a house here on Ocean Terrace that she rents out. But she lives just across the street with her parents in the brick house her father — a truck driver — built back in 1960. For the Vendettis, this tidy little home with its front-yard ocean view represents their piece of the American Dream.

    “Our houses may not be mansions,” she says. “But they are our homes. And we will fight for our homes like we would fight for any family member who is sick or in trouble.” Like her neighbors, Lori has nowhere near the resources the town and the developers do. But with the help of the Washington-based Institute for Justice — the nation’s only libertarian public interest law firm — they are fighting back.

    You might not think what is happening to the Vendettis and their friends could happen in America. And it didn’t used to be this way — at least when the “public use” provision of federal and state constitutions was understood to mean that governments could only invoke eminent domain for, say, a highway or school. Unfortunately, expansive court rulings have allowed local politicians to take from the poor and give to the rich.

    Probably the worst was the 2005 U.S. Supreme Court decision in Kelo v. City of New London. In that case, the high court ruled that the Connecticut town was within its rights to take Susette Kelo’s waterfront house on the grounds of economic redevelopment. In a tart dissent, Sandra Day O’Connor rightly noted that the beneficiaries of such logic would inevitably be the rich and politically well-connected. “Nothing,” she wrote, “is to prevent the State from replacing any Motel 6 with a Ritz-Carlton, any home with a shopping mall, or any farm with a factory.”

    The usual M.O. for city fathers eyeing some juicy piece of property is to declare the homes of people living there “blighted.” That’s just what happened to Lori and her neighbors. She says that when Long Branch first started to talk about a redevelopment plan in the mid-1990s, no one even suspected their homes were being targeted for teardown. Then they found that their neighborhood was officially declared blighted.

    The good news is that while New Jersey’s politicos are apparently content to leave their citizens vulnerable to these kinds of seizures, the courts have been more, well, judicious. In a welcome ruling last year, the New Jersey Supreme Court in Gallenthin Realty Development Inc. v. Borough of Paulsboro said that the government could not declare a property blighted just because someone else might put it to higher economic use. Last week the appellate court followed up by sending the Long Branch case back to the lower court. The three judges made clear they were skeptical of the blight designation — and put the burden on the city to prove it.

    Now, anyone who walks down these streets can see that while the homes may be modest, they are not blighted. A visitor can also see how terrible it is for ordinary Americans to have to live under the threat of a forced sale simply because some government official decides their homes aren’t upscale enough.

    “My parents want to fix up their fence, I want to build on my property, and other people have their own improvements,” says Lori. “But who wants to invest your money when you think the city is just going to end up taking your home from you?” Good question.

  130. alia says:

    Me again, swooping in from still frigging cold England. (Really, people are wearing winter trousers, flannel coats, warm hats. And these are the locals, not my hot house rose self…)

    Nom (and anyone else fantasizing about the estate in the country idea): http://www.cornwall-calling.co.uk/national-trust/trengwainton.htm

    Sir Rose Price built the walled kitchen garden (according to the magazine I read today) right after the year England had no summer. (the Maunder Minimum + major volcanic eruption) Talk about climate change!

    Anyway, short version: What if, instead of just building a sustainable estate as an investment in commodities for the shareholders, it was (once minimally planted up and running) an Eco-Tourism, post-petroleum educational Bed and Breakfast? (Could you get tax credits, or run it as a charity if it was educational?) At least if it was in New Jersey (and it would definitely be easier to get in the tourists if it was just a train day trip away from NYC) you could claim it as a working farm and get cheaper real estate taxes.

    (See? Real estate *and* new jersey, in one post! I’m losing my rambling touch…)

    …oh, and since the UK is full of rambling old Victorian (and older) estates, both public and private, there are many many degree programs for Estate Managers. you could import recent grads and make them do all the heavy lifting.

  131. 111 – 2002 is when Freddie and Fannie started considering entering the subprime market. Before that they were only purchasing conforming loans.

    I knew that they were buying sub-prime MBS but I thought they were still barred from directly purchasing loans…. Actually, now that you wrote that I think I did know about this but forgot. Thanks for jarring the memory.

  132. Sybarite101 X says:

    Question for applicance gurus:

    My parents’ refridgerator just kicked the bucket, after only 5 years. Frigidaire.

    What are the most reliable brands, in your opinion?

    TIA

  133. Fiddy Cents on the Dollar says:

    A proposal being floated in Toms River…

    http://www.app.com/apps/pbcs.dll/article?AID=/20080812/NEWS02/808120408/1001/NEWS

    “The idea is to use money from the township’s Affordable Housing Trust Fund to provide a reduction in a homeowner’s mortgage, according to John F. Russo Jr., Toms River’s affordable housing attorney. In exchange for the funding, a deed restriction would be placed against the property, he said.

    When the home is sold in the future, the restriction would require it to be sold to another income-qualified family, at a price restricted to levels set by the state Council on Affordable Housing, Russo said. The Affordable Housing Trust Fund is made up of money contributed by builders, not taxpayers, Russo said.”

  134. rhymingrealtor says:

    Stu,

    That’s a nice offer, very comfortable I won’t commit as I am going on vacation soon, however I would suggest you give out your address thru grim, ask him to screen possibly, you know get name address and phone number prior to giving address info.

    KL

  135. lostinny says:

    Stu
    If you guys have room for another veggie, I’d come to the game.

  136. ben says:

    Tom

    “In an interview I think the CEO of Fannie Mae had said something like What were we supposed to do? All the money was in nonprime. Were we supposed to put a sign on the door that said ‘Gone Fishing’?”

    Had that gone fishing, they wouldn’t have any problems.

  137. Tom says:

    Re: Guy with gun at foreclosure

    I found some info on the foreclosure. The defendant in the foreclosure proceedings looks like it might have actually been the guy with the gun. There was a quit-claim deed according to “what’s that site that shows recent bergen county sales?”.

  138. Tom says:

    ben,

    They couldn’t make billions of dollars fishing. I think the GSE’s need to become agencies again or just plain private companies without government backing.

  139. Orion says:

    …If I could save time in a bottle,
    the first thing that I’d like to do,
    is forget all the junk that I’ve bought,
    that has now turned into doo-doo…

    http://www.bloomberg.com/apps/news?pid=20601087&sid=a8sW0n1Cs1tY&refer=home

    And, this does NOT include the $1 Trillion lost so far in market cap!

  140. NJl$ord says:

    Right on bro. You make my day.I should vote it post of the day :)

    You’re smarter than the rest of the board. The free tissue and food ideas are just brilliant. Well done!

    #81 re101

  141. NJl$ord says:

    I have quite a few kenmore fidges in my rental. You know those old heavy stuff never broke.

    #139

  142. reinvestor X says:

    You’re damn skippy that I’m the smartest one on this damn board. I’m too smart to be scammed by the likes some some young punk like Stu.

    Come on now, where the hell does he get off trying to get visitors to buy his damn groceries while claiming to stage an fun “event” and then turn around and try to cheat everyone out of their money playing some trumped up poker game. If that’s not a cheapskate scam, then I don’t know what one is.

    Funny, you got posters here lining up to get fleeced like lemmings jumping off a cliff. I don’t know what the world is coming to with this younger generation coming to the fore.

    August 12th, 2008 at 8:02 pm
    Right on bro. You make my day.I should vote it post of the day :)

    You’re smarter than the rest of the board. The free tissue and food ideas are just brilliant. Well done!

    #81 re101

  143. BklynHawk says:

    Stu-
    If you’re within walking in distance of the train, you can pencil me in. Unlike RE X, I’m happy to bring something to chip in for food and beverage.
    John

  144. Clotpoll says:

    So, how did those curbs on shorting the fav19 work out?:

    http://tinyurl.com/6xetf6

    What black ops do Bergabe, Klink, Cox, et al have cooked up now?

  145. Clotpoll says:

    In case anybody missed Mike Morgan’s happy/happy/joy/joy today:

    http://tinyurl.com/632hxa

  146. chicagofinance says:

    NEW YORK — Here’s what qualifies as a bargain in New York — $495 for a seat at a ballgame.

    Hoping the price is right, the Mets set that figure as the average cost for the best seats next year during Citi Field’s first season. While that’s a 79 percent increase over this year, it’s a small fraction of the $2,500 for the top tickets at the new Yankee Stadium.

    “We have different customer bases and fan bases,” Mets executive vice president Dave Howard said. “We set our price where we think it was fair given all considerations of the various issues.”

    The Mets appeared to make a conscious effort to price themselves lower than the YankeesNew York Yankees .

    “Whatever works for them, I’m happy for them,” Yankees chief operating officer Lonn Trost said. “We do what we think is appropriate. In order to have 47,000 affordable seats, we had to have 4,500 expensive seats.”

    The priciest tickets at Citi Field are the 76 Sterling Club Platinum seats behind the plate, which include food and nonalcoholic drinks. The price is up from $276 for the comparable seats at Shea Stadium this year, a 73-seat section called Home Plate Club Gold. All of the most expensive tickets for next year have been sold.

    Citi Field, scheduled to open in April along with the new Yankee Stadium, has 42,500 seats, down from 57,365 at Shea Stadium. But there will be about 39 ticket prices, an increase from the current 29.

    Prices for tickets behind the dugouts at $800 million Citi Field average $375 for the first two rows, with the best seats in the house at $495.

    The average price is $225 for rows three-to-six, $175 for rows seven-to-12 and $150 for rows 13-to-31.

    A little farther out in the lower deck, the field seats average $125 to $225.

    At the $1.3 billion new Yankee Stadium, which seats 52,325, the 1,800 Legends Field Suite seats in 25 sections ringing home plate go for $500 to $2,500, up from $250 to $1,000 for the comparable tickets this year. There also will be 1,200 Main Level Outdoor Suite seats in nine sections behind the plate at $350 to more than $500, and 1,300 Terrace Level Outdoor Suite seats in nine sections behind the plate, which sold out at $100 to $135.

    The Yankees have not announced prices for the seats near the outfield but say they will keep the lowest-priced reserved seats in the top deck at $20 and $25 and bleachers at $12. Trost said 25,000 seats will not have an increase and that a complete price list will be released this month.

    Reserved seats in the upper deck at Citi Field, called the Promenade, will average $19.

    Howard said the Mets have talked to about 3,000 season ticket holders about relocation and hope to speak with about 3,000 more by the end of next month. The Mets are requiring 10 percent deposits for next year.

    “We weren’t looking to extract the last dollar,” Howard said. “We were trying to produce revenue that would support our expenses and our debt service but also balance that against the realities that tickets were going to be going up for our customers. We were going to deliver qualitatively a far, far higher product for them.”

    While the Yankees have the same prices for all games, the Mets have five sets of prices, depending on the opponent, the month and the day of the week. An April midweek night game costs less than half the price of weekend games against a popular rival.

    The Mets have sold 48 of 49 available luxury suites for next season at $275,000 to $500,000, with some purchased for up to 10 years.

    Trost said the Yankees have lease commitments for 44 of 51 suites priced at $600,000 to $850,000, and are sold out at the $650,000 and $850,000 levels.

    The Yankees already had the third-highest average ticket price in the major leagues this season at $41.40, according to the Team Marketing Report, trailing the World Series champion Boston Red Sox ($48.80) and Chicago Cubs ($42.49). The Mets were fourth at $34.05, well above the major league average of $25.40.

  147. Laughing all the way says:

    # NNJJEFF Says:
    August 12th, 2008 at 2:11 pm

    Question for the board:

    If you are buying a house in the 600K range, would you put around 200K as down payment and get a lower interest rate conforming loan, or put minimal 20% down, take a non-conforming loan of higher interest rate and save for rest for renovations.

    TIA

    Like it in theory. Really depends on your situation, how much you can save and how quickly, job security, etc. We want to limit our loan to 350k, and we’re planning on putting down in the 175k-200k range.

  148. jafo says:

    On Downpayments

    I am be proponent of paying cash, and loath debt. I will usually only take on debt if can get higher rate of return than interest in near zero risk cash equivelent.

    However, at current prices buying even a modest home in NJ is most likely out of reach for all but highest income and most liquid.

    The next best thing, would appear to be a large down payment. I would make the upper bound of a down payment the amount that sill leaves you with 6 months (preferable 12) expenses in cash. You calculation for expenses should of course include the new loan, taxes, and other “carrying costs”.

    So the question then becomes, what is the lower bound?

    At first glance, I would say as much as you put down – given above constraints.

    But upon further thought, you might actually want to go with the minimum amount required to get lowest available interest 30 year fixed mortgage and still have positive or at least neutral monthly cash flow.

    Here is why. There still significant downside risks for housing and real risk of at least broader asset deflation. Retaining cash would hedge both risks. You would also be able to get larger tax deducation. The latter may be especially important if fall into AMT, and aren’t able to deduct property taxes.

    Worse case scenario, if you had to walk away, its better to walk away with another 50-100k. You can always make pre-payments with cash or carry house more months if out of work. You may not be able to take cash out, in today’s HELOC environment and in face of further declines in home values.

    A high loan to value on a single asset isn’t always a bad thing, if you total degree of leverage is low. Here, it might actually reduce risks.

  149. NJl$ord as joker says:

    Who said we have a housing slum? Who care the gas is only $?

    We have people (quite a lot) paying $$$$$ for a sport ticket.ha…

  150. make money says:

    Gold is moving in the right direction.

    Oh happy day!!!

Comments are closed.