Everything old is new again

From the AP:

New normal for home sales: Buyers have the power

The American dream of homeownership is still attainable. Buyers just have to deal with a new set of realities.

A year after the collapse of the housing market triggered the financial meltdown, lenders are demanding more money up front, high credit scores and proof of income. Paperwork must be in perfect order. Patience and persistence are required. And don’t even bother asking about a subprime mortgage.

It’s a vastly different set of rules from earlier this decade, when home prices soared and mortgages were easy to come by.

In some ways, it’s a return to the standards that emerged as the World War II generation bought its first homes in the suburbs: Buy what you can afford. Stick to a 30-year, fixed-rate mortgage. View your home as a place to live, not as a piggy bank.

For people trying to sell their homes, the standards are different, too: Be patient and maybe even lower your asking price, because the balance of power has swung strongly to buyers.

Nearly everyone in the real estate industry agrees on this much: Another dramatic boom-bust cycle isn’t likely soon. Albert Saiz, assistant real estate professor at the University of Pennsylvania’s Wharton School, expects that new regulations and a different consumer mindset will help real estate return to a more traditional cycle.

There will be some ups and downs, Saiz said, but in the long run, prices should move higher. “In the end, the United States is still growing,” he says. “We’re going to need more housing.”

Pava Leyrer, president of Heritage National Mortgage in Michigan, notes that the majority of people are still paying their debts. She’s confident the market will rebound once the unemployment rate begins to fall.

“I really can’t imagine we would go back to the same situation because it took an exact wrong mix of everything for that to occur,” she says. “If it ever did happen, I’ll be long dead.”

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196 Responses to Everything old is new again

  1. grim says:

    From Reuters:

    Commercial property defaults may set record – study

    Commercial mortgage defaults of loans made by banks are projected to peak in 2011, and could set a new record next year, according to a report released on Tuesday by Real Estate Econometrics.

    The real estate research firm revised its early projections for the rest of the year, viewing the default rate of mortgage loans on office buildings, hotels, shopping centers hotels and other non-residential income earnings property to be 4.2 percent, up the most recent forecast of 4.1 percent.

    Falling rental rates, higher vacancies and the absence of a functioning credit market have combined to undermine borrowers’ abilities to keep current with their monthly payments.

  2. grim says:

    From the NYT Dealbook Blog:

    Madoff Beach House Attracts a Spate of Offers

    Multiple bidders have made offers on Bernard L. Madoff’s Montauk beach house, and a buyer might be announced by the end of the week, a listing agent said.

    “It has been very busy,” Joan Hegner, an agent with the Corcoran Group, told The New York Times’s Allen Salkin.

    The 3,000-square-foot oceanfront house on the dunes in Montauk went on the market for $8.75 million on Sept. 1, and 70 real estate brokers showed up for an open house two days later.

    Over the Labor Day weekend, there were 23 showings to potential buyers, Ms. Hegner said.

  3. grim says:

    From the NYT:

    As an Exotic Mortgage Resets, Payments Skyrocket

    Edward and Maria Moller are worried about losing their house — not now, but in 2013.

    That is when the suburban San Diego schoolteachers will see their mortgage payments jump, most likely beyond their ability to pay.

    Like millions of buyers during the boom, the Mollers leveraged their way into a house they could not otherwise afford by taking out a loan that required them to make only interest payments at first, putting off payments on the principal for several years.

    It was a “buy now, pay later” strategy on a grand scale, meant for a market where home prices went only up, and now the bill is starting to come due.

    With many of these homes under water — worth less than the loans against them — many interest-only mortgages will soon become unaffordable, as the homeowners have to actually start paying principal. Monthly payments can jump by as much as 75 percent.

  4. cooper says:

    Good Morning all
    #3 Grim, is there a chart or graph showing when loans will reset in the future?

  5. grim says:

    From the WSJ:

    Lower Manhattan Feels Pain of Office-Supply Glut

    Eight years after terrorists destroyed the World Trade Center, the replacement of most of the office space has become bogged down in a political and financial stalemate. But that is just fine with many of the neighboring landlords, who are confronting one of the worst supply gluts in years.

    Reliant on the financial-services industry, downtown Manhattan has seen vacancy rates soar as firms have gone out of business or laid off workers. The rate will rise to 11.5% by the end of this year and 12.3% next year after staying in the single digits since 2007, according to a projection by Reis Inc., a market research firm.

    The glut likely would worsen if the towers, planned to replace over 11 million square feet of office space lost when the World Trade Center was destroyed, are delivered before the economy rebounds. But the chances of that happening are diminishing because of the battling between the Port Authority of New York & New Jersey, which owns the site, and private developer Larry Silverstein, who leased the office space for 99 years six weeks before the terrorist attack.

  6. renter says:

    “The Colonial Revival house owned by Kevin Wolfe and his wife, Alexandra, embodies a respect for the past.”


  7. veto that says:

    From lst nights post:
    “there are over 12 pages of preforclosures (in middlesex county). How is anyone determining real value with so much of this out there and unresolved?”

    Barbara, Considering the way banks are hoarding their foreclosures and not selling them, those foreclosures in middlesex will likely have the effect of reducing inventory and increasing the market prices of homes that are actually for sale.
    In this way, foreclosures are stabilizing the market. I cant tell exactly how, because each bank discloses their own amount of detail about their bad loans, but it looks like they may be slowly writing the foreclosed assets down to zero (or close to it).
    It would be great if, once these foreclosed assets are fully written off, they start dumping them into the market at steep discounts. But who knows what other gimmick accounting rule change they will come up with by then.

  8. ruggles says:

    “there are over 12 pages of preforclosures (in middlesex county). How is anyone determining real value with so much of this out there and unresolved?”

    Middlesex County has no value.

  9. gary says:

    This housing bubble stuff is a bunch of bullsh1t. People will pay anything to live in these Upper Bergen County towns. A lot of people are bleeding wealth.

    – A Realtor at an open house in spring of 2006.

  10. veto that says:

    Wealthy Families Succumb to Bankruptcy as Real Estate Crashes

    Sept. 9 (Bloomberg) — Wealthy individuals’ Chapter 11 bankruptcy filings jumped 73 percent in the second quarter from a year earlier…

    Falling U.S. home prices leaves them unable to refinance or sell their property when they drop below the value of their mortgage, said Chicago bankruptcy attorney Joseph Baldi.


  11. Shore Guy says:

    “uy what you can afford. Stick to a 30-year, fixed-rate mortgage. View your home as a place to live, not as a piggy bank.”

    What concepts, buying what one can afford and a house is a living space not an investment plaay. Huh, interesting.

  12. Shore Guy says:


    And now those who would pay anything are just bleeding.

  13. ruggles says:

    9 – “This housing bubble stuff is a bunch of bullsh1t. People will pay anything to live in these Upper Bergen County towns. A lot of people are bleeding wealth.”

    – A Realtor at an open house in spring of 2006

    I’d pay a dollar. That’s anything. But you have to move the house out of Bergen County.

  14. Barbara says:

    “Wealthy Families Succumb to Bankruptcy as Real Estate Crashes

    Sept. 9 (Bloomberg) — Wealthy individuals’ Chapter 11 bankruptcy filings jumped 73 percent in the second quarter from a year earlier…

    Falling U.S. home prices leaves them unable to refinance or sell their property when they drop below the value of their mortgage, said Chicago bankruptcy attorney Joseph Baldi.”


    You see, if they were truly “wealthy” they would just write down the loss and take a little hit, then get on with it.
    These people aren’t wealthy, they have simply enjoyed fat salaries that have allowed them to go into huge debt.

  15. frank says:

    Have you looked for a gig in Europe instead?

  16. Cindy says:


    Have you discussed this? I was out of town for several days – New grandson in WA.

    Happy birthday Grim. – article:

    “CIC Looks to Pile Cash Into U.S. Real Estate”

    “China’s $300 billion sovereign-wealth fund is eying big investments in distressed U.S. real estate, according to people familiar with the matter. To finance some of the deals, China may rely on an old trading partner, the U.S. government.

    In recent weeks, officials from China Investment Corp. have held talks with U.S. private equity fund managers, including Blackrock Inc., Investco Ltd., and Lone Star Funds, about potential investments in beaten-down property assets………

    So wait a minute – Aren’t these the PPIP People…..?

    What’s up?

  17. Barbara says:

    7. Veto,
    but at some point, all the fancy paperwork in the world won’t be able to distract from the vacant 4/2.5 colonial with 3 ft grass in the front yard.

  18. veto that says:

    Mortgage applications surge as rates tumble

    NEW YORK (Reuters) – U.S. mortgage applications surged last week, with demand rising to its highest level since late-May as consumers sought to take advantage of the lowest interest rates in months, data from an industry group showed on Wednesday.

    While home refinancing loans dominated demand, the appetite for applications to buy a home, a tentative early indicator of sales, hit its highest level since early January. The overall trend bodes well for the hard-hit U.S. housing market, which has been showing signs of stabilization.


  19. veto that says:

    Barbara, ha, thats true. I have the sense that banks will start cleaning that stuff up. But right now they dont want to sell the properties so they have no incentive to pay a lawn boy.

  20. John says:

    PPIP is dead. US people could not absorb concept of lending money for free to banks to buy assets at a discount. Other issue is banks wanted to buy their own distressed assets but they blocked that. Who wants to buy outher peoples distressed assets? Would have worked great. You have an asset you think is worth 40 cents throw it into PPIP if someone buys it more than 40 cents sell, if someone wants to pay 40 cents do nothing, if the highest offer is lets say 19 cents, buy it back at 20 cents take the tax loss, use the money you borrowed to buy it back to lend out at 7%, repeat repeat repeat. This process and feeding frenzy would have thrown lots of cash into lending markets and would have raised prices quickly to market prices. Instead people could not understand that the banks that caused this mess would benefit and there is a greater good to this. People just don’t understand.

  21. Cindy says:


    @16 – Because it was at WSJ – I couldn’t read the entire article but found it posted at another site…

    Turns out they envisioned the idea of sovereign wealth funds investing through PPIP so they limited investments by any single investor to no more than 9.9% of each PPIP fund.

    “The cap was intended to assuage any concerns that any one investor, like China, could control too much, according to government officials.”

  22. Barbara says:

    I have yet to go on Zillow and find a house listed that was bought in 04-06 with a listing price below what it was paid for. Not once. And 90% of the time its listed about 20% over with no obvious improvements when viewing the photos.

    The staring contest continues.

  23. Barbara says:

    Also, Zillow is showing comps in some towns as just having had one sale within the last 30 days. Is this accurate? 250 homes for sale, 45 new listings (past 5 days or so) and only 1 sold in 30 days? Or is zillow just goofy?

  24. Danzud says:

    #16 Cindy,

    I suppose there may not have been any other way other than the China card for this to be played out. I’m just surprised the Chinese actually want to play. Maybe not, they are gamblers after all.

  25. veto that says:

    Barbara, since 2004-05, inflation has risen about 15-20% cumulative. If prices are the same as 2004, then they are ‘real’ly 15-20% lower.
    This is one way of looking at it.

    Another way of looking at it is this:
    Lets say worst-case, prices will crash another 20% in the next 5 years. Inflation will probably increase a cumulative 10-25% durinng the same five years. Net effect is that you will pay about the same price today as five years down the road – at least under this made-up scenario that ignores the possibilitiy of a deflationary apocolyopse, (which doesnt seem extremely likely anyway right now).

    A sidelined house buyer may have been waiting since 2005 to finally buy in 2015, and then when he/she does buy ten years later, they might pay the same price as they would have in 2005 anyway. That sounds horrible but it would be a huge 30-40% price crash in real terms.

  26. Cindy says:

    24 – Danzud – Turns out it is a minor chunk of change for them – why not have some fun gambling.

  27. Barbara says:

    25. veto
    interesting, haven’t looked at it that way. I suppose that wages would have to keep up at least half of that in order for it to pan out. This is doubtful but who knows.

  28. Cindy says:

    I think about the reasons for the huge drop here (sand states) compared to the more conservative drops elsewhere….

    Just a thought…

    It was unrealistic for our prices to soar as they did – there was no scarcity of land. There are plenty of places to build in CA, AR, NV. Yet – the prices flew up AS THOUGH there was a supply/demand issue. I could never figure that out.

    These areas were so over built and the fall reflects that – massive supply on hand. It doesn’t appear that NJ has the over supply issue that we have here.

    So we had an entirely new group of homeowners – school bus drivers, gardeners etc. who had previously rented. There were so many available houses that everyone became a buyer with zip down and interest only for three years. Unbelievable. We had programmed many more for failure than elsewhere in the country.

  29. Barbara says:

    I bought a house in 99 for the same price the owner paid for it in 89. He felt that he took a wash and I’d have to agree.

  30. Pat says:

    gawwd…this thread forced me to go out and read the new FASB epistle on the purpose for their existence, and then Fair Value -820.

    I had to brew another pot.

    The grass growing in the yard thing still has not been included as a representative measure for reclassification of Level 3 assets.

  31. John says:

    I also bought my home in 1999. But the couple was Russian. Believe me judging from the stink they never took a wash.

    Barbara says:
    September 9, 2009 at 9:14 am
    I bought a house in 99 for the same price the owner paid for it in 89. He felt that he took a wash and I’d have to agree.

  32. veto that says:

    “I suppose that wages would have to keep up at least half of that in order for it to pan out.”

    Wages probably wont keep up with inflation as we are slugging along through this mess, and our living standards will suffer as a result. Still the price of the home will maintain its level as inflation keeps it propped up even though its really crashing.
    Your example at 29 is perfect. He invested a couple of hundred dollars at 0% interest, meanwhile the price of other goods and assets were appreciating at 2-6% per year, watching his investment get erroded by 30-50% over ten years. Horrible investment for him. Nice pick up for you. Just in time for the next housing bubble, where you made… millions.

  33. John says:

    Veto even worse, fence sitters like me loaded up on 15% bonds back when they were available earlier this year. At that rate money doubles every 7 years. If home prices stay the same for 14 years I get the house for free!!!!

    veto that says:
    September 9, 2009 at 9:02 am
    Barbara, since 2004-05, inflation has risen about 15-20% cumulative. If prices are the same as 2004, then they are ‘real’ly 15-20% lower.
    This is one way of looking at it.

  34. kettle1 says:

    Veto, barb

    Dont forget that most of there foreclosed homes that are sitting empty essentially have a shelf life. unless the banks are actively maintaining the homes, their value drops at a rate greater then the drop in the overall market due to physical deterioration of the homes.

    You reach a point where it makes more sense to bulldoze the home then it does to try and cell it. That point may differ for every house, but with the environmental extremes of the northeast (hot humid summer, cold winter) the shelf life of an unmaintained house is not very long before you see significant degradation. We have to remember that these foreclosed homes will not be the same as a lived in/maintained home

  35. Sean says:

    re: #33 John – That should be 4.8 years no?

  36. veto that says:

    “Shelf life on foreclosed homes.”

    Ket, good points.
    From the bank’s perspective, if they write the whole asset down, they basically are holding a house they got for free.
    They’ll put $80K of new electric, new roof, whatever and then sell that puppy for $200K and still make $120K.
    This has been the great give-away to keep the economy going. We gave away all of our economy’s future earnings to save the banks. Any revenues our country makes going fwd will service the american debt load that will remain for the next 50 years…

  37. jamil.hussein says:

    New York Times is preparing the public for the Era of Enlightened strongman. Dictatorship works so well in China that we should try it here too. Yeah, baby.


    “One-party autocracy certainly has its drawbacks. But when it is led by a reasonably enlightened group of people, as China is today, it can also have great advantages. That one party can just impose the politically difficult but critically important policies needed to move a society forward in the 21st century.”

  38. LTLV says:

    *17 Give up veto has got himself into a lather that prices are not going to drop any more, that this area is somehow different.

    Unemployment does not matter, foreclosures, nothing. It’s liking hitting your head against a wall.

  39. PGC says:

    Apologies if this was posted already. At least there is some hope in NJ.

    Teacher contracts in New Jersey reflect weak economy

  40. LTLV says:

    *27 No indication that wages are going to rise any time soon.

  41. Clotpoll says:

    chi (from yesterday)-

    After a week of fighting with banks and chugging Knob Creek, I often suffer from exopthalmos to the point that my children mistake me for a 225-lb fruit fly.

    “clot: use “exophthalmos” properly in a sentence….”

  42. kettle1 says:

    Cindy 28

    So we had an entirely new group of homeowners – school bus drivers, gardeners etc. who had previously rented.

    I would argue against your point. NJ certainly has seen a huge class of individuals move from renters to “owners” based of minimal or no DP and huge amounts of leverage.

    The economic growth of the last 20 yrs was based on credit expansion, not income expansion. If credit continues to contract the more recent class of “owners” is highly unlikely to remain “owners” for very long.

    Its simply a matter of a reduction the capacity to service debt, whether a mortgage, car payment, or credit card.

  43. veto that says:

    “If home prices stay the same for 14 years I get the house for free!!!!”


    If any of us here were brilliant, we would have been buying up junk bonds when the financial system was falling off a cliff – like you did.

    But in this case, there is a fine line between a genius and idiot. If those bonds dont default you are the former. If they do default, at least we know you have big humungous ball-s.

    The best part about your junk-bond buying spree was that you were talking trash to all of us women while you were doing it. And so far you turned out to be right.
    I just hope you dont turn out to be the michael milken of long island.

  44. SG says:

    Cindy 28: I blame this NIMBY attitude in NJ responsible.

    How Zoning Keeps Homes Out of Reach, Increases Prices

    Across the country, zoning laws consistently prevent new homes from going up in many locations and often unnecessarily block the transformation of neighborhoods that could provide affordable housing. After all, only about 6 percent of the nation is developed. Two-thirds of New Jersey, the nation’s most developed state, is open space. We have plenty of land to build homes — if politicians let them be built.

  45. Clotpoll says:

    Barb (23)-

    Even though it’s Zillow, that sounds about right.

    Take my word for it: for all the media spin and talk, there are precious few actual sales in relation to all the crap, overpriced listings that either sit there forever, expire or withdraw.

  46. Cindy says:

    42 – Kettle –

    Not saying you didn’t have a new group of home owners as well – we all did as credit became available to everyone.

    But I do struggle with why we seemed to have over built here in the West – cheaper land? Builders pored into the Central Valley from all over.

  47. veto that says:

    “veto has got himself into a lather that prices are not going to drop any more, that this area is somehow different.”

    LTLV, its not as simple as rallying for a price crash. Thats only half the story. And if that is what this blog has been diluted to, then its lost its way.
    Prices might crash another 20% in the next five years. I could see that as a possibility. What will inflation do during that same period?
    Do the math on these different scenarios and then explain to us where you think prices will be. I wont knock your opinion just because it differs.
    Also, you seem upset with me because i dont think nominal prices will go down much more. I’m upset about it too. I was hoping to buy a nice 4 br for 2x annual income.
    In all seriousness, without knocking your opinion, what is your base-case scenario for nj prices, rates and inflation over the next five years? I bet our predictions are way closer than you think…

  48. Clotpoll says:

    BTW, I will again reiterate my call that the US economy- including residential and commercial RE- will be in a complete death spiral by the time the weather turns cold.

    The Xmas retail season should be a real hum-dinger, too.

  49. Cindy says:


    TBP – Rithholtz – Tactical Error: Health Care vs. Finance Regulatory Reform

    “I believe the brain trust behind the Obama White House has made a huge tactical error.”

  50. Clotpoll says:

    vodka (34)-

    I like it when neighbors of my short sale properties call me up and expect me to cut the grass and kill the rodents.

    Like I’m the owner or something.

    The best is when I tell the callers to go do it themselves.

  51. Cindy says:

    Have a great day all…


  52. Clotpoll says:

    LTLV (38)-

    It is so much worse out there than anyone can imagine.

    Anyone on this board who spent a week with me would never buy a house in this environment unless they planned to stay 10+ years or were buying a super-discounted short sale or REO.

  53. kettle1 says:


    that 6% figure is misleading at best. its unreasonable to assume you would or could build out 100% of your land mass. Secondly your need a significant amount of undeveloped land to support urban areas for everything from water generation to general ecosystem supports.

    The problem with suburbia is that it is a very inefficient use of land and has a large environmental footprint. This means that you need more undeveloped land to support suburban sprawl, then you would well planned urban or village type development.

    Its nonsensical to base you development simply off of % of a given land area developed. Unless you want the northeast to look like mumbai

  54. Clotpoll says:

    vodka (42)-

    The only diff between NJ and CA is the proportion of subprime in the mix of defaults.

    CA was a subprime-dominated state. NJ’s undoing will be the surge of Alt-A and prime el foldos.

  55. LTLV says:

    *47 Unemployment, property taxes, massive consumer debt, jobs that are gone never to return that is why prices are and will continue to fall in this area.

    The rest is just noise. To say as you did yesterday that prices have barely budged, is incorrect. They have fallen, not enough, but still substanially from where they are.

    And finally we have seen real estate busts before in our area, all the government manipulation in the world cannot stop the cycle.

    I just do not think you need to get yourself upset over this.

  56. kettle1 says:

    Cindy 46

    This is an off the cuff guess, but i think one of the contributing factors is the relative population density.

    From a quick glance it appears that it was simply easier for developers to expand in area developed in the west, while it was easier for developers to expand “financially” in the east.

    I have not dug through all the data and this could be wrong, just my guess.

  57. LTLV says:

    *52 Yesterday’s consumer credit #’s for July biggest pullback since records started being kept in 1943.

  58. kettle1 says:


    dont retailers make about 20-40% of their annual income during the holiday season?

    what happens to CRE when Xmas is canceled? When does Obama start the Xmas tax rebate program?

  59. Clotpoll says:

    Somebody cue up the Ren & Stimpy theme song:

    “So there you have it: slow painful grind before the storm or a quick reversal. Given that I expect a very sizeable move the other way, I think it is much more likely that with the use of propaganda, revised data, and 10th derivative arguments on the business cycle, the eternal utopists or evil carry-traders will try to hold this status quo and push the market a little further into risk appetite territory before all the retail accounts can get properly wiped out.” – Nic Lanoir, ICAP


  60. Clotpoll says:

    vodka (58)-

    I’d just like to know which national retailers stopped paying their rents during last Xmas season.

    I think this year’s trendy holiday gifts will be library paste and food stamps.

  61. kettle1 says:


    another interesting question; What happens to the pols when the normal wave or temporary holiday jobs that help close peoples income shortfalls, fails to materialize.

    a failed Xmas is a double wammy. The seasonal workers just lost a chunk of income at a time when they most likely need it most . And at the same time businesses lose a chunk of their annual income. Thats a nasty feed back loop

  62. Clotpoll says:

    I like cartoons. Me happy then.

  63. veto that says:

    LTLV, im not upset.
    I’m trying to take the blinders off to only one scenario.
    I think the ultra bears who are always looking for the markets to crash all the time will miss some solid opportunities.

    i realize prices have fallen. You cant deny that inflation has helped cusion some of that fall. thats all im saying. I think prices will continue to fall, but at a slower pace.

  64. Sean says:

    Just how long can the Fed keep rates at near Zero?


    You do all realize the Fed has to raise rates and by some accounts soon. When that happens housing goes which way? Most likely down no?

    And the stock markets once rates are raised and they withdraw all of the liquidity propping up the markets? Seems like a pullback will happen there too.

  65. LTLV says:

    *65 What inflation? Not relevant as far as I can see. Deflation first, than massive inflation, with gut wrenching increases in property taxes.

    And even when inflation does kick in who will buy at 10% or higher mtg rates and 12 000 a year in taxes for a modest house?

  66. veto that says:

    “It is so much worse out there than anyone can imagine.”

    Clot, In your opinion, why hasnt this been fully reflected in market prices yet?
    Is it because of banks manipulating inventory, the 8k tax credit, clueless stubborn sellers, low mortg rates… ?
    RE in my town in CNJ (in my price range) is solid as a rock. Its like a nightmare. Everything selling within a month at 2005 prices. On top of that, there is no inventory.

  67. Danzud says:


    How much work has to usually be done to a house that is short-sold or REO’d or what have you seen had to be done to make the houses liveable?


  68. LTLV says:

    *68 Not doubting you, but I find that a little hard to believe.

  69. veto that says:

    “What inflation?”

    LTLV, if we do see a deflationary spiral, then my whole inlation theory gets blown to bits.

    The guvt is committed to creating inflation. i think the odds are in their favor.

  70. veto that says:

    “I find that a little hard to believe”

    Its annoying but true.
    Prices kept climbing into 2007 and then collapsed down to 2004 levels during the crisis but have since strengthened a bit.
    Keep in mind that the town is growing and a huge new development has been built as well as a new HS. Plus the houses in my price range are in low supply.
    But i see the same trend in west windsor and princeton.
    Some of the other towns (Hamilton, e windsor, lawrenceville) are taking more of a beating. See the comp killer i posted yesterday..

  71. LTLV says:

    * And I maintain that inlfation when it comes will kill the housing market further. I don’t see any real upside for housing over the next 10 years, and probably longer. And of course the ball and chain of property taxes.

  72. SG says:

    kettle1: 53

    When you drive around CA, you see tons of new communities that have come up in distant suburbs. You don’t see anything even 10% close to what was constructed in CA in last 10 years. Granted this was not the case in established cities and suburbs of SF, LA & San Diego.

    Agree with Clot also that sub-prime was lot more component in CA then in NJ. The NIMBY movements in CA made house least affordable in CA. Even today about 48% of population is renting and can’t afford house. When you have such a large percent population deprived of ownership, the willingness to do anything to own home is greater.

    NJ is better in some respect than CA and worse in some other aspect. NJ has smaller population renting (I believe about 35%), and for majority of them even sub-prime loan was not enough to get into housing in 2003-2006 time frame. Also in NJ taking loan at 50% of income level was not considered as standard, which had been in CA.

    Growing up in Mumbai and having family involved in construction business, I can tell you, the havoc created by lack of free market and infrastructure, are the main cause. I agree with you on 6% number does not mean you develop remaining 94%. It only means that Land is available, what is lacking is political will to even develop another 1%. In NJ that is mainly due to fear of increase in school children.

  73. Clotpoll says:

    Dan (69)-

    I don’t know the average & I don’t know if it’s significant. I’ve seen mold-filled horrorshows and homes that seem brand-new.

    I do know that when the mold and rot take over after extreme seasonal changes with no heat or AC, things go downhill fast.

  74. Clotpoll says:

    veto (71)-

    Get yourself over to Mish. By his calcs (which are very convincing), we are over -6% GDP.

    The Hindenburg cannot be reinflated.

  75. SG says:

    Housing supply and housing bubbles

    Like many other assets, housing prices are quite volatile relative to observable changes in fundamentals. If we are going to understand boom-bust housing cycles, we must incorporate housing supply. In this paper, we present a simple model of housing bubbles that predicts that places with more elastic housing supply have fewer and shorter bubbles, with smaller price increases. However, the welfare consequences of bubbles may actually be higher in more elastic places because those places will overbuild more in response to a bubble. The data show that the price run-ups of the 1980s were almost exclusively experienced in cities where housing supply is more inelastic. More elastic places had slightly larger increases in building during that period. Over the past five years, a modest number of more elastic places also experienced large price booms, but as the model suggests, these booms seem to have been quite short. Prices are already moving back towards construction costs in those areas.

  76. yikes says:

    love how jamil’s making it out to be that we either have “radio hosts” as news sources or “state-run media” as news sources.

    i feel bad for you, guy.

  77. yikes says:

    what’s scary about jamil-types is that they listen to hannity and those fools and in arguments they completely parrot those thoughts and only those thoughts.

    any question to them is met with a question – usually about the media. listen to the guys who challenge hannity – he never has an answer, he always spins it to the media, regardless of question.

    i am actually – to borrow a line from someone here – to the right of attila the hun financially, but liberal on many social issues.

    i dont think i’ll ever vote republican … i’d sooner not vote altogether.

  78. Hubba says:

    Gold up, Oil Up, Dollar taking it on the china again. Rally ON!!!!!!

  79. Hubba says:

    china = chin. Subliminal mistake.

  80. bi says:

    veto, simple. indians are buying real asset: gold and real estate. these are items you can touch and feel.

    >RE in my town in CNJ (in my price range) is solid as a rock. Its like a nightmare. Everything selling within a month at 2005 prices. On top of that, there is no inventory.

  81. Secondary Market says:

    I’m holding out so much hope that I’ll soon find a property that fits this profile (or a traditional listing at 2001 levels – yeah I know, good luck with that). It’s been my target for months, my Realtor thinks I’m crazy and with each loud footstep above our apartment my Wife pleas to get her and the new born out asap. I have all the patience in the world but I can’t lie, frustration almost broke me.

    Clotpoll says:
    September 9, 2009 at 9:58 am

    @ 52 –

    Anyone on this board who spent a week with me would never buy a house in this environment unless they planned to stay 10+ years or were buying a super-discounted short sale or REO.

  82. BC Bob says:

    “The Hindenburg cannot be reinflated.”


    The architect’s have no clue that a tectonic shift is in the process of taking place; savings, debt payments, downsizing, deleveraging, jobs. etc.. Hell, from 2002-2006 50% of the jobs created were RE related. Since this recession started we have wiped out the previous 10 year growth in jobs. Our only hope now, crush the dollar and hope that our exports keep us breathing. Emerging markets now our saviour? Comforting?

    The masters can print all they want and continue the race to the bottom, paper. It does not matter, they are completely powerless in stemming this tide. They can only make matters worse.

  83. Clotpoll says:


    Tell your wife to call me. The real pain hasn’t even hit yet.

  84. bi says:

    51#, many taiwanese (and chinese) believe 8 is a lucky number. saddly a typhoon started on 8/8 this year and killed more than 700 people in taiwan alone.

    >Cindy says:
    September 9, 2009 at 9:56 am
    Have a great day all…


  85. BC Bob says:

    “>RE in my town in CNJ (in my price range) is solid as a rock. Its like a nightmare. Everything selling within a month at 2005 prices. On top of that, there is no inventory.”

    Total BS.

  86. veto that says:

    I feel your pain brother. i do.
    You’re just trying to do the right thing. But your wallet, heart and wife are all screaming three different things.
    For guys like us, this is pergatory.

  87. LTLV says:

    *79 The left is guilty of those very same tactics. They can be a little nicer about it in the begining, but they will just as soon cut you below the knees if you disagree with them. They know best in their opinion.

    The left and right, Demo or Repub, makes no difference, they are both rotten to the core, the system is broken.

  88. Clotpoll says:

    If one of the big annoyances in your life is hearing the neighbor’s footsteps above you, consider yourself lucky.

    I can introduce you to a 50 y/o pal of mine who just lost a 200K/yr job, has a kid at Penn and two younger ones right behind him. Natch, he also has a 3/27 mortgage that adjusts in February, 60K in cc debt and a wife who is a bitch on wheels on the best of days.

    I give my pal a lot of credit. He already knows he will never replace his income. He’s just trying to figure out a Plan B. I think he might take a job in another city & come home on weekends, just to avoid his wife.

    I would bet there are thousands of slight variations on the above story just in NJ.

  89. LTLV says:

    *87 That is what I thought, was a little nicer about it though.

  90. bi says:

    there is an anticle in today’s WSJ saying China Investment Corp, which has 300B under management, are looing to pile cash into beaten-dwon U.S. commercial real estate market. watch out your SRS.

  91. John says:

    Back in days of Honest Abe we had a 40 year period of bascially zero % interest. At one point banks paid negative 1 or 2% interest just to keep your money safe in the bank.

    Sean says:
    September 9, 2009 at 10:21 am
    Just how long can the Fed keep rates at near Zero?

  92. Clotpoll says:

    bi (92)-

    Please honor your lost wager and STFU about SRS.

    You are a clueless bag of blood.

  93. veto that says:

    “indians are buying real asset: gold and real estate.”

    bi, this is true. and when your neighborhood on the weekend looks like new dehli with all the orange and blue head dresses and scarves, you know that their collective activity has an effect on the market.
    My wife was playing with our child at the neighborhood playground a couple weeks ago. An old indian guy walks up to them and tried selling her euros and gold coins… telling her that dollar will drop soon.

  94. Clotpoll says:

    John (93)-

    Sweden now has negative interest rates, I believe.

    Surely, it must be working out oh so well.

  95. bi says:

    94#, i don’t think you can find my post where i explicitly made any agreement on this blog. please try just as you trying srs.

  96. SG says:

    Kettle: This article has some nice analysis on how boom/bust happened in different area in US.

    Print-Friendly VersionHouston Business—A Perspective on the Houston Economy

    To my surprise, the sub-prime percentage was not significantly different between CA, NJ, TX, IL or GA.

    Miami 45.1
    Detroit 37.2
    Houston 33.9
    Los Angeles 32.3
    Dallas 29.4
    Chicago 27.2
    Atlanta 24.4
    Washington, D.C. 22.7
    New York City 22.4
    San Francisco 22.4
    Philadelphia 18.4
    Boston 17.7

  97. Secondary Market says:

    @ 85 Clot,

    We’re looking at an REO this weekend listed at 350k, original price was 270k in 01. Dude HELOC’d himself out of the house and now the grass is 3 feet high and apparently the unfinished basement has a water problem. 300k would be my charity offer to the owner and peace offering to my wife. Expect a call on Monday :-)

  98. bi says:

    94#, clot, if you are still holding that bag, you are really a fool. when it first hit $11, i was here screaming because i saw some opportunity. you should have averaged down and gotten some shares out after it hits $13.5. this crap is not good for long-term as i said here many many times.

  99. jamil.hussein says:


    “what’s scary about jamil-types is that they listen to hannity ”

    yikes, you are so cute. When the State Media says that Health Care Reform saves money/reduces deficits, gives better healthcare to everybody and insures everybody and everybody can keep their current plans and doctors, you no doubt actually believe that BS.

    When the revelations of that 9/11 Truther, Mumia-supporting “let’s overthrow capitalism through ecoactivism” marxist nutjob came into the light (thanks to actual investigate work done by right-wing radio talk hosts) there were exactly 0 reports in State Media. They were in full protective mode, just like during the John Edwards episode. Let’s be honest: State media is nothing more than a media arm of the left-wing of Democratic party (incidentally, today the New York Times is openly calling for a one-party dictatorship since it works so nicely in China when Enlightened leaders transform the society).

  100. John says:

    They have the hottest girls in the world and they go like bunnies. Screw my +1.4% at ING and make it -1.4% and give me babes like in Sweeden any day.

    Clotpoll says:
    September 9, 2009 at 11:23 am
    John (93)-

    Sweden now has negative interest rates, I believe.

    Surely, it must be working out oh so well.

  101. kettle1 says:

    SG 74

    See pages 10 and 11


    Home ownership rates since the 60’s are currently at an all time high and are in a reversion to mean.

    Even today about 48% of population is renting and can’t afford house. When you have such a large percent population deprived of ownership, the willingness to do anything to own home is greater.

    The demand for home ownership has been artificially inflated through cheap lending and aggressive marketing

    In reality home ownership is not the ideal situation for everyone. And for people who are likely to move often or are not financially prepared to own a home renting is a much better option. I rent and yet my family has not had any less of a happy meaningful life due to me renting. In fact i am better off then many of my friends who own and are buried in debt or being eaten alive by taxes.

    In my opinion the problem is not lack of development in NJ, but inefficient and wasteful development in NJ. If has numerous negative side effects from the affordable housing issues to environmental degradation.

    Part of the solution to affordable housing is to remove the cheap money from the system. The same cheap money that has has cause joe sixpack to bid houses up to 600K at 8X their annual income.

    By removing the cheap money you will actually help everyone in the long run (except for the wall street bankers). You will see an end to the misallocation of resources into poorly built and speculative housing.

  102. veto that says:

    “RE in my town in CNJ (in my price range) is solid as a rock. Its like a nightmare. Everything selling within a month at 2005 prices. On top of that, there is no inventory.”

    BC: “Total BS.”

    BC: Im surprised you would call me out like im some lying mortgage broker trying to close a subprime deal. I’m just calling how i see it dude.

    Here are a few that i found in the 3 minutes of looking…

    4 fox runne, robbinsville – Sold 9/22/05 for $525K, and then again 10/7/08 for $600K

    104 yard st, robbinsville – Sold 6/2004 for $392K, and then again 12/2008 for $465K.

    These are not flipped homes. They are newer construction 5-15 yrs old.

  103. bi says:

    87#, Total BS unless you sing gold-up, RE-down, metal-up, assie-up and dollar-down.

    BC Bob says:

  104. Painhrtz says:

    Back from European vacation with the wife for a relative’s wedding then 8 days in Alsace wine country. Great time.

    come back to 9 AM meeting this morning with management, company laying off and my department is reorganizing. Happy Days. Safe so far, because I’m the only one in my role but I expect to be adding secondary job responsibilities soon.

    Hype if your reading I truly am the death knell to employment when I get hired somewhere.

  105. kettle1 says:

    Bi 82

    veto, simple. indians are buying real asset: gold and real estate. these are items you can touch and feel.

    just like the Europeans were going to save NY metro RE right?

  106. George Soros says:

    chinese sovereign funds eye US property. It’s a sign of bottom or top?

  107. Qwerty says:

    RE: When the revelations of that 9/11 Truther, Mumia-supporting “let’s overthrow capitalism through ecoactivism” marxist nutjob came into the light

    It was amusing how the NY Times, et al, reported on this story only AFTER Jones was booted by the White House.

    All the news that fits, print.

  108. bi says:

    111#, that’s the only thing you can contribute to this blog?

  109. All Hype says:

    Hype if your reading I truly am the death knell to employment when I get hired somewhere.

    Pain, you are not the death knell, we are working in an industry that is contracting due to mergers, buys, poorly run drug development programs and flat out stupidity.

  110. kettle1 says:


    just an intermediate retrace on the way down. We aren’t near bottom until everyone and their brother is cursing housing. sovereign funds buying is not a bottom.

    just a janitors 2 cents.

  111. Qwerty says:

    RE: “4 fox runne, robbinsville – Sold 9/22/05 for $525K, and then again 10/7/08 for $600K”

    Well, it does come with a second “n”.

  112. veto that says:

    Ket, CNJ has a huge asian population. From what i see, they come here to work hard for a dollar and i dont think many are laying around collecting unemployment. They out earn hispanic, Afr Amer, and caucasians.
    From what i have seen over the last year, a large percenatge of people looking at open houses are asian.
    That is clearly helping to keep demand propped up around here. I will not go as far as saying that any ethnic group will save housing prices but immigration changes certainly will have some effect on prices – whether its up or down.

  113. Danzud says:

    #83 2nd

    Just do what I did last December. Move from a bottom floor rental to a top floor rental. While I do look on the internet at houses and townhouses, my wife is realistic and sees us renewing….

  114. bi says:

    111#, a few days ago when the market had some pull back. you were here jumped up and down even saying vix was your friend. look. if your portfolio was killed by that particular etf, you were killed by vix since it was exactly vix brought it down besides market movement.

  115. veto that says:

    Well, it does come with a second “n”.

    Doesn’t everyone want to pay triple to live on a street that is mis-spelled on purpose? or is that just a cnj thing?

  116. veto that says:

    Treasury says millions more foreclosures coming

    WASHINGTON (Reuters) – Only 12 percent of U.S. homeowners eligible for loan modifications under the Obama administration’s housing rescue plan have had their mortgages reworked, and millions more foreclosures are coming, the Treasury Department said on Wednesday.


  117. kettle1 says:


    in regards to RE out west. This is going to be a long ugly decline for them. probably more so then the east coast. Look at the recent reports on the west coast water situation. The average outlook is dire. Its hard to see growth or stabilization in a region that is over consuming its water supply.

    Vegas is a sneak preview of what several south west cities could be set to see.

    Both the major aquifers and the Colorado are dropping to critical levels. There is no easy or inexpensive fix for either issue.

    Dont forget that lake meade is dropping at a critical rate and generates about 2 gigawatts of electricity for the region. If the water continues to drop at current rates there are projections that the level could be below the primary intakes (even the new lower one) sometime around 2020

  118. prtraders2000 says:

    Just got an invite to a Le Tip breakfast. Anyone familiar with the group and whether or not it is worth the effort? 7:00 am is a little early for me to network.

  119. SG says:

    Kettle: 104

    Home ownership in NY-NJ MSA in 2000 was 53.0%


    While in 2009 was,

    New York-Northern New Jersey–Long Island 51.2

    Will put second link in next post.

  120. jcer says:

    NNJ/NYC Metro market is still full of fools. There are really dumb people with credit and some money who are buying, and buying close to ask because they believe the lies realtors tell them. Even still volume is way off. The gov’t needs to get out, banks need to put their inventory on the market, and rates need to go up. All of this is inevitable. I’m waiting for the next leg and my gut tells me oct/nov is going to be ugly not only for housing but the equities market as well. The casino will be shutting it’s doors soon.

  121. SG says:

    See the table 6, Homeownership Rates for the 75 Largest Metropolitan Statistical Areas


  122. bi says:

    108#, kettle, i got your point. but sometimes hype and percetions will drive the market much further than we anticipate, just as oil last year and netural gas prior to labor day.

    >just like the Europeans were going to save NY metro RE right?

  123. chicagofinance says:

    From author of the book I am reading….

    There Goes the Neighborhood
    Housing speculators are back, and they’re hindering efforts at block-by-block revitalization.

    Alyssa Katz | August 17, 2009

    To get to Pittsburgh, a historically black neighborhood south of downtown Atlanta, I drive past several boarded-up and burned-out homes. Turning onto McDaniel Street, I steer around a pile of clothes and toys spilling out into the road. “Lord, behold, a family’s house foreclosed and their possessions just thrown out there,” says LaShawn Hoffman, CEO of the Pittsburgh Community Improvement Association, from his storefront office down the block. This is one of the vastest foreclosure zones in the nation. On maps of bank sales, Hoffman observes, “you almost can’t see the community because of all the red dots.”

    His organization has counted them: It found six out of 10 homes in Pittsburgh are now vacant, casualties of foreclosure with wood planks and metal shields guarding their windows. Hoffman’s group mows rangy lawns and bolts houses shut before squatters, prostitutes, or drug dealers settle in.

    Hoffman would like his organization to step in and buy every vacant property it can. It has teamed up with the Annie E. Casey Foundation to form the Partnership for the Preservation of Pittsburgh, and together they’ve received a $2 million grant from the U.S. Department of Housing and Urban Development (HUD) to begin transforming Pittsburgh into a neighborhood where Atlantans will choose to settle. That’s not as crazy as it may sound.

    Pittsburgh is just moments from downtown Atlanta. The Casey Foundation already controls a key development site in the neighborhood, a 31-acre former truck depot that sits alongside the Beltline, an unused rail track that rings Atlanta and is slated to become one of the nation’s great urban parks. With an additional $2 million from Casey, the partnership plans to start by buying 100 derelict houses in strategic spots and turning them into affordable rentals. As Hoffman puts it, “We want gentrification, but with the people who’ve already lived here.”

    A little, graying, vinyl-sided house is just the sort of property Hoffman is looking to buy. It adjoins the zone that the project is targeting. But like many vacant houses here, it’s off limits. In May a San Jose, California, company called Stonecrest Investments bought it from Litton Loan Servicing, a division of Goldman Sachs, for less than the price of a used car — just $3,000.

    Like other community leaders trying to save neighborhoods devastated by reckless lending, Hoffman is in a race against time. As soon as Pittsburgh foreclosures go on the market — usually within two weeks of repossession — buyers make cash offers, no strings attached. Many have never been to the neighborhood, or even to Atlanta. They are looking to exploit a phenomenal opportunity: Lenders are dumping foreclosed real estate onto the market at prices so low that it’s worth buying empty houses in bulk, on the mere prospect that they may sell for more in the future. The cast of players has largely changed, but the new wave of speculation is bringing back a familiar disruptive frenzy. As Pittsburgh’s foreclosures are plucked off one by one, Hoffman helplessly watches the wave of profiteering wash over his project to rebuild the neighborhood.

    “Properties we think we can acquire today — snap, snap, snap; they’re already gone,” he says.


    Pittsburgh never had it easy, but until a few years ago it was a place where black families of modest means could buy a home and put down roots. “This neighborhood used to be nice,” says Evelyn Campbell, who lives on Ira Street in a house her family has owned for 28 years. Campbell recently tried to help her granddaughter buy the empty house next door, but they couldn’t figure out who owned it until it was too late — CitiMortgage sold it to an investor last year for $9,800. It remains empty.

    Sub-prime lending sent the fragile neighborhood into free fall in the mid-2000s. Pittsburgh became a playground for mortgage-fraud schemes that sold properties for many times more than they were really worth — tiny two-bedroom homes were trading for as much as $250,000 each to straw buyers, borrowers who signed their names to loan papers in exchange for kickbacks. As those mortgages went into foreclosure en masse, tenants renting in the houses found themselves evicted.

    “It was like we had a toxic waste spill and everyone was gone,” says Gail Hayes, manager of the Atlanta Civic Site for the Casey Foundation.

    HUD’s new Neighborhood Stabilization Program is Washington’s answer to the swaths of decimation created by hundreds of thousands of repossessed, empty homes nationwide. Last year, as part of the emergency legislation authorizing the federal takeover of Fannie Mae and Freddie Mac, Congress devoted $3.92 billion to help more than 300 cities, states, and counties buy up vacant foreclosed homes and restore them as part of thriving neighborhoods. (This year’s stimulus adds $2 billion more in grants that HUD will award competitively.) This spring, nonprofit developers and entrepreneurs competed for the first round of grants, administered by local and state governments under HUD’s Community Development Block Grant program. The Pittsburgh project is one of 19 grantees sharing $12.3 million in funds from the city of Atlanta; county governments in the region are handing out $58 million more.

    But the neighborhood-rescue effort by HUD and philanthropies is confounded by the death spasms of a failed mortgage market. Most of Pittsburgh’s mortgages were long ago sold off to investment banks that pooled them into mortgage-backed securities, which the banks then sliced up and sold to investors. Each mortgage pool has two caretakers: a trustee that is its legal representative, and a mortgage servicer, a company under contract to collect payments from borrowers and pass them on to bondholders. Servicers also usually have authority to sell off real estate once it goes into foreclosure.

    They sell those foreclosures off at prices so puny that speculators are purchasing them by the hundreds, sight unseen. Stonecrest has bought up 86 Atlanta homes, almost all for less than $10,000. Across the country, the company has acquired more than 1,800 foreclosed homes, or REO — “real-estate owned” — purchased as is from mortgage servicers, using cash pooled from small investors. Some of Stonecrest’s houses end up occupied by un- or underemployed families relocating to inexpensive Atlanta from hostile economies up north, with contracts that promise them deeds at the end of 10 years of monthly on-time payments. It’s akin to the Rent-A-Center business model, in which customers end up spending $3,000 in monthly installment payments to eventually own a $500 couch. In the meantime, the prospective owners are responsible for maintaining fragile old structures to which they don’t even hold the deeds. Other Stonecrest holdings are destined to remain vacant — “dump property,” in the company’s lingo. As Stonecrest advises its investors: “It’s best to purchase REO properties in bulk. The potential profits on the sellable properties should easily cover investor losses on the worthless ones.”

    Another California company, Stone Equity Group, likewise smelled opportunity in Pittsburgh. It buys foreclosed properties for four figures and holds seminars to recruit individual investors, encouraging them to use their retirement funds to buy the houses for around $20,000 apiece. (“Erase retirement poverty” is a company slogan.) Those investors in turn expect to find tenants to live in the houses and ultimately own them, paying $500 down and $500 a month on installment plans.

    Lorelei Kolegue, an accountant from Boston, learned about Stone Equity at her real-estate club. This spring she tapped her retirement funds, which had been withering in the stock market, to buy a 647-square-foot taupe cinderblock two-bedroom across the street from the Campbell residence for $19,900. Its lawn is so overgrown there’s no path to the front door. A water heater sits in the middle of the kitchen floor — a sure target for vandals if this place doesn’t find an occupant soon. Kolegue has never set foot there. She has entrusted Stone Equity to fix up the house and find a contract buyer on her behalf.

    Stone Equity says its contribution is a positive one. After all, the people signing up for its rent-to-own contracts can no longer get mortgages, now that sub-prime lending has vanished. “It’s not about making money,” says CEO Joshua Host, “but about rebuilding communities to help hard-working families own a home, get out of the foreclosure crisis, help build a middle class.”

    But buying the tiny house on Ira Street isn’t likely to vault a future tenant into the middle class. If a purchaser materializes and diligently makes on-time payments every month for 15 years, the deed will be his or hers for $90,000 — to a house Stone Equity bought from a Goldman Sachs mortgage pool for $6,900.


    Mortgage servicers didn’t set out to destroy neighborhoods. Their job description appears innocuous: For a modest fee (roughly a quarter of a percent of the take), they collect monthly payments from mortgage borrowers and pass them along to investors. But a wrecked financial industry has left servicers hungry for cash, as they have to squeeze money where there isn’t much left to extract. They’re charged with collecting payments from borrowers who can’t make them, on property that isn’t worth the amount loaned against it, on behalf of lenders who no longer exist. “They have a complete lack of capacity to manage the crisis,” says George McCarthy of the Ford Foundation, which has been working on strategies to help neighborhoods weather foreclosures. “Their revenue sources are cut off.”

    The five biggest mortgage servicers are now run by banks that have received bailouts under the government’s Troubled Asset Relief Program, including Wells Fargo, Chase, and Bank of America. But while TARP participants must agree to offer loan modifications to borrowers who can’t pay their bills, the institutions have no obligations or even guidance when it comes to real estate that is foreclosed and empty. Servicers are bound only by their contracts with the mortgage-backed securities trusts, which are committed to maximizing returns to investors.

    Neighborhood Stabilization Program grant recipients, such as the Pittsburgh partnership, are ill-equipped to compete with cash buyers. Congress ordered them to buy property at a discount from market prices. Yet a servicer that agreed to such a deal could be vulnerable to lawsuits from investors. Groups also have to find sellers who are willing to let them cherry-pick properties in their permitted target areas and to wait for HUD?mandated environmental reviews.

    Some TARP institutions have started working with local groups looking to buy foreclosures, seeking to overcome such obstacles. The banks have a stake in making sure real-estate markets recover — the value of their troubled assets depends on it. But about half of Pittsburgh’s real estate is controlled by a distinct breed of servicers specializing in sub-prime mortgages. Litton Loan Servicing handles transactions on mortgages originated by defunct operations such as Fremont, SouthStar, Ownit, and Decision One. At the end of 2008, Litton serviced more than 360,000 mortgages. Florida-based Ocwen manages more than 304,000 sub-prime loans, nearly 56,000 of which are in or near foreclosure. American Home Mortgage Servicing, Inc., picked up the pieces of Option One, Ameriquest, and Argent, totaling 575,000 mortgages.

    Sub-prime servicers have long been the target of complaints about excessive fees for late payments — a major source of revenue. But once a property is in foreclosure, it goes from yielding income to costing a servicer dearly. Servicers must not only hire caretakers to mow lawns and guard houses from vandals, they also have to advance principal and interest payments to investors that the borrower long ago stopped making. A sub-prime pool stocked with unpaid mortgages can cost a servicer millions each month; according to its financial reports, Ocwen’s foreclosure-carrying costs jumped by more than two-thirds in the past year, to $174 million.

    With their rosters full of junk loans securitized by Wall Street, most such servicers have a strong incentive to get rid of foreclosed real estate as quickly as possible. By selling the properties to speculators in bulk, servicers turn crushing liabilities into instant cash. “The Wall Street assets are just being dumped,” says Rob Grossinger, Bank of America’s point person for groups buying foreclosures through the Neighborhood Stabilization Program. “Their execution strategy is ‘Take what you can get.'”

    American Home Mortgage Servicing uses auctions to sell dozens of foreclosures at a time, largely to real-estate speculators operating in multiple cities. Says spokesperson Christine Sullivan, “Sales of REO properties through an auction process have the added benefit of addressing the problem of community blight by getting properties that otherwise may not sell into the possession of owners who are motivated to fix them up and sell them for a profit.” Yet such motivation isn’t apparent in Pittsburgh, where American Home Mortgage sold a house with smashed windows and a sagging roof to National Asset Management Group, a Las Vegas-based speculator that specializes in flipping properties to other speculators. The house, one of at least 148 the Vegas group has bought from the servicer, sits across the street from Last Chance Church.

    “The speculators are back, flipping property,” says Mtamanika Youngblood, who’s coordinating the Pittsburgh partnership. “Meanwhile, we can’t get asset managers to return our calls.” The Pittsburgh group will have to engage in some speculation of its own — quickly buying up properties to get them out of a destructive cycle of selling and reselling. The real revitalization — repairing and renting the homes — will have to wait.

    Since the federal grants only begin to cover the costs groups will confront as they renovate and repopulate blighted houses, and bank loans can be astoundingly expensive when they’re available at all, Youngblood will be getting help from the National Community Stabilization Trust, a collaboration between several national community-development nonprofits. The Ford and MacArthur foundations have put up a combined $53 million to underwrite a loan fund for foreclosure-reclamation efforts. Most pivotally, the trust is brokering access to the mortgage servicers that control the fate of foreclosed real estate. It has worked out standardized agreements that give local nonprofit affiliates first crack at purchasing foreclosures for sale. Servicers can defend these deals to mortgage-securities investors; while they may get less money by selling houses this way, they’ll ultimately save much more by not paying for months of maintenance.

    The TARP servicers, Fannie Mae, and Freddie Mac have all agreed to offer foreclosures for sale to participating groups. But most sub-prime servicers have not. “That’s now a threat for the cities trying to fix up neighborhoods,” says Craig Nickerson, president of the National Community Stabilization Trust. “Many of the investors are not fully renovating the property. They’re taking key strategic inventory out of the plan” — that is, the same homes nonprofits need for their block-by-block revitalization efforts. As servicers cut their losses, it’s costing neighborhoods dearly.


    For all its difficulties, Pittsburgh is one of the fortunate neighborhoods. Tina Arnold wanted to see a Neighborhood Stabilization Program grant come to Lakewood, her neighborhood in southwest Atlanta. She and other neighbors dutifully participated in public reviews as the city developed plans for its federal dollars, and Arnold recently established a group called Sustainable Lakewood to clean up her increasingly derelict neighborhood. But the government money won’t be coming here. Like too many communities now besieged with foreclosures, Lakewood has no organization with the necessary real-estate experience, and no outside group has taken an interest.

    With a neat hedge out front and handcrafted furniture on the curtained porch, Arnold’s blue house looks like a mirage — a hint of Martha Stewart amid the apocalypse. On her short block of 10 homes, eight are vacant, and the skeletal structures have become targets for abuse. Dumping, arson, drug deals, break-ins — they’re all part of life on Gould Street.

    Week after week, this freelance interior decorator cajoles those who still live in Lakewood to grab a garbage bag and start cleaning up what the city of Atlanta has failed to. Arnold’s latest vision is an art contest for the most creative sign made of discarded tires — a way to publicly scold those who would dare to dump here. But she reserves her choicest condemnations for the real-estate speculators who have bought her entire block, like the one who paid HUD $6,600 for a house that now has broken windows and unfastened doors. “Do you live next to an open and vacant house?” she asks, as if the owner is in the room. “What makes you think I want to?!”

    Her neighborhood is a monument to property dumping by mortgage servicers. The house just around the bend is the product of a May 2008 fire whose wreckage has never been cleared — melted siding encloses charred timber and ashes, garnished with fresh garbage. Earlier this year Ocwen sold the property to a Utah investor, in its present state, for $1,000. For a while, a sign out front advertised it for sale by a South Carolina foreclosure investment firm, and Arnold has thought seriously about mailing pictures to the company president’s neighbors, with a note: “You know the bad neighborhoods you hear about? He’s one of the people who caused it.”

    If there’s any hope for Arnold’s forsaken neighborhood, it may have just moved in next door to Ocwen’s pyre. Diana Cooper and her son signed an installment-plan contract to buy the small frame home from Stonecrest, loaded their possessions into a van, and drove down from Chicago. Stonecrest bought the house from American Home Mortgage Servicing for $5,576; if Cooper and her son make monthly payments on time for 10 years, the house will be theirs for about $24,000. A retired hospital worker, Cooper used to live in the Ida B. Wells and Cabrini-Green housing projects, which have given way to new private development. “Now people can’t afford it,” she complains. “It’s part of the plan.” The Atlanta house seemed like a great deal for two self-employed people looking for new digs. Cooper and her son will have to make whatever repairs are necessary. Because servicers don’t have to prove that properties sold at foreclosure auctions comply with building codes, Cooper has no idea what’s in store.

    But at least the house is occupied. For a place without Neighborhood Stabilization Program money, that’s progress. Even areas that did get federal grants are receiving just a fraction of what it would cost to buy, restore, and rent or sell even a modest number of empty properties. Some cities, including Cleveland, Flint, and Youngstown, have so much vacant real estate that they’re planning to use much of their federal funding for demolition.

    For better or worse, investment companies like Stonecrest, with their relatively deep pockets, may have to become part of the solution to neighborhood blight. “Do not demonize investors,” suggests Alan Mallach, a senior fellow at the Brookings Metropolitan Policy Program who has been advising federal grantees around the country. “In most cases it’s not a choice between them and a homeowner — it’s a choice between them and long-term vacancy and abandonment.”

    The federal program isn’t just limited by funding inadequate to the scope of the crisis. Some veterans of community development worry that financial institutions are offloading their problems onto groups not equipped for the monumental task. The law obligates grantees to include housing for very low-income people — a great idea until someone has to finance and manage it. Congress’ insistence that homes must sell for less than the cost of their purchase and renovation is also a deterrent to attracting private dollars. And in many stricken areas, there’s no clear demand for new housing for rent or for sale, so projects could just shift demand from one distressed neighborhood to another.

    HUD is set to award $2 billion more in Neighborhood Stabilization Program grants this winter. But for the federal spending to have an impact, the nonprofits need the same thing the nation’s homeowners do: a reliable and deep source of credit. The National Community Stabilization Trust is looking to attract up to $300 million from social investors, yet that’s just a fraction of the dollars now flooding into the lucrative speculative market from private loan pools and banks. Even though the servicing divisions of TARP banks agree to unload their foreclosed houses to nonprofits, the banks are not lending funds to nonprofits to fix up the homes — and likely won’t unless their federal overseers make them.

    “Even with good leverage, $3.92 billion would do about 90,000 properties nationwide,” notes Nickerson of the National Community Stabilization Trust. “Every month in America right now, 90,000 properties go into foreclosure.”

    Research support for this article was provided by the Investigative Fund at The Nation Institute.

    Alyssa Katz is the author of Our Lot: How Real Estate Came to Own Us and a consultant with the Pratt Center for Community Development.

  124. jcer says:

    Oh yeah and lenders are still crazy, more dp is necessary and appraisals are too high, risk pricing needs to return.

  125. Clotpoll says:

    veto (116)-

    Trust me; the Asians you may be seeing at open houses may be active buyers, but they are not contributing to propping up prices in any area of NJ.

    Here’s what they are doing:

    1. IF they offer, WHEN they offer, they come in low. Very, very low.

    2. If the negotiations go more than 1-2 rounds of counteroffers, they’re gone.

    3. Or, you get them to offer & acceptance, and they back out of the deal three hours later.

    4. Or, you get the deal through attorney review, and they use the home inspection to initiate a second negotiation. If they don’t get the equivalent of a new house or massive concessions, they cancel the contract.

    People who save and are thrifty are not out in today’s RE market looking to pay market price.

    Anyone who faces this on the other side of the table is well-warned to expect that the deal will fall apart. The only way to get most buyers like this to the closing is to have a seller who completely capitulates.

  126. Schumpeter says:

    bi (126)-

    The only “neutral gas” around here is the vacuum between your ears.

    “…just as oil last year and netural gas prior to labor day.”

  127. Schumpeter says:

    veto (116)-

    Also, keep in mind that less than 2% of houses nationwide sell as the result of an open house.

    The open house as a valuable sales tool died about 5 years ago.

  128. Painhrtz says:

    Hype agreed. Healthcare reform will save us! /Sarcasm off/

    It is past noon so I think I avoided my reorg for now. then again I have not seen my boss so who knows.

  129. John says:

    They are tricky. One minute they are your friends and next minute they are dropping bombs on Pearl Harbor.

    veto that says:
    September 9, 2009 at 11:53 am
    Ket, CNJ has a huge asian population. From what i see, they come here to work hard for a dollar and i dont think many are laying around collecting unemployment. They out earn hispanic, Afr Amer, and caucasians.
    From what i have seen over the last year, a large percenatge of people looking at open houses are asian.
    That is clearly helping to keep demand propped up around here. I will not go as far as saying that any ethnic group will save housing prices but immigration changes certainly will have some effect on prices – whether its up or down.

  130. kettle1 says:


    here is the NJ data from your link


    i am not sure what you are suggesting. This is exactly what we should expect to see as all of the home owners that were not financially prepared to own a home get shaken out of the system.

    Most home ownership rates are still above average.

    The government decided in the early 90’s or so that pushing the homeowner ship rate up what help solve various social ills. That experiment has been a complete failure.

  131. John says:

    The home ownership rate never changes. All that changes are the % of people who live in homes they own.

  132. John says:

    A rare day when I get a article about real estate, football and PSLs.

    400K PSL Bidder Charged For Fraud
    Posted on September 9th, 2009 by Bassett
    The man who paid the highest premium for PSLs at the new stadium might not have done it on the up-and-up, according to NBC New York.

    A die-hard Jets fan who paid a record $400,000 for rights to two 50-yard-line seats might now be watching the games from federal lockup.
    David Findel posted a $1 million bond today after being charged with mortgage fraud. He used the equity on his exclusive Colts Neck, N.J., home to secure the bond, federal officials said … he was accused of devising a scam to defraud mortgage lenders of millions of dollars.

    A federal complaint said he abused his position as the President and CEO of Worldwide Financial Resources by fraudulently obtaining money from lenders through a scheme to “resell identical residential home mortgages to multiple financial institutions” in New York and New Jersey.

    Add in some interesting quotes Findel’s himself made from last October after his bid was awarded.

    “I am amazed in the interest since I purchased them – how many people want to buy them for more than I purchased them for,” he said.

    The current economic climate may have been hard on his industry, but Findel said that was all the more reason to buy the seats now, he said.

    “Although part of the mortgage business is in turmoil, this is an opportunity to invest in my business – and to further demonstrate our loyalty to the New York Jets,” he said.

    That first quote is classic. Creating a secondary market for something that doesn’t exist? Life often imitates … business … in this case.

    Yikes. In so many ways, this perfectly encapsulates the problems many average fans have with the new stadium. Longtime devoted middle class fans who have been used to sitting on the 50 yard line for 20 years are being pushed out of the way for this. Now I’m not saying that this is what all auctioners are, but it just seems classic that this would happen. The team wanted big money, and they’ve got it. I just wonder if they care where that big money came from.

  133. RayC says:

    It was a “buy now, pay later” strategy on a grand scale, meant for a market where home prices went only up, and now the bill is starting to come due.

    Grim – this quote from the NYT’s article shows that the press STILL doesn’t get it. Even if prices went up, they were NEVER going to be homeowners using an exotic mortgage on a property their salaries could not support. The best they could have hoped for on the day they bought was to sell at a profit and rent somewhere else.

  134. LTLV says:

    *116 So immigrants are stupid and will over pay.

  135. LTLV says:

    *117 Your wife is a smart woman.

  136. veto that says:

    Chi, thx. I was going to buy the book but now there is no need.
    I guess they are mostly describing cities that are ground zero for the housing crisis.interesting. But iwant to read something that explains why the hell nj prices won’t correct. Is it the water? It must be the water. Everyone loves nj water. Tastes like sulfer with one lump of sugar.

  137. LTLV says:

    *105 Both of your examples are almost a year old.

  138. PGC says:

    #129 Clot

    It all comes down to playing cards. How hard can you push before they fold and don’t be surprised if they call your bluff.

  139. Hard Place says:

    I just went to gsmls after not checking prices in my target areas for over 6 months. I still see some of the same houses for sale. Most are only lower in price by about 5%, when yoy price declines are showing 10%+. Guess I’ll just bury my head in my rental for another 6 months to a year. Oh yeah, my landlord knocked my rent down over 10%. That was nice. Too bad my wife is leaving her job to stay home and watch the kids. I’ll have to try to bring home more bacon in this tough environment.

    Also recently got into one of the boards favorite investment topics in SRS. Don’t know if this fall will be any improvement, but impending default of Stuy Town could be a catalyst. This was a deal that exemplified the CRE mess as it was done at ridiculously low cap rates hoping to get more market rate tenants by getting rid of rent stabilized tenants.

    Good luck sideline watchers.

  140. veto that says:

    “Both of your examples are almost a year old.”

    LTLV, i use app data universe and they dont have 2009. I can tell you that 2009 was way stronger than the end of 2008, especially late spring/summer.

    55 eldridge – Sold Nov 2003 for 385 – asking 468 today. Asking 22% above 2003/04 prices. I’m pretty sure they’ll get 440K for it.

  141. Hard Place says:

    veto that,

    That is clearly helping to keep demand propped up around here. I will not go as far as saying that any ethnic group will save housing prices but immigration changes certainly will have some effect on prices – whether its up or down

    I’ll extend the impact of your comments further. The US was built on the back of immigrants. Population growth through immigration has helped foster the growth of the US, not just housing. The demographics helped as it provided a increasing base of citizens to contribute to the tax base. Not all immigrants are non-tax paying citizens. Those that are non-taxpayers, eventually have children who are American citizens and eventually become tax paying citizens. I think the anti-immigrant policies being expounded are anti-American, as this was the initial foundation of our America. Believe what you may, but the founding fathers of this nation were descended from immigrants. We all are, some more recent than others.

    /socio-political rant off

  142. veto that says:

    Hard Place,

    My argument was not against immigration, i was just highlighting its effect on demand.

    I believe we are bringing in more asians right now than we are lead to believe. We realize that we need them to keep our workforce competitive.
    They come from 3rd world – starving, with a phd in math and another phd in computers, willing to work 20 hr days for ten bucks. They lift the bar for all of our workers.

  143. veto that says:

    MLS ID #5524854
    296 Perrineville – Smaller 4/2 on .75 acres backed up to a farm.
    They bought it in June 2004 for 262K and they have been listing it for 340K for the past year.
    They didnt do any upgrades as far as i can tell.

  144. John says:

    Veto, those first generation or even second generations can’t think for themselves, I managed 40 of them once and there is a reason the electric light bulb, car or plane could never be invented by most asians. Hard workers yes, original thinkers, no. Also on a side not I find it funny when Indians call themselves Asian. Yea, people from Mexico and Canadas are Americans too since they live in the Americas.

  145. John says:

    Amy Fisher could do a better job than this guy.

    WASHINGTON (MarketWatch) — A leader of a faction of Federal Reserve officials typically worried about inflation said Wednesday he did not see the tinder in the economy that could lead to an inflation fire in the near-term. In a speech, Richard Fisher, the president of the Dallas Federal Reserve Bank, said falling prices was the bigger risks because businesses are cutting prices to maintain sales volume and clear inventories. Growth should be sluggish because firms, with no pricing power, are trying to preserve profit margins by holding expenses in line. The outlook ahead looks like a “check mark,” Fisher said. In other words, this is a sharp, small up-tick in growth, followed by a long period of slow growth, he said

  146. John says:

    I fear my days of information asymmetry are behind me, can anyone help a brother out?

  147. kettle1 says:

    since when did california decide to emulate spain???

    Study: 2 out of 5 (40%) working-age Californians jobless

    Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2009/09/06/state/n000211D96.DTL#ixzz0QdNai8D1

    the housing slump in Cali isnt over with unemployment being this bad.

  148. Comrade Nom Deplume says:

    Tax News of the Day:

    Treasury going after 529 Plans:

    (from today’s Treasury release)

    “Per Beneficiary Contribution Limits. Currently there are effectively no limits on Section 529 account balances. Because 43 states offer plans open to residents in other states, a beneficiary can have accounts in as many as 44 states, each state with a limit exceeding $224,465. Putting an effective limit on Section 529 contributions
    requires making the limits per beneficiary rather than per beneficiary per state. Per
    beneficiary limits would reduce the tax benefits to high income families and, by lowering federal tax expenditures for the program, would potentially free up federal resources for education aid that could be targeted to low and middle income families.”

    BTW, “high income” for these purposes include those making less than 250K. This on top of a little-published phaseout in 2009 for the tax exemption of Education Savings Bond earnings for those making far less than 250K.

    How’s that Hope and Change working for you?

  149. make money says:

    To those who sincerely believe that health insurance carriers and drug companies are hauling in “obscene” profits, the answer is very simple. This is (still) the United States of America and you are free to start your own insurance or pharmaceutical company.

    Once you’ve in business please give me a call, and I’ll be right over. I get such a kick out of counting obscene profits…

    I saw this comment on another blog and thought it hit the nail on the head.

    It’s funny that everyone seems here seems to choose to ignore this dog and pony show.

    While the country is going bankrupt, Washington is focusing on the environment and helthcare. This will give historians a kick when they study the fall of the last remaing superpower.

  150. Barbara says:

    45. Clotpoll

    I was out, but yeah I’m no expert but if what I’m seeing on Zillow is fairly accurate (a single closing every 30 days in each of the 4 NJ markets I search every week with over 250 houses in inventory and nearly 12 pages of preforclosures), it seems like madness to buy a house in a straight deal. Couple this with the Montclair realtor who keeps calling me even though I know I was in the dead file for a long time.

  151. make money says:


    You can’t grow your economy if you can’t impove your infrastucture. We just passed with a “D”

  152. Barbara says:

    Meh, Clairns best seller in a gel based self tanner, 20 years and running. Nobody’s happy.

  153. njescapee says:

    re: 152, As I recall, we used to refer to these types of changes as the “middle class squeeze.” Cheers!!

  154. Victorian says:

    This is (still) the United States of America and you are free to start your own insurance or pharmaceutical company.

    Make –
    Ever wondered why nobody has done this yet? The barrier to entry is very high. In order to run a successful insurance company, you need a very large risk pool and tons of administration for bargaining power.

    Two ways an health insurance company can make money – increase the risk pool or deny claims.
    The government already insurers the riskiest pool – old people via Medicare. The insurance companies then get to cherry pick the best out of the rest. Then, they have teams to research and deny the claims of the people who will cost them the most by linking it to an obscure condition earlier in their life.
    All the rest of the civilized countries have some version of nationalized healthcare. I guess this is America and we prefer to go bankrupt after falling sick.

  155. Barbara says:


    “I guess this is America and we prefer to go bankrupt after falling sick.”

    catastrophic coverage is for P*SSIES!

  156. Schumpeter says:

    The entire American economic system has been bent to the purpose of enslaving the lower and middle classes to some master or another…all in the service of the gubmint and large corporations.

  157. HEHEHE says:

    problems solved:

    Fed Says Economy Stable or Improving in Most of U.S. (Update2)


  158. njescapee says:

    Dear Mr Schumpeter aka Clotpol, There is always Old Crow @ 10 bucks a fifth if Knob Creek becomes out of reach.

  159. John says:

    I represent that remark!

    Schumpeter says:
    September 9, 2009 at 3:29 pm
    The entire American economic system has been bent to the purpose of enslaving the lower and middle classes to some master or another…all in the service of the gubmint and large corporations.

  160. LTLV says:

    *144 Well than you should have closed sales for at least some part of 2009 at this point. Way stronger based on what asking, or sold price? Again your examples are almost a year old.

    I have no proof but I strongly doubt that hosues in CNJ are going above 2005 levels. If I am wrong. so be it.

  161. kettle1 says:

    Real Estate – The 800,000 Pound Deflationary Gorilla

    * Here’s a recent headline for you: “Nine years worth of condos flood uptown Charlotte.”This is Charlotte, North Carolina folks. We’re not talking about an obvious place like southern Florida, California, or Las Vegas. We’re talking about a fairly typical non-coastal American city ([..]. Nine years supply at the current sales pace while credit continues to get tighter and unemployment is still rising?!

    * Fannie and Freddie have “backed more than 70 per cent of new home loans since 2008.”

    * The government is now backing 90% of new mortgages [..].


  162. HEHEHE says:

    Kettle you keep coming on here with all you facts. Ben F’g Bernanke just told you the recession is over. Get it! O-V-E-R!!! Go celebrate.

  163. BC Bob says:


    Yes, do love ths assies, down under. Sold out half today. If anybody believes in green shoots, why do they hold dollars?

  164. chicagofinance says:

    veto that says:
    September 9, 2009 at 12:59 pm
    Chi, thx. I was going to buy the book but now there is no need.
    I guess they are mostly describing cities that are ground zero for the housing crisis.interesting.

    vito: The book is interesting so far…it has a momentum about it. It goes set-up, Chicago, Cleveland, Sacramento, Atlanta…essentially you know the story, but it really puts some human faces on it. It keeps building (no pun intended). It also gives you a clear sense of why certain people are biased idiots (e.g., Retsinas of Harvard – whose report we ripped apart about a year ago). I remember thinking “…he is a Harvard professor…why would he accept funding from these sources?”

  165. BC Bob says:

    the assies.

  166. BC Bob says:

    Pant up demand for assies.

  167. Sean says:

    re: #166 -re: Charlotte, North Carolina

    I wonder what ever happened to our resident redneck Mitchell? He dropped off this blog about a year ago. Seem to be lots of foreclosures in his neck of the woods, and I gather the click through web-advertisement business doesn’t pay like it used to.

    Perhaps he is busy noodling for food and sleeping in a van down by the river.


  168. veto that says:

    “I have no proof but I strongly doubt that houses in CNJ are going above 2005 levels”

    You’re not wrong. Just didnt read my post clear enough. I’m talking about my town. Each town is getting hit differently during this correction.
    I’m not speaking for all of CNJ. I only look in mercer county.
    And i said they are ‘at’ 2005 levels, not ‘above’ 2005 levels.

    “So immigrants are stupid and will over pay.”

    Not saying that either. Im saying they’re employed ready to buy and have been buying – a new ethnic group is creating new demand.

    LTLV, I realize you like to disagree and that is fine but its hard to have a two-way discussion with you because you twist words and then quote things that was never said in the first place. Then you strongly disagree but dont offer your own analaysis or specifics. I’d still like to hear your prediction on housing prices and inflation since you are so quick to dismiss mine.

  169. Schumpeter says:

    sean (172)-

    I think he’s selling meth to pro wrestlers.

  170. Schumpeter says:

    …or working the third shift at a Waffle House.

  171. SG says:

    John: those first generation or even second generations can’t think for themselves.

    What do you know. You work in Financial Services, and we know what they invented in last few decades.

  172. veto that says:

    169 – yeah i saw your post, i checked it out put on the wish list.

    I’m hoping she will give some indication of why the meltdown isnt happening here to the same degree – or maybe the similarities will be eye opening and its just delayed.

    Nice little video interview of your friend…


  173. Barbara says:

    someone should do a swab sample at a typical Waffle House counter. Oh, and the vinyl seats too. That’s an Oprah I would watch.

  174. chicagofinance says:

    veto that says:
    September 9, 2009 at 4:43 pm
    I’m hoping she will give some indication of why the meltdown isnt happening here to the same degree – or maybe the similarities will be eye opening and its just delayed.

    vito: I am in the Atlanta chapter which is just the example of pure criminality and fraud. I am towards the end, so while all the underpinnings of the Wall Street stuff are there, she hasn’t come out and connected all the dots yet. I’ll mention more as I read it.

    I just want to ensure she keeps it balanced. So far she appears to have made that a priority.

  175. chicagofinance says:

    I didn’t know Solomon Dwek puts you into moderation.

  176. Hubba says:

    Why is it that the finance and pols always have all the fun?


  177. SG says:

    I would love to find out whatever happened to Duck’s house. I remember it was in Cliffside park right on some kind of ridge. I believe he listed it for $899K or so. Anyone with historical MLS access?

  178. John says:

    Actually my uncle has numerous patents for both domestic aircraft as well as numerous top sercret milatary equipment used in the last four wars. There is a whole section on him in an aerospace museum. When I did consulting I had Boeing out in Seattke once ask me advice on the new dreamliner, (I was actually there just for some boring accounting stuff), lots of IFE stuff and the new bathroom on the dreamliner that actually has a window. That is a little tricky as Jamco makes the labs prefab so the window is behind the prefab so I had to work with Jamco on that. Not for nothing I have the same and first and last name as my uncle so Boeing asked if we were related, when they found out I was they assumed I was also gifted in aerospace. To my suprise I was able to provide lots of good aircraft help, it is in the gene pool. So in a few years when you are taking a dump at 20,000 feet on the new dreamliner, just think of good old John from this site when you are in the John. Enjoy the view baby. I am a problem solver baby.

    SG says:
    September 9, 2009 at 4:42 pm
    John: those first generation or even second generations can’t think for themselves.

    What do you know. You work in Financial Services, and we know what they invented in last few decades.

  179. Schumpeter says:

    John = George Costanza

  180. Schumpeter says:

    “So in a few years when you are taking a dump at 20,000 feet on the new dreamliner, just think of good old John from this site when you are in the John.”

    At the rate we’re going, the only dumps we’ll be taking in 20 years on any form of public transport will be Greyhound buses or donkey carts.

  181. make money says:


    Watch Schiff school the blonde and the moron reporting live from chicken house.

  182. LTLV says:

    *173 I gave you mine yesterday, but will do it again. Drop of 30 to 40% from peak pricing 2006.

    Inflation not a concern at this point as we need to get through the delfationary period. Once we do get inflation, well I believe you cannot have high prices,and high interest rates. 500k shanty shack with 10% mtg? Not happening.
    And of course property taxes in NJ. They have not gone away you know.

    Also unemployment stated rate of almost 10% (natl),9+ in NJ and rising on both counts. How can we talk about prices not dropping further when NJ unemployment is at it’s worst levels since the early 70’s ?

    Finally it happened before no valid reason to believe it won’t be the same again. (large price drops) Government manipulation can only go so far, as I have said.

  183. kettle1 says:

    RE charlotte NC

    was down there recently. There are 2 high rise apartment buildings still going up. SO on top of the 9 year supply of condos, you also have how many hundreds of units that are set to hit the market in the next 2 -3 years?

    Oh and the major high income employment field in charlotte that all these condos are targeted towards? Young banking professionals.

  184. kettle1 says:


    sorry, will try and cut back on the facts

  185. ns says:

    John ,

    Sometimes your bigotry amazes me. I pity the Indians that get to work with you or for you. Because repeatedly you post insulting comments towards them/us.

    I don’t know whether it is of any use to even respond to your silly comments but here goes –

    Just because in America, term ‘Asian’ is used mainly for East and Southeast asians, that does not mean the rest of the world uses the term in the same way. Anyone living in an Asian country is an Asian, anyone living in a European country is an European and so on..

    But obviously you don’t see beyond your own culture/views/lingo.

    And YES, SURPRISE !! not every culture says “GOD BLESS YOU” when someone sneezes. (a response to your earlier post) Infact I remember when I was FOB, I got startled and a bit embarrased when I sneezed in public and a complete stranger then commented on it ! Ofcourse she was only saying ‘God bless you’ ! And though I know better now, it doesn’t come naturally to me to say it every time I hear a sneeze.

    Isn’t it true of all immigrants, that they come with their own culture and value system and as they get slowly exposed to American culture they learn and slowly assimilate.

    Then isn’t it petty to berate them or mock then for these small differences..

Comments are closed.