Fed: April Beige Book

From the Federal Reserve:

Beige Book – April 11, 2012

Second District–New York

Growth in the Second District’s economy has picked up somewhat since the last report. Labor market conditions have been stable to slightly stronger in recent weeks, and a sizable number of contacts say they plan to add workers in the months ahead. While consumer prices generally remain steady, business contacts in a number of industries indicate rising cost pressures. Manufacturers report steady improvement in business conditions. Most retailers and auto dealers describe sales as steady but strong in February and the first few weeks of March. Tourism activity has been mixed but generally strong since the last report, with bookings for the months ahead described as robust. Home sales activity has continued to strengthen since the last report, though prices have been steady to somewhat lower; rental markets have continued to improve, and there has been a pickup in rental multi-family construction. Commercial real estate markets remained steady in the first quarter of 2012. Finally, bankers report increased loan demand, no change in credit standards, and the most widespread declines in delinquency rates in a number of years.

Construction and Real Estate

Housing markets across much of the District appear to have picked up since the last report, while rental markets continue to firm. Home sales are reported to be on the upswing in northern New Jersey, though prices are steady to declining, largely due to more distressed properties coming to market. One industry expert notes surprising strength in new multi-family construction in New Jersey–almost entirely rental units–thus far in 2012; this segment now accounts for well over 50 percent of all new homebuilding, which is said to be unprecedented. Apartment rental markets in both New York City and northern New Jersey continue to firm, with inventories tight and rents rising steadily. A major New York City appraisal firm notes that Manhattan’s co-op and condo market has firmed since mid-February: while prices remain flat, sales have picked up–especially for studio and 1-bedroom co-ops–and new contract activity is estimated to be running 7 percent ahead of a year earlier. Conditions in the outer boroughs have been somewhat softer. Real estate contacts in western New York State report continued gradual improvement in home sales activity but note some downward pressure on prices.

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127 Responses to Fed: April Beige Book

  1. Brian says:

    Good morning NJ and Mike. It is way too early.

  2. grim says:

    From RealtyTrac:

    Q1 2012 Foreclosure Activity Lowest Since Q4 2007

    RealtyTrac® (www.realtytrac.com), the leading online marketplace for foreclosure properties, today released its U.S. Foreclosure Market Report™ for the first quarter of 2012, which shows foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 572,928 properties during the quarter, down 2 percent from the previous quarter and down 16 percent from the first quarter of 2011.

    The first quarter total was the lowest quarterly total since the fourth quarter of 2007, when 527,740 properties with foreclosure filings were reported. The report shows one in every 230 U.S. housing units with a foreclosure filing during the quarter.

    “The low foreclosure numbers in the first quarter are not an indication that the massive reservoir of distressed properties built up over the past few years has somehow miraculously evaporated,” said Brandon Moore, chief executive officer of RealtyTrac. “There are hairline cracks in the dam, evident in the sizable foreclosure activity increases in judicial foreclosure states over the past several months, along with an increase in foreclosure starts in many judicial and non-judicial states in March. The dam may not burst in the next 30 to 45 days, but it will eventually burst, and everyone downstream should be prepared for that to happen — both in terms of new foreclosure activity and new short sale activity.”

    First-time foreclosure starts, either default notices or scheduled foreclosure auctions depending on the state’s foreclosure process, increased 7 percent from February to March, the third straight monthly increase. Foreclosure starts in March exceeded 100,000 for the first time since November 2011, although they were still down 11 percent from March 2011.

    States with the biggest monthly increases in foreclosure starts included Nevada (up 153 percent), Utah (up 103 percent), New Jersey (up 73 percent), Maryland (up 53 percent) and North Carolina (up 47 percent). Thirty-one states posted monthly increases in foreclosure starts in March.

    The average time to foreclose also decreased in Colorado, Utah, Massachusetts, Nevada, Michigan and Maryland. Despite the decrease, Maryland still posted the fifth longest time to foreclose, 618 days. The states with the top four longest times to foreclose were New York (1,056 days), New Jersey (966 days), Florida (861 days) and Illinois (628 days).

  3. grim says:

    From HousingWire:

    Returns for REO-to-rental investors could reach $100 billion

    The rental market for real estate owned properties could reach $100 billion in 2012 with single-family REO investors in Florida and the Midwest reaping the most profit.

    According to new data from CoreLogic, the single-family rental market is “strong and vibrant with stable rents, low months’ supply and a healthy pace of closings.” The sector boasts potential returns for investors that are far and above many asset classes in the real estate market, helped by the government’s new REO-to-rental program.

    To measure single-family rental returns across the nation, CoreLogic examined capitalization rates among 26 markets. The best opportunities for single-family REO-to-rental investors, the company discovered, are in Florida and the Midwest, which boast high cap rates and a large stock of potential REO properties.

  4. grim says:

    More on that from the NYT:

    Treasury Faulted in Effort to Relieve Homeowners

    A fund to support homeowners in the communities hit hardest by the collapse of the housing bubble has disbursed just 3 percent of its budget and aided only 30,640 homeowners in the two years since its creation, according to a report released on Thursday by a federal watchdog office.

    The Hardest Hit Fund, which was created in the spring of 2010, grants money to state housing finance agencies for efforts to help families that are facing foreclosure. It has “experienced significant delay” because of “a lack of comprehensive planning” by the Treasury Department and limited participation by Fannie Mae, Freddie Mac and the large mortgage servicers, said the report by the special inspector general for the Troubled Asset Relief Program.

    “TARP wasn’t supposed to be just a bank bailout,” said Christy L. Romero, the special inspector general for TARP, in an interview. “It was specifically designed with the goal of helping homeowners, and our concern is that that goal may not be met.”

    As of the end of 2011, the Hardest Hit Fund had spent $217.4 million out of its $7.6 billion budget, the report found. The program is intended to reach homeowners who are unemployed, or living in areas with high unemployment rates or steeply falling home values.

  5. Mike says:

    Good Morning Brian And New Jersey

  6. grim says:

    Let’s talk foreclosure tsunami…

    I’m not seeing tsunami, I’m seeing at best, dribble. I continually scan the Sheriff Sale dockets to see what inventory is hitting and when. The volume of new REO is still centered on the crappier areas, and the volume of REO in nicer areas is still thin. The good stuff gets scooped up quick, and the buyer is walking away with a smile on her/his face.

    Inventory is down big, all across the state, buyers would LOVE more inventory at this point in time, but it’s just not there. Some subset of REO represents a good portion of saleable/desirable inventory.

    The big question is, can the market absorb the foreclosure inventory as it trickles on? What’s the tipping point?

    We’re talking about years to clear the market. With a near 1000 day default to REO lag, today’s defaults won’t see the light of day until almost 3 years from now. Do we really expect the judiciary to staff up and start fast-tracking/craming these through the system? Doubt it. In fact, I wouldn’t be surprised if the number moves near 1200 once the pipeline starts working through.

  7. Anon E. Moose says:

    Grim [3, 7];

    “TARP wasn’t supposed to be just a bank bailout,” said Christy L. Romero, the special inspector general for TARP, in an interview. “It was specifically designed with the goal of helping homeowners, and our concern is that that goal may not be met.”

    We’re talking about years to clear the market. With a near 1000 day default to REO lag…

    Interesting juxtaposition. Considering that Ms. Christy Romero considers a ‘homeowner’ based solely on whether their name was placed on the deed, not whether they actualy paid anything towars this house everyone seems to consider “theirs”.

    Against that, free rent for deadbeats isn’t a bug, its a feature — a popular uprising prevention one — bought and paid for by TARP money.

  8. grim says:

    I think a significant upside to the increased REO inventory in the area is that bargain hunting buyers will abandon the short-sale market in favor the REO market, where buyers can actually purchase for-sale homes, and not just waste time and money waiting around for a sale that will never take place.

    The short sale market is garbage, trash, a waste of time. It sucks buyers in with unrealistic pricing and false opportunity, and spits them out the other side (months or years later) filled with distrust and distaste.

  9. Bocephus says:

    Sell?! Sell to whom? Bahahaaaaa. Gary love ya baby!

  10. grim says:

    You do know there were more than 75,000 home sales in NJ last year, right? 75% of them in North and Central Jersey. Yes, I acknowledge that during the peak of the bubble we were running at a rate that was double this, and that the current rate is significantly depressed in comparison with the mania we went through. However, home sales didn’t go to zero, even during the second great depression. For perspective here, we’re talking 8 and a half houses sold, each and every hour of every day last year.

    So, to answer the question of who to sell to? One of the more than 75,000 individuals/families that will buy a home in NJ this year. You can sell to any one of them. It may not be at a price you’d like though. Caveat is that your overtaxed, overpriced, overbuilt stucco crapshack listed at 2006 prices will not find a buyer. There is not a seat for every ass in this case, and you will be hard pressed to find a greater fool in that pool of 75k.

  11. Brian says:

    Hey Grim, a few days ago you posted the March MLS snapshot. Would you mind posting the numbers for Newton?

  12. Bocephus says:

    Die Antwoord rulez ur ass.

  13. Bocephus says:

    Newton is fer gheyz.

  14. Bocephus says:

    Jerzy sux azz. Yo-landi Visser so badazz.

  15. grim says:

    Newton

    March 2011
    74 Active (Avg List $204,218)
    9 New (Avg List $177,300)

    March 2012
    83 Active (Avg List $181,330)
    11 New (Avg List $197,036)

    Q1 2011
    4 Under Contract (Avg List $204,375)
    7 Sold ($174,500)
    Avg Dom 91
    SP/LP 86%

    Q1 2012
    11 Under Contract (Avg List $181,127)
    5 Sold ($170,300)
    Avg Dom 97
    SP/LP 94%

  16. Bocephus says:

    Fawk the upper class. -Yo-Landi Visser

  17. borat the dictator says:

    Goodnight. Njjjjjerseyyy

  18. grim says:

    That’s some crazy shit

  19. Another day in hell.

  20. Brian says:

    White South African Rave-rap groups is fer gheys

  21. Dissident HEHEHE says:

    HAHAHA Panzner is back

    The New Normal of the Non-Recovery
    http://www.financialarmageddon.com/2012/04/new-normal-of-the-non-recovery.html

    Always watch the back end. Ain’t that right Johnny!

  22. Still working a BAC short sale on the side. Going into year 2 today. Already had 2 files rejected over “missing” documents that I had provided and were still in the common electronic database. Working on app #3, and it doesn’t look any better than the first two go-arounds.

    Multiply my story above by 250,000, and you may sense that we have a wee problem here.

    This will all end in tears.

  23. Bocephus says:

    Brian kneel before Zod muthafawker.

  24. Bocephus says:

    23. Big boys don’t cry…..

  25. Brian says:

    Ease up on the acid and the ecstasy Bocephus.

  26. Dissident HEHEHE says:

    You know I have to say I admire this Bobby Petrino. So many of these dudes throw it all away on women that are way less good looking than the gal he was caught tapping. He’s still an overrated coach but he definately has decent taste in women.

  27. Brian says:

    Looks like Bocephus and Borat were out at an all night rave together. Either that or they’re the same person.

  28. grim says:

    My short sale stats are abysmal, a little over 90% of all my “accepted” offers don’t ever end up closing. Hell, that doesn’t even include my own short sale hell.

    No matter how much I argue that it’s a waste of time, people always want to “give it a shot”. Here is a typical experience:

    Offer gets accepted, champagne corks fly, everyone is psyched! A week turns into a month. Inspections take place, lawyers start racking up fees. A month turns into three. Lawyer farts and the buyer gets excited something might be happening, but nothing does. You go ahead and finalize your mortgage commitment, because there are rumors that a letter might be coming. It doesn’t. Tempers start to flare, fingers start getting pointed, emails start getting heated, accusations about ineptitude or lack of involvement start to fly. Six months later, bank comes back with a counter offer $49,000 higher than the “accepted” offer. Buyers flip out, not understanding how the bank can counter against an offer that was already “accepted”. Sellers don’t give a crap, don’t bother talking to them. Nine months later, despite having an approval from the first lien lender at offer price, the second lien now refuses to budge, wants full pay off. Lawyer has already done a number of searches (read: $$) for flood, judgements, etc. Buyer’s landlord starts getting pissed off because they were already supposed to be gone, he needs to find a new tenant and doesn’t want to have to try to rent it in the middle of winter, buyer keeps pushing for more time. Doesn’t matter now, because the first lien deal has just expired, so need to start negotations with the first lien lender from the beginning again (it only took 5 months to get a response the first time around, maybe we can do it in 4 now). Legal fees keep racking up. Deal finally starts to fall apart (really was never a deal to begin with). Threats start to fly around suing for the funds the buyer “wasted” on inspections, applications, appraisals, surveys, credit checks, legal fees, etc. Just for good measure, the buyer burns through another couple hundred having their attorney send worthless letters to everyone. Sellers still don’t give a shit, they are away on vacation in Tahiti for the next two weeks. Waste of time, deal dead, deposit checks all get returned. Buyer missed the start of the school season, now needs to stay put as the kids are in school again. Listing goes back on market with an ask of $10,000 less than last time, throws buyers into a wild rage, tornado of profanity. Buyer gets a $1,200 bill from their attorney in the mail just in time for Christmas (Merry F*kin Xmas!), the tornado is back, this time F5.

    But hey, at least they gave it a shot!

    Is there really any wonder why cancellations are running high? It’s got nothing to do with financing or appraisals.

  29. caljn says:

    #28 Brian

    No matter, they are both tedious.

  30. Brian says:

    Hey Bocephus, you call in sick to work yet? Tough to go to work flyin on acid and X. Better head home and scour the medicine cabinet for some fokken downers. Gotta sleep it off buddy.

  31. Jill says:

    Brian: I left you a question in yesterday’s thread.

  32. seif says:

    #2
    “There are hairline cracks in the dam, evident in the sizable foreclosure activity increases in judicial foreclosure states over the past several months, along with an increase in foreclosure starts in many judicial and non-judicial states in March. The dam may not burst in the next 30 to 45 days, but it will eventually burst, and everyone downstream should be prepared for that to happen — both in terms of new foreclosure activity and new short sale activity.”

    #29
    sounds like a nightmare. i considered embarking on a short-sale purchase but have passed for now. renting for another year seems like the move. what is the process for REO purchases and how do buyers become aware of them?

  33. 30 year realtor says:

    #7 Grim – Between the current dribble and the new filings 3 years down the road are all the faulty Notices of Intent. The recent NJ Supreme decision allows those faulty NOI’s to be corrected. Once those corrected files begin rolling in we will finally see some REO inventory from the big 6 banks.

  34. Brian says:

    The previous owners did the conversion before I bought the house. It was a selling point for me. They dug up the old oil tank too. Glad they didn’t sell it to me that way, it turns out it was leaking and required remediation. Must of been a huge PITA. They gave me a copy of the environmental report which was like 100 pages long.

    I think natural gas should be respected, but it is nothing to be afraid of. One benefit over propane is that it is less dense than air and dissipates. Propane is denser than air and can pool in your basement in the event of a leak. BOOM>>> NG is at least a bit safer than propane in that sense.

    I smelled a small leak once. I called the gas companies emergency hotline and they sent a guy within like an hour. He had a meter/sensor thing and found the leak and tighened the fitting for free. It has a very strong odor added to it and it’s fairly obvious when you have a leak.

    You should call the local gas company if you’re interested in converting. They’re probably happy to have a new customer. I’ve heard some companies even do it for free in some circumstances. Couldn’t hurt to talk to them.

    128.Jill says:
    April 12, 2012 at 8:27 am
    Brian #114: Did you already have a gas line into your house for your stove? I have no gas coming into my house, so a conversion would be a major hassle. I’m also afraid of gas, what with aging pipeline and houses exploding throughout northern NJ. I know that the price is far less and I’ll have to do the conversion eventually, even if it’s just so I can sell. But if you folks can convince me that I don’t have to worry about CO and explosions, I may consider it when my current oil burner goes.

  35. gary says:

    One industry expert notes surprising strength in new multi-family construction in New Jersey–almost entirely rental units–thus far in 2012; this segment now accounts for well over 50 percent of all new homebuilding, which is said to be unprecedented.

    Uprecedented… sort of like back in 2005 when houses went under contract within hours of hitting the market with 10 offers over asking? When debt is your biggest asset, it’s pretty hard to make an offer on a house. But then again, what do I know, I’m just a temp worker with an 86 IQ.

  36. 3B says:

    11: I know someone who bought during the “second great depression”, 2008. Selling today with a 100k loss. Just saying.

  37. 3B says:

    #16 grim: How about Hillsdale (Bergen Co)?

  38. gary says:

    Home sales are reported to be on the upswing in northern New Jersey, though prices are steady to declining, largely due to more distressed properties coming to market.

    Not entirely, but I’ll play. The prices are declining because people have nothing left and they can’t find a job that will sustain the utter f*cking madness called day-to-day life here in the NJ/NY area. That, and $4250 in savings is not going to get you a bland 3bd/2bth ranch in a neighborhood where the ask is 549K and the taxes are 11.5K. For those of you with an IQ even less than mine, I’ll keep pounding this message until the light bulb goes on.

  39. grim says:

    33 – Maybe 30 Year wants to chime in here, but in my experience, REO purchases are among some of the easiest and smoothest transactions I’ve ever been a part of, especially when the asking price is close to being where it needs to be. Once that REO is listed, the machine is in motion. Title is free and clear, no stopping it after the offer is accepted.

    However, I will say that many banks are demanding about how deals are structured and the timelines that need to be met. It’s their way, nothing else. I’ve had banks that dictated higher deposit amounts, fast closing timelines (always unrealistic), and some even attempt to saddle the buyer with penalties if they miss closing dates.

    Negotation generally plays out a little bit differently, since you don’t have an emotionally-invested seller on the other end. It’s Jeff over at some lender/servicer you never heard of somewhere in middle Ohio. He’s got a number on his spreadsheet, and that’s his number.

  40. gary says:

    3b [37],

    That’s impossible. Real Estate only goes up and they’re not making any more land.

  41. Bocephus says:

    31. No but i juzt busted one across your ol lady’s chest, whew i feel better now.

  42. Bocephus says:

    Gary joined in later for some atm.

  43. gary says:

    grim [11],

    It may not be at a price you’d like though.

    And there is the million dollar statement. Whether it’s 10 sales or 100,000 sales, it’s all about price. We’re approximnately 20% off of peak price in Northern Jersey, correct? And part-time service sector jobs are not the road to recovery nor is that accelerating, out of control rocket know as property taxes. What’s left? It’s a slow, continuous spiral down in price. We’re in the bottom of the 5th and the pitcher has already thrown close to 100 pitches. He’s about to get shellacked.

  44. 3B says:

    In addition to the guy I know who bought in 2008 and is selling now at a 100K loss, below is somebody else who is going to get hammered. The house sold in 2007 for 325K. Local guy bought it, cleaned it up slapped in a new kitchen and bathroom, and sold if for 460K in 2008!!!! Listed below now at 399K; taxes just under 10k. And it is on the corner of Kinderkamack.

    http://www.njmls.com/listings/index.cfm?action=dsp.info&mlsnum=1213113&dayssince=&countysearch=false

  45. 3B says:

    Initial claims up, Spring break effect, prior claims revised sharply upwards.

    http://www.marketwatch.com/story/us-jobless-claims-jump-to-380000-2012-04-12?dist=beforebell

  46. Comrade Nom Deplume says:

    [31] Brian,

    In bocephus’ case, I suggest lithium.

    [24] bocephus,

    I am Zod, and have the photos to prove it. So stop taking my name in vain.

  47. Zack says:

    #29 Grim,

    Thanks for enlighting us with the short sale process. You never hear these in the media..

  48. grim says:

    48 – They get really fun when you actually get a deal together, but the seller decides they don’t want to move anymore, 9 months after they accepted the offer. Can you blame them? They haven’t been paying a dime to live there for the past 18 months, now they’ve got to go out and rent a place? It costs how much to rent a house in town?!?! Damn! Have you seen the price of rentals lately?

    Cue the “time is of the essence” letters and failure to perform lawsuit threats.

    Why bother, you think you’ll ever get a penny out of them?

  49. seif says:

    The whole discussion about writing down mortgages makes my stomach turn…

    Housing and Urban Development Secretary Shaun Donovan laid out the case for a program with such checks and balances to convince the Federal Housing Finance Agency, which regulates the companies, to provide more mortgage aid.

    “This isn’t about force; this is about making the right decision for homeowners and for the taxpayers,” Donovan said in an interview taped for C-SPAN’s public affairs television that was set to air on Sunday.

  50. grim says:

    Don’t get me started on all these agents calling themselves “Specialists” in short sales, as if it is some sort of recognized qualifiation or indicator of success.

    Hey, what’s that down the road, is that a bandwagon? Lets go!

    Idiots. Love it when I call one of these “Specialists” up with a simple question, like “Who is the second lien held by and what’s the current balance?”, and they’ve got no clue. Or, even better, they feign complete ignorance and claim “their lawyer is handling it.”

  51. Juice Box says:

    re: # 7 Grim??? Tsunami or Trickle?

    Knock, Knock, Knock!!!

    Who is there?

    It’s the Sheriff, you have 10 minutes to gather your belongings and get the F……. OUT!

    Grim You are way ahead of yourself, and are scanning the Sheriff sales way too soon. NJ Supreme court Justice Rabner only allowed the banks to start up forclosures in NJ last August after suspending them the prior December. The banks waited for their mulligan from the Justice Dept and State Attorney Generals and Federal Court Judge Rosemary Collyer out of Washington DC rubber stamped the Robo signing settlement last week.

    Give it a few months for the foreclosures to ramp up. They banks will be emboldened to clear their balance sheets of what remains, they have captured the accountants, they have captured the regulators and they have captured justice. There is now nothing standing between them and the 100k+ homes in NJ that are delinquent.

  52. Happy Renter says:

    Jobless claims unexpectedly rise last week
    http://www.reuters.com/article/2012/04/12/us-jobless-claims-unexpectedly-rise-last-idUSBRE83B0PV20120412

    Oh, it’s all so … unexpected!

  53. chicagofinance says:

    The End Is Nigh (JJ Edition):

    Workers at trendy Chinese restaurant make ‘phallic’ dumplings: suit
    By BRUCE GOLDING

    Kitchen workers at a celeb-packed Manhattan Chinese restaurant allegedly use a culinary technique they don’t teach at Le Cordon Bleu — making mock peni$es out of the dumplings before serving them to diners, an ex-bartender claims in a lawsuit filed yesterday.

    Yvonne Diaz says the disgusting displays were but one item on a menu of s-xual harassment and assault that she endured while working at Chin Chin on the East Side between 2007 and last October.

    Diaz claims the workers at the eatery — which boasts customers such as Tyra Banks and Jennifer Lopez — routinely used dumplings to make nasty food phalluses, putting them “in their crotch areas making it look like they had big peni$es.”

    The dirty dumplings would then wind up on unsuspecting customers’ tables, Diaz claimed.

    “Kitchen employees would with no hesitation prepare food to be served to the customers from the very same dumplings that they used to make peni$es,” the suit says.

    Diaz also alleges that owner Jimmy Chin boasted of overcharging Sean “Diddy” Combs for a bathroom mirror that got broken during a back-room taping of his show “Making the Band,” according to the Manhattan federal court filing.

    And Chin — who she said occasionally used racist terms — once said it was “a good decision” to put Mariah Carey in a “private section” after she showed up “high on drugs,” court papers say.

    Diaz’s suit, which seeks unspecified damages, says she was repeatedly ogled and harassed by p0rn-loving co-workers who watched X-rated movies in the kitchen every Sunday “without exception.”

    At least once a month, she says, some of the kitchen workers would approach her while holding a pair of oranges to their chests and saying: “Nay Nays; Nay Nays is very good.”

    Diaz also alleges she was repeatedly groped by at least two co-workers, one of whom “pushed his erected peni$ into [her] buttocks area.”

    Chin yesterday denied Diaz’s allegations, calling them “frivolous” and “ridiculous nonsense.”

    Chin also said he regularly seated Carey away from the dining room to “protect her privacy.”

    Carey’s lawyer also said that the claims about her being impaired were “absolutely false.”

  54. Bocephus says:

    47. I got more good chem than Dr. Feelgood. Comes with the territory. The Swiss cut their workforce. Income unaffected. Check one for the strength of great thinkers.

  55. Commanderbob says:

    Re:#45. 3B says:
    April 12, 2012 at 9:04 am
    “…In addition to the guy I know who bought in 2008 and is selling now at a 100K loss, below is somebody else who is going to get hammered. The house sold in 2007 for 325K. Local guy bought it, cleaned it up slapped in a new kitchen and bathroom, and sold if for 460K in 2008!!!! Listed below now at 399K; taxes just under 10k. And it is on the corner of Kinderkamack…”

    http://www.njmls.com/listings/index.cfm?action=dsp.info&mlsnum=1213113&dayssince=&countysearch=false

    Commanderbob sez:
    It looks like one of those cheap Charles Reis tract homes. Lots of them in RiverEdge and in the northwest sections of Englewood … I had reinsulated the walls -(as a contractor)- of maybe six or eight of these houses through the years… The walls had NO insulation (No fiberglass or rockwool) except a thin sheet of aluminun foil in the wall cavity !!! — I would bet that when the kitchen was done over that the cheap contractor did NOT reinsulate (blown-in cellulose) the wall behind the countertop ( most s.o.b kitchen guys don’t remove the plaster; they just punch holes and have their subs’ run the new gas line and electrical wiring/boxes..They don’t even rough-patch the holes ).
    —-The result? —Serious drafts around the new upper and lower cabinets and the dishwasher !!!—In my experience, more kitchen re-do’s have this problem regardless of the price of the job –Ba$tard$ !

    These homes, IMHO, are probably worth ‘tops $ 310,000; especially in Riveredge with the high taxes !
    Commanderbob.

  56. grim says:

    52 – Fannie has been grinding through since March. Hudson Savings is gearing up as well. Heck, they’ve probably got the nicest batch of REOs in Jersey (not that it’s something they’d brag about).

  57. Juice Box says:

    3B – River’s Edge on the Brink…… Perhaps you should write a book.

    Inside the race to stop the extinction of the Unicorns on the banks of the mightly Hackensack.

  58. gary says:

    Commanderbob,

    Good to see your posts once in a while!

  59. Juice Box says:

    re # 57 – Grinding through uncontested perhaps. Do any of our Legal Eagles in NJ know if the law firms that handle the foreclosures for the banks are hiring?

  60. ozerna says:

    Commanderbob,
    any idea how much it would cost to reinsulate the walls for this type of house?
    http://www.realtor.com/realestateandhomes-detail/7-Rockledge-Rd_Montville_NJ_07045_M52487-11346
    thank u

  61. 3B says:

    #56 Commander: It is a Reis colonial. I always thought they were solidly built, and were good candidates for additions/renovations. And I agree that 300-310K is all they should sell for, and the ones on the busy streets even less. And with the high taxes that is what (IMO) they will all be selling for.

  62. 3B says:

    #58 Juice: It is too late!!

  63. grim says:

    61 – If those windows are original, you are wasting your money insulating the walls.

  64. Juice Box says:

    3B – All is not lost, you are forgetting the November surprise of mortgage principal reductions.

  65. grim says:

    Ah shit, Rockledge, I’ve shown that house numerous times (at least 3 “regulars” here have seen it), it’s been on the market forever (going on 2 years now), the seller is clueless. It was pretty uninspiring in the mid-fives, probably still so. I remember the back-yard being pretty steeply sloped, not really family friendly. I thought they were on deck for sewer hook up as well, but I don’t see that the listing changed.

  66. grim says:

    Nevermind, looks like they converted to sewer and took their big $$ lumps to do it.

    Going back through some old emails, that house has had oil tank issues too, tank is buried in the crawlspace, and some previous contracts fell apart due to issues around testing.

  67. Glen says:

    Commanderbob, were you the original “Contractor Bob”?

  68. ozerna says:

    we made an offer on the house but it was rejected, according to the seller’s realtor they already have an offer contingent on buyer’s house sale.

  69. Jill says:

    At least my tank is in the basement, though when I switched oil companies earlier this year my old one sent me a letter about removal/fill the fill valve with sand/etc. That could end up being the biggest hassle about converting.

  70. grim says:

    If they hadn’t replaced the oil tank, and you weren’t asking for it, they did you a favor.

  71. Commanderbob says:

    #61 ::Commanderbob,
    “…any idea how much it would cost to reinsulate the walls for this type of house?
    http://www.realtor.com/realestateandhomes-detail/7-Rockledge-Rd_Montville_NJ_07045_M52487-11346
    thank u…”

    Commanderbob sez:
    If it was built in 1969, (as per listing..) It probably has the max fiberglass insulation in the walls;—— Reinsulation that would be blown-in under max-pressure would not make a great difference in increasing the R-Factor; Besides, it would be a difficult and expensive job to access the walls of a verticle plank home ——— I would not do the ceilings because ‘you’ are against the roof. (you need a 2″ air-space between the insulation and the roof deck) And it looks like there is very little ‘crawl’ attic (if any!) to properly insulate and to help retain heat in the house on rooms with normal flat ceilings.

    The ‘key’ here as Grimm says is the WINDOWS.— If they are original, then they are either single pane or an old type of 1/2 “thermolpane. The only practical energy-saving project would be to change ALL windows to modern 7/8″-to- 1″ thermopane OR to very-expensive Triplepane ———-And get three-to-five estimates if you are considering it.

    GARY: I am always ‘lurking’ in the background and greatly enjoy your amusing posts !
    I always miss the Get-Togethers we all had in the “old days”—- especially that one in Hoboken ! —-Morristown was good too !——Perhaps GRIMM can organize one again,,, —Soon.
    Commanderbob

  72. Anon E. Moose says:

    Grim [29 & 49];

    Sellers don’t give a crap… Sellers still don’t give a sh!t, they are away on vacation in Tahiti for the next two weeks.

    I know they don’t give a crap because they’re not getting anything out of the sale anyway (in fact, they’re getting out of the trap, even if they have to leave the cheese behind, but that’s another post). They don’t care/can’t/aren’t motivated to bring a check to the closing table and/or sign a note for any deficiency to close the deal precisely because there is no real threat they they are going to be out on the street any time soon. Which goes back to the banks not foreclosing because they don’t need the capital, they get all they need via government bailouts. TARP == Free rent for deadbeats.

    I’ll believe the banks are serious when short sales go for $1 like time shares. I’ve got to get a little discount for my aggravation.

  73. ozerna says:

    no, the oil tank was removed, we have the
    copy of the paperwork; btw , after following this blog for the past seven years, I learned a few things including staying away from houses with inground oil tanks.
    thanks

  74. Commanderbob says:

    RE: #68
    68.Glen says:
    April 12, 2012 at 10:34 am
    Commanderbob, were you the original “Contractor Bob”?

    No.-That probably was someone else— I have always posted here for years as ‘Commanderbob’. Even though I have been a “specialty” contractor through these years as a means of making a somewhat decent living….Along with being at various times: a Home Inspector, Construction/subcode official , Building Inspector and was schooled as an Electrical Engineer….
    But, my favorite -(no income)-”hat” has been as a Historian.

  75. 3B says:

    #69 Foolish on the part of the sellers IMO.

  76. zack (48)-

    Grim has just scratched the surface. The best short sales are when the holder of the second lien demands an off-the-closing-statement payment (from any party willing to cough it up) in order to greenlight the title closing.

    Nothing like the use of extortion to remedy a fraud.

  77. grim (51)-

    Sadly, the only NJ Realtor “certification” that’s valid is certifiably learning disabled.

  78. juice (52)-

    Those banks still have an eensy problem with the shit MBS they hold at par and their busted-out REO inventory that they value at 2006 levels.

    If the banks/snake tries to digest the REO/pig too quickly, some bright-eyed person might get the idea they’re…gasp!…insolvent.

    Banish the thought!

  79. Glen says:

    #75 – commanderbob

    Ok, that must have been someone else. I met someone years ago at a birthday party and he actually mentioned he posted on this site, but now I think it was actually “contractor bill”

  80. grim (57)-

    Hudson City was a hardass portfolio-only lender back in the day. They never allowed short sales, even when it was in their best interest. They have been foreclosing steadily & fast through the whole robosigning mess, since all their loans were portfolio.

    Believe me, these dolts are no smarter than all the rest of the banksters. They FK’d everybody because they think this stuff is worth way more than it really is and that they’ll come out of this better than if they’d allowed short sales or DILs.

    They are about to be proved wrong.

  81. Just because Hudson City never lent to below-720 FICOs doesn’t mean their REO inventory isn’t a bunch of dilapidated shitboxes.

  82. I could do a hilarious Hudson City REO tour of Bernardsville and the Mendhams.

    Some of this stuff would make Whitney & Bobby’s crackhouse look like the Taj.

  83. Anon E. Moose says:

    And I get flamed…

    78.There Went Meat says:
    April 12, 2012 at 11:23 am
    grim (51)-

    Sadly, the only NJ Realtor “certification” that’s valid is certifiably learning disabled.

  84. moose, you speak from ignorance. I speak from having been in the trenches.

  85. Anon E. Moose says:

    Re: Meat [81];

    That’s HCBK for those of you playing along at home. Looks like they held up pretty well compared to the BKX index.

  86. Juice Box says:

    Meat – my understanding is the MBS in not on the Banks balance sheet so only the Widows and Orphans take the write downs. When Banks foreclose or do a short sale or do a refi and reduce the principal only the first-lien mortgage securtized mortgage takes the write down. The Banks actually improve their own prospects as a second-lien holder because the second-lien is not securitized and is on Banls balance sheet so the write down goes only to the first or something like that.

    You can see why short sales with second liens lead to the extortion you mentioned in post 77.

  87. juice (88)-

    Not exactly. Point-by-point (and please, somebody here who’s a bank finance whiz please correct me if needed):

    1. Plenty of banks still hold plenty of MBS, even though all the worst crap has been dumped on the Fed. Remember, there’s a lot of troubled Alt-A and Prime paper still being held by banks and valued at par.

    2. Second lienholders do take writedowns; however, they did a lot of it in ’08 and ’09 as the loans were beginning to go sour and the writing was on the wall. I do hear rumors that WFC still has a lot of second lien writing down to go, though.

    3. There are securitizations of second liens. Woe unto the holders.

    4. One of the HAMP iterations capped 2nd lienholder recovery to a max of 3K in a short sale, although all the lienholders like to feign ignorance of this.

    5. The ultimate toxic scenario is when the same bank holds the first and second…and the first directs its attorneys to sue the second just as if it’s another institution. WFC is infamous for this.

  88. grim says:

    Second lien is first loss, in many cases those loans are worth 0 cents on the dollar. Second lien doesn’t get a proportional share of the proceeds, they get whatever is left over after everyone is paid, which usually boils down to zero.

    This is why even getting a response is near impossible. What do you think it costs to keep employees staffed on telephones waiting for your call? Or to send you a registered letter reviewed by legal? At best they are going to receive nothing, so why dedicate any resources at all to helping you resolve your problem, this all costs money, and only serves to increase the loss. This is your problem, not theirs.

    Ignoring the owner and continuing to send out late payment notices is really the most logical course of action.

  89. grim (90)-

    I always found that if I attacked it early in the process, I could get the first to allow the max of 3K from the closing proceeds to go to the second. I would then go straight to the second and tell them this was all they would get…take it, or leave it.

  90. Dissident HEHEHE says:

    Lend to whom?

    Surplus Liquidity Is Killing the Credit Markets

    Other than corporate debt, which isn’t really corporate anymore, we’re witnessing the death of every credit market segment: secured consumer, unsecured consumer, consumer residential, commercial real estate, and sovereign.

    Read more: http://www.minyanville.com/business-news/markets/articles/credit-bubble-global-credit-bubble-financial/4/11/2012/id/40375#ixzz1rqVRjhTd

  91. gary says:

    Meat, this one’s for you:

    Should Corrupt Bankers Face the Death Penalty?

    http://www.zerohedge.com/news/guest-post-should-corrupt-bankers-face-death-penalty

  92. gary (93)-

    Only if they allow me to administer the lethal injection.

  93. Comrade Nom Deplume says:

    [60] juice,

    Haven’t seen it, but there would not likely be much to report. First, because staff handles much of this, and second, because attorney time is actually pretty efficient when it comes to court: Bring in a bunch and go thru them with the judge seriatim. Rubber stamp stuff.

  94. 30 year realtor says:

    Grim #40 – Your depiction is accurate.

    In all my years I have never seen a buyer pay a per diem penalty for closing late. REO sellers piss and moan about a lot of nonsense. They huff and they puff, but all they really want is a closing.

  95. joyce says:

    (93)
    gary,

    If someone commits murder, they’ve obviously ruined a life and the perpetrator deserves life in prison or the death penalty.

    If someone commits fraud and steals millions/billions from all these people, that could have ruined a lot of their lives to a lesser extent of course. I think they do not deserve the death penalty, but life in prison or least a few decades is fair.

  96. joyce says:

    “The man with the briefcase can steal more money than the man with the gun.” ― Mario Puzo

  97. gary says:

    “Behind every great fortune, there is a crime.” – Mario Puzo

  98. Anon E. Moose says:

    Joyce [98];

    That’s — “One lawyer with his briefcase can steam more than a hundred men with guns.”

    Meat might have corrected you though.

  99. Anon E. Moose says:

    Steal, even.

  100. ozerna says:

    Grim andCommanderbob,
    thank you for the replies; most likely, we’ll continue to keep an eye on that property, hubby likes the location of the propery but the reality is that the house requires a lot of work; it’s just difficult to justify paying that much for the location.

  101. Anon E. Moose says:

    Does this count as NJ real estate related:

    In Bergen County, N.J., commercial foreclosures are up 7 percent this year over last year. In the first year of the recession, there were 373 foreclosure actions filed in Bergen County, while in 2011 there were 1,586. Commercial foreclosures are up 10 percent for the state as a whole.

    How can this be so close to the wealth of Manhattan bleeding out along the NJ Transit tracks?

  102. jj says:

    Hey in Atlantis. And the recession is over. What the heck is with all the tattos, every women and man has so many tatoos looks like a biker convention. 15 year at record low, stocks up two days straight, Maybe I should stay away from wall street for another few days. Off to Carmines!! Wells as soon as I finish a few more beers.

  103. Juice Box says:

    JJ – People of Walmart convention at the Atlantis this week…

    What out for Flipper I heard he is a real horn dog….

  104. freedy says:

    http://www.crainsnewyork.com/article/20120412/HOSPITALITY_TOURISM/120419959 20 million to market AC . Will it work? Can AC fight off Pa., Yonkers, Pocono,
    Sands, and Queens?

  105. Classy joint, that Atlantis.

  106. freedy (106)-

    Better to spend 20mm on 20 cruise missiles to level that dump.

  107. xolepa says:

    (108)
    Hmmm. Maybe he has a timeshare there. A sure sign of investing genius.

  108. freedy says:

    http://www.nj.com/news/index.ssf/2012/04/gov_christies_use_of_state_pol.ht

    To travel in comfort on someone else’s dime. Does anyone really believe that this guy
    is for the citizens of NJ? Or perhaps just in waiting for the next gig?

  109. freedy says:

    http://www.nj.com/news/index.ssf/2012/04/gov_christie_calls_for_mandato_1.html And oh,by the way lets pay for Rehabs for the druggies as well

  110. J La says:

    105, 107… Priceless

  111. AG says:

    North Jersey’s problem is property taxes and crap inventory. I wont mention being able to taste the air and the cancer cells. I laugh when I drive through Westfield/Summit area and see Abraham Lincolns log cabin up for sale. Plenty of good folks taking their kids to school in the morning. Its a shame they have to live in such overtaxed crap boxes. The inventory s_cks people. Dont buy that sh_t.

  112. AG says:

    104,

    JJ,

    Re: Women and tattoos.

    Classic empire decline. All empire declines are preceded by a decline in morality and self respect. Tramp stamp anyone?

  113. AG says:

    I knew that gold chart looked wicked yesterday. Nice move on real money. 1680 resistance. If we correct 100 bucks I would load up. QE to infinity. The next one is going to be big.

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    Liberty, according to my metaphysics, is an intellectual quality, an attribute that belongs not to fate nor chance. Neither possesses it, neither is capable of it. There is nothing moral or immoral in the idea of it. The definition of it is a self-determining power in an intellectual agent. It implies thought and choice and power; it can elect between objects, indifferent in point of morality, neither morally good nor morally evil.

    –John Adams

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