What’s the right timeframe to resolve a foreclosure? Fast or slow?

From Bloomberg:

New York Protecting Defaulters Stalls Rebound: Mortgages

New Yorkers Paul and Angelica Kashman, declared in default on their mortgage in July 2010 and foreclosed on by Wells Fargo & Co. (WFC) in February 2011, say they aren’t deadbeats.

“We always knew that when we get into a court of law and show that we have all the information and backup, the truth will come out,” said Paul Kashman, 37, a manager in the hospitality industry. The couple, stuck in limbo by legal bureaucracy, says they were mistakenly pushed into foreclosure, and are eager now to save their home, using court mediation.

Their case is among 72,000 pending in the New York system, accounting for a quarter of the civil caseload, and highlighting the strength and weakness of the state foreclosure process. While borrowers have protections unavailable in many other states, it takes more than 1,000 days for banks to repossess a home, stalling a housing recovery by keeping pressure on values for years to come as a constant drip of distressed properties enter the sales market.

The New York area was one of only two in the country to post year-over-year home price declines in the latest Case- Shiller 20-city index. Homebuyers also could lose, with the Federal Housing Finance Agency considering a fee increase to compensate Fannie Mae (FNMA) and Freddie Mac for doing business in New York and four other states with slow, costly foreclosures.

“New York suffers from what appears to be altruism, in that it postpones foreclosures as long as possible — the problem is that altruism can be expensive,” said Anthony B. Sanders, an economics professor at George Mason University in Fairfax, Virginia. “It slows down the housing market and it results in lenders being almost unwilling to lend. New buyers will pay the price for this.”

It’s one of five judicial foreclosure states, including New Jersey, Connecticut, Florida and Illinois, in which home repossessions require court review that the FHFA is targeting. The agency has said it’s seeking to compensate Fannie Mae and Freddie Mac (FMCC) by bringing their pricing of risk more in line with how private lenders operate. The FHFA last year had the two government-controlled companies almost double the annual fees they charge for guaranteeing mortgage bonds, with increases averaging 0.2 percentage point.

“The proposal would create the perverse incentive that states should either give up the fight against mortgage fraud and roll back consumer protections or face the consequences of higher mortgage rates for consumers,” Benjamin Lawsky, superintendent of the New York Department of Financial Services, wrote in the letter. “The proposal would also shift the cost of the failures of lenders and servicers onto New York State borrowers.”

“The byproduct of an aggressive and zealous defense is that the homeowner gets to stay in the home much longer than they otherwise could have and actually gets to keep his home,” Richardson said.

In New York it took 1,089 days on average to foreclose in the fourth quarter, the longest of any state and more than five times the pace in hard-hit Arizona, a non-judicial state that has worked through much of its backlog, according to data from RealtyTrac.

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

88 Responses to What’s the right timeframe to resolve a foreclosure? Fast or slow?

  1. grim says:

    From Forbes:

    “Housing Recovery” Is More Complicated Than You Think

    When you stand back and look at the U.S. housing marketplace at the start of 2013, what do you see?

    A moderate to strong rebound underway in home prices in many areas, fast turnaround times from listing to sale, and multiple-offer competitions increasing as local home inventories plunge?

    Or maybe:

    A surprising and sobering stagnation in prices in large swaths of the country, with some areas experiencing lengthy times from listing to sale, despite inventory declines. The softening in these local markets could be significant enough to slow down the overall pace of national price gains this year.

    Which do you choose?

    How about both? The latest statistical overview of 146 major metropolitan areas compiled by Realtor.com reveals strikingly different conditions around the U.S., ranging from double-digit percent price increases in communities that suffered some of the deepest hits during the housing and mortgage bust years, to persistent price declines in dozens of cities that are now struggling with their own busts caused by high unemployment and unresolved local economic challenges.

  2. Mike says:

    Good Morning New Jersey

  3. grim says:

    From CNBC:

    New Housing Fears: Home Prices Are Rising Too Fast

    “For Sale” signs may seem like an eyesore to neighbors on any given local street, but the lack of them is a much bigger problem.

    Just 1.82 million homes were listed for sale in December, according to the National Association of Realtors. That is a 22 percent drop from a year ago and the lowest supply since May of 2005, when words like “boom” and “bubble” followed the word “housing.” At the current sales pace it would take just 4.4 months to sell those homes.

    “The greatest concern in the market is the inventory situation,” said Lawrence Yun, chief economist for the NAR. “Even if we see an increase in the Spring and Summer, if home sales hold at the [current] level or even a 5 to 6-month supply, price increases are guaranteed. We don’t want to see rapid appreciation in prices faster than income.”

    The reasons for the low supply are varied, and the low numbers are in fact feeding on themselves. If potential buyers can’t find something to their liking, they will probably not list their homes for sale.

    There are also still 10.7 million borrowers who owe more on their mortgages than their homes are worth, according to the latest report from CoreLogic. An additional 2.3 million have less than five percent equity in their homes, referred to as near-negative equity. Most of these homeowners are stuck in place, unable to sell unless they can afford to pay in to their mortgages. As for new supply, even though builders are increasing starts, they are still not even at half the pace they were at the height of the housing boom.

    As a result, home prices are now rising more and faster than most analysts predicted due to this short supply, up 7.4 percent year-over-year in November, according to CoreLogic. They are especially surging in some of the hardest hit markets from the housing crash, where large-scale investors are swarming with cash in hand. In Phoenix, home values jumped nearly 32 percent from a year ago in November and are now at the highest level since October of 2008 according to DataQuick. While still 39 percent off their boom-high in June of 2006, they are now up 41.5 percent from the bottom, and there is not much on the market.

  4. grim says:

    9 degrees outside, hot damn, and just when I thought NJ was transitioning to a climate without snow, dreaming of basking in the sweet caress of global warming. Mike, what are you reading out there? Zero? 1? I can tell the heat has been cranking all night, both dogs gave up the couches to sleep on the radiant tile floor in the kitchen.

  5. grim says:

    Still more than a month away from when the new accelerated foreclosures program for abandoned properties takes effect in NJ (March 1). It’ll be a good six months or so before we understand if it has any impact at all.

    30yr – What’s your take? I know the percentage of abandons are higher in the hood, but from an overall NJ market perspective, I can’t see them being any more than 10% of the total pre-courthouse market.

  6. Brian says:

    What’s the right timeframe to resolve a foreclosure? Fast or slow?

    The sooner the better. Let markets work. Doing it slowly is like chinese water torture.

  7. Brian says:

    7 degrees this morning grim.

  8. grim says:

    From HousingWire:

    Home purchases return to 2010 levels

    The number of Americans filing home purchase and refinance applications grew for the week ending Jan. 18, pushing all mortgage application activity up 7% from the previous week.

    The Mortgage Bankers Association noted its home purchase index grew 3% from the prior period, reaching its highest level since May of 2010 when the market was still feeling the effects of the popular homebuyer tax credit.

    “This increase in purchase applications was primarily for conventional loans, as the seasonally adjusted Conventional Purchase Index was at its highest level since October of 2009,” the MBA wrote. “The unadjusted Purchase Index increased 9% compared with the previous week and was 26% higher than the same week one year ago.”

    The refinance index also shot up 8% last week as fixed mortgage rates rose.

  9. Brian says:

    Hey Nom, here’s an argument against the nompound….

    http://www.phillyburbs.com/news/local/courier_times_news/breaking_news/police-seek-gunman-in-fatal-home-invasion/article_a08b6962-974b-578b-8c3f-bb7f6d486ace.html

    You are isolated and vulnerable in this situation unless you have a security system and your gun on you at all times. This guy was apparently a gun owner, and the perps entered through a window. He didn’t have time to get to his weapons. My feeling has always been that you are better off in a more densely populated area where you know your neighbors…then they can alert the authorities if there is suspicious activity.

  10. grim says:

    Looks like Freddie Mac may have figured out short sales finally…

    The Shorter Short Sale: Long on Borrower Benefits

    Faster. Easier. More transparent. These are only some of the benefits borrowers are experiencing with the new Freddie Mac Standard Short Sale program that became effective on November 1.

    Because of their complexity, short sales have traditionally taken months to complete. We worked with our regulator, the Federal Housing Finance Agency, to remove obstacles and streamline the process so we can help more borrowers and reduce costs for the company and taxpayers. The end result is a shorter short sale process that’s long in benefits for borrowers:

    Quicker decisions. New decision time lines significantly shorten the process. Now, servicers have 30 days to make a decision once they receive a completed application, and an additional 30 days beyond that if they need more time to negotiate with third parties. A final decision is required by day 60. We estimate that the time to complete a short sale will decrease by approximately 50-75 percent.

  11. Fabius Maximus says:

    Toasty 11deg in prestigious Bergen County. Must be that we are so close to NYC!

  12. Fabius Maximus says:

    Clot,
    Who was on the Biggest Loser this week? Alan Shearer or King Kenny?

  13. Mike says:

    read 10 degrees on the car thermometer

  14. Comrade Nom Deplume, apparently. says:

    So cold in Chester County that the windshield washer fluid came out like syrup and froze to parts of the windshield even though I had been driving 30 min and the car was warm.

    Dog wasn’t thrilled to be out for her morning walk either.

  15. Painhrtz - So Long and Thanks for all the Fish says:

    2 on my thermometer at 6AM though I think it is a bit off since it is not calibrated.

  16. grim says:

    For JJ, from Bloomberg:

    Will the Middle Class Want Micro-Apartments?

    Soon, Manhattan will not have enough housing to accommodate the growing number of one- and two-person households. Developers have been building up, adding high-rises, to make more living space on the island, but the city has another proposal: allow developers to build smaller. On Jan. 22, New York City Mayor Michael Bloomberg, founder of Bloomberg Businessweek’s parent company, announced the winning design for the adAPT NYC competition seeking proposals for a new micro-apartment development.

    As part of the pilot program, the winning team comprised of Monadnock Development, Actors Fund Housing Development Corp., and nArchitects will build 55 micro-units between 250 and 370 square feet (including a kitchen and bathroom) at 335 E. 27th St. in Manhattan. The city waived zoning regulations at the site, allowing the new apartments to be smaller than 400 square feet, the minimum size since 1987.

    Twenty-two of the 55 units will be “affordable” for low- and middle-income households. That is, they will be earmarked for those with an annual income of up to $48,100, and for those earning up to $93,310. Monthly rent on the low-income apartments will initially be set at $939, while the middle-income units will go for $1,873. “The developer purchased the site from the city at a reduced cost so that they can provide the affordable units,” city spokesperson Julie Wood said in an e-mail.

    The remaining 33 apartments will be market rate (i.e., higher-priced). The average monthly rent for a non-doorman studio in December was $2,282, according to the Manhattan Rental Market Report, which is put out by real estate brokerage MNS—though existing units are at least 400 square feet.

    Similar projects are under way in other crowded cities. In November, the minimum size for apartments in San Francisco was reduced to 220 square feet from 290 square feet. Up to 375 micro-units will be built at first and reviewed by the city’s Planning Commission before more projects are green-lit. In Boston, about 300 300-square-foot units are being developed in the Innovation District on the South Boston waterfront.

    All those up-and-comers who dream of living in a shoe box they can call their own may finally get their wish.

  17. Brian says:

    16 – They will be filled with the mistresses of the wall street guys.

  18. chicagofinance says:

    When I lived in Chicago, I explained to people that in the NYC area when it gets below 10 degrees, everyone starts to get pissed off. In Chicago it is practically every day of the week in Jan-Feb……

  19. Comrade Nom Deplume, apparently. says:

    The NJ Frozen Real Estate Report

    (and now, back to our regularly scheduled ad hominen attacks).

    Driving to Wilmington. It’s further south, maybe I’ll pick up a couple of degrees.

  20. Ragnar says:

    I’m in Toronto today and even Canadians are complaining about the cold.

  21. grim says:

    Surface Pro tablet will have pricing starting at $899 and that doesn’t include the $129 keyboard? The high cap model with keyboard will set you back more then $1100?

    And for a price more than double the iPad (yes, I’ll acknowledge that it’s not even remotely in the same segment), you don’t get a similar high-res screen (surface pro is a pedestrian 1920×1280, so much for pushing the envelope).

    That’s an awfully hard price to swallow, even though the pricing is comparable to similar spec’ed Ultrabooks. I still think there is a bias in the marketplace where there is an expectation that laptops are more powerful and thus should cost more money. That view isn’t going to last much longer, but it’s still out there.

  22. Peace, Love, Dope & Beer says:

    the surface pro is “supposed” to be an ipad competitor; i don’t see how that can be at that price. didn’t someone in the meetings realize the price might be an issue?

  23. Peace, Love, Dope & Beer says:

    19 –

    Peace, Love, Dope & Beer says:
    January 23, 2013 at 8:51 am
    your definition of ad hominem is very LIBERAL. The other day you misused “whining” now “ad hominem.” You use a very different dictionary than most.

    from Wikipedia:
    Examples of ad hominem attacks:
    “The Mayoral candidate’s proposal about zoning is ridiculous. He was caught cheating on his taxes in 2003.”

    “What makes you so smart and all-knowing that you can deny God’s existence? You haven’t even finished school.”

    “If Dr. Smith is such a skilled heart surgeon, then why was he arrested for gambling?”

    “Your fashion opinion isn’t valid; you can’t even afford new shoes.

  24. Ernest Money says:

    Phony & Fraudy getting FK right?

    These assclowns get it wrong 100% of the time.

    More pain to come. More Chinese water torture. Then, it all goes to black.

  25. Ernest Money says:

    Recovery? I got your f’ing recovery (BTW, you should also read Krieger’s article on NAR complicity in money laundering):

    “Many of us spent much of 2012 confused about how the U.S. real estate market was improving within the context of a broke and unemployed citizenry. Well as time has passed the answers to our questions have been revealed. The criminals are piling in. I first explained a couple of weeks ago how the financial oligarchs in the United States are currently in a bidding war to become America’s slumlords in my post: America Meet Your New Slumlord: Wall Street.

    Now we also discover that part of the bid to U.S. real estate has come from another criminal class. In this case, we are talking about corrupt Chinese officials who are pulling their ill gotten gains from their homeland and desperately placing it in real estate all over the globe.”

    http://libertyblitzkrieg.com/2013/01/22/chinese-criminals-are-buying-billions-in-u-s-real-estate/

  26. Brian says:

    Grim Surface Pro and Ipad have a different target customer. The iPad is a consumer device, which IT departments have Fked around with to get it to work on the corporate network.

    The Surface Pro is designed and targeted at the Corporate customer.

  27. Mike says:

    25 Ah so it’s Ming & Ping that’s behind the housing recovery.

  28. grim says:

    26 – Sure, maybe, but why go out of your way to emphasize that it will be available in Staples and Best Buy if that is the case? If corp is their approach, I’d expect there to have been a massive direct sales campaign towards this. Not only that, but this would be a huge change for their direct sales organization, since the current focus is license, license, and more license.

  29. Anon E. Moose says:

    Fab [126, prev thread];

    I won’t bring it into today. Go look there if you want to continue discussion.

  30. joyce says:

    Anyone else notice how oil (now up over $96) and gas prices (down to $3.39 by me) are no longer correlated?

  31. Brian says:

    Grim did Apple advertize any of their product releases much? I don’t recall.

    On a related note, you should find this funny:

    Confirmed: Thieves Break Into Microsoft Offices, Steal Only iPads

    http://www.huffingtonpost.com/2013/01/08/thieves-break-into-micros_n_2433693.html?utm_hp_ref=microsoft-surface

  32. Brian says:

    Sure Apple makes beautifully designed products Grim. I appreciate the work that’s gone into those devices too. But the one thing that they have that others don’t and should fear…is a cult like following.

  33. yome says:

    I noticed about 50 cents premium

    ..

  34. joyce says:

    That index, if I read it correctly, says gasoline prices have been slowly rising over the past 3 months.

    Is that correct?

    If yes, that is the opposite of what I’ve been seeing amongst the dozen or so gas stations I routinely drive by.

  35. grim says:

    From MarketWatch:

    U.S. home prices up 0.6% in Nov: FHFA

    U.S. house prices rose a seasonally adjusted 0.6% in November, according to the Federal Housing Finance Agency’s monthly house-price index released Wednesday. Compared with the same period in the prior year, prices are up 5.6%, according to the index, which is based on data from Fannie Mae or Freddie Mac mortgages. Despite gains, prices remain 15.2% below a 2007 peak.

  36. grim says:

    From Bloomberg:

    Home prices continue rising as inventory shrinks

    Home prices climbed 5.6 percent in the 12 months through November as buyers competed for a dwindling inventory of properties, according to the Federal Housing Finance Agency.

    Prices rose 0.6 percent from October on a seasonally adjusted basis, the FHFA said today in a report from Washington. The average estimate of 15 economists in a Bloomberg survey was for a 0.7 percent advance. The index is 15 percent below its April 2007 peak and about the same as the August 2004 level.

    “Rising prices are good news at this point and they are making the difference,” Patrick Newport, an economist at IHS Global Insight in Lexington, Mass., said in a telephone interview. “It brings in more buyers and sellers and lubricates the housing market. It’s going to stimulate sales.”

    The smallest gain was in the region that includes New York, New Jersey and Pennsylvania, where values rose 0.5 percent.

  37. yome says:

    35 sept to oct trade for dec to jan delivery was going down. It should start rising soon

  38. yome says:

    The Yahoo arrangement illustrates that the Netherlands, in the heart of a continent better known for social welfare than corporate welfare, has emerged as one of the most important tax havens for multinational companies. Now, as a deficit-strapped Europe raises retirement ages and taxes on the working class, the Netherlands’ role as a $13 trillion relay station on the global tax-avoiding network is prompting a backlash.

    The Dutch Parliament is scheduled to debate the fairness of its tax system today. Lawmakers from several parties, including members of the country’s governing coalition, say they want to remove a stain on the nation’s reputation.

    “We should not be a tax haven,” said Ed Groot, a parliament member from the Labour Party, which along with the People’s Party for Freedom and Democracy took power in November. Both ruling parties are “fed up with these so called PO Box companies,” he said. “If they go somewhere else we are not sorry at all because they spoil the name of Holland. Otherwise you can wait for retaliation measures and this we don’t want.”

    http://www.bloomberg.com/news/2013-01-23/yahoo-dell-swell-netherlands-13-trillion-tax-haven.html

  39. Statler Waldorf says:

    It costs over $1,600 to have an iPhone for one year. If the phone is lost or stolen, add another $650 (16GB) or $850 (64GB) to replace.

    http://pocketnow.com/2012/10/03/the-total-for-an-iphone-5-is-1800

  40. Statler Waldorf says:

    The Made in China iPhone also has a 300% markup while typical retail markup is about 60%.

    Rather than employ Americans, Apple execs choose to exploit slave labor in China.

    And privacy? Every click, website, video, app, is tracked, including your GPS location. Welcome to 1984, Big Brother.

  41. grim says:

    40 – Probably costs the average household $1,600 a year to watch Honey Boo Boo and Biggest Loser, and look at stupid cat pictures on the Internet. And that’s before the $1000 TV, which, if broken, costs $1000 to replace.

  42. 30 year realtor says:

    Grim #5 – The percentage of short sales and deeds in lieu is substantially higher than any other period I am familiar with. Logically this would lead to a lower percentage of vacant homes in foreclosure. In inner city areas investors have been buying up properties for cash flow for several years. This has reduced the number of abandoned properties substantially.

  43. 30 year realtor says:

    Anyone following the Bergrin trial? Went to opening arguments yesterday. Very entertaining. Best free entertainment around!

  44. Anon E. Moose says:

    Weather: me thinks we could use a little bit of that ‘global warming’ some folks seem to be all a’skeered about.

  45. yome says:

    #44 the article is different from what I understand. An immigrant myself, when I sponsor a family I need to sign that I will be responsible for that person. They check for my stable income. The person sponsored if a senior is eligible for SSA after being sworn in as US Citizen, usually 5 years after being a green card holder. I understand what we signed to sponsor smeone is not being enforced. The rule is there just not being enforced.
    The citizens of this Country should not be responsible for elder immigrant that never work and never paid into system.

  46. Anon E. Moose says:

    yo [47];

    The rule is there just not being enforced.

    Careful there, bub. Talk like that will get you on the government watchlist or something. [TIC]

  47. chicagofinance says:

    joyce: gasoline prices at the pump in NNJ & CNJ are related to oil prices, but are not correlated 1 to 1. As we have discussed here in the past, there currently is a big split between U.S. oil (WTI) and European oil (Brent). Since we are in the northeast, we are affected by a combination of the two. However, regardless of the price of oil, it still needs to be “cracked” or refined into various products for commerical and personal use. The real issue these days is the lack of refining capacity for the northeast, because we are awash in oil and natural gas……so as much as you may want to track an easily identified index such as WTI, in reality, it would be more important to track wholesale gasoline prices for New Jersey.

    joyce says:
    January 23, 2013 at 10:50 am
    That index, if I read it correctly, says gasoline prices have been slowly rising over the past 3 months.
    Is that correct?
    If yes, that is the opposite of what I’ve been seeing amongst the dozen or so gas stations I routinely drive by.

  48. chicagofinance says:

    Coach missed their earnings today. One of the reasons given (other than people are broke) is that spending has be siphoned off by electronics…..

    grim says:
    January 23, 2013 at 11:57 am
    40 – Probably costs the average household $1,600 a year to watch Honey Boo Boo and Biggest Loser, and look at stupid cat pictures on the Internet. And that’s before the $1000 TV, which, if broken, costs $1000 to replace.

  49. cobbler says:

    chi [50]
    It’s been more of Sandy-related jump in NJ gas prices (compared to the rest of the country) that is still leveling out. Normally our price on average is ~10 cents below PA, in early November it was ~40 cents higher as a result of a supply bottleneck. Gas station owners try to keep price as high as they can, as long as their neighbor stations do the same – as a result, the price drops are much slower than the increases. RBOB gasoline (which is actually our wholesale price as it is for NY Harbor) now is about 15 cents more than in November.

  50. Libtard in Union says:

    I pay nothing for my iPhone. I have an iPod Touch with a FreedomPop Hotspot. I refer to it as my iCheap.

  51. Phoenix says:

    Steubenville again. If they are not busy raping the teenage girls in the town…….
    Are they fracking there? Chemicals in the water?

    http://www.foxnews.com/us/2013/01/23/ohio-couple-in-deal-with-prosecutors-pleads-guilty-to-putting-kids-in-plastic/

  52. Phoenix says:

    Is this a good time to convert a regular IRA to a Roth?

  53. grim says:

    40 – Realize though, that the prices you quote from that article are really no different than the general price it costs to own a top-tier smartphone with dataplan, period. The fact that you say iPhone 5 is irrelevant, applies across the board, whether it be a
    Samsung Galaxy Note 2, iPhone 5, HTC One X+, Droid DNA, Razr HD, all of these phones cost almost exactly the same amount. Likewise, they all cost roughly the same to replace if they are destroyed/lost while under contract, the fact of the matter is that large carrier subsidies are a core part of the business, these little things are EXPENSIVE.

  54. Anon E. Moose says:

    Phoenix [56];

    Is this a good time to convert a regular IRA to a Roth?

    You’re paying tax now, to avoid tax on earnings later. Do you believe that the government is going to keep its promise of tax-free withdrawals on earnings, or will not transition to a VAT making tax-free withdrawals moot? I’m not so sure. I suspect at some point (maybe soon, depending on 2014), tax-free withdrawals will be frozen based on account balances as a date certain, or perhaps a set dollar value cap, with any future earnings or amounts above fully taxed. They may also adjust marginal rates to account for Roth withdrawals (e.g., maybe they won’t collect tax on the Roth money, but it will be counted in your AGI for calculation of the rest of your taxes owed on any taxable income.

    I’m hedging my bets, and have both – my Roth is much smaller than my traditional IRA, because until I bought a house I had no other significant tax deduction. Having both also lets me choose my tax rate in retirement, at least until one or the other account gives out.

  55. Statler Waldorf says:

    “the prices you quote from that article are really no different than the general price it costs to own a top-tier smartphone with dataplan”

    Agreed. However, with most people sitting in front of a computer all day, it makes little sense for most to own such an expensive item.

    I’m sure you’ve run the numbers beforehand, and made an informed decision, but I’ll wager the vast majority of “smart” phone users have not, and are instead blindly weighing down their finances.

  56. All Hype - Mr. Oil, Mr. Gas, Mr. Coal says:

    Great News! Congess kicked the can for 3 months. When May comes, we can just keep on printing until October cause why spoil your summer vacation. After all, the new budget (not really a budget) is just around the corner.

    Everyone wins!!!

  57. Libtard in Union says:

    Conversion of Roth to Traditional IRA may best be split up over many years since it could put you in a higher tax bracket too.

  58. Ernest Money says:

    hype (60)-

    They will keep printing until the wheels come off.

    We have spawned yet another bubble: one of debt and little green pieces of paper.

  59. Ernest Money says:

    The burst of the latest bubble du jour will be the mother of them all.

  60. Brian says:

    No Budget No Pay

  61. Anon E. Moose says:

    Lib [61];

    Not to mention that most people don’t have the available cash to pay the tax hit without dipping into the pool itself (10% penalty on the early withdrawal), so Uncle Sam helpfully lets them spread it out (five easy payments!).

  62. chicagofinance says:

    Trick with conversion is to use money external to the account to pay the taxes. The hardest thing is to find a way to get the money into the Roth.

    FWIW – You should have converted in 2012.

    Two points…there is a new tax law provision (needs to be adopted by your 401(k) sponsor) that will allow conversion from tax-deferred to Roth inside of a 401(k) plan.

    Second, you can open a traditional IRA, make a non-deductible traditional IRA (only $5500/6500 catch-up) contribution and then convert the balance to a Roth with no income limits. Be careful…..if you have other non-defined contribution tax-deferred balances in IRA’s….then you will be screwed so forget it…….

    Anon E. Moose says:

    January 23, 2013 at 3:25 pm

    Lib [61];

    Not to mention that most people don’t have the available cash to pay the tax hit without dipping into the pool itself (10% penalty on the early withdrawal), so Uncle Sam helpfully lets them spread it out (five easy payments!).

  63. chicagofinance says:

    Bob Marley?

    Brian says:
    January 23, 2013 at 3:21 pm
    No Budget No Pay

  64. joyce says:

    No budget, and their salaries will be deferred and then paid out in full

  65. Libtard in Union says:

    “FWIW – You should have converted in 2012.”

    I didn’t have the heart to point out the golden investment opportunity offered last year (and I think the year prior too).

  66. All Hype - Mr. Oil, Mr. Gas, Mr. Coal says:

    Clot (62):
    The Republicans are a friggin joke. They are going to fold time and time again and come up with these stupid little fixes so they can tell their constituents that they are trying really hard to hold the president’s feet to the fire.

    There is nothing to stop Obama from having the debt raised as he wishes. Looks like non-stop money printing for the next 4 years, guaranteed!

    BTFD!

  67. joyce says:

    Hype,

    From what I read, this temporary “fix” suspends the debt limit all together during this interim period. If passed by the Senate, what’s to stop them from suspending it all together the next time?

  68. All Hype - Mr. Oil, Mr. Gas, Mr. Coal says:

    what’s to stop them from suspending it all together the next time?

    Good question Joyce. If they do suspend it all together then Congress should probably pack it in and call it a day. At that point Obama has total fiscal control and has just bypassed the Constitution. If the Republicans are willing to do that then there is not a need for the Republican Party although they could just give Obama the reigns so he can let the whole economy blow up.

  69. Painhrtz - So Long and Thanks for all the Fish says:

    Come mister tally man tally me bannana republic

    Daylight come and I want to print dollars

    10 trillion, 20 trillion bunch!

    Day mesa DayOooooh

  70. Anon E. Moose says:

    Joyce [71];

    what’s to stop them from suspending it all together the next time?

    Practically: our credit rating.
    Actually: nothing.

  71. joyce says:

    Incrementalism at its finest… on both sides of the isle. And I absolutely detest that stupid phrase that every politician uses. Love to smack the pollster or whomever created it.

  72. yome says:

    #56
    My opinion, it depends how much you will need at retirement. I played with a 10 40 and figured, if me and my wife were collecting $2400 in SS and $1000 a month in $401 k. We will not owe any fedral taxes. If I took $2000 a month from 401k I will owe $700 at the end of the year at current rates. Where we are retiring $3400 a month is plenty if house is paid. It is probably true in the US if you retire to a no state tax and low property tax State with house paid.

  73. Juice Box says:

    RE: Expensive toys AKA Smartphones.

    Apple earnings today should be interesting.

    Jig could be up for Apple and Samsung and their nifty but expensive toys. Just look out below for Apple stock. 30% down from Sept and a long way from $700. Also owned by lots of short term players.

    The Quad core phone chipsets, the newest breed of smartphones that now only costs only $160 retail is here now, flooding China’s markets now soon to land on US shores.

    Margin compression hurts, and Moore’s law is still in effect.

    You can thank Qualcomm for your pain if you are long AAPL.

  74. yome says:

    76 So my before tax 401k will still not be taxed at retirement

  75. Comrade Nom Deplume, apparently. says:

    Money,

    I just got your newsletter. Lay off B or I’m coming over there.

  76. Juice Box says:

    AAPL halted watch the rush to the exits don’t
    Be a Costanza…

  77. Juice Box says:

    Costanza!

    http://www.youtube.com/watch?v=ueh_1PeJhaQ

    After Hours: 461.58-52.43‎ (-10.20%‎)

  78. Phoenix says:

    Moose and Chifi, thanks for the good and bad news about the IRA. I am in the medical field, finance is my weakness. At least I am working and attempting to put money away for retirement. I am in that grey area-make enough money to lose badly if not invested wisely, but not enough money that anyone who deals with it on a daily basis has any interest in me.

  79. joyce says:

    Chinese Survivor of Tiananmen Square and crazy fringe nutjob, of course…
    http://www.youtube.com/watch?v=I6_vCbi0JeI&feature=youtu.be

  80. Fabius Maximus says:

    #82 Moose,

    I will defer to the Eddie Rays of the board, but in general you need to look at income today and were you think taxes will be.
    My 2c is: Roths make sense whe you are starting out and in a low tax bracket or in your last years when gains won’t be as big an issue. Roth in your peak years does not make sense as you are paying in with last dollar income.

  81. Fabius Maximus says:

    Tweet of the day.

    Tom Brady was fined $10,000 for his Ty Cobb-style “spikes high” slide. Frank Gore was fined $10,500 for his second violation of the uniform policy for wearing his socks too low. That seems reasonable, NFL.

  82. McDullard says:

    #70…

    You are aware that the debt ceiling is almost a meaningless number, right? The congress still has to pass the budget, and shutdowns can occur [like in 1996] if there is no agreement. All that is irrespective of the debt ceiling.

    I suspect you are probably aware of all that and are just trolling…

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