From Bloomberg:
U.S. Housing Decline Reveals Winners and Losers: John F. Wasik
The U.S. housing bust is like a leaking ship. You may still be able to stay afloat, depending upon where and how bad the holes are.
Will the home market continue to sink or is it just bobbing around waiting for buyers to rescue it? With odds almost favoring a recession due to the housing and mortgage meltdown, it’s a good time to examine what makes local markets weak or robust.
There was no single cause that burst the housing bubble. Demographics, economics and mass psychology — what I call demoeconology — merged to create a buying frenzy that was like a meme, a contagious mass information pattern that infects minds with new ideas.
If you understand the dynamics of these powerful forces, you can then begin to see which markets will have more painful price declines and which will experience appreciation.
For now, it’s fairly easy to conclude that most home markets are in a funk and won’t pull out of it soon.
In August, housing prices posted their biggest drop in almost 40 years and pending sales fell the most on record. New- home sales declined to a seven-year low. There are more than 5 million homes sitting unsold. The behavioral economics of this market are tugging buyers to the sidelines for now. And with the possibility of 2 million more homes coming on the market due to foreclosures, the supply is outpacing demand.
…
Mass psychology anchored home buyers to the myth that homes were endlessly appreciating wealth vehicles. Now the sentiment has shifted.As Yale University economist Robert Shiller wrote in a recent paper, home buyers fell prey to a “social epidemic” and a “widespread perception that houses are a great investment.”
The fallout from the bust will probably impair the economy at large. Shiller found that “residential investment as a percentage of gross domestic product has had a prominent peak before almost every recession since 1950.”
…
Will this downturn be like the 15 percent decline between the third quarter of 1989 to the fourth quarter of 1996 or the 42 percent rout in Los Angeles between December 1989 to March 1997? Since real estate is a conglomeration of local markets, it depends what area you are considering.
In my mailbox this AM from Centex (another Sale of the Century!):
BE FIRST AT THE DOOR
FOR A PRIORITY PREVIEW
EARN PROGRESSIVE COMMISSIONS
UP TO 5% AND $50 GIFT CARDS.
THIS SPECIAL REALTOR PROGRAM
ENDS NOVEMBER 18, 2007.
And, in the fine print:
“Commissions are paid on published base price or actual selling price if lower than published base price.”
Clot,
Send Centex this;
“Housing: That Sinking Feeling
Homeowners are getting slammed as builders slash prices. The big question: Will this shock treatment help hasten the end of the painful downturn?”
http://www.businessweek.com/magazine/content/07_42/b4054001.htm?chan=top+news_top+news+index_top+story
I forgot the bond-market closed today. I am at work and noone’s here.
Would there be any fire sales in NJ from Centex?
America’s Priciest Property Taxes
Matt Woolsey, 10.03.07, 6:00 PM ET
Matt Woolsey
After navigating a tight credit market and securing a home loan, a big property tax bill really hurts.
And nowhere is it felt more than in New York and New Jersey, where residents pay more in these taxes than anyone else in the country. The hardest hit? Homeowners in western New Jersey’s Hunterdon County. Last year, the median yearly property tax bill amounted to a whopping $7,999 here, according to the Tax Foundation, a nonpartisan research group in Washington, D.C, which compiled data based on 2006 figures.
Things aren’t much better in New York. In Nassau County, Long Island, the median homeowner drops $7,706 a year, while up north, Westchester County residents pay $7,626 a year.
In Pictures: America’s Priciest Property Taxes
In fact, New York and New Jersey residents can expect to pay up to $6,500 more in yearly property taxes than the national average. The reason: The region’s homes are among the priciest in the country, and tax rates there are high as well.
“They spend more on government [in the Northeast],” says Gerald Prante, an economist at the Tax Foundation. “In New York and New Jersey, they’re high on every tax.”
Elsewhere, it’s one or the other, not both. California properties are among the country’s most expensive, but property tax rates there are a third what they are in the Northeast. Property tax rates in the Midwest and South are comparable to the Northeast, but the homes there are often half as valuable, making the amount paid in taxes significantly less.
Dishing The Duty
Many homeowners are paying taxes based on assessments done during the real estate bubble. Now that it’s popped, they’re overpaying–home values have not kept pace with the decline in prices.
In other parts of the country, prices continue to climb. The Virginia Beach and Norfolk areas have seen four straight years of price increases, and homeowners there are finding themselves writing bigger and bigger checks to Uncle Sam.
“We are not angry about rising assessments, because that shows that there’s genuine increase in wealth in terms of equity,” says Brian Smith, president of the Norfolk Tea Party, a tax relief advocacy group in Virginia. “But just because market rates have increased doesn’t mean the government is entitled to the windfall.”
What’s more, many local governments are using the tax revenue boost from the boom to set up programs that continue to require funding–even though the market has cooled, and in many cases, tax bases have shrunk.
“If they spent the windfall on some new program, what happens when the property values go down, or when the base falls?” says Prante. “Are you going to raise the rates or cut the program?”
Other parts of the country have laws in place to make sure property taxes don’t swell. California’s Proposition 13, passed in 1978, caps property tax rates for residents in the Golden State. Other states, like Arizona, which doesn’t have property values as high as California’s, have slightly higher property tax rates, but lower income taxes.
“[California’s] higher average property values produce more local income,” says Anthony Sanders, a professor of real estate finance at Arizona State University. “Arizona makes up some of the difference in total tax revenues by having slightly higher sales taxes.”
Warm summers, mild winters and tempered taxes. Sounds like a mix sure to make Northeasterners envious.
The trouble in NNJ & CNJ is that we just don’t have enough new development to make this housing downturn happen quickly. The only folks who just need to sell are folks who are either transferred or going thru personal difficulties like divorce etc…
On No development issue, I understand in areas which are already congested (closer to NYC), but there are many more towns esp. in Central and Western towns that could allow development but refuses to do so. They hide behind Zoning laws and Open spaces program and restrict any development.
“The reality is that New Jersey is deep in a financial hole”
Just raise taxes, they will pay anyway.
From the Home News Tribune:
Jerseyans get off easily on gas tax — property tax is another story
State Sen. Joseph Vitale, who represents a large part of Middlesex County in the 19th District, has a safe seat. How safe? At an editorial board meeting last week he said, “Raise the gas tax.”
The state’s infrastructure is in trouble. Last week a report was released by the state Department of Transportation indicating the state needs $800 million a year for bridge maintenance, about $291 million more than what is now being spent. The report was ordered by Gov. Jon Corzine after a bridge collapsed in Minneapolis, killing 13 people in August.
The $800 million figure was presented at a news conference held beneath an 80-year old viaduct, which feeds cars and trucks into the Holland Tunnel.
The governor stood under the viaduct, which suggest he did not lose his bravery during that life-threatening crash on the Garden State Parkway.
“I don’t like paying taxes. I don’t like paying tolls. No one does. I also don’t like bridges collapsing,” he said, when the report suggested more than one-third of bridges in New Jersey do not comply with all federal guidelines.
And that’s just the bridges. Our roads are not getting any younger.
“The question is, going forward how do you fix it? Do we have the political will (to raise the tax)?” Vitale asked.
…
According to newjerseygasprices.com the average cost of a gallon of unleaded in New Jersey was $2.506 on Friday. Had the governor and legislature snuck through a 10-cent tax increase on us midnight Thursday, raising the prices to $2.606, we might not have noticed, and we would still be paying more than 15 cents below the national average of $2.758.
Why is everyone so upset about declining home prices’s? We have enjoyed upswing of 15-25 % every year in housing . So the bubbles grew!!! Its time for home sellers to reduce asking prices’s form “unreasonable” to more acceptable levels (25-30% less ) and buyers will come!!
JPM and BAC to write down $3 billion in loans: report
http://www.reuters.com/article/ousiv/idUSN0828016420071008
On Property Tax article. Nassau county, I can understand, high population, high cost of salaries etc… for higher taxes. But Hunterdon???
I live very close to Hunterdon, and consider it great area to live, but I think the towns here have been taken over by some weird agenda.
My friend at ML told me yesterday that in their division the Marketing department has been asked to cut costs by 30%. According to him, things will get really ugly if Stock market tanked.
SG Says:
October 8th, 2007 at 9:01 am
On Property Tax article. Nassau county, I can understand, high population, high cost of salaries etc… for higher taxes. But Hunterdon???
I think the Hunterdon data is skewed because there’s not a lot of low end housing there. There are fewer homes and most of them are expensive. You don’t have a thousand condo’s and lower income homes which bring the average tax bill per house down. The number to look at is the average tax per $1,000 in value. ie, what’s the tax bill for a $500,000 home in Bergen vs Hunterdon? I don’t think the difference will be all that much. Places like Montclair and Millburn will be much higher.
Finance Ministers Discuss Dollar Woes
Last week, the employers federation BusinessEurope said that, by crossing 1.40 against the U.S. dollar, the euro exchange rate had reached a “pain threshold” for European companies. It also complained the euro was appreciating too fast against the Chinese yuan and Japanese yen.
While echoing their concern, the finance ministers of the 13 euro-zone nations will reiterate Europe is an innocent victim of others and that the euro-dollar exchange rate issue is part of a broader set of problems triggered by China’s trade surplus and America’s huge debts that require concerted steps to undo.
To help remedy the risk of a financial crisis, it is calling for more scrutiny of how banks repackage and sell loans — particularly those made to people with no money, job or assets — as investments that were rated as sound by credit rating agencies Standard & Poor’s, Moody’s Investors Service and Fitch Ratings.
October 8, 2007 — PITY Christopher Hitchens. Not because he is going to hell for his attacks on Mother Teresa. Not because his liberal friends despise his support for the war against terrorism. Pity him because he just had all his pubic hair pulled off. Hitchens, who’s writing a three-part series in Vanity Fair on self-improvement, visited the J Sisters on Friday for a full male Brazilian bikini wax, which his editor-in-chief Graydon Carter gleefully described four months ago as “the back, the crack and the sack.” The salon staff evidently doesn’t mind Hitchens’ chain-smoking, or his taste for scotch. Our source said, “It’s not his first time.”
clot: regarding the Yankee rant
Yes, I despise the team too, but really the big problem is merely sustained excellence. When there becomes a cachet associated with being at a Yankee playoff game that has nothing to do with the sport, you get the effect you profile. I saw the same thing in Chicago at Bulls games when I was there in the mid-1990’s. I still remember Bill Walton remarking at the crowd on TV. The crowd was applauding and he said “…you can hear all the jewelry jingling…”
Here’s to the house being cleaned out…..
chicago – thank you for [14]. that cracked me up.
ABX Indexes
“You’ve only seen the first round in the deterioration of the mortgage area,” said James Melcher, president of Balestra Capital, a New York-based hedge fund with about $270 million of assets. “The second round is just starting, and it’s going to be worse.”
Balestra Capital’s fund rose about 130 percent this year through September, according to a letter sent to investors. The fund used so-called ABX indexes to benefit from the increase in home-loan delinquencies. ABX indexes allow investors to buy into derivatives called credit-default swaps on multiple securities. Bearish investors have used ABX bets to wager against the health of mortgage lenders to people with bad credit histories.
An ABX index tied to 20 subprime mortgage bonds rated BBB- slumped 46 percent in the third quarter. The index has declined about 70 percent this year, data compiled by administrator Markit Group Ltd. show.
Homebuilding Index
Home prices in the U.S. will drop on a year-over-year basis for the first time since the Great Depression of the 1930s as an estimated 1.5 million people are in danger of losing their homes to foreclosure, according to estimates from the Fisher Center for Real Estate and Urban Economics at the University of California at Berkeley. The 16-member S&P Supercomposite Homebuilding Index has fallen 62 percent since the housing boom peaked in September 2005.
While Northern Rock, Merrill, UBS and Bear Stearns weren’t prepared for the market reversal, Harbinger’s $11 billion hedge fund, run from New York by former Barclays Capital trader Philip Falcone, climbed more than 65 percent this year. The $4.5 billion Paulson Credit Opportunities Fund rose more than 300 percent and Kyle Bass’s Dallas-based Hayman reported a 400 percent return. All the funds benefited from the slumping mortgage market.
Hedge funds are mostly private pools of capital whose managers participate substantially in the profits from their speculation on whether the price of assets will rise or fall.
Several comp killers came on the market this week.
The smart sellers with stale listings dropped prices immediately to match.
The greedy dummies, hoping for a miracle, did not.
Hitchens is an interesting fellow, now particularly so in light of the revelation of MTs letters.
“Tens of thousands of New York bankers are braced for a crippling round of job cuts as the aftershocks of the credit-market collapse reverberate the length and breadth of Wall Street.”
‘This is a variable-cost business,’ said David Wyss, the chief economist at Standard & Poor’s in New York. ‘That means when revenues go down, you cut jobs to account for it.’
“Wyss believes that Wall Street could be on course to cut as many jobs as were lost after the terrorist attacks of 2001. He also thinks cuts won’t be restricted to New York, as banks are likely to want to shed jobs in all the world’s big financial centres, including London.”
“Analysts estimate that 40,000 jobs could be lost in New York alone.”
http://money.guardian.co.uk/news_/story/0,,2185220,00.html
Clot,
I believe you said you do REO sales, where is the best place to find listings? I think RealtyTRac is pretty good, but you have to apy for it. The sheriff’s website is helpful, but it seems like almost every auction never makes it to the block and gets pulled that friday morning before the auction.
Any tips?
Thanks
bb,
http://mortgage.chase.com/pages/other/co_properties_landing.jsp
http://www.reoexperts.net/
http://www.countrywide.com/purchase/f_reo.asp
http://apps.indymacbank.com/Individuals/Realestate/Search.asp
http://www.premierereo.com/reo/consumerSvlt//nav/ConsumerNavL1.jsp/requestPage/consumer/PropertySearch.jsp
SG #5
I’m not sure if understood the tone of your post, development is not the answer. it sounds like you are suggesting that we just build on any available land until we bring all of the values down.
That concept is grossly over simplified. For example, you need so many acres of untouched land to support human development ( i.e. you need so many acres of woodland and filed to allow surface water to refill aquifers). Secondly it has been shown that urbanized areas require huge amounts of resources from the surrounding non-urabnized areas. It would be much more effective in the intermediate and long run to rehabilitate places such as west orange and newark then to try and urbanized outlying areas. Unfortunately it is much easier to build new urban areas then fix the broken areas, so we know what choice most people would make.
Ultimatly urbanziatio has huge environmental costs. I am not suggesting that we go back to hunter-gatherer society. But at some point we run into the christmas island issue ( the natives of christmas island deforested the entire island in order to build the famous statues. As a result the ecosystem collapsed and the island had to be abandoned.)
Clotpoll… re: Yankee rant
Boy you really have to dig deep to find stuff to complain about the Yankees, don’t you? Why don’t you worry about the sorry state of your own team?
I know he was not “Captain Clutch” last night, but who is the better shortstop in NY now?
Enjoy the long winter!
#18
Lil John, how about a link next time so that space isn’t used up uselessly?
GRIM – I know how you say if something is priced right, it will move, but as buyers, shouldn’t we be on the lookout for houses in communities where we could see massive foreclosures?
If you buy a reasonably priced house today, and in your 500-home community 50 people end up foreclosing (this is happening in many places; cleveland, long island, san diego, etc), the value of your house will go down.
This is my only argument against buying now. I think the smart move is to wait until the spring, when (probably) the worst of the foreclosures are behind us, to make a decision.
Unless buyers can find out what just how many people in x community used sketchy loans, I’m leery of buying a house and watching it go down in value for a few years before it goes up again. Even if you plan on buying and staying for 30 years, should you – for whatever reason – need to sell soon, you’re screwed.
Your thoughts?
Pretty good Minyanville piece re the Homebuilders:
http://www.minyanville.com/articles/Housing-Homebuilders-Beazer-KB+Homes-Hovnanian-D.R.+Horton-Standard+Pacific-Meritage/index/a/14378
UnRealtor
Would love to see those comp killers…
chicagofinance 15,
It reminds me of the Knicks games for most of the 90’s, too. All the celebs draped in bling and other phony BS. Too bad they couldn’t bring their puggles and trophy babies, it would’ve made a nice photo op.
And if you take a walk in some of the parks in Upper Bergen on a beautiful sunny day, you get to see all the pretty wannabe people with their designer strollers and neatly dressed brats doing the brisk walk thing with Mummy and Daddy wearing the Yankees lids. I particularly like the blond pony tail pulled out the back of the hat on Mum. Very trendy, Muffin.
To wear a Mets cap would be grounds for arrest. lol!! Makes no difference to me but it sure is entertaining.
ChiFi (14)-
I will now bathe with an electric toaster.
https://www.wellsfargo.com/mortgage/account/altrepayment
There may not be as many forecloures in prime properties as you think. I still see foreclosures mainly in lower income neighborhoods. However, in the better neighborhoods where buyers are only slightly underwater they are starting to see short sales. That you might not even know since it looks and smells like a regular sale at first glance. It is so bad that Wells Fargo lets you apply on-line for a short sale. Also look at the massive foreclosure inventory at Wells and remember that is only one bank and not even near one of the biggest subprime lenders.
John (18)-
“Make volatility your friend.”
Where have I heard that before?
http://www.nypost.com/seven/10062007/business/freeze_is_on_at_giant_mortgage.htm
October 6, 2007 — Ellington Capital Management, the country’s largest mortgage-backed securities hedge fund, sent a letter to investors notifying them that redemptions and withdrawals in two of its funds would be suspended because of a sharp decline in the liquidity of certain mortgage- and asset-backed markets.
The Old Greenwich, Conn.-based hedge fund, which has $5.2 billion in assets, is considered a bellwether for measuring the health of the mortgage-backed securities market.
John (18)-
“Even the good Dr. Freud was known to relax at the end of a demanding day with a drink and smoke.”
And a big, fat line of blow.
bergen (22)-
Forget the sheriff sales. 80% of that stuff is going back to the bank now.
Lots of REO is listed in the MLS channels…and the number is increasing.
Also, some lenders maintain websites dedicated to their REO inventory. Google around, and you’ll pick them up.
No need to pay for this info. These banks will practically pay you to take this crap off their hands.
Freud was doing eight balls? Who would’ve thunk it.
Donnie (25)-
Was anything I wrote about the Yanks last night not true?
I don’t remember even mentioning Jeter. Why bring him up? IMO, he gets a mulligan for this series. The guy was bound to have a playoff slump at some point.
Clot,
You did mention the Tribe’s BP pitchers[game 3&4}. Akin to the National’s and Marlin’s pitching staffs? Just sayin…..
Clot,
You said:
Forget the sheriff sales. 80% of that stuff is going back to the bank now.
Why go through a sheriff’s sale, if the houses are going back to the banks anyway?
Is it that the sheriff’s sale is the last opportunity for the borrower to reclaim the house before it goes back to the bank?
Is it more of a protocol or procedure that establishes that the borrower isn’t going to try to reclaim the house?
“Too bad they couldn’t bring their puggles and trophy babies, it would’ve made a nice photo op.”
Classic
scribe (40)-
NJ is a judicial foreclosure state, meaning foreclosures are administered by the courts. The sheriff sale is a necessary step in the process. When homes are not taken down in the sheriff sale, they go back to the bank for $100.
The redemption period in NJ is up to 10 days after the sale.
C’mon, man… I’m jones-in’… just gimme one more hit… that’s all I’ll need and I’ll be good.
use http://homes.realtor.com/prop/1082424662
Grim- thanks for the REO links.
Clot- you said they go back to the bank for $100.
Is this when they don’t get their lien amount? If the lien is $300K and that’s where the bidding starts and no one makes a bid, then it goes back tot he bank for $100?
When does the bank say screw the lien amount I’ll take whatever I can get. Start teh bidding at $100K? Or is this when they go to an REO broker like yourself?
Clot,
And then the bank finds a realtor to put it back on the market?
That’s the point where the house really becomes available to the public?
Is it that the prices at the sheriff’s sale are established by the outstanding loan balance, and the sheriff’s sale is also an attempt to see if someone will step forward and pay the full balance? And then, once the house goes to a realtor or its REO site, that’s the point where the bank will start discounting to try to move the house out of inventory?
Clot,
I’ve been baffled by the sheriff’s sales because it seems that not much happens at that level – lots of $100 sales back to the lenders.
kettle1: The issue argument against any new housing development has been that schools can not keep up with new students.
The environment argument actually should allow for more high density housing compared to current policy where only houses I see getting constructed are McMansions. If you look at most of Europe, there is much more planned high desity towns well connected by transportation. If environment was concern then McMansions on 5 acre land should be banned.
scribe,
Not much action at auctions when upset prices are higher than market prices.
anecdotal evidence:
I went for a walk in Central Park on Saturday around the Met. I guess I’m a little out of the loop…..when did this area turn into the river walk by BPC? I’m telling you, something is seriously out of whack….someone has to chuck out all these bankers….I’ve never felt as if there was such uniformity and monotony in NYC……..yeeech!
I just picked two recent sales from Bergen sheriff’s listing. When I look at these two it seems like both are owned by the bank, the first in Bergenfield “went back” to Wells Fargo for $100. The second in Paramus was “sold to” B of A for $448K?
762063 9/28/07 217 PHELPS AVENUE BERGENFIELD $100 WELLS FARGO NA AS TRUSTEE FOR CARRINGTON MORTGAGE LOAN TRUST SERIES 2006-NC1 ASSET BACKED PASS THROUGH CERTIFICATES
762025 9/28/07 68 BUSH PLACE PARAMUS $448000 BANK OF AMERICA N.A.
bergen (44)-
That’s mostly right. Usually the reserve is the “upset price”, in which all other liens, debts, attachments are put on top of the mortgage balance.
scribe (45)-
That’s pretty much it. And, for the record, I’m not an REO broker (a la Ralph Barone in today’s other post here). I do the pre-foreclosure/foreclosure/short sale thing. I prefer representing buyers for REOs, not the banks.
Not that I’d turn down any bank’s REO listings…
scribe (46)-
No potential equity in any of those places. Just pure piles of debt/loss. That’s why they go back to the bank.
Says it all……
Asked on the way to his car if Torre saved his job with the victory, Steinbrenner answered, “What?”
bergen (50)-
Looks like BofA had to jump in and bid against a serious player in order to protect their interest.
They must believe that they can turn it out REO and at least get that 448K back…if not, more.
ChiFi (54)-
Selective amnesia.
Crazy, like a fox.
…..someone needs a durable POA
“In fact, 52 percent of builders surveyed in August reported lowering sales prices, unheard of a few years ago, said Gopal Ahluwalia, staff vice president of research for the National Association of Home Builders.”
Does anyone believe there are still 48% of builders reporting to the National Assoc. that haven’t cut their price? Give me their location where they are building because I guess people are still buying houses at full pop according to this dribble. Another crap statistic reported by the media.
Looks like BofA had to jump in and bid against a serious player in order to protect their interest.
My guess was junior lienholder
Clot, Grim
Thank you. That explains the process.
When countrywide and chase get around to telling us their imparied loans and write-offs during the 3q I am sure it will be a good spook to the markets. Chase might be a buying opportunity but countrywide is a train wreck that until I get an annual report and 2008 FY numbers I don’t know how they are going to survive long term as a stand alone entity. Sure someone may buy them at a bargain but only the pennies on a dollar recent bondholders will make out if someone like BOA buys them, the common shareholders will still get a blood bath as BOA won’t scoop that wreck up for anywhere near its current price of $20..
grim (59)-
Maybe. I’m sure these days there are a couple of chucklehead outfits holding junior liens who show up and bid, as a sort of f-you to the holder of the first.
However, most junior lienholders these days know they’re dead men walking. Just no point in even trying to bid in the six figures to recover 50K from some sucko HELOC that should’ve never been underwritten.
John (61)-
Sarbox be damned. How do you know Countrywide’s annual report won’t be a fraud?
Will they even make it to the next annual report?
Clot [63],
I agree. The quarterly earnings are just a marketing gig. Who knows what their auditors will include in the annuals? Does anybody really think the writedowns reported accurately reflect the likely financial impact on banks/their investors?
SG Says:
October 8th, 2007 at 11:46 am
“kettle1: The issue argument against any new housing development has been that schools can not keep up with new students.”
I actually agree with Kettle1 on this one concerning Central Jersey. They have been developing the area like mad for years – all of those townhouse developments were farmland 10 years ago. Many towns have doubled their populations in that time.
The state is a much nicer place with a mix of urban/rural than it would be as one giant suburb. If the compromise is large lots I don’t really have a problem with that.
I would rather see the focus on urban renewal and smart growth.
Europe has many good examples but those areas grew up organically over time, well before the advent of the car so they work with what they have. The generation of many US areas is/was completely different and the culture is different too.
That said, the fact that many towns are overrun with McMansions is pretty sad and poor land use.
The bank attorney bids $100 and if anyone makes a higher bid then the bank’s attorney’s are instructed to bid the Upset price.
The banks will never bid above upset price.
The trick to buying foreclosure properties is that you have to find the property that you like and that the lien/upset price is at 50-60% of your estimated value of the property.
Good luck finding anyone who’s defaulting and isn’t leveraged up to their eyeballs.
Thanks for the input on the REO’s.
So on my paramus example where it went to B of A for $448K, it started at $100, I could’ve come and bid $101, but the lawyer for B of A would’ve said no way and bid $448K?
A better example where someone could actually buy a house at a discount might be this one:
761612 11/30/07 8 AVON COURT BERGENFIELD $14901.71
I’m assuming the house is worth more than $14K, so assuming this goes to auction (and there’s no other hidden liens), someone will bid greater than $14K, let’s say $100K, the bank will get it’s $14K to settle the debt, the homeowner will get $86K (just as if they sold it on their own) and then the bidder will be the owner for $100K?
# 66
I agree that the Mcmansion trend is indeed bad overall. However, high density develpment is not teh only answer. the best answer is a combination of high density areas like east NJ while maintaining some areas low density. It is difficult to compare europe to the SU because the European towns and cities grew up before the advent of the car. Since the US infrastructure is based on the car you will see little change in our development habits until we can somehow shift some of our infrastructure to an alternative form, of which there are many possible combinations and is a discussion for another day.
Ultimatly one of the biggest road blocks is cultural/ social. You can redevelop east orange all you want, but until people take responsibility for their surroundings condition and have some respect/pride in their homes then any urban rehabilitation will end up like any other public housing project and quickly go down the drain.
“St. Joe Co., Florida’s largest private landowner afflicted by the worst housing slump in 16 years, plans to eliminate more than 75 percent of its workforce, sell about 100,000 acres of land and scrap its dividend.”
“The retrenchment includes cutting 760 jobs, selling 190 homes and about 1,200 developed home sites, Jacksonville-based St. Joe said today in a statement. This quarter’s earnings will be reduced by a $30 million charge. The company will also have $7 million in severance costs this year and next.”
http://www.bloomberg.com/apps/news?pid=20601087&sid=aumsdh3bznkM&refer=home
SG # 47,
I also agree with the general premise of your comment there
761612 11/30/07 8 AVON COURT BERGENFIELD $14901.71
I’m assuming the house is worth more than $14K, so assuming this goes to auction (and there’s no other hidden liens), someone will bid greater than $14K, let’s say $100K, the bank will get it’s $14K to settle the debt, the homeowner will get $86K (just as if they sold it on their own) and then the bidder will be the owner for $100K?
Exactly.
Issue is that you have to do your homework with the county clerk. From speaking with the so called experts I have come to conclude that there is no such thing as free lunch in Foreclosure either. Chances of an average Joe getting a property are very very small. Homeowners who have equity get contacted by cash payers and sell the property or delay the auction until they do.
Only unwanted properties ie the ones with two much debt on ever make to the auction.
bergen (68)-
Wow. Just on the surface, that looks like it might be a property in which there is either just a small balance left on the first…or perhaps the first was paid off at some point in the past, and that 14K is a second or some sort of LOC.
My guess is that proerpty will be the object of some heavy bidding…IF it even makes it to the sheriff sale. I’d think somebody is working real hard right now to make the 14K payoff to that lender.
bergen (68)-
Any interested party should also run title on that property to see if there are tax, water or sewer certificate holders that are attempting to foreclose. That 14K is a suspicious-sounding amount…
This should be a fun phone call. I know the KPMG partner who does the external audit for CWM and she is a tough cookie so I doubt they will get a free sox ride come year end.
COUNTRYWIDE TO REPORT 2007 THIRD QUARTER
EARNINGS AND HOST LIVE
TELECONFERENCE ON OCTOBER 26, 2007
The Company will host a live, telephonic management discussion of the third quarter’s results at 12:00 p.m. EDT.
Live audio dial-in numbers:
(800) 700-7414 (U.S.) or (612) 234-9959 (International)
14K is a suspicious-sounding amount…
It’s very suspicious. I agree with Clot.
Now I’m gonna go check my pulse.
john (75)-
I heard it was rescheduled to Halloween and Angelo was going to do a video teleconference call in a Dick Nixon mask.
Oops…he may not require that mask. “Leatherface” would be an excellent Halloween character for Mr. Mozilo.
How can I not tip my hat to the original Leatherface, Ed Gein?
Don’t read this if human taxidermy doesn’t give you a frisson of enjoyment:
http://movies.ign.com/articles/736/736910p1.html
BC Bob #70
Hurricane seems everywhere in FL. Do you think that it is worthy to consider to buy land/house when price is RIGHT?
make (76)-
I’m gonna go take six showers.
GOOG cracks $600. Still trading at a lower P/E than YHOO.
All disclaimers.
lisoosh & Kettle: Single Family Houses is as American as Apple Pie. Majority families would not live in town houses or condos in dense urban areas. Suburbs are what made America since 50’s. In fact, I read somewhere Suburban development starting from 50’s, was one of the major cause of USA’s economic strength.
The only way you can keep use less environment and allow for high density is allowing Single Family Housing on small lots like .15 to .2 acre lots. Instead, what you have in NJ is towns making zoning laws of acre plus or only approving McMansions on large lots.
SG (83)-
“The only way you can keep use less [sic]environment and allow for high density is allowing Single Family Housing on small lots like .15 to .2 acre lots.”
Take a look at Milltown/Vanderveer Rd area in Bridgewater. A gazillion McMansions on .2 acre lots. How can you call that environmentally-sound? It’s holocaust-by-real estate.
Clot: The way I see saving environment is allowing no development in sensitive areas, creating better and more parks etc… By doing development only in small area, other sensitive areas can be protected.
I actually think the development you mentioned is good model for future. First it meets cultural requirement, where if not all but many families would like to live and raise kids. Second it has high density compared to houses occupying acre lots. Third it provides much larger tax base for very small usage of land. It also reduces town expenses as things like Road Servicing, Winter services, Grabage collection etc… take less resources.
It may not be optimal or meet old standard of large lot housing, but I think such housing serves more options.
From today’s edition of Investment News:
National database is in works
FINRA to develop CRD-like system for mortgage brokers
By Rosalyn Retkwa
October 8, 2007
The Financial Industry Regulatory Authority is developing for mortgage brokers a national database similar to the Central Registration Depository.
Working under contract for the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators, FINRA is creating a national database — the National Mortgage Licensing System — that will be launched in January and cover licensing and enforcement actions in the mortgage brokerage business.
[snip]
It will “eliminate the opportunity where a company might get in trouble in one state and then try to change its name and open in a new state,” said Steven Antonakes, the Boston-based commissioner of banks in Massachusetts.
The system will give most of the states their first opportunity to check criminal history on a national basis via the FBI, making it “much easier to weed out any bad actors,” he said.
Mr. Matthews said the system also will make it easier to identify mortgage brokers who are originating bad loans, because every loan application will carry a unique number identifying the mortgage originator. That kind of data will allow vendors “to create a performance score similar to a credit score,” he said.
The NMLS also will be available to the public.
Because it will exclude bank-based loan officers, the system is not without its critics. The National Association of Mortgage Brokers, based in McLean, Va., which represents non-bank brokers, has been especially vocal.
In a press release issued this year, Harry Dinham, then NAMB president, noted that some of “the largest and most recent fines and settlements for abusive lending practices” involved banks and lenders that would be exempt from the NMLS, citing Ameriquest Mortgage Co. of Orange, Calif., which entered into a $325 million settlement in 2006. It was formed under a thrift charter.
http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20071008/FREE/710080324/1009/INIssueAlert01
Clot–
I don’t know if you have a subscription to WSJ. There is an interview with the owner of Top of the Hill in Chapel Hill: http://blogs.wsj.com/independentstreet/2007/10/08/sex-and-the-city-and-the-small-town-bar/
Rachel
SG (85)-
Why not the Euro/Transit models? Why even create new units, when existing structures can be retrofitted?
And, high density- suburban style- only benefits one entity: builders. Developments like Milltown/Vanderveer are a big net loser for municipalities.
Please don’t tell me that stack-a-shacks as far as the eye can see are some sort of exurban panacea. Go to Houston or Atlanta, and you’ll see how these things invariably end…as suburban slums.
From the APP:
Foxtons files for bankruptcy, claims nearly $41M in liabilities
Foxtons Inc. has filed for Chapter 11 bankruptcy, saying the declining housing market prevented it from continuing its operations. The real estate company reported assets of $488,000 and liabilities of $40.9 million.
The filing in U.S. Bankruptcy Court in Trenton would give the company a chance to preserve the value of its assets. Those assets eventually will be liquidated and used to pay off creditors, the filing said.
The filing on Friday evening came a little more than a week after the West Long
Branch-based company announced it couldn’t survive and laid off 350 of its 380 employees.
The announcement by Foxtons created waves in the Shore’s real estate market. The company made its name by taking direct aim at traditional real estate agencies by offering commissions that were lower than what competitors charged. Once the housing market slowed, though, the company’s losses mounted.
When it closed, Foxtons had 4,400 listings in New Jersey and New York. The company wants to sell the listings, along with customer databases and any equipment, furniture and vehicles that aren’t leased. It believes those assets can generate $2.6 million, according to court documents.
Kettle – you had a “however” but I think we are pretty much on the same page. I grew up in the UK and there they made the mistake of clearing out old slums from the cities and moving the populations to purpose-built “estates” which actually magnified all of the previous problems and removed the social fabric which had prevented them from worsening.
SG – There certainly is a modern American tradition of SFH’s in suburbs, but there is also a tradition of people moving to the “big city” for excitement and culture – witness New York, Chicago and San Francisco; an American tradition of small towns – think “It’s a Wonderful Life” (which I think people mistakenly try to recreate in their move to the suburbs); and another tradition of the rural farmer/cowboy/rancher. The suburbs are certainly not a cultural requirement or a necessary dream, rather a result of a car based society and a wish for larger/more luxurious housing.
Looking at the development you point to as a model, I don’t think we will agree though. To me such developments are disgraceful – ugly and souless. A thousand identical families living in a thousand identical houses, nowhere to go and nothing to do. The kids can’t walk anywhere, the parents turn into taxi drivers and social secretaries and the houses are too big to affordably cool, heat and furnish.
I much prefer current efforts to revitalize old towns such as Somerville, enlivening the town center, or South Bound Brook where an old industrial site was turned into high density housing walking distance from the train station. Many such towns have older SFH housing stock ripe for refurbishment and renewal and brownfields waiting to be cleaned up. That should be the first priority.
Why not the Euro/Transit models?
Isn’t that what the German did in WWII? However, they were all one way tickts.
Rachel (87)-
Thanks! Missed that.
That guy is a genius. However, your boyfriend has him trumped with the fried poultry.
John (91)-
My FIL is 89 y/o and an Auschwitz survivor.
He could probably kick your ass with a toothbrush.
The wonderful life house is an actual house located in Great Neck Long Island.
The morning express train is one stop to NYC in under 28 minutes. I think that house was walking distance to the train station.
It was back on the market a few years ago and it pretty much looks like it did in the movie. The realtor may have even thrown in Santa’s cane.
Clotpol, what is an FIL? I remember in high school we saw the movie “Night and Day” and we had a women from town with the serial numbers on her arm from the concentration camp who was actually there do a Q&A right after the movie. I used to see a lot of surviviors in my town growing up, not so much anymore. Then again 9/11 seems a million years ago to a lot of people so WWII is really one for the history books in a country where people get their news from TMZ.
Visited Auschwitz (Oświęcim), for the 3rd time, when I was in Europe this past summer. My parents grew up in a village not very far away.
If you’ve never been, it’s an incredibly difficult experience. No words written, or pictures published, come close to describing it.
Opps the house in Great Neck is from Miracle on 34th Street
Clotpoll (92)
John has successfully managed to insult just about every person of every ethnicity in the very short time he has been posting on this blog. I call it halitosis of the intellect
John
FIL = Father -in-Law
The CIBC exports study
In peak oil circles, the likelihood that world oil exports will peak and then decline faster than world oil production has been discussed, tracked, and generally accepted for some time now. Last week the notion that peak exports may well be near at hand hit the mainstream when Jeffrey Rubin, the chief economist of the Canadian investment bank CIBC, released a report on declining oil exports and began briefing Wall Street groups about his findings.
With the headline grabbing “$100 oil by the end of 2008”, Rubin reported that rising demand in oil exporting countries such as Mexico, Venezuela and Saudi Arabia will put pressure on global oil prices in the coming years. He expects exports from OPEC countries, Russia, and Mexico will likely decline by about 3 million barrels per day over the next five years with the biggest drop coming from Mexico, a key U.S. supplier. Rubin believes that of a potential drop in exports of 3 million b/d, 2 million will directly affect US imports. This coupled with very expensive new production such as deep-water and Alberta sands production will lead to $90 oil during 2008 and $100 oil by the end of the year. Thereafter, oil prices will remain in triple digits.
Rubin posits that as one of the few sources of oil still open to private investment, Alberta will gain an increasing share of US oil imports.
If FIL means father-in-law, my FIL’s father met his death by being snatched up by the Germans out of his bed in WWII, but it is so many years ago and all of those people who committed those crimes are long dead, my father recalls the German warplanes flying over his house with bombs out ready to drop and him ducking for cover. We have the hit show on broadway the producers, hogan heros etc. Everyone lost someone and we can’t sit around and moan about it for 70 years. Lighten up.
#96 Grim – I’d like to go sometime. It is a right of passage for many Israeli kids.
Ever see “Kitty go back to Auschwitz”? Rends every piece of your soul.
John,
Graduating from Hate 101 to advance dooshbagism….congratulations buddy, your dad must be proud. Oh what that you say, you haven’t spoken in years? Makes sense.
John Says:
” Everyone lost someone and we can’t sit around and moan about it for 70 years. Lighten up.”
Most people when dealing with those who have faced unimaginable horrors have the common sense to take their cues from them. True survivors don’t need to be told what to feel by some spoiled, suburban, bravado-by-proxy pseudo-cowboy.
grim (89)-
Any Foxtons listing client lurking here who needs to obtain an unconditional release should do the following:
1. Execute and sign a withdrawal/status change form for the MLS in which your property is listed.
2. Write a letter, addressed to Robin Ervin, Foxtons broker-of-record. Indicate that: a) the demand for unconditional withdrawal is NOT being pushed by a competing Realtor; b) you demand immediate release and will not accept assignment of your listing to another broker; c) you are facing hardship (be specific) due to Foxtons’ inability to fulfill its fiduciary obligations.
3) Fax the letter and change form to Robin Ervin at Foxtons at both (866)772-8516 and (866)254-3197. Understand that Foxtons contact numbers are being constantly changed and/or disconnected. These numbers were working as recently as Friday of last week, though.
4) Make a .pdf of the materials, and e-mail them to robin.ervin@foxtons.com
4) Make a .pdf of the
John (95)-
Father-in-law.
John (101)-
You take the cake. BTW…you’re also fully living up to the mental image most of the world has about I-banker types.
If you think the Holocaust has no modern-day repercussions, you’re as ignorant as the denizens you disparage for getting their news from TMZ.
At least Gordon Gekko wasn’t a plagiarist.
Hey, you were not in WWII get over it. Some people can’t move forward, I remember I worked with some kook who had a meeting in Windows on the World on 9-11 and missed the bus that day and the nut went into counseling cause he coulda died. Manwhile my uncle died in 9-11 and my aunt stopped going to the widow things cuase it is the same old same old and no-one is moving forward. My mother and father are long dead both due to a botched medical procedure with tainted blood so I don’t talk to them much. Actually, I don’t hate anyone, what is the point. Fact of life is our grandfathers would have never imagined we would be best friends with the Japanese and Germans and we would have a toyota and mercedes in our driveway and our future great grandchildren will be vacationing in Iraq, Cuba and we will have a new ememy.
I remember working at a client who just lost most of her co-workers in 9-11 and we were trying to recreate all the trades in progress. She told me that unless you were stuck in that staircase unable to move after the first tower had fallen. You were really choking and ready to say your last prayers as the staircase grinded to a halt you have no right what so ever to talk about 9-11. She said all the people downtown who were nearby act like they were there, but standing down the block looking at a burning building is not the same as being there. I worked with her with burns still fresh on her back in late Septemer 2007 and we got all the missing trades back and settled. She could move forward in just two weeks and I like to move forward. I think it is hatred not to move forward.
John (108)-
The ability to “move forward” and obtaining a rudimentary understanding of history are two separate issues. One has nothing to do with the other.
My FIL certainly “moved forward”. He came to the US penniless, built a business and retired at the age of 55. “Moving forward” was never an issue for him, since the failure to do so would’ve finished him as surely as a guard at Auschwitz would have had he not worked hard every day.
Your “get over it” statements do not come across as stoic (although I suspect that’s not your intent, either). Instead, they seem crass and ignorant. Punctuating them by your offhand remarks on your own parents’ demise also makes them creepy and disrespectful.
whatever, funny how there is never any mention of the millions of gyspies who got it.
Hey John, even a sixth grader is smarter than you……………….
Why People Should Study and Remember the Holocaust
Mr. Greenberg’s & Ms. Lisiak’s 6th Grade Class, June 6, 1997
The Holocaust is not just a word used to describe something anymore. It is spelled with a capital H and is known to everyone as tragedy.
We should study the Holocaust because it teaches us about prejudice.
We should learn about the Holocaust because we want to, not because we have to.
We should study the Holocaust to learn how cruelly the Jews were treated for just being human.
We should study the Holocaust because there is no doubt it could start again.
We should study the Holocaust to prevent future ones.
We should study the Holocaust to be grateful for the things we have.
We owe it to the innocent people that died, for the people tortured in concentration camps, and also for the people that escaped and who saw their loved ones dying at their feet.
We should study the Holocaust so that people at a young age can learn and not repeat the mistakes of the past when they grow up.
The gas chambers, concentration camps and forced labor are all things one should know about.
Many people probably said to themselves, “They aren’t coming for me. Why should I care…well I can answer that with another question. What if they come for you? Who will be around to help then?
I really think our country should have helped more…but we didn’t. We could have saved many lives.
Finally, We should study the holocaust so that we are not blinded by our outerself.
RR (99)
John = a**hole.
I really should be more patient with his ilk. But life’s too short.
John (110)-
Why does the ethnicity of those who “got it” matter? Do you mean to imply that some of them had it coming…and others didn’t?
I didn’t mention my FIL’s ethnicity. Did you just assume he was Jewish?
You have, however, staked out for yourself a special level in the race of asshole.
A cherry on the sundae for John:
All afternoon, I kept wondering why some of the things you wrote sounded so familiar. Who else would make such statements?
Then, it came to me on the way home: David Duke.
Don’t taze me bro!
#111 Essex
Then start spelling genocide with a capital G.
http://en.wikipedia.org/wiki/Genocides_in_history
The fact that it still happens in todays world is a discrace to all.
http://blog.nj.com/statattack/2007/08/getting_local_with_home_sale_p.html
Company Events And Corporate Actions Thornburg Mortgage, Inc. will announce
3rd quarter 2007 results after the market closes on or aroundOctober 16, 2007.