From the Associated Press via the International Herald Tribune:
Bank economists see home prices only halfway through decline, gloom for consumers
“home
…
prices
…
halfway
…
through
…
decline”
(The above quote meets the AP standards for blog quotation)
Summary: A group of 10 prominent economists say that home prices are only halfway through the decline. Expectations are that prices will fall an additional 15% by late 2009.
1st?
Why is it after 200%+ run ups in less than a decade, the worst decline forecast by any expert is about 20%?
From the NJ OAG:
Attorney General Announces Mortgage Fraud Lawsuits
Attorney General Anne Milgram filed mortgage fraud lawsuits against 36 defendants charging consumer fraud and civil racketeering by various mortgage brokers, real estate entities and others throughout New Jersey.
The unrelated complaints accuse defendants of inducing consumers to buy property on the basis of false promises and misrepresentations, and of taking out mortgage loans on the basis of grossly inflated property values. The defendants include mortgage brokers, real estate appraisers, title companies, straw buyers and sellers, and promoters. Filed in state Superior Court in Essex, Camden and Passaic Counties, the three complaints allege violations of both the New Jersey Consumer Fraud Act and the New Jersey Racketeer Influenced and Corrupt Organizations (RICO) Act involving 25 properties and more than $5 million in fraudulent loans.
The separate lawsuits name as defendant 15 corporations and 21 individuals. The lawsuits allege that all defendants engaged in a practice known as “inflated sale and crash,” in which investors are convinced to buy property at grossly inflated values through mortgage loans obtained using false information. The defendants broker these loans knowing the properties will end up in foreclosure. Some defendants are also accused of using an approach known as “bait and bump,” in which a mortgage solicitor offers a loan on false terms, then informs the defrauded consumer at closing that it is too late for them to get out of the transaction. Still others are accused of luring victims with bogus “rent-to-own” and “foreclosure rescue” deals.
In some cases, unwitting investors faced foreclosure and their credit ratings were ruined. The defaulted homes contributed to community blight and also threatened to devalue neighboring properties.
“The actions alleged in these lawsuits are unconscionable. The conduct involved ranges from acquiring properties through false mortgage applications to prevailing on a desperate homeowner to transfer the deed to her property to someone else on the false promise that she would be able to buy back her home,” said Attorney General Milgram. “It is imperative that we root out alleged mortgage fraud like this and protect the victims of these predatory lending practices.”
MJ…Homeowners are just lucky I guess
From Reuters:
FDIC updates rules on big bank deposit coverage
The Federal Deposit Insurance Corp approved on Tuesday a proposal to help U.S. bank examiners better determine the amount of deposits at a large bank in the event of a failure.
FDIC Chairman Sheila Bair has repeatedly said the failure of a big U.S. bank is remote. But more financial institutions, trying to deal with big exposures to soured mortgage lending, are expected to become insolvent this year.
The new rules would require the largest banks to modify their deposit systems so the FDIC could quickly calculate how much it would need to pay out on deposits in insurance coverage if one failed. That would include requiring banks to determine the order of qualified depositors.
The rules would apply to banks with at least $2 billion in domestic deposits and either at least 250,000 deposit accounts or total assets of more than $20 billion. About 160 banks would be covered by the rules.
“That is really a critical authority that we need to deal with, with the eventuality of a large bank failure,” FDIC Vice Chairman Martin Gruenberg said at an open meeting.
MJ – in part it’s a function of math.
If you take $100 and increase it by 100%, you get $200.
If you take $200 and reduce it by 50%, you get $100.
So an increase of 100% followed by a decrease of 30% over 4 years, factoring in inflation, begins to approach giving back 100% of those gains.
I was told there was not going to be any math…
From the Star Ledger:
Study: 20 percent of NJ families don’t earn enough to afford basics
One of every five New Jersey families does not earn enough money to afford the basics – housing, food and child care – even though most households have at least one breadwinner, according to a study released today.
The report by the Poverty Research Institute highlighted the characteristics of these 500,000 households in an effort to debunk stereotypes about the poor, and encourage lawmakers to fund more effective programs to lift them out of financial insecurity.
The study found 85 percent of these economically fragile families had at least one person working, although not everyone held full-time or year-round employment. Only six percent of these families received welfare.
way of topic but i just realized my blackberry picks up paper clips like a magnet. scary!
2ndary
that would be the magnet in the speak of the speakerphone on your blackberry, i do believe
make money
i know that you have been heavily into gold as of late, but i have to ask, have you held your position with the current gold prices? I would guess that you are on the opinion that it will jump up again when we hit the next bump in the road…
just curious seeing as you may be the biggest gold bug on the board.
” we probably cannot handle space colonization”
true.
13
I nominate August as the next gtg month.
12 Patient
What? No Spaceballs?
lost
no
our helmets are not good enough.
15 Speak for yourself. Hmmph!
what wrong with my helmet???
http://technabob.com/blog/wp-content/uploads/2006/10/giant_helmet.jpg
Like… wasn’t Helmet a metal band in the 80s?
I think I was at Khyber Pass in Phila after work one night for that band.
kettle1 – I may not be make money but I am holding gold both physical and the GLD ETF. As long as the S&P is heading downhill it makes for a reasonable hedge.
//All Disclaimers
http://www2.sgvtribune.com/ci_9614700
ServiceMaster impacted by housing slowdown
http://www.hud.gov/about/secretary/prestonbio.cfm
Secretary Preston was Executive Vice President of The ServiceMaster Company,…
I love my coincidink finds.
Like… dude!
http://www.metalunderground.com/bands/details.cfm?bandid=1100
http://www.centredaily.com/business/story/661170.html
This Report Analyzes the Impact of the Credit Crunch on the Intermediary Mortgage Channel and Provides an Outlook for the Future
Blackberry uses a magnet to detect when it is holstered, this way the profile goes silent or vibrate etc.
Dear AP,
‹^› ‹(•¿•)› ‹^›
Star Ledger and so-called “Poverty research Institute” sez:
“..Study: 20 percent of NJ families don’t earn enough to afford basics…
…One of every five New Jersey families does not earn enough money to afford the basics – housing, food and child care – even though most households have at least one breadwinner, according to a study released today…
…The report by the Poverty Research Institute highlighted the characteristics of these 500,000 households in an effort to debunk stereotypes about the poor, and encourage lawmakers to fund more effective programs to lift them out of financial insecurity…”
Commanderbob Sez:
Yep, another liberal “think tank” thinking of more ways to extract (steal) more tax money out of NJ citizens who properly pay their way in society—-I don’t need some useless, unproductive, self-important over”educated” numb-sculls to “debunk stereotypes” of so-called poor: You know those stereotypes —–the ones that just keep on having kids that they cannot afford,expecting the rest of us to support with “FREE” money from the government…
I wonder who funds these “poverty research” groups ??—-Maybe I could get a job with them and shake them up ?!—That would be a “Hoot” !!———HMmmmmm
BOB
Gary
I am so not a Helmet fan. My husband on the other hand…
WaaaWaaaa Foul…I give up.
M&T Bank is suing Deutsche over a 82-million-dollar (53-million-euro) investment in mortgage securities known as collateralised debt obligations (CDOs) that went sour, the paper said.
M&T, in which Buffett’s…
http://tinyurl.com/6huqhc
kettle,
I agree with Make $ and Sean. I am more bullish the yellow metal than bearish RE. Have been long since 2003, traded in and out a few times. There is a world war coming, that is a currency war. There will be one winner at the finish line.
All Disclaimers.
“Study: 20 percent of NJ families don’t earn enough to afford basics”
Maybe they should move out of NJ?
How about moving to Mexico? What a concept.
Since the affordable housing bill is about to be passed, does it mean that a middle class family earning $500K in NJ can finally afford Westfield or Hoboken?
lostinny,
I always had a sentimental thing for Motorhead. :)
“i just realized my blackberry picks up paper clips like a magnet”
yeah, and they also cause brain tumors & auditory nerve damage on the side of the head that you hold your blackberry.
Don’t believe me? Do a pubmed search.
SAS
Dodd, Conrad Answer Questions About Mortgages
Sen. Christopher Dodd acknowledged Tuesday that he knew he was part of a VIP program for Countrywide Financial, but says he had no idea that it meant he’d get special treatment on his mortgage rates.
Conrad, for his part, seemed more geared toward making a mea culpa for any appearance of preferential treatment. Conrad told reporters on Tuesday that he had donated $10,500 to Habitat for Humanity, which is the amount he saved on his lower interest rates for his Bethany Beach, Del., house.
I hate to admit it, but Ahmadinejad is spot with this one.
“As you know the decrease in the dollar’s value and the increase in energy prices are two sides of the same coin which are being introduced as factors behind the recent instability,” Ahmadinejad said.
http://tinyurl.com/3rz2h9
SAS
Mortgage groups blast parts of Senate housing bill
Mortgage industry and business groups are urging lawmakers to drop pieces of a housing bill they say would be too restrictive on lenders.
The letter also criticized a portion of the bill that creates a nationwide licensing system for mortgage brokers and loan officers.
NJ charges fraud in $5 million worth of mortgages
Mortgage industry = total crooks
SAS
SG 38,
so mortgage fraud in about 3-5 home purchases????
really, that is all they could find? I dont think they looked very hard…
BC Bob et al
I a still bullish my self and as you could probably has guessed, i have a similar opinion as yourself BC. My opinion is certainly not an educated opinion compared to yours but the same none the less.
I was curious as to whether or not any of the gold bulls here had felt some heat
Gary 33
I’m sorry I can’t say the same.
Commander Bob, Frank: I’m sure you’re lovely people, and I can almost understand where you’re coming from, but I strongly disagree with where you’re going. Please remember you don’t know the entire audience listening to your posts.
lost,
Aw C’mon, Lemmy is ugly and built for speed, what’s not to love. lol!
43 Gary
Well he sure is ugly. I’m not sure he’s built for much more then horror movies. The closest I get to liking him is the cell phone commercial where the guy has Motorhead tix but he can’t reach his friend to tell him.
@6 njpatient
Take $100 and increase it by 200% you get $300.
Then a 20% loss on your $300 leaves you with $240, still a 140% increase over the original $100.
So we do the experts see so little loss after such a big, fast run up? A 140% run up over less than 10 years is supposed to be the normal corrected run? That’s better than the idealized stock market. It’s not supposed to be like that.
I’d like to see the recent numbers for these charts:
http://www.realestateabc.com/graphs/natlmedian.htm
“I was curious as to whether or not any of the gold bulls here had felt some heat”
Kettle,
Heat? YOY, it’s up 35.13%. I would imagine the financials and consumer discretionary would be thrilled to be packing that heat.
#27 commander bob
Daycare for 2 kids runs at least $2,500 a month. That’s for a real day care center with professionals running and working there. If you want to stick you kid in someone’s basement daycare that’s a lot less, but I’d pass on that deal.
BC,
yes i know, i have been watching gold, but there were a few comments a couple of weeks ago referring to gold being out of favor. I meant to respond then and did not. The other point was that some people on the board commented on jumping into gold when it was over 1000.
disclaimer,
my stake in gold is primarily an “OH $HIT” fund and not an investment.
Kettle,
I got out at during the Bear Stearns melt up. Back in when it tested the previous 28 year high. The longer it consolidates above the old high, the more powerful the next move will be. Old ceilings, in commodities, are becoming new floors. Old floors, in RE, are becoming new ceilings.
That said, anyone who entered new positions, over 1,000, may be a little testy these days.
All Disclaimers.
re: earnest deposits
previous thread
grim says:
“Both sides incur costs throughout the process, the transaction costs associated with buying or selling a home are high.”
(68) non deplume says:
“But the lawyers have an established dance that they do in order to cover that.”
(71) clotpoll says:
“Until AR is ended and the contract is essentially reinstated and becomes binding, both principals fly without cover.”
Why can’t anyone answer this question?
Can a seller snag my earnest deposit money if I were to back out during attorney review?
This process is FUBAR. No wonder we are in crisis.
Disclaimer;
When/if I buy RE again it will be my “Oh $hit Fund. 90% of friends/acquaintances are planning on retiring off their RE. I plan to retire off my gold.
re: #52 BC Bob when the central banks advertise that they will be unloading Gold it is time to buy as a Hedge of course.
All Disclaimers
NBC News ran a story on how Denver went from having no rail service 14 years ago to 35 miles today, with another 130 miles in the works. Cities out West can add rail at lower cost since they are still expanding in a lot of cases – retrofitting Eastern cities could prove challenging. I would love to see useful light rail pop up all over NJ, but I have a feeling it’ll be a long time before anything is done.
http://www.msnbc.msn.com/id/3032619/#25212564
In response to bi’s statement that I feel everyone who is against Obama is a racist:
This is a complete falsehood. I only claim racism when the only flaws that people can point out about the man is that his wife’s mom still lives in a slum, or that he took out college loans. I wish people could see how he and his wife defied the odds. Both had to work extremely hard for where they are today, graduating at the top of their classes. Now look at McCain’s accolades. He was involved in three plane crashes while serving in Vietnam. He was always at the bottom of his class. Had it not been for the fact that his father was an admiral, he would not have gotten into the naval academy. He cheated on his wife and then neglected her leaving Ross Perot to pay for the medical bills. Essentially, he is ‘W’ without the alcoholism and born againism. Now start bringing up accomplishments about the man and I will not find you to be a racist. But if you continue to point out that Obama’s only flaw is guilt by association, then you need to reexamine yourself.
An McCain used to be someone I would vote for. This was, until he started spewing lies and flip flopping like a fish out of water during the 2000 election. McCain absolutely hated ‘W’ and his position was clearly 180 degrees away from ‘W’s. Once ‘W’ won the nomination, he completely remodeled himself in ‘W’s shadow.
Will Obama raise taxes on the >$500,000/year clique? Hell yeah. Will McCain? Hell no. He’ll just borrow from our children and those below the million dollar line who pay a regressive portion of their income.
Clinton turned a deficit into a surplus in 8 years. Bush triples our federal debt, mostly through funding a war against a country that did not attack us. These two points alone would keep me from voting Republican in the 2008 election.
Now tell me about some of McCain’s accomplishments besides being a POW.
You should be careful about those “professional daycares”. My ex worked at one for a short time between jobs and she was the only person with any type of real education, certification, and experience.
Gold should not be relied upon as a long term investment. In the long term, it will probably grow at the same rate as dollars under your mattress. If you believe the dollar and our economy are going to cr@p the bed, then why not short it in any one of a number of short ETFs. You could even go ultra short 2X or 3X and not have to worry about margin calls in exchange for a <1% management fee.
http://tinyurl.com/3k7l4l
Seriously. Gold is a great hedge against inflation and a great material to make jewelry out of. As a long term investment, you’re probably better off in RE.
re: #57 Stu
Are you stating that the orgy is over or are you recommending something else perhaps a financial stock?
What stu said.
at 55.
“Will Obama raise taxes on the >$500,000/year clique?”
If you think taxes will only be raised on the >500,00 clique, than I want some of what your smoking. There are not enough people in this country making >500K for which a tax hike on this group would make a bit of difference. To get to the liberal utopia of the permanent welfare state, taxes will be raised on anyone who makes money, there are no two ways about.
“Clinton turned a deficit into a surplus in 8 years”
Clinton with a republican congress. Divided government, that’s the ticket. Do you really think Obama with a Dem congress is going to curtail spending and taxing, especially after the dems have been in the wilderness for the past 10 years? I will bet every penny I have you will see an exac repeat of Bush’s first six years w/ a Rep congress, except the money will be stolen from the productive and handed out to the not so productive.
I don’t blame you for wanting to vote against the repubs, but you shouldn’t be so naive to believe that one single thing will change in DC.
“McCain’s accomplishments besides being a POW”
He sang like a canary & got royal treatments because vietnamese knew who is daddy was.. thats for s*hit sure.
http://www.youtube.com/watch?v=RbUUp8tVxIM&feature=related
Sean,
There are a lot of ways to invest in equities without jumping on the latest and greatest flavor of the month. Financials? Why take the risk! If you really want to do well in the market, be ahead of the herd and turn off cnbc.
For example, if you think there will be a large increase in unemployment, then buy pawn shops and cheap colleges. If you think oil is peaking, then buy a driller. When Boeing doubles, Good Year quadruples. There’s not a lot of competition in tires that fit 737’s.
Once you start to think this way, you will probably do really well.
Here are a few more examples. When the flat screen TV took off, I invested in Corning. When this recent green thing started, I invested in Nabors (a natural gas driller). As I’m noticing vacant stores in the mall, and in office space and warehouses, I short commercial real estate. When I noticed the lines at Chipotle were out the door everyday at lunch, I brought into the IPO. None of these calls were made in Barron’s, IBD, and definitely not on CNBC. I doubt a single broadcaster on that network has a degree in economics, yet most suckers invest their hard earned money on their advice. Lenny Dykstra telling you to buy deep in the money puts and calls? Come on. Trust YOUR instincts, not someone elses and don’t be a hog or fall in love with a stock.
As to what you should invest in tomorrow? You’ll have to figure that one out on your own. But first pay off your credit cards.
First time home buyer looking for advice. A month ago, we attended an open house and liked the house enough too consider making a low ball offer on the house. A few weeks past and we notice the listing was no longer coming up in the mls search. We assumed the house was sold. This week we find the house listed as a FSBO at 10% below the last asking price. This FSBO price is in our low ball range. My questions are:
1. Can we deal directly with the owner now or do we have to go through the realtor (we signed in at the open house)?
2. This is a big purchase for us and we are nervous about doing it ourselves. Can we have an agent represent us? If so, how is the agent compensated?
3. If we decide to put in an offer ourselves, is there any site where we can find a formal offer letter with standard terms and conditions.
4. Are there any additional terms and conditions we should consider adding?
I am sure we will have more questions later. Thanks in advance for any advice/comments.
Dave923
JBJB:
We’ll all pay higher taxes, but the wealthiest will have a harder time paying less than I do, which they currently often do. For example, Corzine paid 6% of his income in taxes a few years back. What the F is that. AMT had my $150K paying 25%, no more Roth for me, limited deduction on my mortgage interest and a stimulus check that was smaller than my jimbrowski. And Corzine paid 6%.
Obama was at best, middle class, less than 10 years ago. He knows what it is like to be screwed in the middle. McCain only knows close friends like the Reagan’s and the Perot’s. Who do you think he will be looking after.
I’m not so naive that I think Obama will create drastic change, but it’s nice to see one of us in the White House for a change.
By the way, guess what the highest tax rate was raised to in the 30’s. 90%!!! And the Rockefeller’s still kept on working and gave to charity as well. Today the top tax rate is what 38%? And the poor millionairs complain like their world is ending.
There was another big mortgage fraud case in my area. There was a company that would get Korean immigrants to get multiple mortgages on their homes by hiding them from other lenders.
The head of the Palisades Park company that started these mortgage scams was recently caught by the FBI.
When I first saw the story back in 2006, the report said the scam could total as much as $100mil. The recent releases indicated it was $20mil. I tried sending out emails to find out what happened to the other $80mil but haven’t received any responses.
One of the properties, that is roughly a $300k house, managed to get around $1.9mil worth of credit. I believe I found it’s foreclosure listing.
I also recently read of an interesting mortgage scheme in MN. They would pay people $5k in exchange to use their credit to buy a house.
Stu
Again, if you think Obama is “one of us”, I want some of what you are smoking. You can project whatever fantasy you want onto what Obama is or might be, but the fact is, he is an elitist liberal democrat who has never strayed from the same boring liberal interest group policies of 5 decades ago. When you couple that with a dem congress, it is the recipe for disaster in my opinion. We are basically going to have NJ at the federal level – an ever expanding and out of control welfare state with a hostility towards business, those who are productive, a.k.a the job creation framework of this country. Now, you might be able to make an argument that this is the direction the country should be headed – meaning more economic power to the federal government. If that’s the case, make the argument, but can we please stop with the fairy tales about Obama the Savior and how is going to save us from the ills of the past.
stu – I have no desire to bend over for the longs on the S&P. My taste for gold started during y2k and I have the coins to prove it. I know plenty that have said 1500 was time to buy, and if you do not like gold as a hedge then fine as far as the rest of your sage advise, I will take it as I always do and run the other way when the herd crowds my space.
Oh there is moderation here :) I must have accidentally misspelled niagara.
Anyway. The point I was trying to make was that the last big mortgage fraud case I saw in NJ, the charges were only for 1/5th of what the original reports were for.
I wonder if that is the case here. If they are downplaying the amount of losses.
when it comes to peak oil, i am long on railroads. As fuel gets more expensive and truckers feel the pressure more freight is moved to rail roads. They may see substantial growth in the future. for comparison a freight train gets can get 400 short ton-miles per gallon of diesel
disclaimer: bozo the clown knows more about finance and investing then i do
skep-tic,
Regarding our discussion on gov’t involvement, I ran across something today and I’m really confused.
As early as 2001, HUD was aware of flipping schemes that were being perpetrated in collusion with lenders and started working on rules for FHA insured mortgages to prevent this. The rule was finalized in 2003. I have more thoughts on it here so I don’t litter this page with more of my opinionated ramblings.
So the WP the other day says that the Bush administration encouraged things, then I find this, that is attributed to Bush that aims to try and stop artificial inflation, but for years artificial inflation continues.
The reason it came up in the news again is because it was suspended today for a year. So it’s ok for lenders to artificially inflate home prices again?
Stu said:
“By the way, guess what the highest tax rate was raised to in the 30’s. 90%!!! And the Rockefeller’s still kept on working and gave to charity as well. Today the top tax rate is what 38%? And the poor millionairs complain like their world is ending”
Stu, why do you think the Great Depression lasted as long as it did? Horrible government decisions like the one above!
patient (12)-
” we probably cannot handle space colonization”
Dunno about that. I’d check with bi first.
Had breakfast with my State Senator this AM (before attending an all-day short sale seminar, which I’ll discuss once I’ve had enough to drink). The COAH bill hits his chamber Monday for a vote. He doesn’t know which way it will go for sure, but he thinks it may pass.
He feels the six-town coalition against it has teeth and will litigate. The township I live in- and the township my office is in- are both participants in the coalition.
JBJB (61)-
“To get to the liberal utopia of the permanent welfare state, taxes will be raised on anyone who makes money, there are no two ways about.”
Yup. The thing these liberal eggheads never get is that crushing taxes- both income and capital gains- are not checks on the ultrarich. The ultrarich can afford to pay them.
What they ARE, are a killer to those who are TRYING to improve their lot in life. Where’s the incentive to do better…if all “doing better” means is that the gubmint confisc@tes all the fruits of your labor?
Dave (64)-
1. Depends. Did the listing expire, withdraw…or did the agent grant an unconditional release to the owner? If the agent may still be potentially due a commission, don’t be surprised if the owner lies to you when you ask him the status.
2. Yes, you can have an agent represent you. In that case, you pay him.
3. Sure, go ahead. You are “nervous” (your word, not mine) about approaching this thing. Get a form at Staples or download something off the internets, fill it out, cross your fingers, and hope for the best. Sounds like a plan to me. Hell, it’s only money; if it goes poof, you can make some more. BTW, holographic contracts between principals become binding when fully-executed (I’m not an attorney, but I’d bet a few bob an attorney would confirm this for you).
4. Dunno.
3.
Stu – Obama is a left wing radical, with the same thought process as a Marxist, 20 years of brainwashing and the Trinity United Church of Hate. Why do you think Obama attracts so many radical people, like Ayers. At least Mccain wants to Drill for Oil, Obama doesnt. I am voting for Mccain