“If you had a Macy’s card and a gas card, you could buy an $800,000 home.”


Brace for other shoe to drop in mortgage mess, some warn

With most of the country still reeling from the subprime mortgage meltdown, Mark Hanson is warning of the next looming blow.

Hanson, a bank consultant and former mortgage broker from the Bay Area who writes a blog under the name “Mr. Mortgage,” is among a handful of industry soothsayers who expect another big wave of foreclosures to hit sometime around 2010, driven by defaults among people holding less risky loans known as “alternative-A.”

Subprime is the term applied to loans given to people with shaky credit. Alt-A is the next-higher category, typically covering mortgages to borrowers who had better credit but didn’t want to document their incomes or wanted an initial period of low payments, often covering only the interest on the loan. Technically the term “alt-A” applies to securities backed by the loans, but it has come to be used for the mortgages themselves.

While defaults have been creeping up in the alt-A category this year, the foreclosures that have wracked the housing market so far have been largely the result of defaults among subprime borrowers.

“I think we are through the subprime blowup, but that’s nothing compared to what’s coming,” said Hanson, who made similar predictions on CNN in April.

His theory is that other borrowers will follow the path of subprime borrowers, who started defaulting when their mortgage interest rates reset to higher levels. Many alt-A borrowers face a bump in their monthly payments starting mid-2010, according to financial services company Credit Suisse. The firm’s figures, reported in the International Monetary Fund’s report on global financial stability, show a big bubble of U.S. mortgage rate readjustments hitting during that time period, including borrowers with “option ARM” loans that allow a borrower to initially make payments that are so low the balance increases.

A record $400 billion in alt-A loans was issued in 2006, according to data by specialty publisher Inside Mortgage Finance, cited in published reports. Alt-A accounted for 13.4 percent of all mortgages offered that year. Hanson said lenders first started pushing them in 2005 as a way for buyers to combat skyrocketing prices and continued issuing them into 2007 despite the subprime concerns.

“It’s not hard to get a 700 credit score,” he said, citing a typical score for an alt-A borrower when the loans were being widely offered. “If you had a Macy’s card and a gas card, you could buy an $800,000 home.”

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

107 Responses to “If you had a Macy’s card and a gas card, you could buy an $800,000 home.”

  1. grim says:

    From the APP:

    A.G.: Real estate pros cheated new buyers

    New Jersey is suing 36 corporations and people in three real estate organizations, alleging complex schemes to cheat unschooled home-buyers who put their faith and trust in the sincerity of the accused. Named in the complaints are two Jersey Shore companies.

    In one South Jersey case, a minister says she was defrauded, explaining through tears in a Tuesday phone interview that she worked with one of the sued companies because she believed, “They were Christian.”

    “I’m getting kind of watery-eyed about it right now, thinking how much I trusted them,” said the Rev. Jewel Brown of Sicklerville.

    “This is fraud that is driven by greed. . . . You are talking about fairly sophisticated, complex scams,” Attorney General Anne Milgram said. “Many of these folks were unsophisticated individuals,” Milgram said, referring to the alleged victims.

    Many, said Milgram, were first-time home-buyers being manipulated by real-estate professionals who fell back on the line — “This is how it is done.”

    “A lot of these loans were no-income-verification loans,” said Deputy Attorney General Megan Lewis.

    Among the accused in the civil suits are mortgage brokers, real estate appraisers, title companies, straw buyers and sellers and others accused in three separate cases of “civil racketeering” to defraud victims of more than $5 million.

  2. grim says:

    From Bloomberg:

    Bernanke May Regret Interest-Rate Cuts, Lawson Says

    Former U.K. Chancellor of the Exchequer Nigel Lawson said Federal Reserve Chairman Ben S. Bernanke may be “regretting” the fastest pace of U.S. interest-rate cuts since 1984 as global inflation accelerates.

    “The Bank of England has been very cautious and careful and it has been much closer to the views of the European Central Bank,” Lawson, 76, who was finance minister from 1983 to 1989 under former Prime Minister Margaret Thatcher, said in a telephone interview. “It has not gone conspicuously the way of the Fed, where I suspect that Mr. Bernanke’s now regretting it.”

  3. grim says:

    From the WSJ:

    Congress and the Countrywide Scandal
    June 18, 2008; Page A15

    Countrywide Financial Corp.’s “friends of Angelo” program provided sweetheart loans to key banking players in Washington, D.C. They included former Fannie Mae chief executive Jim Johnson, Senate Budget Committee Chairman Kent Conrad (D., N.D.) and Senate Banking Committee Chairman Christopher Dodd (D., Conn.).

    The growing scandal surrounding the “friends of Angelo” loans (so-called by company employees, referring to Countrywide CEO Angelo Mozilo) should serve as a political wake-up call. Yet the Senate appears intent on pushing forward legislation, co-authored by Sen. Dodd, that would bail out the worst actors in the subprime mortgage banking industry.

    Campaigning in Lancaster, Pa., on March 31, Sen. Barack Obama blamed Countrywide’s CEO for “infecting the economy and helping to create a home foreclosure crisis.” Yet Rep. Barney Frank (D., Mass.) and Mr. Dodd have crafted a bill to provide $300 billion in new taxpayer loan guarantees to Countrywide and others. The bill will allow troubled financial institutions to foist the riskiest mortgages in their portfolios onto the Federal Housing Administration (FHA) — ultimately putting the American taxpayer on the hook for their bad bets.

  4. grim says:

    From the Washington Post:

    Senators Deny Knowing Of Home Loan Favoritism

    Senate banking committee Chairman Christopher J. Dodd said yesterday that he knew he was part of a “VIP” mortgage program offered by Countrywide Financial, but he said he was not aware that the privilege included waiving fees that regular customers must pay to obtain lower interest rates.

    Dodd (D-Conn.) — who reportedly received the special treatment as part of the company’s “Friends of Angelo” program, named for chief executive Angelo Mozilo — said loan officers told him and his wife in 2003 that they would be part of an exclusive program. But the couple assumed the plan gave them unspecified courtesies and did not ask whether it included a waiver of the fees, known as points, or a reduced interest rate on their loans, the senator said.

    “I don’t know that we did anything wrong. I negotiated a mortgage at a prevailing rate, a competitive rate. . . . I did what I was supposed to do,” Dodd told reporters at a news conference called to discuss the matter and legislation to address the nation’s housing crisis.

  5. grim says:

    From the Courier Post:

    Proposed state budget is a modest first step

    Legislators avoided raising taxes and spending as in years past. They must do so again in coming years.

    A weakening economy, along with historic overspending by state officials, made balancing New Jersey’s budget especially difficult this year. So, we offer acknowledgment — perhaps a C+ to give a grade — to the Legislature and the Corzine administration for negotiating a $32.86 billion budget that lowers state spending from last year and doesn’t include new taxes or one-shot gimmicks that only add to the debt.

    But to show us they’re serious about bringing fiscal responsibility to a state government that’s been a money-wasting fiscal and ethical failure for at least two decades, legislators must lower spending, make more cuts and force consolidation next year and in the years after.

    Overall, state officials did a good job of balancing competing funding priorities, available state revenues and broader fiscal concerns. They sculpted a budget plan that lowers spending by about $600 million, but avoids sharper cuts that could have forced some households, especially lower-income New Jerseyans, onto life support. We do think they could have cut more in areas that wouldn’t have brought pain to poor, sick and elderly residents, and a panel of South Jerseyans who examined the budget for us offered several viable ways to do so.

    The budget that awaits the governor’s signature doesn’t eliminate painful cuts; it just makes them less severe or spreads out the burden to blunt the overall effect.

  6. grim says:

    From Bloomberg:

    Chuck Prince Finds Selling Home No Easier Than Fixing Subprime

    Former Citigroup Inc. Chief Executive Officer Charles O. “Chuck” Prince III lost his job because of the housing slump. Now he’s having a hard time selling his home.

    Prince’s five-bedroom Tudor-style house in Greenwich, Connecticut, has been on the market for six months. He has cut the price by $300,000 to $5.85 million, according to the property listing.

    The housing recession has hit the bedroom communities that Wall Street favors most. The median home price fell 8.1 percent in Greenwich in the first quarter from a year earlier. Declines were as much as 25 percent in 14 of 19 wealthy Manhattan suburbs in Connecticut, New Jersey and Westchester County, New York, since the start of the year, according to a Bloomberg survey of brokers and multiple listing services. The drop shows that 83,000 job cuts and $393 billion of mortgage-related losses and asset writedowns at financial firms are damaging even the most expensive U.S. real estate markets.

    “There is really just no firewall around these sorts of communities that insulates them from what is going on in the housing market,” said Nicolas Retsinas, director of the Joint Center for Housing Studies at Harvard University in Cambridge, Massachusetts. “No one wants to make a purchase and have to tell a spouse, a partner or a friend that `Oops, I bought and that house is worth less today than it was.”’

  7. grim says:


    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)?

    Not a problem at all, deal with the owner directly.

    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?

    You could, but you would be paying them out of your own pocket. Agree on compensation first.

    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.

    I’d suggest getting to a point with the owner where you are confident you can make a deal and then bring in an attorney to handle the sale. You’ll likely have an attorney representing you at closing, so it shouldn’t be a big deal to bring him/her in early. I could send you a copy of the NJAR contract.

    4. Are there any additional terms and conditions we should consider adding?

    As much as I’d hate to say it, probably something you are going to want to discuss with the attorney drafting up the contract.

  8. Tom says:

    Are people supposed to feel sympathy for Chuck? Or is this just a story so we can all say “Ha Ha!” in a Nelson voice?

    The guy pays around $4.5 million for a house in 2003. We can stop right there. If anyone should have known how flaky the housing market was it should be the CEO of a financial services company that happens to be one of the world’s largest companies.

    But he goes on and complains that he can’t sell his home for a $1.35 million dollar profit, even after he cut 5% off the price. I don’t think Sandy did a good job grooming this guy.

    He didn’t lose his job “because of the housing slump”. He lost his job because of his company’s involvement that caused it to lose billions of dollars.

    Oh that was a good laugh :) Thanks grim.

  9. DL says:

    In the NJ zip codes where we will end up buying, I’m seeing houses disappear from the Fox and Roach web site after sitting months on the market with multiple price reductions. Curious if there are any statistics that track how many people list, then de-list due to the falling market. One example was 4 br 2 ba – 3,200 sq ft; asking 389k, reduced to 354k, comps going for 298k to 310k. Guess they can afford to wait until it gets better?

  10. DL says:

    Mortage applications plunge on soaring rates.


  11. Bubble Burst says:

    Our realtor stopped sending us auto gsmls update emails for new listings and price changes. Is there anything she has to do to keep it up and running or did she just intentionally decide to shut us off?

    We have been trying to stay updated on the market in certain areas but probably have no intention to buy until 2009 at the earliest. I think she may have been frustrated by us not wanting to look at any of the overpriced listings right now in a market with falling prices with no bottom in sight yet. But you would think she would want to keep us as a client for the future unless she decided to leave the business.

    Any thoughts on this plus an easy way to get added to gsmls listing updates without having to deal with a pushy real estate agent?

  12. grim says:


    I can tell you that on the GSMLS, for the period between 6/1 and 6/18, there were 690 Withdrawn properties and 228 Temporarily Withdrawn properties in Bergen, Essex, Hudson, Hunterdon, Morris, Middlesex, Passaic, Somerset, Sussex, Union, and Warren counties. If we add in the 1,009 properties whose listing contracts expired, we see that close to 2,000 properties were removed from the GSMLS alone in less than a 3 week period. Of course, as quickly as they leave, an even greater number return. Almost 3,000 properties were added to the GSMLS over this period and approximately 300 under contract properties fell out of under contract and were returned back to the market.

  13. grim says:

    Any thoughts on this plus an easy way to get added to gsmls listing updates without having to deal with a pushy real estate agent?

    Email me at jamesbednar@gmail.com , I can set you up.

  14. Tom says:


    I don’t know how hard this would be to do but I’d be interested in seeing statistics comparing the number of houses that are being listed that were purchased in the last 3-5 years or so vs ones that were purchased before that, or even before 2000.

  15. rhymingrealtor says:


    Further to comments to Dave 923 I would say to skip attorney got to title company they are that much more helpful to first time buyers, answering all questions speaking to them basicly handholding throught the process. I have worked with title company for a couple years, that womand has gotten more for buyers than any attorney I have ever worked with. They have attorney’s on call for AR process, and they are way cheaper. I have seen attorneys screw buyers on a regular basis for years now the last great example recently was so blatant the buyers are preparing to sue. They should.


  16. Tom says:

    of the 9 new foreclosures in bergen county almost half seemed to be for people that owned their home for over a decade that borrowed against the new found equity.

  17. Bubble Burst says:

    Thanks Grim!!

    I sent you an email

  18. Taddy says:

    “To show us they’re serious about bringing fiscal responsibility to a state government that’s been a money-wasting fiscal and ethical failure for at least two decades”. This is true.

  19. HEHEHE says:

    “In one South Jersey case, a minister says she was defrauded, explaining through tears in a Tuesday phone interview that she worked with one of the sued companies because she believed, “They were Christian.””

    Happy are the victims of mortgage fraud, they’ll reside in a McMansion in heaven.

  20. thatBIGwindow says:

    Tom: that was the case with my house. It was inherited free and clear, then 15 years later foreclosure on a equity loan! What she did with the money is beyond me, certainly didn’t put it into the house.

  21. grim says:

    From MarketWatch:

    Morgan Stanley profit falls 60%

    Morgan Stanley, the wall Street brokerage firm, said Wednesday its second quarter profit fell 60% to $1.03 billion, or 95 cents a share, from $2.58 billion, or $2.45 a share ago. The company’s revenues in the quarter fell to $6.51 billion from $10.5 billion a year ago.

  22. Contractor Bill says:


    The Royal Bank of Scotland has advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyses the major central banks.

    “A very nasty period is soon to be upon us – be prepared,” said Bob Janjuah, the bank’s credit strategist.

    A report by the bank’s research team warns that the S&P 500 index of Wall Street equities is likely to fall by more than 300 points to around 1050 by September as “all the chickens come home to roost” from the excesses of the global boom, with contagion spreading across Europe and emerging markets.

    RBS warning: Be prepared for a ‘nasty’ period
    Such a slide on world bourses would amount to one of the worst bear markets over the last century.

    More by Ambrose Evans-Pritchard
    More on banking
    RBS said the iTraxx index of high-grade corporate bonds could soar to 130/150 while the “Crossover” index of lower grade corporate bonds could reach 650/700 in a renewed bout of panic on the debt markets.

    “I do not think I can be much blunter. If you have to be in credit, focus on quality, short durations, non-cyclical defensive names.

  23. grim says:

    Paulson talkin’ his book?

    Paulson & Co. Says Writedowns May Reach $1.3 Trillion

    John Paulson, founder of hedge fund Paulson & Co., said global writedowns and losses from the credit crisis may reach $1.3 trillion, exceeding the International Monetary Fund’s $945 billion estimate.

    “We’re only about a third of the way through the writedowns,” Paulson, 52, told the GAIM International hedge fund conference in Monaco today. “There are a lot of problems out there and it will continue to be felt through the year. We don’t see any signs of stabilizing.”

  24. Essex says:

    “…blessed are the cheesmakers…?! ”

    “…Wats so special bout the cheesemakers…?!!??!

  25. grim says:

    From Bloomberg:

    U.S. MBA’s Mortgage Applications Index Fell 8.8%

    Mortgage applications in the U.S. declined last week, led by a slump in refinancing as borrowing costs surged.

    The Mortgage Bankers Association’s index of applications to purchase a home or refinance a loan fell 8.8 percent to 507.9 from 557.1 the prior week. The index reached a six-year low of 502.3 last month. The group’s purchase index decreased 4.4 percent and its refinancing gauge lost 15 percent.

    Prospective buyers are holding off as rising foreclosures add to the glut of properties on the market and force home values down even more. Sales will probably remain depressed as lenders restrict credit, and concern over inflation boosts mortgage rates.

    “The increase in mortgage rates is decidedly negative for the housing outlook,” said Michelle Meyer, an economist at Lehman Brothers Holdings Inc. in New York. “Higher rates strain affordability, suggesting home prices may have to fall further to provide an offset.”

    The MBA purchase index fell to 359.6 from 376.2 the prior week.

  26. Tom says:


    She could have been scammed into the loan, medical expenses, drugs, gambling, bad beanie baby investments.

    I’m currently not highlighting post auction properties that go back to the banks (REO’s). I was hoping to build a site where people looking to buy an affordable home in the area could find distressed homeowners and make a deal where the homeowner doesn’t walk away with nothing. But so many properties owe more than what they are worth. Lenders are letting properties go at auction for less than the judgment, in one case it was 40%.

  27. grim says:

    Lenders are letting properties go at auction for less than the judgment, in one case it was 40%.

    Details please.

  28. PGC says:

    Gold bubble is so yesterday.


    Just think they may be mining the Gold coast to recover all that Chromium that was dumped.

  29. 2010 Buyer says:

    I know that there is still a significant amount of ARMs that are still resetting until well into 2009. These owners are having problems refinancing because of home depreciation, wait until the Fed raises rates again.

  30. Tom says:

    What’s interesting is that in the notices, the attorney’s for the lenders will explicitly state that they will let it go for fair market value and provide an email to negotiate a short sale before the auction.

  31. #24 – Well, obviously that wasn’t meant to be taken literally. It refers to any manufacturers of dairy products.

  32. grim says:

    Thanks Tom.

  33. DL says:

    Re 12. Thanks Grim. Appears expectations are adjusting. I suspect that the reason properties are withdrawn and then re-listed is to maintain the appearance the listing is fresh, or to change realtors. Your site is a excellent source of enlightenment.

  34. PGC says:

    #31 Tom

    Here is a nice example coming up

    762317 6/20/08 40 WESTBROOK AVENUE MIDLAND PARK 368090.54


    $368k on the note, $299K for sale. The bank is 20% under and dropping. If it sells for $275K, the bank would be out about 30% after costs.

  35. thatBIGwindow says:

    40% less judgement but in Bergenfield, yeah that is about right.

  36. grim says:

    I’m not so much interested in the town, moreso the shift by lenders to accept a bid that is less than judgement. That is the news, not that Bergenfield is in the crapper, we all knew that.

  37. Tom says:


    The coldwell listing looks to be from the current owner since the auction hasn’t passed. Looks like they’re either willing to take the loss themselves or they have already negotiated with the lender to take a lesser amount if they can sell.

    A lot of the listings don’t even make it to auction for various reasons. Either they settled with the lender in some fashion, renegotiated the loan, sold privately etc.

  38. thatBIGwindow says:

    Perhaps, I was thinking more on the lines of a vacant house on the banks books getting vandalized and being more difficult to unload. It will be interesting to see if this trend spreads to nicer areas.

  39. Pat says:

    grim, some of these local lenders cannot possible take on more inventory. Up until a few months ago, I was strictly seeing 30% REO discounts.

    I can’t get my hands on their expense forecasts by property type, though. It would be a nice exercise in auction discounting.

  40. Tom says:


    the lien for the 40% one was picked up by a guy who says he specializes in negotiating short sales for people in trouble. Not sure if you checked out his site or know anything about him.

    When someone tries to work a short sale on behalf of the homeowner I thought it was usually done in a way that kept the house from hitting the auction block.

    Any one know more about people that do stuff like that?

  41. Tom says:

    Unfortunately Donald hasn’t visited my blog recently to explain to me why these figures are meaningless so I’m left in the dark.

  42. Pat says:

    I have to believe, without any facts, that the banks are seeing a lot of inventory come through with backlogged maintenance.

    If so many ‘po folk’ bought homes they couldn’t afford between ’03 and ’07, we should be seeing a higher than normal carry charge on the books.

  43. grim says:


    Aside from the deferred maintenance, lots of “polished turds” on the market.

    New kitchens and baths, but nobody bothered to address the crumbling foundation and outdated utilities.

    Saw a super nice bath a few days back, tumbled marble, travertine, blown glass vessel sink, and a rotting cast iron vent stack in the wall.


  44. bi says:

    in the name of school, uncle corzine wants more money from you …


  45. Tom says:


    The banks wont be that bad off. Most of the early mortgage payments are interest, so though the principal hasn’t gone down much, the banks did get a decent chuck of change for the period that the loan was in good standing.

    Not sure about this particular case, but a lot of lenders didn’t care if the properties were foreclosed. They would just resell the property for a profit since house prices always go up :)

    Not too long ago, even if the judgment was less than market value, the bank representatives would state at the beginning of the auction that they would bid it up to fair market value. That they changed their tune so quickly tells me we’re nowhere near a bottom and that there isn’t going to be a rebound coming any time soon.

  46. make money says:

    Even if the Feds were honest about the CPI, they wouldn’t be smart enough to catch this.

    Kellogg Co. is using smaller packaging while charging the same prices for five brands of its cereals sold in the United States, effectively raising their prices for the second time this year. The company started shipping the new boxes to stores this month.

    Boxes were reduced by an average of 2.4 ounces for 14 items sold under the Apple Jacks, Cocoa Krispies, Corn Pops, Froot Loops and Honey Smacks brands, Kellogg spokeswoman Susanne Norwitz said.

    “This price adjustment on select ready-to-eat cereal brands was taken to offset rising commodity costs for ingredients and energy used to manufacture and distribute these products,” Norwitz said.


  47. bi says:

    abc poll:

    michelle obama v.s. cindy mccain: 48 to 39


  48. Dave923 says:

    Reposting from last night…..

    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.


  49. Pat says:

    make, it doesn’t matter…we care only about TV’s. When TV’s become smaller for the same price, then we should start seeing riots.

    Who ever heard of food riots, anyway? It’s all about the TV.

  50. make money says:


    I had no idea that you are a political analyst. Great job there buddy.

    It’s been a while since you’ve shared your investments with the board. Have you wised up and are sitting on the sidelines or is it cause that guy Margin keeps calling you?

  51. 3b says:

    #39 tbw: From what I can gather, at the moment in River Edge there are 5 bank owned homes on the market for sale.

  52. kettle1 says:

    Rearding scholls….

    If newark students cost 20,000 each, then why are we not jusst seding them all to elite private schools???? Yes i know that pingry isnt going to be taking very students from newark, but i am sure that there are some enterprising individuals around that would be more then happy to provide a pingry/delbarton etc level education for 20,000 a student!

    Really, i am not kidding. If we as tax payers are putting this kind of money into each student, then why do we not have PhD behavioral scientists advising on school behavior issues, PhD physicists teaching science etc?. I know that it is a combiination of school life and home life that gives rise to the fina out come

  53. grim says:

    CNN ran a story about how Cindy plagiarized a Toll House cookie recipe last night.

  54. grim says:


  55. grim says:


    See comments 7 and 15 above.

  56. Essex says:

    52…my guess is that charter schools try to do that — but in many ways you have greater obstacles than simply $$$ to contend with in providing a ‘Pingry’ experience.

  57. bi says:

    50#, make,
    here is the formula for the market this year:

    D = a*P + b*O + c*B

    D: Dow Jones Industrial Average

    P: Oil price
    O: Obama poll number
    B: Bank bad news (1: yes, 0: no)

    a, b, and c are all negative numbers

  58. Rich In NNJ says:

    (55 & 54)

    Hmmm, seems no one cares about the sensibilities of cookietarians.

  59. Tom says:

    “CNN ran a story about how Cindy plagiarized a Toll House cookie recipe last night.”


    That doesn’t seem fair.

    How do we know you’re just not a very good baker?

  60. gary says:

    So when is CNN going to talk about how Mrs. Barack Hussein Obama is NOW, for the first time in her life, proud of America?

  61. kettle1 says:

    56 essex,

    Indeed there is a huge environment factor ( i.e home life) that comes into play in comparing a pingry to newark. But i still believe that if given an opportunity a private/charter school could do an order of magnitude better then the state does with 20K/child.

    My wife is a PhD pchild psychoogist and she will be the first one to tell you that you need a solid home life that values education in order to achive a pingry type level. But even if we just compare the caliber of instruction at a pingry level school to newark the difference is huge.

    In my opinion there are only 2 options. Either it is impossible to effectivly teach these students in their crrrent environment ( which i do not believe) or the state is astronomically ineffective even given the massive amount of money they have..

  62. thatBIGwindow says:

    #60: gary, why would CNN want to bash their candidate’s wife?

  63. Occasional lurker says:

    Aside from the deferred maintenance, lots of “polished turds” on the market.

    New kitchens and baths, but nobody bothered to address the crumbling foundation and outdated utilities.

    Saw a super nice bath a few days back, tumbled marble, travertine, blown glass vessel sink, and a rotting cast iron vent stack in the wall.

    This sounds like the typical “Suzanne Researched This” purchaser couple. Spending is based on emotion and status-seeking. Fancy appliances and tons of Pier One decorative crap. Meanwhile rooms have one outlet each and the winter brings $500 heating bills and a drafty wind tunnel of a house.

  64. Tom says:

    While driving to office I heard on Bloomberg Radio that Avg home prices in NJ, CT, NY area are down 25% from peak. I have been watching NJ market a bit and I feel its more like down between 5-10%. What do you guys feel ?

  65. #53 – Oh good lord, you weren’t kidding.
    Isn’t this just a re-cycled story from when Hillary was first lady?
    Have we gotten so bad that our pointless, pandering to the knuckle dragers, smear stories are hand-me-downs?
    I give. Seriously, I do. I would leave but there is no where left to go.

  66. njpatient says:

    Bush slurring like a drunk

  67. Rich In NNJ says:


    You say it like it’s a bad thing?

  68. Secondary Market says:

    here is some philly data (albeit from a local realtor) with this disclaimer:

    These charts are provided as a service to the general public. The owner / operator of this site makes no claims regarding the accuracy of this data. Please do not rely on this information as a guide to purchasing real estate as the data is subject to errors and omissions.


  69. jcer says:

    Newark schools are 20k a student, just like Jersey City schools because of corruption and waste. Look at who got paid when the school was built, who did they buy the land from at above market rates. Than look at what the administrators payed themselves, in JC, Charles Epps head of the schools went to a “Conference” in london, it was 5 days he was there for 3 weeks with the taxpayer paying the bill, guess what it cost, 20K. Now those are the things we hear about I imagine the waste is much higher. Getting teachers to teach in Newark, Orange, EO etc. requires at minimum a 6 figure salary. It is a mess and no one want to clean it up, politicians use those funds of 20k per student to dole out political no show jobs. A private company would be more suitable for running the schools.

  70. grim says:

    This flashback brought to you by history.com:

    Solar-energy system installed at White House
    June 20, 1979

    Carter presided over a nation still suffering from the fallout of the 1973-74 Organization of Petroleum Exporting Countries (OPEC) oil embargo. Carter, a proponent of alternative and sustainable energy sources, put into practice what he preached and, in June 1979, had a $28,000 solar-heating system installed on the White House roof. The system consisted of 32 photovoltaic panels that generated enough energy to provide hot water for the entire White House. During his term Carter also had an energy-efficient wood-burning stove installed in the drafty White House residential quarters.

    In 1986, President Reagan had the solar panels removed and put into a federal storage facility in Virginia, stating that the energy crisis that had affected both foreign and domestic policy during Carter’s term would not be a factor during his own.

  71. nj terp says:


    Teachers in Orange don’t start or make 6-figures. Some might but most don’t.

  72. jcer says:

    Occasional lurker, it is nuts how many people avoid doing the important structural, plumbing, electrical, and heating improvements. You can gold plate the home all you want but if it has original 1920’s plumbing that is a problem and a big cost, worst of all you have to rip out the gold platting to fix the problem. So it is great they spent 10-15k on a bath with nice tile work etc. but when I need to fix the waste plumbing or supply I need to rip out 5k worth of tile work? It would have been better if they did nothing and had a lower price.

  73. kettle1 says:

    Anyone hear aboout the recent report released on the sate of the new Orleans levies now that they have been repaired? A group of various experts has said that the current levies could be breached by a strong CAT II hurricane!!!

    Anyone want to take odds on NO being fooded agagin due to breached levies within 5 years.


  74. grim says:

    And your useless fact of the day:

    My parents named me after Jimmy Carter, although my brother insists that it was Jimi Hendrix.

    File this for future reference:

    Never go to St. Joes in Paterson, ever. Overheard in the ER waiting room last night, “I’d rather die trying to get to Hackensack than risk bleeding to death here waiting for a doctor.”

  75. jcer says:

    NJ terp, I know teachers who have left suburbia to teach in Passaic, Paterson, Newark and left suburban schools earning 65k to get 90-115k, especially math/science teachers with 3 or more years of experience. Many new teachers do not want to subject themselves to places like Irvington.

  76. homebuyer says:

    jcer, it seems like your experienced in what it takes to really make a older home work. in your estimation what do these type of things cost? i understand each home is different but i would love to get a range on what you think it takes to update the guts of a home

  77. Rich In NNJ says:


    Funny, I used to do work at St. Joes and Hackensack. I informed my employer that if I was ever in need of medical attention while on the job at St. Joes, make sure they take me to Hackensack.

  78. Dave923 says:

    grim, KL,

    Thanks for the valuable advice.


  79. gary says:

    Tom [64],

    The fat, drunken b*stards still think it’s 2005 for the most part and the naive, st*pid twerps are still falling for the prestigous and haughty bait.

    So, to answer the question, prices have fallen roughly 5% as the id*ots would rather rot in their POS split than sell it.

  80. Tom says:

    The amount of people that were able to buy homes recently because of the loans lenders were giving away to anyone, combined with the pressure people felt because they were constantly told that they need to buy soon before prices go up even more and interest rates go up led to a lot of people purchasing homes that had no idea what to look for.

    That and people thinking they could do the stuff the saw done on a 30 minute home improvement show and start flipping homes but in reality had no clue. I liked it when the only home improvement shows were This Old House and Hometime, where they usually showed that doing a good renovation takes months not minutes.

    I wasn’t in the market but went along to a few open houses there were some spectacular homes where you could tell the person knew what they were doing. But there were a lot of really bad ones. Kitchen cabinets that weren’t alinged, Exposed ductwork from the range exaust above the cabinets leading to the exterior wall. Refinished floors where they didn’t even bother filling in the holes from the tack strips that when the carpeting was removed, fingerjointed trim that was stained and varnished, crown moulding that was nailed flat to the wall, kitchens that looked like they just threw together the first 10 cabinets they found on sale somewhere, brand new mismatched light fixtures. They would have been better off doing nothing at all.

  81. grim says:

    New Jersey unemployment skyrockets to 5.4%

    Details to follow.

  82. Tom says:

    good god I need to proofread what I write.


    People are still in denial or trying to get the most they can out of those that are. That’s going to change when they realize lenders aren’t giving away the amount of credit they used to. House prices are going to fall big. I think the lenders are trying to keep things quiet until they unload some more foreclosures.

  83. gary says:


    Sounds plausible to me. This blog has taught me to be more patient…. we’ll see how it goes. I think energy and food price, general pyschology and a wave of Alt-A resets on the horizon is just too much load to bear.

  84. ricky_nu says:

    I had asked this a few days ago, and I dont htink I got the right website, but some had posted a nifty site that had up to date home sales data in NJ (It had up to April few days ago), looking mainly for Bergen county data, but I think that other countied were included. Can anyone help here?

  85. NNJ says:

    Newark needs to be blanketed with cameras in public places with an expiration of 5 years. If crime decreases, some sanity can return to the area, until then Newark will stay a piss-hole. Booker has not been as effective, but much better than prior administration.

  86. lostinny says:

    75 Jcer
    So NJ is the opposite of NY? Teachers leave the city to make more in the burbs. You’re saying in NJ teachers make more in the burbs?

  87. Richie says:

    File this for future reference:

    Never go to St. Joes in Paterson, ever. Overheard in the ER waiting room last night, “I’d rather die trying to get to Hackensack than risk bleeding to death here waiting for a doctor.”

    My brother-in-law and his wife took their infant to the emergency room in St. Joe’s at 9pm one night. They didn’t see a doctor until 5am.

    They could’ve walked to Hackensack in that time.


  88. lostinny says:

    75 Jcer
    SOrry that was meant to ask if teachers make more in the city in NJ.

  89. grim says:

    New Thread!

  90. Minnie says:

    The racism on this site is shocking.

  91. mark says:

    here we go ,,, minnie with a race card
    must be a lib

  92. Rich In NNJ says:

    Ricky_nu (84),

    I think this will be the 3rd time I’ve posted this at your request.

    The most up to date free site for home sales in Bergen and Passaic counties. 07/08 property taxes, too.

    If this isn’t the site you’re talking about, let me know.

  93. BeachBum says:

    Enjoying the blog, but am looking for the same type of information more focussed on Bradley Beach, Ocean Grove, Avon and Belmar. Any ideas?
    The prices are not coming down – people still want a half a million dollars for an unrenovated house 4 blocks from the beach – seems crazy to me!

  94. jcer says:

    Homebuyer, I have been investigating the restoration of homes from the 1840’s-1880’s in Jersey City/Hoboken and have been trying buy one. I have employed the help of a general contractor, roofing expert, structural engineer, and pest expert so along the way I have picked up some general knowledge. Thankfully my father is a developer(They have experience with large historic rehabs) and so it has only cost me some money and not an arm and a leg.

    Rot is your worst enemy, this is typically caused water intrusion a big problem in older homes where there has been deflection. Sealing and waterproofing an older home is continual maintenance, a penny of prevention is worth a pound of cure. Older homes require more maintenance but assuming this has been done and there are no structural problems. In a 3000 sqft home lets assume with 1 kitchen 3 baths, re plumbing the supply with PEX cost like 9-10k, plus what ever plaster/sheet rock damage. Your waste/vent again depending on usage of pvc or cast iron could range from as low as 5k to as much a 10 or 12k again not counting collateral damage, floors, walls, etc. Your best bet is to gut the bathrooms and kitchen, new floors and Sheetrock which is easier to deal with than lathe plaster or horsehair plaster walls. The other rooms can probably have their walls spared and repaired by an experienced plaster guy, not cheap but it will retain some of the character of the home. So about 15-20k for plumbing. Electrical for 200 Amp service a new box, and complete rewire about the same 20k. You need to paint probably every room after this and patch all of the holes in the plaster. Now things to consider, HVAC, a new install of ducting and an a high SEER HVAC system is about 25k, if you have sufficient ducting it is less probably 15k. But to make it look nice and avoid ugly ducting a high velocity system would run about 30k-35k(spacepak) better option in older homes. To update the mechanicals in a 3000 sqft house as a homeowner, contractors pay less, and you pay more because you are not totally gutting the building or doing a new build and thus it is more time consuming, would cost probably 100k, conservative estimate for the the kitchen and baths is 45k so 150k brings the interior up to the standards of a newer build. Now if there is exterior issues siding, roof, etc that is more.

    If you don’t need central air, you could go baseboard heat for about 15k. Some older homes have systems that are in much better shape than others and still have some life left in them. You can go piece meal but it sometimes costs more if the systems fail and you replace them one at a time. But if a plumber tells you the cast iron waste lines have another 15 years worth of life there is little point in replacing them. Water supply lines, and electrical can be added with minimal disruption and probably should always be modernized if they have not been put in within the last 30 years. Once you start replacing waste lines you are probably gutting the kitchen and baths.

    So it is very expensive to do things the “right way”. Most home owners do not, but to make that historic home function as if it were new, I’d probably open my pocketbook and expect to spend 200k. This applies to very old homes and assumes the previous owner was not replacing things. Many older homes have been partially updated an thus the costs are much lower. Just assume whatever you think it will be it is more as more problems will be exposed. You would be much better suited to buy a home that has been mechanically updated and as always it is very important to get a good inspection, and when the results come back to get an actual contractor give you an estimate on the probable work that has to be done. If you are buying something very old a public engineer might be a good person to have they will charge around 5k for a report detail the functions of all of the systems and the structural condition of the building. Let the buyer beware.

  95. Tom says:


    I posted this before but these are my thoughts on where house prices need to be. With unemployment and gas prices being what they are, it wouldn’t be surprised if it goes lower.

    I was checking out NJMLS the other night out of boredom. A couple of the kitchens in the smaller co-ops caught my eye.

    This is a horrible kitchen remodel. I know it’s a small space with limited options but at least get some things to line up. On the plus side, it looks like someone actually lived there and I don’t think did this solely to increase the value. http://photos.njmls.com/2817187.5.jpg

    This one was my favorite. At first glance you’re like “wow” http://photos.njmls.com/2813978.6.jpg

    Then I realized the space over the sink is half cabinet half empty space. I’m guessing these are ikea cabinets because in the closeups the doors don’t align properly (person didn’t take the time to get it right) and there’s a gap between the back of the cabinet and the wall which usually happens with Ikea’s wall cabinet mounting system. No effort made to get an end panel or other way to finish it off so it isn’t so bad.

    In this pic you see the butcher block top and the granite looking countertop don’t match up. http://photos.njmls.com/2813978.4.jpg That’s really annoying.

    They at least found a 20″ stainless range though.

    But you have to ask yourself? Does a kitchen like this really belong in a small studio apartment? For reference the first picture was for a 1 bedroom.

    The bathroom tile job looks amateurish too. Saw a lot of stuff like these in the past few years. And they’ll sell. Not as fast as they used to though.

  96. jcer says:

    89 yes in order to attract teachers away from suburbia where the students generally aren’t dangerous urban areas pay higher salaries for experienced teachers. Strangely enough police are the opposite, suburban cops are paid very well, more so than the cops who face the risks of NJ’s urban decay.

  97. bts says:

    Summary of the conversation my wife just had with a realtor from an open house we saw on Sunday.

    R – “Are you interested in placing an offer?”

    W – “The place is nice, but on a busier street and overpriced.”

    R- “What price would get you in here?”

    W- “I would have to talk it over with my husband”

    R – “I can represent you. Sometimes we have office exclusives that don’t go on the MLS (she started off the conversation by saying that she was a little greedy)”

    W – “We are working with a buyers agent that we are happy with. Isn’t it a conflict of interest to represent the buyer and the seller? It seems corrupt and no other industry allows this.”

    R- “Sometimes clients prefer to have an exclusive listing”

    W – “How does that possibly benefit the client? Why wouldn’t they just sell it themselves if it isn’t on the MLS?”

    R – “Thats the power of a realtor”

  98. Jill says:

    Grim #4: My questions about this are:

    1) Whether the so-called “friends of Angelo” program was ONLY offered to politicians, or if it was a marketing ploy to make the company seem more “personal”

    1) whether Dodd was TOLD this was a “friends of Angelo” program loan.

    If he thought this was just marketing preferred rates to people with high credit ratings, then I don’t see a problem here. If he knew it was a special program, AND it was just for politicians (and he knew that as well), that would be a problem.

  99. skep-tic says:

    #4 Dodd is so completely full of sh*t. He is an embarassment. As soon as he proposed his bailout plan for the banks it was obvious that he had some special motivation (I was thinking campaign contributions). No one in their right mind would think his plan is favorable for the American people

  100. skep-tic says:


    ““There is really just no firewall around these sorts of communities that insulates them from what is going on in the housing market,” said Nicolas Retsinas, director of the Joint Center for Housing Studies at Harvard University in Cambridge, Massachusetts.”

    wait, I thought Retsinas said most of the Northeast was bubbleproof because of heavy zoning and general lack of available land. Can a reporter please do some research once in a while?

  101. skep-tic says:


    “In my opinion there are only 2 options. Either it is impossible to effectivly teach these students in their crrrent environment ( which i do not believe) or the state is astronomically ineffective even given the massive amount of money they have..”


  102. still_looking says:

    75, 78, 88

    Go to Valley in Ridgewood.


  103. Nom Deplume says:

    Cambridge is bubbleproof for those reasons. The rest of us, not so much.

  104. Nom Deplume says:


    When it comes to cops, cities are generally farm teams for the suburbs. The worst are poor satellite cities and counties. They lose cops to better-paying, safer towns constantly.

    Also, a larger police force will pay less but be considered safer. Backup is worth more than salary, and since they don’t have traffic as a priority, they are generally reactive so there is actually less risk. Also, poor urban areas are ignored by cops because they are not compensated for the risk and are viewed as the enemy, so they don’t bother—that would involve undue risk.

    There is also the job prestige to compensate for pay. Cops are not the sharpest knives in the drawer and don’t have mahy prospects that pay somewhat reasonably and carry the prestige (or just plain old ability to scam) that being a cop conveys.

    BTW, I know this is unvarnished and harsh, but I have my sources (a.k.a. Dad)

  105. alia says:

    11 BB: coincidently, our realtor just wrote me a lovely email today, noting that for some reason her auto drip feed had been set to not send us feeds anymore. she changed it back, and even mentioned that she knew we were not yet ready to buy. ymmv.

  106. The best mortgage calculator is at , you will be prompted to enter the value of the home, the duration of the loan ( in…

Comments are closed.