From the Record:
Countrywide to provide foreclosure-relief fund in N.J.
Countrywide Financial Corp. will set up a $3.7 million foreclosure-relief fund in New Jersey to settle allegations that it wrote high-priced and unaffordable subprime mortgages, Governor Jon S. Corzine announced today.
Corzine said Countrywide, which is now a subsidiary of Bank of America, engaged in “aggressive sales and marketing of inappropriate or bad loans.”
The agreement is expected to help an estimated 8,200 New Jersey borrowers. Under the agreement, the state will receive half of the $3.7 million to fund mortgage modification programs sponsored by state agencies, including the statewide mortgage foreclosure mediation program administered by the state judiciary. The remaining half will be available to sub-prime borrowers who have lost their homes to foreclosure after making six or fewer payments.
The $3.7 million is New Jersey’s share of a $150-million nationwide settlement, which Countrywide agreed to Tuesday, without admitting any wrongdoing.
Under the agreement, Countrywide will offer loan modifications or relocation assistance to borrowers who are delinquent on their mortgages. Countrywide will not begin foreclosure proceedings until it can be determined whether a borrower’s loan can be modified.
Loans eligible for the program are Countrywide sub-prime adjustable rate mortgages (ARMs), pay-option ARMS or other sub-prime residential mortgages for owner-occupied properties serviced by Countrywide and which began between Jan. 1, 2004 and Dec. 31, 2007.
Loan modifications would be designed to bring monthly housing payments, including property taxes and insurance, to between 34 percent and 42 percent of a borrower’s monthly income. If homeowners cannot afford loans even after they are modified, they may receive relocation help, which Countrywide estimates will average around $2,000.
3.7M? Too small an amount to have any impact, right?
S
I think that the domestic economy is a vicious circle: housing goes down, debt goes up/equity less, less consumption, more unemployment. housing goes down.
If housing prices had not gone down wouldn’t those toxic assets value enough for no bailouts?
what am I missing?
Thanks for all the advice guys. As much as a part of me wanted to buy, there was that little nagging voice in the back of my head that i wasn’t ready and you guys helped confirm it. I know the numbers probably don’t add up for me but it’s due to many circumstances in my life. if you had asked me a year ago how much debt i had, i would’ve told you about $60k (CCs and student loans)
PS. I didn’t really decide on a town but i was considering the town i current rent in…lyndhurst.
Ohhhhh. $450 per person.
So 3.7 mill is going to give the average deal 2k. Yet they plan on helping 8,200 people? that works out to $451 a deal.
No wonder Countrywide imploded and NJ gov’s finances are the state there in.
Basic math skills, like letter writing, is becoming a lost art.
wow, peashooter vs tank.
w8ting, if you duplicate what you did last year in paying down the debt, that will all be savings for the new pad/emergency fund.
12 months aint that long a time, you can rent and be a part of lyndhurst too!
sas-previous page
sas says:
April 2, 2009 at 8:04 pm
“DEPUTY MAYOR: NYC GOING THE WAY OF GM”
http://tinyurl.com/df2pll
i didnt like bloomberg’s power grab for term limits, but i will say, he runs that place like a business. tried to get a head of the curve with the crisis, lets the public know the cold hard facts and tries to instill change for the better of nyc.
So much for stimulus, instead of lending, they paid it back…
Given the AIG situation, I suppose the payback is understandable.
From the AP:
5 banks repay $353M in bailout funds
Five banks have repaid millions of dollars they received from the government’s $700 billion financial bailout pot, the Obama administration said Thursday.
…
They were the first banks to repay the government, wanting to escape the increasingly tough restrictions placed on participants in the rescue program.
Lol you can’t make any statements on w8ting comments – starting with the fact that unless he got money from somewhere it is impossible to pay off 50K in debt in a year with income of 115K and rent of 1500$/month – after taxes, insurance health costs and food…. simply impossible. Even for a single person. For a family of 4… yea right.
Starting with the fact that student loan principle an credit card principle payments are not tax deductible.
In general folks here gave you decent advice – save about 40K-50K and look again in a year or so… Prices are not going up and you will also have better Idea on what will happen with NJ Property Taxes.
On the other hand I think some estimates about 36000/year for PITI + upkeep + utilities are a bit too much…
Need to account for “ITI” part being tax deductible…
What stops me from starting to lowballing right now is uncertainty with RE taxes…
job loss is always a possibility but you simply cant plan for that – If I lose my job I am mailing keys to the bank no matter how much I have in the bank – first thing I do is stop paying my mortgage :)
Government encourages people to to this.
P.S. I do not own a house and I think that only crazy person would put more than a minimal down payment on a house in NJ right now…
Look at the house as a way to live rent free for a year if you lose your job!!!
Thank you non-recourse mortgages, and forgiven debt made non-taxable by government!!!
AI: you can if you get a cash bonuses in excess of $50k. ;)
AI: But like you, more than the mortgage itself, the taxes and all the added costs of owning a home that nobody tells you about is what worries me about buying in nj.
As I said before unless he got money from somewhere – you did not tell us full story… So this makes your salary 115K + significant bonus for last year, not 115K.
Or I guess you might count on smaller bonus this year…
anyways listen to advice from people on this blog, but remember that we do not know full picture and we are not your financial advisers – just some high school janitors here – hence the high salaries of folks here – NJ school system :)
The Record had an article about the Teacher’s Pension Fund being $15BBB underfunded. Wonder where that’s going to come from?
AI: I am not counting on a bonus at all this year. i’m very lucky to have gotten anything for 2008.
My circumstances are pretty complicated but another big change that happened over the past year is i stopped paying the rent for my folks which was $900/month. This is how i was able to pay down so much debt over the year.
bailout humor…
To whom it may concern:
I have been a customer of Bank of America since October 2006. In that time I have maintained, in good faith, a checking account, a savings account, an investment account and two credit card accounts.
This letter is to inform you that I am displeased with the service I’ve received from BOA and will no longer be doing business with you.
It has become evident to me that in light of BOA’s irresponsible and abusive overdraft and credit card policies and their associated fees which are in direct opposition to your customer’s wishes and in light of your dishonesty regarding your concern for your customers’ welfare and in light of the moral hazard that you’ve accepted in receiving constitutionally illegal appropriations from the federal government to the tune of some $150 billion and in light of your breach of our good faith contract to provide me the understood banking services in a reasonable and professional manner, I find BOA to be a disreputable organization and have chosen to no longer do business with you.
As of today, I have an outstanding negative balance in my checking account of $440 as well as two outstanding balances on my credit cards totaling approximately $7,800.
I consider my debt to BOA to be paid in full by BOA for the following reason: from information I could find on the Internet BOA has a U.S. consumer base of some $29 million. I calculated my share of the bailout funds allocated to BOA then to be approximately $5200.
This is money I’ve already given to BOA from my federal tax allowances. Now this is just a loan understand. BOA is responsible for paying this money back in full and with interest, to me. Since the federal government made this loan without the constitutional authority to do so and with my money I would like to inform BOA of my terms of agreement which are in addition to whatever TOA you might already have with the feds.
The loan origination fee is $440.
I will start you out with an introductory rate of 10% APR. I reserve the right, however, to change this rate at any time and without notification. Like right now. It just went up to 15%. See how that works? Now as you make repayments to the federal government I will calculate my share of those repayments and apply my entire share to your calculated accrued interest for the year first before I apply any of it to the principle. BTW, your APR just increased to 20%. This is in the best interest of BOA so that if you have other loan payments to make, you won’t be overburdened by unmanageable principle payments to me. Of course the juice will continue to run on your principle.
Furthermore, since you’ve been shown to be financially insolvent and on the verge of bankruptcy requiring a bailout from your customers, I’m afraid I’m going to have to cut off your line of credit from me at $5200 but of course I’ll continue to calculate the accrued interest and expect you to pay it in full. In the case that the federal government decides to loan you additional bailout funds even though your credit with me has been canceled, you will then exceed your available credit limit with me and I will assess BOA an “over the credit limit” fee in the amount of $1000. Unfortunately, there is nothing you can do about this fee as it is my lending policy. I should also inform you that there is a penalty for early repayment of $1000.
So to formalize our contract: you currently owe me $5200 at an APR of 40% (another increase) for the fiscal year 2009. This calculates to an annual interest payment of $2080. Any outstanding principle remaining after fiscal year 2009, along with over the limit fees, will accrue interest at an APR of your current APR + 10%.
If you pay your loan off in full in 2009 at the current annual interest rate of 50% (did it again) then you’ll owe me a total of: $7800 which along with my loan origination fee settles your debt with me and hence my debt with you, assuming you don’t exceed your available credit limit. In this case please post a check for $1000 to the last known address you have for me.
Since the feds loaned you my money without discussing it with me, this TOA is implicitly accepted by you and must be honored.
I realize that some of my terms might seem excessive but trust me: it’s in your best interest. I get nothing out of this.
If you have any questions regarding your loan or the TOA, who gives a shit? But if you do feel the need to speak with an impersonal, automated, touch-tone, menu-driven customer service system followed by an impersonal, auto-programmed, mono-tone, policy-driven, lobotomized, carbon based unit, then dial: 800-432-1000 and enjoy.
With best regards,
Don Cooper
Don Cooper is a Florida native, Navy veteran and Oxford educated economist living and working in the Midwest.
ROFL
Reply With Quote
From the Star Ledger:
Report finds $15B gap in N.J. teachers’ pension fund
The pension fund for New Jersey’s teachers is now underfunded by at least $15 billion, according to an actuarial report released today.
That means if the state were to be asked for all it is obligated to pay right now on teacher pensions, it will come up more than 25 percent short. Payments to retired workers and teachers in New Jersey total $5.5 billion annually, money that comes from taxpayers and revenue from pension investments.
The value of assets in the teachers’ fund, known officially as the New Jersey Teachers’ Pension and Annuity Fund, was estimated to be $36.6 billion as of June 30, 2008, the end of the last fiscal year.
The fund’s liabilities — money needed to cover payments to retirees — were estimated at $51.7 billion as of June 30, 2008.
The gap between what the fund is worth and what is owed, commonly referred to as the unfunded liability, was $12.4 billion as of June 30, 2007. The funding ratio fell from 74.7 percent to 70.8 percent in the latest report, issued by Seattle-based Milliman Consultants and Actuaries.
…
The latest estimate for the state’s entire unfunded pension and benefits liabilities was $28 billion, but that number is expected to grow when more detailed information on the retirement systems for state employees, judicial employees and police officers and firefighters, comes out later this month.
Good. The damn FASB did at least SOME of the right thing. They didn’t go far enough as far as I’m concerned.
For the life of me, I don’t understand how the hell of bunch of damn beancounters were allowed to hold us hostage in the first damn place. What the hell have accountants ever done to drive any damn thing? Nothing that’s what–they just get in the damn way of making money. They should be taking orders not giving them. This is a profession that’s a necessary evil, but one I’d just as soon do without.
If you’re a damn beancounter and got insulted by what I just wrote, then good. That’s exactly what I intended.
“$3.7 million”
what a joke.
i steal from you 100 dollars from under your nose, but to make you think I’m a nice guy, I will give back 3 dollars and act like I’m helping you recover from the 100 i stole.
man alive, how long some you people out there will continue to grab your ankles??
SAS
With respects to 3b
*******************************
Don’t miss out on this deal! Major selling point: portions of the house were remodeled in 1987! Yes, you read correctly, 1987! Now if that’s not a reason to buy I don’t know what is….
http://www.realtor.com/realestateandhomes-detail/Hillsdale_NJ_07642_1107434940
Here’s a pretty steep price cut on a prestige Upper Montclair Street.
GSMLS 2645908 – 384 Highland
OLP 899000
LP 749900
Tax Assessed: 919600
Interestingly enough, this last sold in 1996 for 350k. It was assessed at 448,100 at the time of that sale. Sale price was 22% below assessment which was done in 1989 before the market crashed. Prestigious Montclair dropped dramatically before. It’s doing so again.
Sastry-
Why are you so hot to get a pre-approval if you’re not really serious about buying?
BTW, let me confirm for you that you aren’t serious. When you get serious, you will track down the good deals. Even in a market as awful as this, they don’t fall in your lap.
If you get preaproved now, it will simply expire. If you happen to see a house you like, a good lender can preapprove you in about 15 minutes.
If your Weichert agent can’t accept the trimerge score from your most recent credit report as proof of your bonafides, about 10,000 other agents out there will.
I can also tell you that if this agent hasn’t figured out you’re not hot to trot & kees working with you, you’re hooked up with a crummy agent. Good agents don’t put anything other than committed “now” buyers in their cars.
No offense…just saying.
-22 cue the deer
Here’s a 499k house in Cranford that i actually like.
http://www.realtor.com/realestateandhomes-detail/Cranford-Twp_NJ_07016_1107335739
NYTimes article,
As the Foreclosed Move Out, First-Time Buyers Are Moving In
California Realtors offers perks to home buyers
Changing the market, one house at a time
Just saw a story on the 10 o’clock news that Donna Karan’s new jeans are going to cost $595 a pair.
Where’s the recession?
Clotpoll says:
April 2, 2009 at 10:20 pm
sastry (422)- That’s bullshit.
No this is….
http://www.youtube.com/watch?v=GSGqK-nZkaU
Cindy…it happened in Fresno…what is the inside poop?
Sastry & We,
Wife and I had a credit scores slightly above 800, got a pre-approval at realtor’s behest before making offers. Everytime we made an offer on a different house, we had to renew the pre-aproval. Our scores are now high 700s with the only hit being “too many inquiries affected score”. Not a big deal for us but if you’re on a cusp, watch it.
Geithner’s Non-Recourse Gift Keeps on Giving to Gross (Update1)
30/safeashouses-
saw that in the NY Post today. was wondering if it would get the $300 jean discussion started on here again.
NJ Wine, Nompounds, Firearms, Investing, $300 Jeans and Real Estate Report
Well, I think I’m now out of the market for at least another year. A lot of reasons floating through my head — too many to post — but consistent with what everyone on the board seems to say.
Eh, what the hel1, it’s late, and since this is the only time I have to post (and I have the floor all to myself!), here come my 2 cents worth of reasons… (actually alot more than 2 cents).
you’re not alone (re 35 and 36)
:)
sl
The case against buying a house in NJ:
I will use Monmouth Co as an example, but anyone can build their own case! It’s fun!
Exhibit A, Taxes.
Monmouth Co avg tax growth from ’00 to ’07 = 55% (~7% per year compounded)
http://www.nj.com/news/bythenumbers/ click the “taxes in your town” link
Exhibit B, Price growth.
Monmouth Co avg growth from Q3,2000 to Q3, 2006 = 148% (>16% growth per year compounded)
http://www.njar.com/research_statistics/housing.html you have to pull data for your area from the end of every quarterly report
Drop so far? From Q3,2006 to Q4, 2008 = -22% (approx -9% per year compounded)
+148% then -22% ?? Not.. yet.. there. Especially considering what follows.
Exhibit C, Per Capita Incomes.
Monmouth Co, from ’00 to ’06 (current yr $) = 21% (~3% per yr compounded)
http://www.bea.gov/regional/reis/default.cfm?selTable=CA30 select NJ, and your county.
or,
Monmouth Co, from ’01 to ’07 = ~18% (again, ~3% compounded)
http://data.bls.gov/PDQ/outside.jsp?survey=en
Finally Exhibit D, Population.
Monmouth Co, from ’00 to ’06 = ~4% (or <1% per yr compounded)
(from same BEA source as above)
Closing remarks:
It seems (if my research is right) that the tax growth of 7% per year and home price growth of 16% per year became drastically dislocated from income and population trends (3% per yr and 6 yrs.
6.) Large amts of investment $ rotated into sector.
7.) Fear of forever losing the homeownership dream, (toward the end).
8.) Poor memory on part of regulators/ policy makers.
And the supply fought to catch up. As it did, demand began its retreat..
Why?
#s 2, 3, 4, 5, 6 and 8 reversed trend 180 deg.
I’d say there is evidence that current negative forces would push equilib prices below historical trends, since many RE parameters weren’t so poor pre-boom. (A big overshoot on down side?)
So IMHO, clearing prices are far below where current asking prices are, and it’s probably somewhere closer to late 2002 prices assuming 4%/yr apprec and a stable/sound economy. Due to the current economy (unemployment) and tax growth, I’d say maybe lower.
I’m tired of hearing that prices here are different b/c “we’re near the CITY”, or “near the BEACH”, etc…
BS. The city and the beach have always been here, they did not appear in the last 9 yrs. If I’ve missed something, please chime in. Otherwise, I see no fundamentals supporting the current prices even with additional 15% discounts.
The case against buying a house in NJ:
I will use Monmouth Co as an example, but anyone can build their own case! It’s fun!
Exhibit A, Taxes.
Monmouth Co avg tax growth from ’00 to ’07 = 55% (~7% per year compounded)
http://www.nj.com/news/bythenumbers/ click the “taxes in your town” link
Exhibit B, Price growth.
Monmouth Co avg growth from Q3,2000 to Q3, 2006 = 148% (>16% growth per year compounded)
http://www.njar.com/research_statistics/housing.html you have to pull data for your area from the end of every quarterly report
Drop so far? From Q3,2006 to Q4, 2008 = -22% (approx -9% per year compounded)
+148% then -22% ?? Not.. yet.. there. Especially considering what follows.
test
Of course, Grim, my masterpiece post is in mod.
What gives? This happens alot to me and I post infrequently without questionable language. If you get to it, please unmod 38, and feel free to delete 39 (my attempt to avoid whatever mod screen you’ve set up).
ugghh.
This thing aint nearly over.
Clot,
We got the pre-approval to put in one bid on the 10 red bud. Low ball 450, seems like the winning bid was at 485, though not sure… agent said there were bids above the asking price of 525, but no one has numbers. Then the realtor asked me to a full approval (conditional on appraisal). I sent the docs…
So far, it hasn’t taken much time (of anyone) and I keep getting daily auto emails. If it goes too long, we’ll suspend things for a year…
Does it seem a bit unfair towards the agent (I did tell the agent and the finance person that there is a very low likelihood of anything happening). What is the normal practice? They tell me if I am wasting their time, or they keep sending more and more listings to me?
S
W8ting [3],
Anyone who can pay down that much in loans and cards in a year gets my vote. Rock on.
SG [27],
Now that’s progress. First you’ve got someone who scratched to get 20% down and looked at hundreds of houses to find the right one. She’ll do fine. (As if there was ever a question with a last name like Goldman!)
The Homestead condo I’m not so sure about. 87k seems cheap but all sorts of trouble signs. Only 3k down. Neighboring properties now cheaper. And how on earth did she end up with $1100/month payments on an $84k mortgage?
One more thought. If its possible to get 3 bedrooms, 2 baths, and a pool in Miami for 187k, then surely the same deal should be available in, say, Montclair. Now that it’s been in the Times, maybe everyone will start to think that way. 187 in Montclair, 250 in Upper Haughtyville. Come to Poppa.
[Doctor, the fever seems to be getting worse and the delirious ravings too …]
(31) Chicago – I have no idea when that “ball girl” play was made. Amazing. Luckily a foul ball – still…I don’t think she was supposed to do that.
Grim – On your original Countrywide post –
We have had these workouts in California for some time. The word is that Countrywide does not have the staff to handle them. Folks call and call and routinely end up at the bottom of a heap of paperwork because each loan servicer is trying to work 80 to 100 clients at a time.
I listened to a radio program with Brad Maaske – Real Talk KMJ 580 – last weekend, he says folks have to call twice a week to keep their paperwork on the top of the pile because those that aren’t close to foreclosure – and a “high priority” – might get lost in the shuffle until the last possible minute. Per his interview, “These guys just don’t get it – they are seriously understaffed.”
If you qualify, they will do a work-out dropping your interest rate as low as 2% to reach the 31% income to payment ratio. But no principal reductions. They waive the late fees and add interest to the end of the loan.
Rev (38)-
Pretty much my thoughts.
Now you can make yourself a fruity drink, pull up a chair and enjoy this Summer’s riots, with no distractions.
Sastry (43)-
Nothing at all wrong with what you’re doing, especially since you’ve announced your intentions. If the agent just has you on an auto e-mail, that’s a lot different than schlepping you around or dropping everything to meet you on short notice.
Still don’t get why you’d come in on an obvious multiple offer situation just off the bid. Swing for the fences, or pass. IMO, it’s like the old quote about Bert Blyleven:
He always pitches well enough to lose 3-2.
Dr. Housingbubble says no bottom in CA until 2011/2012 due to the quantity of
option ARMS here. Now I’m reading you folks say 2015 – Uhg.
Cindy (47)-
80 to 100 clients?
Try 150 to 180. In a place like Countryfraud, the workout people won’t even look at files that are not airtight in terms of completeness.
The word I hear is that most banks haven’t even identified their pool of eligible candidates yet (remember, the banks are supposed to be notifying those candidates via mail).
Just another gubmint boondoggle that ultimately won’t work…
After reading the article, I just feel that I really need more info. Can you share some resources please?
After reading this article, I feel that I need more information on the topic. Can you suggest some more resources ?