So much for that decline in foreclosures

From the Wall Street Journal:

Banks Ramp Up Foreclosures
Increase Poses Threat to Home Prices; Delinquent Borrowers Face New Scrutiny

Some of the nation’s largest mortgage companies are stepping up foreclosures on delinquent homeowners. That will likely lead to more Americans losing their homes just as the Obama administration’s housing-rescue plan gets into gear.

J.P. Morgan Chase & Co., Wells Fargo & Co., Fannie Mae and Freddie Mac all say they have increased foreclosure activity in recent weeks. Those companies say they have lifted internal moratoriums which temporarily halted foreclosures.

Some mortgage companies had stopped foreclosing on borrowers as they waited for details of the Obama administration’s housing-rescue plan, announced in February, which provides incentives for mortgage companies and investors to reduce borrowers’ payments to affordable levels. Others had temporarily halted foreclosures while they put their own programs in place, or in response to changes in state laws.

Now, they have begun to determine which troubled borrowers are candidates for help, and to move the rest through the foreclosure process.

The resulting increase in the supply of foreclosed homes could further depress home prices and put additional pressure on bank earnings as troubled loans are written off.

Foreclosure sales had dropped in the second half of 2008 as mortgage companies delayed taking action against delinquent borrowers. But sales have been edging up this year, according to LPS Applied Analytics, which tracks loan performance. Foreclosure-related filings increased by nearly 6% in February from the month earlier, and were up almost 30% from February 2008, according to RealtyTrac. The backlog of seriously delinquent loans has been growing.

J.P. Morgan Chase has increased foreclosure actions since the expiration of a moratorium on new foreclosures that began on Oct. 31, and a later moratorium put in place at President Obama’s request.

Citigroup Inc. says it stopped all foreclosures until March 12, at the Obama administration’s request, on loans serviced for Fannie and Freddie. Since then, says a spokesman, it has “reverted to our previous business-as-usual moratorium.”

Wells Fargo has also increased foreclosure actions since the expiration of its foreclosure moratorium,

Both Fannie and Freddie have stepped up sales of foreclosed properties since their moratoriums ended on March 31

GMAC’s mortgage division, which had temporarily halted foreclosures while awaiting details of the Obama plan, is now reviewing loans to see which ones will qualify under the program. So far, about 10% of borrowers in some stage of foreclosure appear to be eligible for the federal program, a company spokeswoman says.

Many have been “playing for time” while the moratoriums have been in place, he says. But the delays have only increased the amount of interest and fees they owe, making their loans “nonviable in the long run.”

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119 Responses to So much for that decline in foreclosures

  1. grim says:

    Someone please tell the Mayor of Morristown that pension deferrals don’t reduce the burden on taxpayers at all, instead it shifts an increased burden to future taxpayers.

    From the Star Ledger:

    Morristown mayor seeks deferral plan to ease taxpayer burden

    Calling the current economic condition a “depression,” Mayor Donald Cresitello convinced members of the Morristown council to defer $1 million in municipal pension contributions as a short-term solution to ease the burden on taxpayers.

    With the average assessed home at $350,000, Cresitello said the program would save the average homeowner $165 in taxes in 2009.

    The state is offering a one-time program for municipalities to cut pension contributions by half, the town’s financial officers said during the Morristown Council meeting Tuesday night.

    The town is in worse financial shape than it was a year ago by about $2 million, chief financial officer Robert Calise and auditor and consultant Jeff Bliss said.

    The town’s surplus is down by about $1 million this year, Calise said. Applications for building permits dropped by about $250,000, and interest on investments plunged by $400,000, Calise said.

    In 2008, the town’s tax collection rate was down by 96 percent, falling two points from 2007, he said. “We’ve done everything, but not having the taxes paid erodes the surplus,” Calise said.

  2. DL says:

    Philly Inquirer recurring puff piece on residential real estate. Philly is different.

    “All these factors have helped the city’s residential market hold up better than other metropolitan areas this past year.

    According to the report, home prices here fell about 10 percent from the peak in 2006, compared with drops of 12 percent in New York, 13 percent in Boston, 32 percent in Los Angeles, and 39 percent in Las Vegas.

    In Center City, average home prices dipped just 1 percent in the last two years and remain 34 percent higher than 2003 averages, the report found, attributing this resiliency to the absence of much speculative development and to “healthy” demand from students, young professionals, and empty-nesters.”

  3. grim says:

    Oh well, so much for the Chrysler/Fiat merger…

    From MarketWatch:

    Fiat threatens to walk away from Chrysler: report

    Italian carmaker Fiat SpA will walk away from Chrysler unless the U.S. carmaker Canadian and American unions agree to significantly reduce labor costs by the end of the month, Fiat Chief Executive Sergio Marchionne told Canadian newspaper the Globe and Mail in a interview published on Wednesday. A deal with Fiat is Chrysler’s last chance to avoid a bankruptcy filing and possible liquidation. Fiat, however, is prepared to abandon a deal unless workers at Chrysler’s North American plants agreed to match the lower labor costs of Japanese and German plants. At the end of March, the U.S. auto task force gave Chrysler 30 days to complete an alliance with Fiat or face a cut-off of the government funding on which it is subsisting.

  4. DL says:

    Ref 1: Hope and change; as in “We hope things will get better so we won’t have to change anything.”

  5. grim says:

    From Bloomberg:

    UBS to Cut 7,500 More Jobs After Loss, Asset Outflows

    UBS AG, Switzerland’s biggest bank, plans to cut another 7,500 jobs, bringing total staff reductions to almost 20 percent of the workforce, amid mounting losses and customer defections.

  6. grim says:

    From Bloomberg:

    Say Good-Bye to Fannie, Freddie as Housing Woes Wreck Status

    Say good-bye to Fannie and Freddie as you know them.

    The bailed-out mortgage finance companies will emerge from their travails combined as one, broken up or with substantially reshaped missions, according to U.S. lawmakers and analysts.

    “It’s highly unlikely that they would return to the way they used to be,” said Ira Jersey, the head of U.S. interest rate strategy at RBC Capital Markets in New York.

    U.S. regulators seized Fannie Mae and Freddie Mac in September amid a rise in mortgage delinquencies that led to a combined loss of $108.8 billion last year. The U.S. Treasury has injected $59.8 billion in emergency funds into the companies.

  7. DL says:

    UBS will post a first-quarter loss and cut 8,700 more jobs as it struggles to recover, its new chief executive said on Wednesday, warning that Switzerland’s largest bank faces an uncertain future.

  8. DL says:

    “HSBC Holdings PLC plans to put up for sale office buildings in New York and Paris as well as its London headquarters, a move that could raise billions of dollars for the U.K. bank.”

  9. grim says:

    From the NYT:

    Developers Struggle to Fill Manhattan Office Space

    A striking 40-story tower under construction on Eighth Avenue between 41st and 42nd Streets in Midtown Manhattan has a number of things going for it, including floor-to-ceiling windows, still relatively rare for an office building; six terraces; a thick concrete core that reduces the need for view-obstructing columns; and many of the latest advances in energy-efficient technology.

    But less than one year before it is due to be completed, there is one major thing that the 1.1-million-square-foot tower, known as 11 Times Square, is lacking: tenants.

    In the 1980s, 53 million square feet of newly built office space flooded the market and led to a collapse of real estate values. For many years afterward, lenders would not finance speculative projects, so only those with commitments from anchor tenants were built. In the current decade, developers have been relatively restrained, adding only 20 million square feet, according to the brokerage firm CB Richard Ellis.

    As real estate values and rents escalated in middecade, however, a few developers were able to secure hundreds of millions of dollars in financing for ground-up construction or extensive rehabilitation of existing buildings — all without any advance lease commitments but with heady expectations of high rents.

  10. grim says:

    (I’d argue that any decline seen during this period must be dismissed on the basis of the foreclosure moratoriums that were in place. It isn’t that the rate of foreclosures or delinquencies fell at all, but simply that lenders weren’t moving forward with foreclosures.)

    From Property Shark:

    New Jersey Foreclosures Down 10% from Q1 2008, But Up 13% Over Q4 2008, the premier real estate data site, today released its quarterly report covering first-time residential foreclosures in New Jersey for Q1 2009.

    Key Report Findings

    · Foreclosure auctions scheduled in New Jersey in Q1 2009 (2,293) were down 10% compared to Q1 2008 (2,560), but they have gone up 13% since Q4 2008 (2,030).

    · Essex County (296) had the most New Jersey foreclosures scheduled in Q1 2009 – Essex (296), Passaic (217), Ocean (217), and Union (215) counties had the most new foreclosures in New Jersey in Q1 2009.

    · Of New Jersey cities, Newark had the most new foreclosures; Dover had the highest rate of new foreclosures – There were 133 new foreclosures in Newark, followed by Paterson with 120, and Elizabeth with 71. Dover had a rate of one home scheduled for foreclosure auction for every 170 homes, followed by Paterson with one in every 373.

    · Passaic County had the highest rate of foreclosures per household with one in every 755 homes scheduled for auction in Q1 2009 – Union County followed with one in every 866 homes scheduled for auction, and Ocean County had one foreclosure for every 924 homes.

    The full New Jersey Q1 2009 Foreclosure Report can be downloaded at

  11. grim says:

    From the New York Observer:

    Midtown, for the Count?

    It’s become increasingly apparent that midtown Manhattan’s status as the country club for office dwellers hangs in the recession’s balance.

    “This is a financial services crisis, and as far as the United States is concerned, office-wise it is centered in midtown Manhattan,” said Robert Sammons, managing director of research at Colliers ABR. “This will probably change the dynamics of Manhattan, certainly of midtown, for years to come.”

    Every spring, as the crocuses push through the soil, New York’s commercial real estate brokerages send forth a flurry of statistics about office leasing at the start of the year. This time, they were stark indeed. Midtown’s nicest buildings—known in the industry as “Class A” office space—had by April a vacancy rate of 12.2 percent, the highest since August 1996, when the vacancy rate hit 12.3 percent, according to Colliers ABR. Those buildings have 7.8 million square feet of sublease space available, the most since Colliers began keeping records in December 1991.

  12. DL says:

    “Some of the nation’s largest mortgage companies are stepping up foreclosures on delinquent homeowners. That will likely lead to more Americans losing their homes just as the Obama administration’s housing-rescue plan gets into gear.

    J.P. Morgan Chase & Co., Wells Fargo & Co., Fannie Mae and Freddie Mac all say they have increased foreclosure activity in recent weeks. Those companies say they have lifted internal moratoriums which temporarily halted foreclosures.”

  13. grim says:

    From HousingWire:

    Housing Prices Yet to Stop Dropping

    By no surprise, U.S. housing prices continued on a downward slide in February. In a report released Tuesday, Integrated Asset Services, LLC, a provider of default management and residential collateral valuations, reports a 3% month-over-month drop in home prices during the month.

    U.S. house prices have now fallen 14.4% on a year-over-year basis and a whopping 17.9% since the height of the real estate bubble in 2006, according to IAS360 data. Since the economic collapse began in September 2008, the index shows a drop of 10.9%.

    “We have seen no indication of a positive turn in the housing markets we track, if anything the rate of decline in some areas has increased,” says Dave McCarthy, president and CEO of Integrated Asset Services.

  14. grim says:

    Copy of the IAS360 report can be found here:

    2006 National Peak to Current Prices
    Hudson -9.5%
    Morris -18.1%
    Ocean -11.6%
    Passaic -21.6%
    Sussex -13.6%
    Union -6.1%
    Warren -15.0%
    (the bulk of these declines have happened in the past year)

  15. crossroads says:


  16. stan says:


    The morristown mayor meant that it released him from the burden of having to make a tough decision or two

  17. Cindy says:

    Grim – I’m thinking that with the moratoriums off, you may see a year like we saw in 2008. We must have had a 20% drop in that year alone as the foreclosures snowballed. You get one or two comps in an area and there ya go.

    Yes, many will exit the market when they find they can’t make the numbers work, but those that have to move will be subject to the going price.

    New Jersey may be in for a big drop this year.

    What do you think? It sure all happened pretty fast over my way.

  18. tbw says:

    I say, as the foreclosures rise, pressure will go on the financial institutions to do more short sales. Fact is, they do not want a vacant house sitting there ripe for vandals and such. In the interim, I know of a few lenders who are working out deals with the current debtors allowing them to pay them monthly in exchange for keeping their houses and maintaining them.

  19. tbiggs says:

    I don’t have the details – my daughter was relating the story of what happened to a friend. Friend had found a nice house in the woods near Kutztown PA. It needs some work, but it’s not trashed. Two days before closing, the bank foreclosed on it instead! Now why on earth would they do that? You would think they’d take the sure sale over the effort and uncertainty of selling a foreclosed house. Maybe the seller had a fair bit of equity in the house and it was more profitable for the bank to steal it…

  20. Victorian says:

    “Now why on earth would they do that? ”

    Maybe they don’t have to mark the property to market now? Hence, they can keep it on their books at a value according to their model because of distressed conditions?

  21. Cindy says:

    I posted this anecdotal experience months ago but will retell the tale. I sat for 6 months with three foreclosures on my block. No signs – no showings – no nothing.

    It was as though the banks decided to unload them all at once.

    Some say they were overwhelmed by the volume and it took that long for them to actually process them. Others say there is a “shadow inventory” and they are only releasing the foreclosures a bit at a time. Don’t know. But by the time they came on the market, all three sold for around 50% off their highs. Next door – high $325,000 – sold for $167,000 – bank owned.

    I’m just thinking, that with the moratoriums off, there may be another push of foreclosures on my street. I’m wondering now if it has made a difference and wondering too, if it will affect the number of foreclosures you see and therefore – more price declines. Because it hit like a wave – then stopped altogether.

    I just figured that was because those were the only over-extended households – but maybe not. Maybe more are in trouble and now that the moratoriums are off – oh boy…round two.

  22. DL says:

    Debt crisis? What debt crisis?

    Mortgage Applications Slide, Rates Tread Water

    “The main impediments to buy, even with affordability at a record high, are fears of job loss and hopes of greater bargains as prices sink.”

  23. tbw says:

    I am in the process of refinancing my current house. My mortgage payment will be about $1,300 a month not including taxes…

  24. grim says:

    Two days before closing, the bank foreclosed on it instead! Now why on earth would they do that? You would think they’d take the sure sale over the effort and uncertainty of selling a foreclosed house. Maybe the seller had a fair bit of equity in the house and it was more profitable for the bank to steal it…

    Sounds fishy.

    The bank doesn’t just decide to wander over to the house and take it. If I recall, PA is a judicial foreclosure state. Therefore, these actions would have been scheduled and made public MONTHS before they actually took place. They don’t have the ability to simply seize the property at will, whenever they see fit.

    Everyone would have known the date of the foreclosure auction.

    In addition, title search would have identified the lis pendens, default notices and perhaps even the Notice to Sell (depending on timing) on the property as well, so everyone would have known the property was heading into foreclosure.

    The “owners” must have known, they’d have to be oblivious to everything not to. Also, if they knew they had a deal in the works, why didn’t they approach the court to postpone? No judge would turn them away if they had an executed sales contract in their possession.

    Was this some kind of cash deal, sans title insurance, sans lender?

    Hell, did the foreclosure already take place, and the sellers not even have equitable title to the property anymore?

    Too fishy.

  25. kettle1 says:

    There are atleast 3 different homes on my street that are empty and have been foreclosed. Another 2 are empty and have had a variety of realtor signs out front for over a year. right down the street is a failed restaurant that has been sitting empty for 1.5 years and the siding is now starting to fall off of the building. The restaurant has its grass cut once a year, when its about 4 ft tall.

    I live near rockaway and there appears to be a huge shadow inventory

  26. Mikeinwaiting says:

    Sounds like it is time to get out of Dodge.

  27. DL says:

    “Shane Fisher thought he got a real bargain: a $202,000 three-story house in Lansdowne – $29,000 less than list price – that he could live in and that had two upper floors he could rent.

    Yet today, Fisher finds himself still scrambling to finance tens of thousands of dollars in unanticipated expenses, including $60,000 in renovation-cost overruns he says could have been avoided if settlement had not taken almost a year to complete.

    The house he put his deposit on 20 months ago was a short sale, in which the lender accepted less than the balance owed on the mortgage. And Fisher’s experience is what other first-time buyers of short sales and foreclosed properties are discovering:

    Short sales promise a lower-cost entry into home ownership, but instead deliver endless delays, constant disappointments, and lenders who go inexplicably silent, unwilling to communicate with buyers and agents, sometimes for months on end.”

  28. House Whine says:

    Can someone pls. explain to me how it is that my contractor guy I use, who has been in business for many years, told me that he is busier now with home renovations than he has been in the last 5 years? Obviously, there are homeowners out there with extra money despite all the gloom and doom I keep hearing on the news every day. Yet, I go to Home Depot and it seems empty. Strange times.

  29. grim says:

    Can someone pls. explain to me

    And if you can’t be with the one you love
    Love the one you’re with


    If you can’t sell and buy the house down the street you fell in love with, remodel the one you’ve got.

    Or, maybe he is lying?

    Or, maybe he is not. Could it be that marginal contractors are now leaving the trades? More qualified contractors could be picking up additional work as a result.

  30. kettle1 says:


    working on it. looks like that may not be until 3QTR. Mr and Mrs kettle have about equal commutes (45 min+) and the areas we like would put one of use at a 1- 1.5 hr commute. and could make kettle jr’s daycare a pain in the a$$ to get to.

    Once you find a daycare that you are really happy with you dont want to mess that up.

    as always having a family means working out the various compromises

  31. grim says:

    From MarketWatch:

    U.S. March CPI down 0.1%, matching expectations

    U.S. March core CPI up 0.2% vs. 0.1% expected

    U.S. CPI down 0.4% in past year, core CPI up 1.8%

    U.S. March energy prices down 3%

    U.S. March food prices fall 0.1%

    U.S. March shelter prices unchanged

  32. Shore Guy says:

    There are so m?y people in the U.S. who seek “easy.” They want to lose weight, while eating anything and everything they want. They want to “firm their bottom” with no exercise. The list goes on and on and includes financial issues. Too many want benefits without the work, sacrafice, and, yes, risk associated with achieving assorted benefits.

    Consequently, many of us have bcome debtors, yet, somehow, look at our assorted mortgaged or financed things and smugly feel that we have achieved some status because we “own” them. Then, because any loss in their value would cause financial ruin, we demand that the prices at least remain flat.

    Sorry folks, all legal investing involves risk. If one wants to participate in the upside, one must accept the potential for losing money on the downside. It is very simple. Just as one should nit walk into a casino with money one cannot afford to lose, one must not invest money in risky ventures if one cannot afford the downside.

    Mrs. Shore and I are in something like the upper 1 or 2 percent of income for our town and our home is right about median size and value for the town. So, 90-odd percent of the people earn less than we yet half of them have bigger and more expensive houses. Perhaps we were over prudent. In fact I know we were. Still, better to be protected from economic uncertanties than exposed to disaster in a downturn.

    As a friend says, if your and your spouse don’t want kids at a particular moment, better to use two forms of birth control than to use none and hope for the best.

  33. Shore Guy says:

    m?y = many

  34. SG says:

    Selling your home for less than the loan

    Good article for understanding Short Sale.

  35. John says:

    Junk Bond Spreads Fall to Lowest Level in Six Months – Is that a Green Shoot? OMG

    BTW the big O forced banks to halt foreclosures for a few months while he unveiled the next big thing. During that period the best game was a short sale. That is over now. Stocks have perked up a bit and consumer confidence is up a bit and rates are down. Now is a better time to foreclose on the deadbeats and sell the property quick before someone pulls another leg off the chair. It is called risk management.

  36. Mikeinwaiting says:

    House Whine
    Most of the guys I know are crying the blues, others just talking their book to make it look good. Having been in the business (wood flooring) note the operative word been. Three crews new homes, residential then it just died. For the few jobs out there you have to price very low as comp is fierce. There are very few people doing anything. That being said spring is the busy time for home renovations, tax checks mostly. If he is not busy now he is out of business. Could also be full of it. Look busy get your price.

  37. Shore Guy says:

    “U.S. CPI down 0.4% in past year, core CPI up 1.8%”

    I suspect this means that companies (or collective bargaining agreements) that use CPI for calculating wage increases will keep wages flat, whereas the employees will find their broad expenses have actually gone up.

    More good news for returning housing prices to reality.

  38. House Whine says:

    Thanks guys for all your comments re the contractor. I guess I can be naive – I like the guy and don’t want to think he is giving me “the goods”. And his price for the job I want did come in pretty high so it is time for me to shop around.

  39. John says:

    The article should be called selling the banks home at less than the loan. Short sales are like giving ransoms to pirates. Deadbeats should be out on the street in a foreclosure. That will modify their future behavior as well as everyone’s future behavior on the block when Dad is out on the street getting beaten by his wife with the rolling pin while their screaming kids watch their stuff get piled up at the curb. See that and home equity loans, zero down, teaser rates and liar loans offers will make you vomit.
    SG says:
    April 15, 2009 at 8:37 am
    Selling your home for less than the loan

    Good article for understanding Short Sale.

  40. Jim says:

    Can someone pls. explain to me how it is that my contractor guy I use, who has been in business for many years,

    Your contractor friend is very fortunate,I know of two carpenters who have gone out of business, both did re-model work,and had over 25 years of business experience.

    I am also a contractor, business is poor,or awful may be a better explanation. Fortunately I have rental income,or after 40 years in business, I would be looking for a job.
    Home Depot is like a graveyard in the middle of the day…when most contractors get their materials.

    Your friend is lucky indeed!!

  41. Shore Guy says:

    Green shoot?

  42. John says:

    Green shoot is the new mustard seed!

  43. Shore Guy says:

    About Home Depot traffic:

    We had been looking to pick up an occasional use property and had some cash set aside for that. As things went south on house pricing, we have decided to wait to buy; why buy a depreciating asset? Our kitchen was a bit old and tired so we took about $75,000 from the downpayment fund and did a fairly modest remodel — nice to be sure, but not over the top. During the course of the remodel — weeks — the contractor made but one trip to HD for shims and a few odds and ends. Everything else came from specialty suppliers or a family-run building supply company.

  44. comrade nom deplume says:

    [30] whine,

    There appears to be a boomlet in renovations, but that is not getting to everyone. Two small contractors on my street and one says things are very slow.

    I also expect that this is a spasm of activity as a lot of folks jumped in for the reasons grim noted, and with the thinking that so many guys who used to work on houses would have time on their hands.

    I plan to wait until late fall when I expect contractors will be far slower than they are now.

  45. Shore Guy says:

    Mustard seeds. Doh! Of course.

  46. comrade nom deplume says:

    [42] house whine,

    Remember what the realtors are always telling you—that business is good.

    I would not expect a contractor to tell me that things are slow and he will cut me a break. Bad negotiating tactic. They know that most people don’t do that much comparison shopping so they tell you that renos are up, they are busy, and here’s the price.

    I half expect that if you tell him you have found far slower contractors willing to work for less, you will hear your friend say (1) be careful, they are obviously not any good, and (2) a slight price concession.

    FWIW, I have a pretty low opinion of contractors (nothing personal Jim but your industry doesn’t have the best rep) so I find simply monitoring their work closely; demanding immediately that they stop cutting corners (and remediate where they do cut); and never, never, paying them in full until the punch list is complete will get you good results from most contractors.

    So what if you tick off the poor ones as odds are you won’t ever see them again, and the good ones won’t have a reason to be ticked off.

  47. Shore Guy says:

    From BLS. Real earnings up.

    Rescession over, get back into debt.

  48. d2b says:


    Complaining about taxes one day and then writing about a $75,000 kitchen remodel the next? And how is a $75,000 remodel modest? Did you get the small Viking range instead of the big one?

  49. Shore Guy says:


    The other thing that we found helps is to take time before starting to specify exact model numbers, lumber grade, etc., for everything. And, as you say, one must hire or serve as one’s own clerk of the works.

  50. ruggles says:

    $75,000 for a kitchen remodel? wow. we just gutted and redid ours for under $12k. guarantee its much smaller than yours though. went with soapstone and marble instead of granite and we kept the floor. I’m balking at the price for doing the bath this summer–15k. I’ve got the best, most honest contractor in western Jersey but I stil want to see if i can get it done under 10.

  51. Shore Guy says:


    There is a big difference between using one’s own money for one’s own purposes and having one’s money taken and squandered by ill-performing governments.

    Also, BTW, in our circle, $75,000 is indeed modest, and, I am not sure why that should bother you.

  52. John says:

    I reused the appliances in my kitchen and did not change windows and it cost me 50K. To do it proper with permits is expensive. I had to do main box, pay to have a big beam removed and replace alum wires some joker put in during 70’s and remove cemented tile and put down new tile and resheetrock. The cheapest real wood tounge in groove cabinets were pretty expensive around 12K. Then granite is like 7K. Plus plumbers, electricians, carpenters, sheetrockers, tile guys all give it to you without lube.

  53. d2b says:

    These times of crisis really separate the men from the boys. Some businesses stay busy, others tank.

    What I can not believe is how many empty stores that I see everywhere. I drove through one of the business districts in one of Philadelphia’s better areas yesterday. For rent signs everywhere.

  54. d2b says:


    Didn’t you use to work for that government? Under Regan, a republican, I believe.

    Plus, if you can’t take a joke, maybe you should go back to your circle.

  55. Pat says:

    Jinkies…I think Shore actually enjoys the stones.

  56. Sean says:

    GerryAdams – from yesterday.

    I will to ask you to please not reference Hoboken as an example. They spend 25k per year per students which I believe is about 10k over the median in NJ. They have music teachers that make 110k a year and they have some of the worst schools in NJ. They have by some accounts over 100 students that do not live in the city of Hoboken but attend school there anyway fraudulently. The Hoboken school system is the poster child for mismanagement and waste in NJ and should never be referenced when speaking about taxation in New Jersey or home rule or regionalization of school and municipal services.

    Also quote from your response Gerry “That being said, I am all for keeping school taxes within inflation, and in fact increases have been minimal recently.”

    Gerry we are in a period of massive deflation worldwide over 50 Trillion in asset price deflation so far, yet the school budgets in NJ have still been increasing, and the towns are still giving out raises.

    In addition to the “minimal” tax increases in property tax state aid was actually increased this year under the new funding program. However money from the Federal Stimulus (Porkuls) was used to fill that budget gap in state aid, that money was not used to create new jobs as it was intended, it was used for maintaining status quo and giving out pay increases, the Stimuls money will dissapear and then what? The towns will have to raise taxes massively.

    Do you see the train coming? Where are the cuts? Does the NJEA not know their time is up?

    There is massive amount of congnitive dissonance emanating from the school systems, this is going to end very badly with massive layoffs and lawsuits.

  57. grim says:

    From MarketWatch:

    Empire State index improves to -14.7 in April

    Manufacturing firms in New York reported their business was weakening in April, but at a slower pace than in March. The Empire State index improved to negative 14.7 in April from negative 38.2 in March. Readings below zero indicate more firms said business was getting worse. New orders and production improved markedly, while inventories continued to fall.

  58. Shore Guy says:


    In order toensure we could sock away extra retirement money and to pay off the mortgage back when we had one, we lived with a BAD kitchen for many years. In the remodel, we did not bump out any walls, although it needs it, because we wanted to keep costs down. We did go with high-er end appliances, but not top-of-the-line. We went with granite because it was not that much more expensive, a few thousand, than our other options and we do lots of baking and the stone is nice for rolling-out dough. The cabinets for the kitchen and pantry were custom, but not the very top of the line. We could have spent 2-3 times what we did, but we are not inclined to make such purchases.

    The thing I found interesting about the project was how the contractor avoided HD over quality issues. I remember a dozen years ago HD seemed to have staff everywhere and they knew building, now they have some bodies but without much knowledge. The goods also seem to have declined in quality over that period and my contractor’s actions only confirmed that impression.

  59. comrade nom deplume says:

    [60] sean

    well said. And yet another reason that the vast majority of folks who are househunting in NJ should not buy.

    I have given this a great deal of thought (especially as I second-guess myself for buying), and I cannot think of why all but a few, select people, whose financial positions favor purchasing, should do so.

    Last night, I was speaking to someone who had been hunting, and she visited this board. She tells me that she is second-guessing her search and I told her, absolutely the right thing. Knowing what I know now, for reasons discussed here, and for other reasons, I would NEVER buy real estate in New Jersey, nor recommend to anyone that they do, except in rare circumstances.

    So my one piece of unsolicited advice on this day when, like Shore and for many of the same reasons, I am pretty p.o.’e to begin with, I will make this bold admonition and prediction: Do not buy real estate in New Jersey; the vast majority of those of you who do buy will regret it.

    /rant off. gonna pay taxes, get back to work, and prepare for the Newark Tea Party at noon.

  60. Shore Guy says:


    Indeed it is expensive to do it right. Heck, I even did my own floor install, as I had the tools, a little time (put a radio in there and listened to some football games), and my craftmanship is as good or better than what I would have received from a subcontractor.

  61. grim says:

    I remember a dozen years ago HD seemed to have staff everywhere and they knew building

    This wasn’t by design, it was out of necessity.

    Not HD’s, but the workers of Mom & Pop supply shops (and in some cases the owners too) who were laid off as a result of an inability to compete with the big box.

    You can only take the shaft for so long before you walk. Those guys have all walked. Now all you’ll find there are minimum wage wanderers.

    “Excuse me, do you have an …”


  62. #5 – UBS AG, Switzerland’s biggest bank, plans to cut another 7,500 job

    Does UBS actually have anyone left? It seems every quarter they lay off around 8k people.

  63. grim says:

    From MarketWatch:

    Biggest drop in industrial output since VE Day

    The output of the nation’s factories, mines and utilities fell 1.5% in March despite higher production of motor vehicles and boost from utilities, the Federal Reserve reported Wednesday. Industrial production is down 13.3% since the recession began in December 2007, the largest percentage decline since the end of World War II. Output fell at a 20% annual rate in the first quarter, and is now at the same level as December 1998. Factory production fell 1.7% in March. Factory output has fallen 15.7% during the recession, also the largest decline since 1945-1946. Capacity utilization fell by a full percentage point to 69.3%, the lowest since the data series begins in 1967.

  64. grim says:

    From Marketwatch:

    U.S. factory output down 15.7% in recession, 63-year low

    U.S. March capacity utilization falls to record low 69.3%

    Read: More layoffs

  65. Shore Guy says:

    “Capacity utilization fell by a full percentage point to 69.3%, the lowest since the data series begins in 1967”

    It may also lead to companies not only shuttering plants, but tearing-down facilities to lower property tax bills. Thus, residential taxes in some places will need to rise to compensate.

  66. #68 – U.S. March capacity utilization falls to record low 69.3%

    Read: More layoffs

    It would seem a lot more layoffs and wage cuts; deflation continues.

  67. Jim says:

    RE 50
    I have a pretty low opinion of contractors (nothing personal Jim but your industry doesn’t have the best rep) so I find simply monitoring their work closely; demanding immediately that they stop cutting corners.

    comrade nom deplume ..

    I take no offense,but actually agree with you. I must compete with unliscensed, uninsured contractors and shopping customers who only care about price.

    Fortunately, I do have a solid customer base, but even that has been whittled down. All contractors are not playing on even ground,and many customers who take the cheapest price ..,get what they pay for.


  68. Shore Guy says:

    The Philadelphia Regional Office
    Consumer Price Index Announcement (Blue Card) for March 2009 is now
    available at:

  69. 3b says:

    #63 com: Agreed. And yet for the past few weeks we still have a small core of people writing letters to the editor in the local town paper imploring people to vote yes for the school budget next week.

    They know times are bad etc. but still vote yes, now more than ever it is so important etc.

    It is for the children they say, but that is BS, it is for them. They have the mistaken belief that the more that is spent on the schools, the greater the chance their home values wont fall,which of course is a myth, as prices are falling every day.

    The same children that they claim to care so much about, are the same children who they expect to one day buy their houses for top dollar of course, with of course staggering yearly property taxes.

    We did it for you they will exclaim! No I say, you did it for yourselves. Leave the children out of it.

  70. hughesrep says:

    You can only take the shaft for so long before you walk. Those guys have all walked. Now all you’ll find there are minimum wage wanderers

    I started, staffed, and managed a Lowes in Jersey from the ground up.

    This area is a tough enviroment for retail workers as well. The customers really beat you up, and the stupidity of the general population is nearly overwhelming. Good people get sick of it and bail (I did). Throw in lousy hours and pay for the general staff and the only ones left are those who aren’t capable of doing much else.

    I’m now the sales manager for a plumbing / HVAC distributor. Most good contractors only use HD or Lowes for small stuff they need to pick up quick or they forget to get at their regular supplier. If a contractor is getting most of his supplies at HD it probably means he can’t get credit at a “real” supply house, or is willing to use lower quality products. Be careful. Caulk and shims are fine, cabinets, plumbing supplies, and even some wood products are iffy.

    And every contractor is scrambling for work. It’s dead out there.

    Has anyone ever just put new doors and drawer fronts on cabinets? I’m kicking it around for our townhouse that is up for sale. I want to do it on the cheap

  71. Shore Guy says:


    Paying for quality work often costs less in the long run.

  72. John says:

    The thing I always find mildly amusing at cocktail parties is when the subject of why elementary school teachers who work 9-3 40 weeks a year with tons of vacation, sick days pension and medical benefits are so overpaid at 100K a year comes up I always ask if the salary is so great, you get summers off and get home early every days when you do actually work why don’t you just become a teacher I always get the same response, I would shoot myself if I had to be in a room full of screaming kids six hours a day and I can’t afford the pay cut.

  73. Shore Guy says:


    We know someone who did this and it looked good. Of course, the cabinet boxes were in good shape, and I suspect that made a difference in how things turned out.

  74. kettle1 says:

    Re the great tax debate:

    A lot of the controversy seems to be generated due to the fact that different people are affected differently by the tax code hence what each party in the argument see’s if different. That is a hard point to constructively debate from.

    The primary issue seems to be the excessive complexity of the US tax code that while fantastic for handing out political favors on the down low (i.e the nascar race track tax break recently which is a stealth bailout).

    One of the few ways to actually fix the system would be to go to some sort of flat tax system or similar and use social programs that to back fill where necessary as some people feel that a flat tax would overly burden the lower income groups..

    of course this wont happen as it would wipe out a great way for politicians to return favors to financial supporters in a “stealth” fashion

  75. John says:

    Figure 1. Financial Institutions – Consensus Earning Estimates and Conference Call Schedule, 1Q 09
    Company Date Time (ET) Q1 09 E a Domestic International Passcode
    Goldman Sachs 14-Apr 11:00 AM 1 .64 888-281-7154 706-679-5627
    JPMorgan 16-Apr 8:00 AM 0 .32 866-541-2724 706-634-7246
    Citi 17-Apr 8:30 AM 877-594-1392 706-643-0278 93310396
    General Electric 17-Apr 8:30 AM 0 .21
    BB&T 17-Apr 11:00 AM 0 .32
    Bank of America 20-Apr 9:30 AM 0 .03 877-200-4456 785-424-1732 79795
    Comerica 21-Apr 8:00 AM ( 0.09) 800-309-2262 706-679-5261 90513349
    U.S. Bancorp 21-Apr 8:00 AM 0 .21 866-316-1409 706-634-9086 90938922
    KeyCorp 21-Apr 9:00 AM ( 0.20) 866-409-1560 913-312-1452 6643393
    Regions Financial 21-Apr 11:00 AM ( 0.41) 800-309-5793 90806917
    Huntington 21-Apr 1:00 PM ( 0.08) 800-223-1238 92645511
    M&T 21-Apr 3:00 PM 0 .75 877-780-2276 973-582-2700 # 91771839
    Capital One 21-Apr 5:00 PM 0 .03 800-289-0705 42109
    Wells Fargo 22-Apr 8:30 AM 0.55 b 866-416-0522 706-902-3479
    SLM (reports on 4/22, call on 4/23) 8:00 AM 0 .20 877-356-5689 706-679-0623 91859703
    SunTrust 23-Apr 8:00 AM ( 0.65) 888-972-7805 517-308-9091 1Q09
    Fifth Third 23-Apr 8:30 AM ( 0.29)
    CIT 23-Apr 9:00 AM ( 0.45) 866-831-6272 617-213-8859
    PNC 23-Apr 10:30 AM 0 .43 800-990-2718 706-643-0187
    Marshall & Ilsley 23-Apr 12:00 PM ( 0.29) 888-711-1825

  76. Doyle says:


    Nom, what would you say is a financial position that favors purchasing?

    Just curious…

  77. John says:

    Bond of the DAY!!!! 7.283 NY Tax Free and AMT free!!!

    267041GG0 DUTCHESS CNTY N Y INDL DEV AGY 4.500 08/01/36-17 7.283(M) 67.206 NY

  78. kettle1 says:

    incomplete thought…

    The primary issue seems to be the excessive complexity of the US tax code that while fantastic for handing out political favors on the down low (i.e the nascar race track tax break recently which is a stealth bailout)….. the excessive complexity is a nightmare for the average user of the tax code

  79. kettle1 says:

    if the government were serious about wanting to improve tax compliance they would simplify the tax code. i believe ( although cant dig up the examples at the moment) that most other countries that have simplified their tax code have seen a increase in tax compliance.

  80. Shore Guy says:


    Flat tax would be fair to everyone. And, to ensure that the “rich” do not get outsized benefit, we can eliminate all deductions for mortgage interest, etc.

    It would result in savings for the economy as nonbusinesses would not likely need tax advisors, the IRS and state tax departments would need fewer employees, etc. I would also have no objection to equalizing the tax rate on earned income and cap-gain income.

    It would be nice and simple and I trust that –despite the assertions that the “rich” are gettingaway with “not paying their fair share” — the greatest objection would come from families earning less than $100,000.

  81. ruggles says:

    62 Shore-for 75k, I’d let Wegmans and Easton Bakery do all my baking for me. lol. depending on your neighborhood, 75k is probably quite reasonable.

    With my house, for 12k and a very good contractor, I have a kitchen which easily competes with any comparable home. most people with antique homes under $500k, either ignore the kitchen or put in a HD job. we did a combination of stock shaker style cabinets (not from lowes or HD), stone counters, stainless steel appliances, beadboard plank walls, a farmhouse sink and an incredibly heavy marble topped island from a consignment store. plus in that price we removed the 50s panelling and revealed a 250 year old stone and beadboard wall which was repointed and restored.

    Having said that, we could have and possibly should have expanded the kitchen into the sunporch and added some huge windows as we have a very impressive 3 mile view across a river valley with 3 ponds and a waterfall. but its good enough for me and the market, I think.

  82. Shore Guy says:


    It sounds like a lovely job. Your statement that it is good enough for the market is something that people lose sight of. While one cannot discount the benefit one gets from improving one’s home, one cannot ignore the market issues, at least not if one hopes to “get back what we put into it.”

  83. Shore Guy says:


    A vitory, of sorts, for your neighbor.

  84. sas says:


    They don’t exist. Conspiracy theory.
    Just something made up by the sorry lame duck bitter renters. I really feel sorry for you guys. Real estate is a great investment “in the long run”.


  85. sas says:

    i love serotonin reuptake inhibitors.
    it makes perception become reality.


  86. Clotpoll says:

    Cindy (23)-

    Smells like a rush to the exits to me.

    I’m finding prospective sellers I’m talking to these days more and more realistic as to price expectations.

    Everybody is a little too compliant.

    As BC has noted many times, as the rush for the exits swells, many will find the exits barred shut.

  87. Clotpoll says:

    sas (88)-

    But in the long run, I thought we were all dead.

  88. Clotpoll says:

    sas (89)-

    Only if you wash down the SSRI with benzene diet soda.

  89. Clotpoll says:

    3b (73)-

    I’m beginning to think that the best thing you can do for your children and yourself is to get out of NJ as soon as possible.

    I counsel all my short sale clients to do this.

  90. Clotpoll says:

    John (80)-

    This is the information that keeps me coming back here!

  91. NJGator says:

    More bad news from the media industry:

    Hachette Cutting Salaries Across the Board
    By Hamilton Nolan, 2:37 PM on Tue Apr 14 2009, 4,211 views (Edit post, Set to draft, Slurp) Copy this whole post to another site

    Slurp cancel select site advertising consumerist deadspin defamer fleshbot gay fleshbot gawker gizmodo idolator io9 jalopnik jezebel kotaku lifehacker valleywag artists gawkershop
    This memo just went out to Hachette employees, notifying them of company-wide pay cuts and an increase in hours.

    Message from Alain Lemarchand, President & CEO, Hachette Filipacchi Media U.S.

    Dear colleagues,

    Today’s business environment requires decisive and quick action for the welfare of the company. This includes a number of difficult decisions on my part, some of which impact you personally. In this case, I deliberated long and carefully before coming to the conclusion that one of the steps that needs to be taken immediately is a cut in base salaries. Effective April 27, 2009, the salaries of all exempt employees will be reduced by 6% and the salaries of non- exempt employees by 3%. In addition, we are changing the regular work day from 7 ½ hours to 8 hours. For non-exempt employees, overtime will continue to be calculated on a weekly basis and will be paid for all hours worked over 40 hours.

    I understand that this economy has already had an impact on each of you and that this represents another loss. I am sorry for that. We hope that taking this measure across the company will save headcount in the long run. I know you join me in wanting this company to remain competitive in this challenging marketplace. I want to assure you that once the economic picture improves, we will reevaluate this decision.

    I thank you for your continued dedication to your work. Your professionalism and contributions are essential to the ultimate performance and success of HFM U.S.

    Alain Lemarchand

  92. Clotpoll says:

    The fact I look forward to Bond of the Day is your assurance that I have absolutely no life.

  93. NJGator says:

    The Condé Cuts Continue!
    Assistants take on receptionist duties, emergency daycare no longer gratis
    Tuesday, April 14, 2009
    (NEW YORK) The March 31 receptionist purge in the once-hallowed halls of Condé Nast left the publishing house with an obvious problem: What happens when the remaining few left on editorial floors break for lunch? Junior staffers to the rescue. The Daily has learned that editorial assistants at flagship titles like Vogue and GQ are rotating in thrice daily, relieving the receptionists while they enjoy three allotted breaks.

    And the cuts just keep on coming. Condé Nast has long offered employees the benefit of free emergency daycare at 4 Times Square, but the company recently implemented a new policy–staffers must now pay $35 for all-day care of one child, and $50 for two or more children. The benefit remains heavily subsidized.

  94. NJGator says:

    Shore 87 – Possible former neighbor. Colbert sold his place in Dec 08. Not sure where his new place is.

  95. 3b says:

    #93 clot: Believe me, I would if I could, but for a variety of reasons I am forced to stay.

    I just get really PO’d, when I have to read these letters every week around this time of year by these clueless letter writers, who claim this is all for the children,when in reality it is all for them.

  96. Shore Guy says:


    If Little Gator goes to NOLA with you, taking a riverboat ride from the base of Canal street to the Zoo, doing the zoo. then walking over to St. Charles St and taking the streetcar back to the Fremch Quarter makes a nice outing.

  97. Shore Guy says:

    French, even.

  98. Clotpoll says:

    3b (99)-

    I wouldn’t worry about it. Even when budgets are voted down, they fall into the hands of mayors and councils who then make de minimus cuts and then jam the budgets up our arses at a later date, when everyone’s lost interest and the media aren’t paying attention.

    Like everything else in which gubmint is involved, it is a rigged game that plays us for suckers.

  99. Shore Guy says:

    Maybe he is off to Alpine too. Anybody who is anybody is, after all.

  100. kettle1 says:

    clot 102,

    you have to love how the system is rigged in NJ so that even if you vote the budget down, the local politicians can then back door it.

  101. Jim says:

    54. ruggles says:
    April 15, 2009 at 9:10 am
    $75,000 for a kitchen remodel? wow. we just gutted and redid ours for under $12k. guarantee its much smaller than yours though. went with soapstone and marble instead of granite and we kept the floor. I’m balking at the price for doing the bath this summer–15k. I’ve got the best, most honest contractor in western Jersey but I stil want to see if i can get it done under 10.

    Where did you source the soapstone from? We’ll be doing a kitchen remodel once I get everything through our town’s historic commission. Since I’m changing the outside appearance with a new window it has to go through the historic review. That is a pain, considering all the problems I’m attempting to fix correctly due to previous remuddling taking place without any permits at all.

    Shore, I agree it is better to pay extra and have better quality and longer lasting things in the long run. I made a furniture order with Restoration Hardware that was expensive but the furniture is top shelf.

  102. 3b says:

    #102 Clot: Oh I know in fact, the vote is a waste. It would just be nice however, to see a resounding no vote, perhaps then the powers that be would know that although we remain silent (no letter writing), there are a lot of people out there who do not buy the BS.

  103. NJGator says:

    Shore 100 – Lil Gator is off to Nana and Pop-Pop’s house for the weekend. Woo hoo!

  104. d2b says:

    I think that we would be more productive as a society with a flat tax. Income tax and social security tax should be like a sales tax with a set amount taken off of the top. No deductions (interest, children, health care) and no EITC for the poor.

    I think that we would be much more productive as a society if we simplified this and removed all provisions. But it will never happen.

  105. ruggles says:

    Jim – Bucks County Soapstone in Perkasie PA — upper bucks.
    We went to Texiera in hackensack and they have many more options if you’re looking for specific grains/colors but prices are a little higher. they’ll take you through the warehouse to pick out specific slabs.
    bucks county has grey or grey with veins. we were going for the industrial science lab look so plain grey was fine.
    be warned that it scratches very easily so you’re better off not actually using them for food prep. most scratches can be wiped away with mineral oil but some, not even very big ones, need to be sanded then oiled–they dont go away so easily. still love the stuff, nothing like it.

  106. BC Bob says:

    “J.P. Morgan Chase & Co., Wells Fargo & Co., Fannie Mae and Freddie Mac all say they have increased foreclosure activity in recent weeks.”

    We were frozen on the slope of hope. The thaw hits, the implosion continues.

  107. Jim says:

    Thanks Ruggles. I’ll check out their website. I’m going for the old farm kitchen look. I’m not real picky about a specific color. We also have an old house. It was built in 1820.

  108. kettle1 says:

    Can anyone comment on the RE situation in the general area of stover state park and van sant airport? I know nothing about it but the area has been suggested to me by a friend.

  109. ruggles says:

    jim-very cool. don’t want to get too specific but what county are you in? love all old homes, the older the better!

    if you go to bucks soapstone–this place uses them for their kitchens and they have lots of displays – – not too far away. Also a pretty good architectural salvage store around there too. owner’s a little annoying but still nice place.

    also have you checked or been to any of the home restoration shows in PA to steal ideas?

  110. chicagofinance says:

    Shore Guy says:
    April 15, 2009 at 9:21 am
    The thing I found interesting about the project was how the contractor avoided HD over quality issues. I remember a dozen years ago HD seemed to have staff everywhere and they knew building, now they have some bodies but without much knowledge. The goods also seem to have declined in quality over that period and my contractor’s actions only confirmed that impression.

    Shore: When my wife and I gutted our Hoboken condo in 1999, we quickly realized that HD was crap. It also has the additional indignity of being ubiquitous. So we quickly realized that we had to shop for everything, whether it be furniture, dishes, rugs etc. at non-chain stores or be doomed to mediocrity.

    We bought lamps on the Bowery (in the stores, not from homeless people – we skipped the used commercial kitchen equipment); we went to the ABC Outlet in Hunts Point; bought fixtures at all small shops in Westchester and Bergen Counties. You can even spend less, but just because it is so rare, it appears to have such a greater amount of cachet.

    I remember buying a Dust Buster at HD, and a year later the motor gave out. I thought WTF? Our contractor asked where we bought it. He mentioned that manufacturers can sometimes have two different sets of specs. The stuff going to the chains can be intentionally manufactured with lower quality in order to meet wholesale price demands by the retailer (i.e. Wal-Mart Effect).

  111. ruggles says:

    113 – Tinicum township is really one of the best, hidden places in bucks county. Solebury and Upper Makefield are the crown jewels–where the rich people are. Tinicum is a lower priced alternative with similar country appeal. While Solebury is like a fancy NJ country town–Tewksbury, Bedminster where they don’t tolerate ugly, Tinicum is not totally immune to the ills of many PA towns. Almost all of the roads in the township wander aimlessly and go nowhere. sometimes, they’ll close a bridge for a couple of years. There are trailer homes and dilapidated cottages tucked in with McMansions and restored stone homes–you absolutely need to investigate every property within a mile of any house you’re interested in as people in PA, especially along the backroads are not regulated well. The most northern part of township towards Nockamixon and Bridgeton have a very backwoods hillbilly vibe–its also somewhat swampy. Perry Auger has an old abandoned dump on it. but where you mention – Geigel Hill/ Headquarters/Hollow horn roads its wonderful–still some trailers around though. in my opinion, the closer to solebury you can get in tinicum, the better.

  112. grim says:

    New thread, up!

  113. Karl says:

    It has been interesting discovering your website and to read about the situation in the US. I am a realtor in Paris/ France and the market here is also about to decline. However, the situation is not as serious as it appears to be in America.

  114. Hi, good post. I have been thinking about this topic,so thanks for posting. I’ll definitely be coming back to your blog.

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