From HousingWire:
COP: Half of HAMP permanent mortgage mods will redefault
Half of the so far nearly 500,000 permanent modifications completed by servicers participating in the Home Affordable Modification Program will redefault, Sen. Ted Kaufman (D-Del.), chairman of the Congressional Oversight Panel said Wednesday.
Since the HAMP launched in March 2009, servicers have completed 495,898 permanent modifications, and extended 1.6 million trials. So far, the Treasury has committed nearly $30 billion to the servicers for a program that was initially estimated to cost $50 billion.
Servicers are paid $1,000 for every permanent modifications and another $1,000 every year the new loan is current.
“To date fewer than half a million homeowners have received permanent mortgage modifications through Treasury’s program, and as many as half of these borrowers will ultimately redefault and lose their homes,” Kaufman said, a view in line with the Special Inspector for the Troubled Asset Relief Program that said earlier in the week that TARP has let down many homeowners.
…
Of all mortgages that had been converted into a permanent modification, 15.6% fell into 60-plus day delinquency within nine months of the conversion, and 11% fell into 90-plus day delinquency. After six months of the conversion, 9.8% had gone into 60-plus day delinquency, and 5.5% into 90-plus, according to the latest HAMP report.
From the NY Times:
Treasury Sees Escalating Risk to Home Prices
The uncertainty over the legal status of foreclosed homes in the nation could further depress home prices and delay the recovery of the housing market, the Obama administration said on Wednesday.
The warning came at the first Congressional hearing since the magnitude of the problem gained wide attention. Distressed properties make up one quarter of all home sales.
Revelations about paperwork shortcuts and so-called robo-signed affidavits, as well as the likelihood of protracted legal battles by homeowners and inquiries by state and federal officials, will hinder foreclosure proceedings and discourage prospective buyers, a Treasury Department official said.
“Together, these two factors may exert downward pressure on overall housing prices both in the short and long run,” said the official, Phyllis R. Caldwell, chief of the homeownership preservation office at the Treasury.
From the Washington Post:
Bailout panel eyes foreclosure mess
Members of a congressional panel charged with monitoring the government’s bailout programs expressed alarm and frustration over the potential repercussions of the unfolding home foreclosure crisis during a hearing Wednesday on Capitol Hill.
The hearing called by the bipartisan Congressional Oversight Panel was intended to examine the Treasury Department’s foreclosure prevention programs, but panelists focused much of their attention on revelations that some of the nation’s largest mortgage servicers routinely submitted faulty and even fraudulent paperwork as they undertook hundreds of thousands of foreclosures.
The panel’s chairman, outgoing Sen. Ted Kaufman (D-Del.), said in opening remarks that the problems “are already undermining investor and homeowner confidence in the mortgage market, and they threaten to undermine Americans’ fundamental faith in due process.”
From the NY Times:
Wells Fargo to Amend About 55,000 Foreclosures
After several weeks of insisting its foreclosure processes were sound, Wells Fargo & Company said on Wednesday that it planned to correct and resubmit up to 55,000 improperly filed documents by mid-November.
Wells Fargo said that current reviews found that bank employees had failed to “strictly adhere” to its required procedures during a final step in its documentation processes. It also acknowledged that “some aspects of the notarization process” had not always been properly followed, creating the potential for paperwork errors.
Wells officials said that the bank started to correct the 55,000 questionable files, and “out of an abundance of caution,” planned to resubmit them in 23 states where foreclosures require court approval. Bank officials maintained that the underlying information in the loan files was accurate and that the bank had not improperly foreclosed on any troubled homeowners.
Fabius
Fabius Maximus says:
October 27, 2010 at 10:06 pm
#16 Hyde,
The physical people did not break the contract, the corporate person did, They claimed the rights of the individual, without being held accountable for any consequeces.
Until that is addressed, going aginst the Social(ist) Person is just tilting at windmills.
Agreed. In my opinion the 1975 Buckley v. Vale (money = speech) ruling is a problem as well. If money = speech you voice depends on the size of your checkbook.
One of my former clients is going on 13 months without paying his mortgage. He is now on his third loan mod application (the first two were approved, and he rejected them). He called to tell me yesterday he had been approved a third time, but will reject it. He’s using the whole process as a delay tactic. Natch, when the jig is up, he will have saved a lot of loot, and he’s already informed me he’ll want me to find him a really luxurious rental when the time comes.
Since the loan is through BAC, I have no doubt that he can apply a fourth and fifth time, thereby extending his free stay ad infinitum.
hyde (4)-
This is Amerika. Man up, and deal with it. Some animals are more equal than others.
Fascist States of Amerika:
“As if there was any doubt before which way the arrow of control, and particularly causality, points in America’s financial system, the following stunner just released from Bloomberg confirms it once and for all. According to Rebecca Christie and Craig Torres, the New York Fed has issued a survey to Primary Dealers, which asks for suggestions on the size of QE2 as well as the time over which it would be completed. It also asks firms how often they anticipate the Fed will re-evaluate the program, and to estimate its ultimate size. This is nothing short of a stunning indication of three things: i) that the Fed is most likely completely paralyzed due to the escalating confrontation between the Hawks and the Doves, and that not even Bernanke believes has has sufficient clout to prevent what Time magazine has dubbed a potential opening salvo into a chain of events that could lead to civil war: in effect Bernanke will use the PD’s decision as a trump card to the Hawks and say the market will plunge unless at least this much money is printed, ii) that the Fed is effectively asking the Primary Dealers to act as underwriters on whatever announcement the Fed will come up with, and thus prop the market, and, most importantly, iii) that the PDs will most likely demand the highest possible amount, using Goldman’s $2-4 trillion as a benchmark, and not only frontrun the ultimate issuance knowing full well what the syndicate of 18 will decide in advance of what the final amount will be, but will also ramp stocks on November 3 to make the actual QE announcement seem like a surprise. This also means that the Primary Dealers of America, which include among them such hedge funds as Goldman Sachs, such mortgage frauds as Bank of America, such insolvent foreign banks as Deutsche, RBS, UBS and RBS, and such middle-market excuses for banks as Jefferies, are now in control of US monetary, and as we explain below fiscal, policy.”
http://www.zerohedge.com/article/paralyzed-fed-defers-decision-monetary-policy-primary-dealers
Need some info from the group if you would:
May need to get to Grand Central on a regular basis – I hate Penn St. and Grand Central is much easier logistically for where I need to be.
Question is: any way to get there from Philly – 30th St or if I moved to Bucks Co is there a station I can drive to in NJ that takes me to GC?
If no train options, any other suggestions? & if you tell me move to NJ or Westchester Co then I may ask that you all use me as the target at the next GTG at the range.
Thanks,
Thanks,
From CNBC:
Builders Hit by Loan Put-Backs
n all the headlines screaming about the big banks and their messy foreclosure practices, we may have overlooked another set of players in the scandal: Home Builders.
The nation’s big builders, as many of you new construction buyers may already know, have mortgage arms (pun intended) which originate loans.
Builders originated $205 billion of loans from 2005 to 2008, according to Credit Suisse’s Dan Oppenheim. Like the big banks, their loan representations are now in question as well, which makes them a target of all the folks who bought those loans.
“We see risk of $1.0 bln in additional mortgage repurchases (spread over several years) related to reps and warranties on loans originated by homebuilders between ‘05 and ‘08, which would represent 9% of book value on average,” estimates Oppenheim. He notes that while banks and other big lenders have taken the largest reserves on mortgages sold to the GSE’s (Fannie Mae and Freddie Mac), private label originations will also cause trouble as investors ramp up put-backs.
I still wonder if / when the decline is going to accelerate big time. Dining establishments are still busy, malls seem busy, hell, even WalMart seems busy. Is this all because people are not paying their mtg and living for today? I don’t see how that is possible.
And with the QE stuff – how much lower can they drive rates? We are pretty close to the bottom as is and is a bank really going to lend to a business whose business is slow – so the small business gets a $250k loan, tries to jump start their revenue steam and it doesn’t work, then what?
Seems to me like this is all last ditch and a prayer.
No amount of money-printing can stim demand from a consumer population that is unemployed in far greater numbers than the gubmint will disclose, broke and scared.
QEII is no less than the formal handover of the gubmint to banksters. It will be an abject failure and will likely plunge the US into raging domestic violence.
Lamar [5];
I think you just made my case (last thread).
Viva Las Vegas Is Right Baby!!!
Check out the pics coming to a neighborhood near you soon:
http://www.financialarmageddon.com/2010/10/gateway-to-the-new-america.html
So Lamar, this round of QE will be the tipping point. Not even sure what the experts who propose this are hoping for?
I think its going to be a big snooze. Market will sell off on the news, 5-7%ish, then be range bound between 10K and 11K on the Dow, 1200 to 1100 S&P, for the next few months. The type of run-up you saw in March 2009 has already occured before the announcement.
End of day there’s not going to be any more fiscal stimulus for a long time so the economy will continue to weaken and that will drain on stocks at some point. You have all the municipal bankruptcy’s and pension problems coming quickly down the road = sizable government lay-offs. This mortgage mess is likely to whack the banks bottom lines pretty well too; BAC might not survive. It has been said before but this might truly be the last big year for Wall Street bonuses. Corps and consumers are entrenched in save mode. There’s nothing there to promote growth and there won’t be until the bad debts, and more importantly potential bad debts, are acknowledged as they dwarf the system.
All this QE can do is temporarily prop up asset prices but even that is going to fail at some point.
he (15)-
If you believe in the “turning Japanese” thingy, QEII could well be expected to be a giant snooze. They have completely buggered their nation by moving in slow motion and collapsing with a whimper, not a bang. It’s the height of postmodern to succumb to ennui and torpor rather than go down with guns blazing.
However, something in our own peculiar history makes me think that it plays out in a much more bloody and violent fashion.
It is the slow motion aspect that is really doing the most harm. Instead of deep pain, over quickly, we have enduring aand deepening pain that paralizes individuals and families and, just as importantly, if not more so, creates a perception of impending and lasting doom. We would have been better off, and still mighr be, to force the unsustainable banks into BK, and recapitalize new ones with good assets from the failed ones as well as an infusion of cash from, who else, the Fed (it is not like it is real money anyway). While we are at it, why not outlaw derivitives.
Let the people who caused the mess get wiped out.
Jobless Claims
Released on 10/28/2010 8:30:00 AM For wk10/23, 2010
Prior Consensus Consensus Range Actual
New Claims – Level 452 K 455 K 440 K to 460 K 434 K
10 yr 2.7
Lamar says:
October 28, 2010 at 6:46 am
One of my former clients is going on 13 months without paying his mortgage. He is now on his third loan mod application (the first two were approved, and he rejected them). He called to tell me yesterday he had been approved a third time, but will reject it. He’s using the whole process as a delay tactic. Natch, when the jig is up, he will have saved a lot of loot, and he’s already informed me he’ll want me to find him a really luxurious rental when the time comes.
Great strategy, whoever this guy is. Assuming he can save the $ on the side.
shore (17)-
Your answer is in your question: the people who caused the whole mess are the same ones in charge of cleaning it up.
Only a nation that pursues a deliberate policy of rendering its population stupid and ignorant could allow such a situation to occur.
“However, something in our own peculiar history makes me think that it plays out in a much more bloody and violent fashion.”
Nah, you forgot, we are a Christian nation! Maybe we’ll go and “christianize our little brown brothers” first. Likely in Iran this time instead of the Philipines back then.
Spin cycle:
If 50% of HAMP participants are redefaulting, then 50% havee not. Theefore, isn’t it a small price to pay to keep people in THEIR HOMES even if we need to use YOUR MONEY to do it. After all, we can always tax the rich to pay for programs to help bail out you at some point.
Era of Zombiism. Who cares about QE2, besides the gambleholics. Actually, if anyone is keeping score, it’s probably QE10, started in 2001. If you really want to get technical, it started with Bretton Woods.
The fed has dug themselves in such a hole that there is no turning back. Their only hope is to destroy the currency. Between forclosuregate, pensions, derivatives, buried states/municipalities, employment, etc.., it will be QE till infinity.
Use any 11/3 volatility to your advantage. Let the drunks take out stops on both sides of the market and jump in if the opportunity presents itself.
where are the Pics of Atlantic City? A lovely city
yikes (20)-
I will now immodestly reveal that it was my suggestion to him that he apply the second time for a loan mod. I figured that BAC’s loss mit was so Mozilo’d and disorganized that a different cubicle jockey on a different day might ignore the previously rejected mod and start the process again.
However, the third loan mod application and the decision to do it over and over until BAC will no longer allow him to submit applications came from him, not me.
To date, he has saved about 37K.
BC (24)-
Yep. Gotta think 11/4 might be a tradeable moment.
So, it seems pancreatic cancer follows a similar course as a banking crisis: festers slowly unnoticed for a long time as good cells mutate to bad ones, then takes a long time to become a full-fleged cancer, then, once it spreads, it kills quickly.
http://www.bbc.co.uk/news/mobile/health-11639263
Freedy, they blew up the Chicken Man in Philly last night.
Trenton is sort of like the pancreas of New Jersey.
Or the sphincter.
Lamar [29],
One of my fav’s.
Nomad #8,
There is no direct way to Grand Central coming from NJ or PA using NJ Transit. You would have to walk or take the subway from Penn Station.
HAMP is crap.
Owner on disability, her income is half the mortgage amount. Husband passed away unexpectedly.
Burning through savings at a rapid pace while trying to sell the house, falling behind.
They offered 6 months IO.
Not a whole lot of equity, I can’t understand why she even tried to keep up.
chicagofinance says:
October 27, 2010 at 4:42 pm
JJ: Where are you biatch?
From Spectrum Asset Management
Our early read that US bank trust preferred securities should perform well within the context of them becoming expensive funding rather than cheap equity gained market affirmation as this sector rallied steadily throughout July. Discounted US bank trust preferred issues rallied toward par and premium issues began to trade to a defacto term of 2013 (when the phase-out of Tier-1 capital begins).
http://www.samipfd.com/854498.pdf
In fact, given that they know her financial position, it’s arguable that a 6 month io period is nothing more than a self serving tactic to milk as much cash as possible from her before the inevitable foreclosure.
Nomad 8 – If you take the subway, you’ll have to transfer and take 2. You’d need to take any 7th ave (red line) train 1 stop to 42nd street and then transfer to the S or the 7 train – both of which will take you to GCT.
If you take a bus into the PA, you can just take the 7 or the S from there if you don’t want to walk across town. Good luck. I hated commuting to GCT regularly from NJ.
Nomes: The best case scenario is that you need to go to Stamford CT. If so, I would use Trenton station and pick up Amtrak. Amtrak stops at Penn Station NYC, but then uses LIRR tracks and then cuts a bypass through Queens, LIC, Astoria, next to the JFK bridge and then picks up with the Metro North New Haven line tracks at New Rochelle. It is the only way…much more expensive though……
Nomad says:
October 28, 2010 at 7:00 am
Need some info from the group if you would:
May need to get to Grand Central on a regular basis – I hate Penn St. and Grand Central is much easier logistically for where I need to be.
Question is: any way to get there from Philly – 30th St or if I moved to Bucks Co is there a station I can drive to in NJ that takes me to GC?
If no train options, any other suggestions? & if you tell me move to NJ or Westchester Co then I may ask that you all use me as the target at the next GTG at the range.
If you end up need to drive, please note that the GW and Tappan Zee bridges are a death march between 7AM – 8:30AM…..
chifi just got back from florida. Every restaurant was packed to the max, bars filled, plane filled, hotel filled. Exact opposite of 2008 and 2009. Stimulus is working.
Interesting met with lots of smart people and everyone said rates up in 2011. Sold a bunch of genworth bonds as soon as I got to office at 105, keeping all my callable bonds as they should be fine, worse case they don’t get called. long term non callable bonds above par I am kissing goodbye to them all between now and thanksgiving.
If rates do rise the trups will be good for coupon clipping, I don’t think they will fall in value but I don’t think they will rise in value, I have some BAC/MBNA trups I bought at 101 with a 8% coupon and stuff like that I will keep clipping away.
Thanks for all the info on getting to Grand Central. Any way it is sliced, the tri-state area is a pain in the a$$.
Fun BOE meeting in Montclair this week. Just spent $35M on a brand new school. Now we’re considering closing 2.
Board may close two schools to balance budget
Faced with a nearly $6.7 million budget gap, the Montclair Board of Education is considering closing two of its 11 schools and making other sweeping cost-reductions that would dramatically alter many day-to-day operations.
Other proposals include:
• Outsourcing teacher aides and other services now provided by in-house staff
• Scrapping fulltime kindergarten in favor of a half-day program to be offered at only two locations
• Increasing classroom size, which the district has struggled to hold to no more than 25 students.
http://www.northjersey.com/news/105773968_To_balance_budget__board_may_shut_two_schools.html
“Thanks for all the info on getting to Grand Central. Any way it is sliced, the tri-state area is a pain in the a$$.”
Welcome to the Third World of transportation.I’m surprised no one takes the local governments to task for the really atrocious transportation system in the tri-state.
the local gov could care less. all they worry about are themselves, pad the pensions ,
[url=http://najgraj.pl]Gry[/url]
12/21/2012 looks more & more likely. Ben doesn’t care as he is one of the Chosen. Interesting, Ben may be a much bigger terrorist then Bin Ladin.
Confused
Ben may be a much bigger terrorist then Bin Ladin
May be? He is arguably one of the greatest financial terrorists.
Shore Guy [23];
+1
CHIfi, just keep moving along, no bond bubble here. This junk was like peanuts last year. Selling garbage above par that has a low coupon is fun.
Status Filled at $106.05
Bond CUSIP 37247DAE6
Description GENWORTH FINL INC NT 5.75000% 06/15/2014
Action Sell
Status Filled at $102.8667
Bond CUSIP 37247DAF3
Description GENWORTH FINL INC SR NT 4.95000% 10/01/2015
Action Sell
To all the knowledgeable folks here- so we finally find a house. Really nice house, good schools, farther than I would like to grocery stores and such, but workable. Would only buy it if we got it at the right price, but now am getting cold feet.
With all the indices pointing south, feel like if I wait, Ridgewood may get to a point where I could actually buy a non-POS at a reasonable price, so we wouldnt have to change schools. What do you think, how much will prices in ‘elite’ towns like Ridgewood etc go down over the next six months? 2%? 6%? 10%?
Hate to be so conflicted, but nothing seems clear in RE.
Spain, where the debt always remains. I doubt they are going to survive this recession with 20% unemployment.
http://www.nytimes.com/2010/10/28/world/europe/28spain.html?_r=1&ref=world
Juice,
Is that U6?
Talking to a hot divorcee in Florida, told me she always believe you buy the biggest and most expensive home possible. No brainer. The new sugar daddy puts the downpayment down, pays all the mortgage payments, and in divorce she gets half the equity, if no equity sugerdaddy gets 100% of debt.
Now girls shake those buns and start buying houses.
Juice 50,
Spain has about 50% youth unemployment, and that is the most volatile group to have unemployed. The pensioner is a lot less likely to throw molotov c0cktails at the police and state buildings then a 20 something that has been chronically unemployed and sees little future opportunity.
HEHEHE – Youth unemployment in Spain is 39.2% most opt to stay in their hometown, living with parents, rather than seek jobs elsewhere.
re 353- Hyde different dynamic in Spain, the youth are not rioting over the pension changes like France. It’s mostly older employed Spanish workers that rioted of the austerity.
It looks like someone else (Ms. Johnson-Seck) might want to consider a vacation to a lovely non-extradition country such as brazil in the near future.
Schack ruled Thursday that California’s OneWest, the last of several banks that relied on an admitted “robo-signer” to transfer the $492,000 mortgage on Covan Drayton’s Hemlock St. home among them, failed to prove it even owns the property in question
The Full Opinion
http://www.scribd.com/doc/40259583/Onewest-Bank-F-S-B-v-Drayton
But dont worry, Moose says this is all legitimate and just a “technicality”.
Spain dominated the world for a cetury or so there; remind you of anybody? Oh wait, Dancing With The Stars is on tonight.
Juice 55
I don’t disagree, but large scale structural unemployment amongst the youth is a powder keg. Spain’s employment laws as they currently exist make it very hard to open up employment for the younger generations entering the work force. A large % of idle youth of working age sitting idle is dangerous to the social stability of any nation. As they say, idle hands are the devil’s tools.
By the way, the Schack decision is from a Brooklyn court
http://www.nydailynews.com/ny_local/2010/10/27/2010-10-27_bklyn_judges_stinging_rebuke_of_robosigners_halts_foreclosure_in_huge_slam_of_le.html#ixzz13a3FBjBo
Prior post: Moose,
This is your issue. You need to talk to someone about it (outside of a blog).
Its not like the deadbeats are even repentant.. they’re obstinately sticking their thumb in their advesaries’ eye.
re #56 – Hyde the 50 state Attorney General task force has been asking the banks to identify all of the Robo-signers. Texas Attorney General Greg Abbott also directly asked banks to identify employees who filed faulty affidavits or other documents in Texas and to identify foreclosures that used such documents.
This won’t end well for them. Don’t mess with Texas…
JJ,
If the rates are going up in 2011, the question for me becomes should I buy sooner if rates are going up or keep waiting as the housing prices drop. My instinct is to borrow less money and screw the rates.
Also from the Brooklyn case
This could raise the stakes a bit for the banks filing these actions.
Oh wouldn’t it be nice if Mass voted out Barney Frank. Still likely to win but not over 50% in the polls.
http://www.reuters.com/article/idUSTRE69R0KR20101028?pageNumber=2
Juice
From the NYT article
Is spain TRYING to incite a revolution???? Large scale structural youth unemployment and the blatant creation of debt serfdom would seem to be a pretty good way to do it.
brink,
You may need a full 12 months to test out your theory. People definitely want to move out of these rich towns and their taxes but they’re also the most able to wait it out.
Juice
also from the NYT article
The most dangerous man is the one who has nothing left to lose. I guess Spain has decided it would really enjoy another 1981 23-F event.
Hyde [56];
I never said it was legitimate, only that robo-signing had no relevance to whether the deadbeat paid their nut or not. And in this case, as so many others, it would appear there is no evidence that the good Drayton’s of Hemlock St. (?!?), Brooklyn have been making their agreed mortgage payments.
Shore Guy says:
October 28, 2010 at 8:34 am
It is the slow motion aspect that is really doing the most harm. Instead of deep pain, over quickly, we have enduring aand deepening pain that paralizes individuals and families and, just as importantly, if not more so, creates a perception of impending and lasting doom.
Agree. band-aid sharp pain (followed by slow rebound) vs. slow death (lost decade, etc) is no-contest
Moose 68
The Draytons are not violating the law, the banks and their associates clearly are.
Relo [60];
Thanks for the psychoanalysis. Worth every penny I paid for it.
I’m searching the depths of human compasion to find a reason to sympathize with, much less advocate some mercy for, these deadbeats — tough to do when the deadbeat themselves act so self-entitled. A mortgage mod (much less a free house!) is not a God-given right; its a business decision. And to the deadbeat, its a bit of mercy that should be accepted with grace and humility.
The bank is within its rights to file foreclosure papers on day 1 of deliquency. In fact, I hope going forward they will. They have little other defense to the deadbeats playing run-out-the-clock.
Hyde [70];
It is “the law” in this country that binding contracts are enforceable, in court if necessary. The Draytons blew right through that one before any robo-signer needed get involved.
More Bill Black
http://www.huffingtonpost.com/william-k-black/no-mr-president-larry-sum_b_775307.html
Re 73,
Keep talking like that and he could end up with a heart attack in a hot tub
71: Moose,
Any time, glad to help with the whole God/repentance/mercy/sympathy thing.
It is within the banks’ rights to do whatever is legal under the contract and State law. It is also within the debtor’s rights to do the same. Seems pretty simple.
HEHE [74];
Which do you predict: live boy or dead girl?
Most likely 4.25 mortgage will be a 5% mortgage, unless you are borrowing like 600K not much of a difference. However, rates are rising because inflation is rising. There is a good chance Home Prices AND Rates are going up in 2011.
This happened big time in 1999 and 2000 where rates rose quickly and so did home prices.
dan says:
October 28, 2010 at 11:09 am
JJ,
If the rates are going up in 2011, the question for me becomes should I buy sooner if rates are going up or keep waiting as the housing prices drop. My instinct is to borrow less money and screw the rates.
hyde (65)-
Never forget that this is the country that invented the auto-da-fe.
Clot, you should really work in mention of the threat to our precious bodily fluids…
/TMC rocks
JJ
in 99 the average household income to home price ration was at the historical average of 2.5X, plenty of room for upward growth. It is still about 5X in terms of national median household income / median home sales price ( source : US Census).
In terms of cost ratio housing is still WAY overheated. History also shows that you will virtually always undershoot 2.5X during the reversion. Once we approach 2.5X we will be approaching bottom but not quite there yet.
That said If you must buy a home, something in the 2.5 – 3X range is much less likely to be a boat anchor around your neck then the average home that is for “sale”. Even if you manage to purchase now at 2.5-3X there is still a good chance that you could end up underwater at some point, as incomes are virtually guaranteed to drop which will drive the home price side of the ratio lower as well.
JJ
in terms of NJ, The 09 median household income was about 68K, the median sales price was 309K ( down from 349K in 08). That puts the NJ ratio at 4.5X.
Anyone buying at 4.5X just bought a boat anchor!
nom:
would you like to do the Brewing GTG at your place on 11/7 ? I looked at the firm’s diary, and looks like there is nothing that they can “hand-off” to me on monday.
Here is a good recipe:
Brown Porter #3
7 lbs pale ale malt
1 lb american caramel malt 40L
1 lb english brown malt
0.5 lbs pale chocolate malt
0.5 lbs oats (pre-gelatinized flakes)
1 0z fuggle (4.8% AA) boiled for 60 minutes
Wyeast 1028 London ale (liquid yeast)
Mash at 156 degrees F
Order the above items at Midwest brewing supplies. Try to get to your house by thursday so you can smack the yeast pack on thursday nite so it will be ready by sunday.
sorry I have not gotten back to you in some time. very hectic at work.
“try to get to your house”= try to make sure midwest delivers by thursday. Or I can try to swing by Corrados and try to buy some of the supplies and mix and match. They sell White labs yeast and may not have all the supplies.
We can get even more local (09 data):
Median Median
Household Home
Income Sales price Ratio
Morris 77340 424000 5.5
Passaic 49210 329000 6.7
Union 55339 299500 5.4
Hunterdon 79888 430000 5.4
Essex 44944 320000 7.1
2.5 income was never the norm in the good towns in Nassau County and Bergen County. The historical norm is 4x.
I actually spoke to the chief economist at one of the largest banks in the world this week. Top 3 bank in world, can’t give name.
Seems the baby boomer crowd who loves to spend every cent they make who are big buyers of trade up homes, vacation homes, travel, dining out, German cars, high end goods are spending again like drunken sailors.
An 86% run up in their stocks in their 401Ks with a bubble in fixed income and commodities, makes them feel a heck of a lot richer now. The ones who did not lose jobs are pretty confident, they actually hated savings from summer 2008 till summer 2010 and are back spending.
Biggest issue people were talking to me in Florida was what to do with their money, they have cash and feel stocks, bonds and commodities are overpriced and worried about the tax rates going up on cap gains. Lots were talking time to get back into real estate and a few have already bought properties. Few even said why let the money sit and .001 in money market might as well go on a vacation with the money.
For those without an MBA or Masters in Economics, it takes two things to cause inflation Liquidity AND Velocity. Fed is trying to induce some inflation via injection of huge amounts of cash into system by buying trillions of dollars of bonds, holder sells his bond to fed then he has cash he has to re-invest or spend. Everyone has been sitting on cash. The Fed could inject ten trillion into economy without inflation if we all just took money and put it under our pillow and never spent it.
However, with QE2 approaching and people starting to spend at top the masses will soon follow. However, sopping up excess cash out of system is tough. You need to jack rates quickly to make it to expensive to borrow and make CDs and Savings account pay 5% again to make you want to save.
Credit Cards have loosened standards back to 2007 however not many using them even though they once again will give credit to anyone. Car companies giving lending deals again, mortgages are getting easier to get. What is slowing us down is the middle class is afraid to take on more debt and middle class says why buy now what will be cheaper next year. Well when Upper Class spending starts driving prices of houses, cars and electronics up middle class will start using that cheap credit to buy before they get priced out which means off to the races with inflation.
Velocity once it is going is crazy. I sell my house I buy trade up house, trade up house guy buys trade up house, we all go to home depot hire people to fix them, buy new furniture, invite people over to see new houses and along the way everyone is spending money. Heck I need a new benz or beemer for my trade up home and how would it look if I did not go on vacation to Atlantis or Disney now that I live in a better neighborhood. The Fed has huge amount of liquidity out there and lending standards are relaxed once this ball gets rolling it is 1999 or 2005 all over again.
We can get even more local (09 data):
Home Price to Household Median Income Ratio ( based on 09 data)
Morris 5.5
Passaic 6.7
Union 5.4
Hunterdon 5.4
Essex 7.1
Median Household Income
Morris 77340
Passaic 49210
Union 55339
Hunterdon 79888
Essex 44944
Median Home Price
Morris 424000
Passaic 329000
Union 299500
Hunterdon 430000
Essex 320000
(32)
I thought there was a bus from PA to Grand Central. I’m not familiar with the weekday schedule, but I’ve personally been on it twice on the weekends.
mr. hyde, my town has unemployed people, slackards, blue collar people, retirees, stay at home wives, illegals, tax evaders, welfare mamas mixed in. On surface homes look expensive in my town at an average of 450K, but homes are bought usually by dual income college educated couples who make on average 200K household income so homes cost home buyers 2.5 of income. But if we did median income it would look like 5x income.
Home prices being expensive in a town should be based on median income of home buyers, not median income of town.
Hyde- re: Spain goes bankrupt at least once a century since the 1400s.
I suspect we are going to see similar austerity measures here in the US soon.
Ahh, Squawk Box with another bailed-out business exec whining about anti-business Obama. What’s is comparison?
In China the banksters’ heads would be on pikes.
Europe and their two months of vacation time and two hour lunches can’t be appealing for management.
I’d love to know what Third World hellhole he’s holding up as the ideal.
/kinda like all the Great Depression 2.0 talk while everyone has a big screen and cable
New Jersey Senate Race a Referendum on Christie as Unions Back Democrat
By Dunstan McNichol – Oct 28, 2010 New Jersey’s organized labor and major political parties are pouring hundreds of thousands of dollars into a special election to serve one year of a vacated state Senate seat, a race that may test the strength of first- term Governor Chris Christie’s attack on employee unions.
Candidates in the 14th District, which includes suburbs of the capital city of Trenton and is home to thousands of state workers, have spent $1.2 million, more than 80 percent of the total for New Jersey’s legislative elections on Nov. 2. The Democrat seeking that seat, Assemblywoman Linda Greenstein, raised $937,000 through Oct. 27 with help from unions for teachers and public employees, campaign-finance reports show.
Greenstein faces incumbent Tom Goodwin, the first New Jersey Republican to seek election since Christie won the 2009 governor’s race. Christie has since gained national fame for assailing the cost of public-sector pay and benefits. He isn’t on the ballot until 2013, so Goodwin is drawing the labor attacks in his place, said Statehouse lobbyist Jeff Tittel.
“I think it’s the unions’ line in the sand,” said Tittel, director of the New Jersey chapter of the Sierra Club, which endorsed Greenstein. “If Greenstein loses, they’re going to be in much more serious trouble next year.”
New Jersey, one of two states to elect a governor last November, has special elections in three legislative districts this year. Spending for those races totaled $1.4 million. All 120 members of the Legislature face re-election in 2011.
Christie Versus Unions
Christie, 48, became the first Republican to win a statewide election in 12 years when he beat one-term Democrat Jon Corzine, a former Goldman Sachs Group Inc. co-chairman.
Since taking office in January, Christie has signed into law pension and benefits cuts for public employees and urged voters to reject school budgets if teachers didn’t accept pay freezes. At an Oct. 26 town-hall meeting in South Brunswick, the governor said he would fire 1,500 state workers next year.
Goodwin, 59, was appointed to fill a vacancy that Christie created in February by appointing Senator Bill Baroni as deputy director of the Port Authority of New York & New Jersey. Republicans have held that seat, which represents parts of Mercer and Middlesex counties, since Peter Inverso defeated Democrat Francis McManimon in 1991.
Democratic Control
Greenstein is seeking to expand her party’s 23-17 Senate majority and move to the Legislature’s upper chamber. Democrats also control the Assembly, 47-33. Union support accounts for $2 of every $3 Greenstein raised outside Democratic political organizations, finance reports show.
“I think the unions are a little more galvanized than usual,” Greenstein, 60, said in an Oct. 25 interview. “They are really working strongly on this.”
Greenstein contributors include the Communications Workers of America, the biggest state workers’ union; the Service Employees International Union, which represents state and city workers; and the New Jersey Education Association, the largest teachers’ union. Christie accused the association earlier this year of using “students like drug mules” to carry information to their parents on voting for school budgets.
Christie has campaigned for Goodwin twice this month, as well as for Republicans from California to Connecticut as gubernatorial races are held in 37 states this year. In an Oct. 21 letter to party members, the governor said he needs “allies working with me in Congress, and state, county and local government to reduce spending, debt and waste.”
“I’ve worked hard but I’m going to work even harder down the stretch because the stakes are just too high not to be giving it all we have,” Christie wrote.
‘Rough Year’
Christie’s former campaign treasurer, Ronald Gravino, serves the same role on Goodwin’s campaign. Goodwin got $218,000 from state Republican political organizations, of $488,462 raised, campaign finance reports show. Unions gave him a total of $10,900, according to reports filed through Oct. 26.
Public-employee unions in New Jersey typically endorse Democrats. Labor leaders say they are working hard in the 14th District because they are grateful for Greenstein’s support during her 11 years in the Assembly.
“She has been a very good friend to public service,” said Hetty Rosenstein, the CWA’s New Jersey area director. “I think no matter what, we’re going to have a rough year next year.”
“It’s based strictly on their record and their answers with regard to central questions,” said Steve Baker, spokesman for the 178,000-member NJEA. The union is one of seven that gave Greenstein’s campaign the maximum $8,200 allowed, filings show.
Labor Support
The amount Greenstein raised through Oct. 27 included about $516,000 from Democratic state political committees, $27,200 from other lawmakers and $147,850 from organized labor, according to Bloomberg calculations. She reported $56,000 in mailing and printing support from the Democratic State Committee yesterday.
Michael Drewniak, Christie’s spokesman, said he was struck by the level of union support for Greenstein. “That says it all,” he said.
Drewniak declined to comment directly on whether the race would be a referendum on Christie. He said the governor had tried to make a “level playing field” for candidates by issuing an executive order on his second day in office that would have subjected unions to pay-to-play limits on campaign contributions. That was rejected after a court challenge.
“The governor’s support is obviously for Senator Goodwin,” he said.
Goodwin, in an Oct. 27 interview, said he believed the race would be about him and Greenstein, not Christie and the unions.
“People will look at this race as about the economy and jobs, and the race is between us,” Goodwin said.
Assemblyman John Wisniewski, chairman of the Democratic State Committee, said observers shouldn’t read too much into the race. Voters elected 47 Democrats to the Assembly last year as they ousted Corzine, he said.
“The real story would be if there were no union contributions for a Democratic candidate,” Wisniewski said.
To contact the reporter on this story: Dunstan McNichol in Trenton, New Jersey, at dmcnichol@bloomberg.net
To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net
.
Dude: 3’s trading at 54 bps and the 5 is 122 bps….your shits are all spread…
48.JJ says:
October 28, 2010 at 10:20 am
CHIfi, just keep moving along, no bond bubble here. This junk was like peanuts last year. Selling garbage above par that has a low coupon is fun.
Status Filled at $106.05
Bond CUSIP 37247DAE6
Description GENWORTH FINL INC NT 5.75000% 06/15/2014
Action Sell
Status Filled at $102.8667
Bond CUSIP 37247DAF3
Description GENWORTH FINL INC SR NT 4.95000% 10/01/2015
Action Sell
(68)
Moose- if the bank lost paperwork that proves they are OWED something from someone. It might not seem fair, but they can’t even prove anything in a court of law.
Can I foreclose on my neighbors house because I know (or think) he’s not paying? Nope, because I have no standing. Whomever does have standing has to prove it. They also have to prove they are the actual creditor. I know this has already been said by Hyde and by all the articles/rulings he’s been posting.
How can you not comprehend this?
(full disclose: I rent, would like to buy something, but in this environment it’ll probably never happen)
joyce (93)-
Moose’s legal vision is tainted by self-interest, coupled with a sense of injustice.
Methinks he also believes that the rule of law only applies to the little people.
Got corn and cotton?
“The problem I have with QE2, is it behaves like a tax on the consumer,” said David Giroux, a fund manager at T. Rowe Price. “People want to believe it’s a free lunch for the economy, but it’s definitely not. Next year, we’re going to be paying more at the gas pump and the grocery store.”
http://money.cnn.com/2010/10/28/news/economy/quantitative_easing_consumer_impact/index.htm?hpt=Sbin
Moose
(71-72)
You’re right that modifying an existing contractual agreement is a business decision. Banks will never do it unless they think they’ll make more (or lose less) by doing so.
You seem to be stuck in the they’re all deadbeats mantra that 99% of the people on here (myself included) were saying a few years ago. But how do you not change your tune in the face of all the evidence of fraud committed by the banks? There is now evidence of instances where not just the borrowers but the lenders engaged in the liar’s loans (e.g. prospective borrower fills our the application truthfully, and the banks change what needs to changed in order to qualify the borrower; then they “lose” or destroy the paperwork to conceal their fraud; now they can’t produce the things they need to in order to foreclose BECAUSE if they do their fraud in part of the court record). That was just one example.
There are deadbeats out there, always will be. You keep saying the people should follow the law. The people only have to follow the contract. (not to mention, if the contract was entered into knowingly, willingly, voluntarily that’s a big problem) The contract also spells out what happens if any fails to perform. Now it’s the banks turn to foreclose. THEY have to follow the law. They are not, clearly are not. The banks never do.
If they were, we wouldn’t be having this conversation.
JJ (88)
You can say it “should” be based on this or that. But historically it was also based on median income of all the people in the area in question. Not just the people who purchased.
what the heck are you talking about. I bought this crap at 50 or 60 in 2009, was hopping to make it to maturity and get par, got out over par today and some is cap gains at 15%. I like 7%+ investment grade, 12%+ junk and 5%+ muni.
4% on a genworth bond is a lot of risk to take for 4%. Heck I don’t even like tax free that much at 4% let alone taxable.
When I bought Genworth bonds I had several of them I was getting 1,000 bps over treasuries,
I sold this today, got Stoneridge and Denny’s full call on 11-1-10. Hope I have what it takes to either sit in cash or buy equities. I know rates are going up, it just takes a strong will to sit on the bench.
Are saying I should have kept the genworth as I was getting some BPs over treasuries still?
chicagofinance says:
October 28, 2010 at 1:23 pm
Dude: 3′s trading at 54 bps and the 5 is 122 bps….your shits are all spread…
48.JJ says:
October 28, 2010 at 10:20 am
CHIfi, just keep moving along, no bond bubble here. This junk was like peanuts last year. Selling garbage above par that has a low coupon is fun.
Status Filled at $106.05
Bond CUSIP 37247DAE6
Description GENWORTH FINL INC NT 5.75000% 06/15/2014
Action Sell
Status Filled at $102.8667
Bond CUSIP 37247DAF3
Description GENWORTH FINL INC SR NT 4.95000% 10/01/2015
Action Sell
JJ – Where have you been? Inflation started again last Summer. The Feds printing press is going to have to buy the whole yield curve for years to come, and if they do a massive QE2 like GS wants about 2.5 Trillion there won’t be too many customers from the UK, Middle East, Asia or otherwise.
Just remember the most important thing unless one is absolutely convinced the Fed will ultimately fail at this effort and, even further, one believes their staying power is greater than the Fed’s [who can print money], shorting Treasuries seems akin to juggling dynamite with a lit fuse.
But anyway here are a few shorting ETFs.
(TBF) ProShares Short 20+ Year Treasury (2x)
(PST) ProShares UltraShort 7-10 Year Treasury (2x)
(TBT) ProShares UltraShort 20+ Year Treasury (2x)
(TMV) Direxion 30 year Treasury Bear 3x ETF
(TYO) Direxion 10 year Treasury Bear 3x ETF
(TWOZ) Direxion 2 year Treasury Bear 3x ETF
(SBND) PowerShares DB 25+ Year Treasury Bond Bear 3x ETF
So smoke em if you got em, it’s gonna be a long walk home.
Historically we had a large middle class in the USA. Now we have a lot of income inequality with lots of rich and lots of poor with few middle class. Richer towns like Upper Saddle River, Alpine, Manhasset only the rich in the town can afford to buy a house in the town, averaging in the maids, nannies, and clerks who live above the stores in town along with the retirees makes no sense. 50 years ago in levitown it made perfect sense.
joyce says:
October 28, 2010 at 1:40 pm
JJ (88)
You can say it “should” be based on this or that. But historically it was also based on median income of all the people in the area in question. Not just the people who purchased.
Hyde I am so glad I am at 2.7x wife goes back to work we drop to 1.5x. Low rates and the bubble sitting turned out OK for mem but there was a cost to my relationship. Starting to rebuild it now, but i don’t think the wife will ever forgive me for making her live in a low end Bergen town.
We will tell them this. Certain Turkeys receive a Thanksgiving pardon or they just run faster than others! We intend PIMCO to be one of the chosen gobblers. We haven’t been around for 35+ years and not figured out a way to avoid the November axe. We are a survivor and our clients are not going to be Turkeys on a platter. You may not be strutting around the barnyard as briskly as you used to – those near 10% annualized yields in stocks and bonds are a thing of the past – but you’re gonna be around next year, and then the next, and the next. Interest rates may be rock bottom, but there are other ways – what we call “safe spread” ways –to beat the axe without taking a lot of risk: developing/emerging market debt with higher yields and non-dollar denominations is one way; high quality global corporate bonds are another. Even U.S. Agency mortgages yielding 200 basis points more than those 1% Treasuries, qualify as “safe spreads.” While our “safe spread” terminology offers no guarantees, it is designed to let you sleep at night with less interest rate volatility. The Fed wants to buy, so come on, Ben Bernanke, show us your best and perhaps last moves on Wednesday next. You are doing what you have to do, and it may or may not work. But either way it will likely signify the end of a great 30-year bull market in bonds and the necessity for bond managers and, yes, equity managers to adjust to a new environment.
what exactly does income vs home price mean to most people? I own my home. Which means I do not have a mortgage. What difference does it make if it is 1x or 10x my income? Also what does it mean to someone who made a big downpayment.
Someone who is making 100k might be selling a split that is paid off for 500K and buying a new home for 700K on a 100 income. It looks like 7x income, but with 200K mortgage and 100k income it is 1x income. the ratio should be on debt not house price.
Lots of people in my town are at less than 1x. Big deal, they bought their home for 40K years ago
JJ No. 85 So only the boomers will be getting a mortgage in 2011? Can’t see history repeating itself this time like 1999.
http://www.ronartest.com/musings/article/ron-artest-s-win-my-bling-raffle
(100) JJ
So with the huge disparity between rich and poor, with only the rich buying the houses, who is going to buy all the homes for sale? Is the enormous inventory not going to drag down prices?
Who is the trade-up-buyer going to sell to? And the gap between rich and poor is widening with everyday.
The ball rolls at the top. Gen Y buys POS coop or cape, Gen X trades up to buys nice house, and Baby Boomer trades up from nice house to a dream house.
Baby Boomer needs to pull a Jefferson and be moving on up to get ball rolling.
Mike says:
October 28, 2010 at 1:55 pm
JJ No. 85 So only the boomers will be getting a mortgage in 2011? Can’t see history repeating itself this time like 1999.
JJ [103]:
Lots of people in my town are at less than 1x. Big deal, they bought their home for 40K years ago
So, like just f*@! the next generation, suck it up and pay – I want beachfront in Boca, DAMMIT! And tell them to keep funding my SS checks (uncapped, of course).
I hope posterity remembers the 60’s flower children/baby boomers/most aptly names “ME generation” as the first Americans to leave their grandchildren a country worse off than they found it.
10.
“And with the QE stuff – how much lower can they drive rates?”
3.75 30 year. If the Fed starts buying MBS again then 3.25. Even lower if need be. Its going sub 4% bank on it.
Joyce [93];
The “Can I sue my neighbor…” argument is specious. You are not the plaintiff. The plaintiff is the bank who the deadbeat was writing checks to. The defendants themselves in these cases most likely acted (at one time) as if they had an ongoing debt; and have offered no evidence to the contrary now, or to explain away their behavior then.
If I had copies of a series of checks from the deadbeat (natually from a long time ago) for a certain amount that corresponded to the PITI on a copy of the deadbeat’s note; that check references an account number that is stamped on a copy of the note, or is cross-referenced with the deadbeat’s address in a database used by the servicer on a daily basis (hence indicia of reliability if the database is in fact relied upon); if the bank further has uncontraverted records showing failure to pay for 12…18…24…36 months! could a reasonable person dispute that there was an ongoing debvt obligation in default?
With that kind of evidence, does it really F-ing matter who signed the ALMIGHTY Lost Note Affidavit, or how little time he spent reviewing the file?
Moose
With that kind of evidence, does it really F-ing matter who signed the ALMIGHTY Lost Note Affidavit, or how little time he spent reviewing the file?
Rule of law? Whats that? I think we are clear on your position.
110-
Do you care about all the acts of perjury and fraud presented to court by the individuals as well as the corporations they were working for?
Rule of law? Due Process?
Save the Robots.
I was a robo signer.
“I had no idea what I was signing,” Tam Doan says of his work for Bank of America’s pre-sale foreclosure department in Southern California. “Either you were in or you were out.” Unlike his job at Countrywide, which he described as orderly, Doan said Bank of America’s foreclosure operations were chaotic and stressful. There weren’t enough people to do the job and they didn’t receive the training needed to do it properly. “With the volume coming in, we were getting inundated,” he said, noting his workday often lasted from 7 a.m. to 8 p.m. “We were signing documents right and left.” He spent so many hours writing his name that his signature morphed into a series of four circles overlapping one another…”I shudder to think how many foreclosure documents have my name on it,” he said.
Rest is a good read.
http://money.cnn.com/2010/10/28/real_estate/robosigner/index.htm
103: JJ,
FHA = 3.5% down.
Hyde [111]; Juyce [112];
“Rule of Law”; “Due Process”
Those phrases are not mystical incantations. You invoke them like they are some kind of talisman that ends the debate in favor of the deadbeat. I think you’ve stumbled upon a new corollary to Godwin’s Law.
The Rule of Law first and foremost includes the enforceability of contracts – such as contracts to borrow money and repay as agreed, those with clearly defined remedies (like foreclosure and eviction) in the event of default.
Due process is a process which insures the right of all parties to be heard on the subject matter in dispute. I haven’t yet heard a deadbeat credibly dispute that they didn’t borrow money, or that they did in fact pay it back as agreed. I know some may think that such matters are inconsquential in the face of a first-line management functionary spending less that the cosmically ordained number of minutes reviewing a file that someone else in the organization already reviewed before signing an affidavit, but I happen to think they have some relevance to the matter.
#110 This is not about owing money. The debate is about to whom the money is owed. Until standing can be proven there is no foreclosure or anyone to pay. It is not even required that a mortgagor deny that there is money due. All enforceable actions concerning debt require the plaintiff to prove standing.You cannot even obtain a judgement to enforce a credit card debt without proving standing.
What Moose is saying is that some yet to be named entity should enforce collection of all outstanding debts, even if nobody can prove ownership of the right to collect the money. Escrow that money as a big slush fund until the rightful owner can be found.
A couple of questions! Who watches that money? What happens if nobody can provide suitable proof of ownership to the proceeds?
Moose,
Its not some magical phrase. The bank is approaching the court to initiate a foreclose with forged, fraudulent paper work and is unable to prove they are the rightful holder of the note under existing law. If they have the paper work and it inst fraudulent them by all means foreclose. There is also the slight issue of selling the same loan to multiple parties as well as violations of truth in lending and dozens of other documented violations.
Each party in the contract should be equally able to avail themselves of the accepted legal standards involved int he process.
30 yr 116
The even richer irony in this mess is that a fair % of people may not be paying their PI to the correct entity. The entities recieved said payments may very well be open to law suits from the home owner demanding all PI be returned with interest. This is not my opinion on the matter but has been laid out by several of the legal professionals i have linked to recently.
All it would take is for a homeowner to spend the time and money to reconstruct the chain of custody of their note. If the The servicer cannot prove they have legit possession of the note or the home owner documents a chain of custody that contradicts the servicers claims then the servicer could easily be on the hook for all PI paid to date.
JJ- tell ya another thing, folks who are buying in the wealthier town are probalbe buying at lower ratios (they guy in Upper Saddle River who buys a $2mm place doesn’t make $400k, and probably put a hell of a lot more down than $400k). I would say leverage goes down as you go up the food chain.
probalbe – probably!
Actually my town is dirt cheap. We have houses for sale under 300K with under 7k in taxes, they are called fixer upper starter homes. Easily affordable to a 27 tear old newly wed couple with 4.25% interest rates. Trouble is everyone wants a mcmansion. They see mom and dad who after 40 years of marriage and savings in a big house in a nice neighborhood and they want it now. Unlike mom and dad who lived in a basement studio apartment when they were newlweds saving for a house.
Gen Y driving new cars to college that is fully paid for by mom and dad in designer clothes and cell phones, IPADs and laptops and credit card where mommy pay bills for and free health insurance I feel really bad for, let them pay for their own school by working full time and driving a $100 dollar dart with no heat and four bald tires to school. They would not last one week
Newly wed couple I know bought a house in my town, each makes like 125 and has a 60k bonus. Total income is $370k, they are 32. Bought a beautiful redone house in spring of 2009 for $435. WAH WAH WAH> they paid 1.4 income. Those 40k houses were back when people made 10K a year, 4x income.
Anon E. Moose says:
October 28, 2010 at 2:06 pm
JJ [103]:
Lots of people in my town are at less than 1x. Big deal, they bought their home for 40K years ago
So, like just f*@! the next generation, suck it up and pay – I want beachfront in Boca, DAMMIT! And tell them to keep funding my SS checks (uncapped, of course).
I hope posterity remembers the 60′s flower children/baby boomers/most aptly names “ME generation” as the first Americans to leave their grandchildren a country worse off than they found it.
First of all banks are not foreclosing on homes. Banks do not hold many mortgages. It is the servicing companies that are often subs of banks that start foreclosure process. Servicing companies do not own homes. Homes are often owned by widows, orphans and 401k plans who in their fixed income options by Mortgage Backed Securities.
The bond holders of MBS that bought a fixed income instrument that should have been low risk and collateralized are the ones who get screwed. Not the banks.
We have houses for sale under 300K with under 7k in taxes
Is that supposed to be a selling point?????
Can we just consider the consequences if either/both sides are wrong?
First, its not disputed that the deadbeat is in default, the only question is to whom (see 30-yr @ [116]).
If the plaintiff is not owed money, then they get the foreclosure, and its proceeds, and the deadbeat is hypothetically still no the hook to the ‘real’ holder of the note (who’s probably in hiding with Nicole’s ‘real’ killer that OJ scoured the golf courses looking for). I’ll admit that could be pretty bad for the deadbeat. As for the foreclosure and eviction and stuff — well, that’s kinda what they had coming to them anyway (see above about admittely in default).
What if the deadbeat is wrong, and the bank is the proper party, and the court denies the foreclosure and bars collection of the loan, the deadbeat gets a free house for their trouble. The holding is res judicata against the bank, meaning they can’t come back to court and try again after they get their paperwork in order. It also means that buying more house than your could afford at the top of a historic bubble AND DEFAULTING ON THE NOTE yields huge payback – remember the sucker still paying his overinflated mortgage nut every month doesn’t get the benefit of a free house, only the deadbeat; no joy for the renter either. The pension plans that were kind of counting on the deadbeat to pay back the money they lent him get stiffed. If private pension plans, grandma eats cat food. If public pension plans the taxpayers take it up the chute so the union hump who retired at 55 doesn’t have to sell his shore house or jet ski.
So which type of error yields wose consequences? I happen to think that the consequences of being wrong in the first instanec are less bad than the consquences of being wrong in the second instance. Throw on top of that some protection to the deadbeat against multiple suits on the same note, and I really don’t see what they have to complain about, no matter how many times they say “Due Process” and “Rule of Law”.
If you have a great school district and clean parks, good roads, three day a week sanitation etc. all for under 7k a year it is a pretty good deal. 7K is a low percentage of income to most home buyers.
Down south and in PA you can pay 3k but then send your kids to private school and pay for garbage pick up so big deal.
What do you think is a good RE tax for a town with good services.
Mr Hyde says:
October 28, 2010 at 4:08 pm
We have houses for sale under 300K with under 7k in taxes
Is that supposed to be a selling point?????
JJ [121];
The baby boomers got to buy brand new construction and mechanicals for 2.5x household (meaning one adult’s) income. They want to sell that same POS cape with the same kitchen, carpet, oil burner, etc. for 8-10x household (that’s two adults’) income. Show me new contruction at anything close to 4x income and I’ll believe you. Till then, the numbers tell me gramps is buggering his grandkids. Either that or I have to hear him pi$$ and moan about how he never gets to see the family because they all moved to North Carolina. Lets sit in the living room with frocked wallpaper that you’re asking $750k for and think about why that might have happened, gramps…
Moose,
How about we force both sides to adhere to black letter law????? That requires only a simple yes or no response. If you answer yes then your position is invalid. If you answer no then the only logical conclusion is that the homeowner should be punished as you see fit contrary to black letter law.
Its not fair, life never has been.
126 -“The baby boomers got to buy brand new construction and mechanicals for 2.5x household (meaning one adult’s) income.”
Yup, and the mortgage rate was 12.5%.
Moose,
I completely agree with you there. It isn’t fair to give free houses to deadbeat homeowners.
In the case where a house note is accidentally lost or misplaced you can usually just submit a document saying it was lost. You back up that document with other documents showing a “fire at the warehouse”, or “flooding that destroyed corporate headquarters”. There are accepted practices for getting around actually having to hold the piece of paper. The alternative is to drive Brinks trucks around bank headquarters holding original paper work. No one wants that to happen, so we allow lenders to submit copies or even argue that it was legitimately lost.
At any time the banks could have submitted this type of material to the courts but they chose otherwise. Why? Probably money. They chose to have robo-signers keep shuffling around the owner of the house until it came back into ownership by the forclosing bank.
When you submit a document to the court that has explicit language on it such as “I have read the entirety of this document and verified the following information to be true” and then have it notorized only to find out that you didn’t do what you said you did, that is called lying.
If you lie to a judge/courts then you have to pay the consequences. This brooklyn judge is determining the cost to be the value of the mortgage that you are seeking, say 300,000$-400,000$ for perjury?
Frankly, I’m tired of the “slap on the wrist” approach to enforcement, I’m in favor of more heavy handed fines like these to resolve the crisis.
You are confusing baby boomers with the “greatest generation”. The “greatest generation” are the baby boomers parents who fought in WWII and came home with GI bill to brand new homes in Levitown. Baby Boomers are born mainly between 1947 and 1963. In my town growing up the last home that sold for 40K was in 1974 and it was a fixer upper. In 1986 the last RE bubble peak homes were selling on my moms block for 350K and people were making like 35k a year. The next peek on my Moms block homes hit 650K in 2006 and now they are like 550K. Homes have not been cheap since around 1973. In fact tons of early baby boomers bought at peak in 1986-1989 their first home or coop and got crushed in 1991/1992 when home prices dropped like a brick. Interesting the cheapest homes were taking into account inflation and salaries in the last 20 years were 1996.
Tail end baby boomers were buying their first trade up home at the peak in 2005/2006 and I know plenty who got crushed.
Anon E. Moose says:
October 28, 2010 at 4:35 pm
JJ [121];
The baby boomers got to buy brand new construction and mechanicals for 2.5x household (meaning one adult’s) income. They want to sell that same POS cape with the same kitchen, carpet, oil burner, etc. for 8-10x household (that’s two adults’) income. Show me new contruction at anything close to 4x income and I’ll believe you. Till then, the numbers tell me gramps is buggering his grandkids. Either that or I have to hear him pi$$ and moan about how he never gets to see the family because they all moved to North Carolina. Lets sit in the living room with frocked wallpaper that you’re asking $750k for and think about why that might have happened, gramps…
Q What do you say to a realtor with two black eyes who won’t submit your low ball offer?
A. Nothing as you already told him twice.
Hyde [127];
You can’t unring the bell. Both sides have violated the “Rule of Law”; the only question is the proper sanction. I’d like to see some sanction on the banks that does not reward the deadbeat for their malfeasance (like that JO federal judge out in Islip who sanctioned the plaintiff by cancelling the debt and giving the deadbeats a free house).
Nicholas [129];
I’m with you all the way there. Let’s just keep in mind that fines for offenses against the court get paid to the court – the fine for sloppy paperwork shouldn’t be a windfall house to the deadbeat.
The deadbeat should have to prove he paid for house.
Throw the deadbeat out. However, should the deadbeat MBS holder have to prove who holds the collateral?
Classic;
“The faith in the dollar is likely to be tested and the credibility of the Fed may be as well,” he said. “Holding US assets might just become as fashionable as kipper ties and large collared shirts.”
Maurice Pomery
Denny’s….fcuking LOL!
98.JJ says:
October 28, 2010 at 1:41 pm
I sold this today, got Stoneridge and Denny’s full call on 11-1-10. Hope I have what it takes to either sit in cash or buy equities. I know rates are going up, it just takes a strong will to sit on the bench.
The end is nigh…..
for sale on Amazon.com
http://www.amazon.com/Rent-Too-Damn-High-Single/dp/B00491LIU2/ref=sr_1_fkmr0_1?ie=UTF8&qid=1288302212&sr=8-1-fkmr0#
Cosmetic surgery costs for Buffalo Public Schools employees have skyrocketed from less than $1 million in 2004 to nearly $9 million last year.
The vast majority of those procedures — nine out of 10 of them — were chemical peels, laser hair removal, skin rejuvenation and other skin treatments. All of them were elective procedures that required a doctor’s approval.
The number of procedures tripled during the same period, with more than 8,000 of them performed for school employees in 2009. Because the district is self-insured for its cosmetic surgery rider, taxpayers cover the entire cost directly, district officials said.
Board of Education member Christopher Jacobs is alarmed by the increase in costs. “On the surface, it smacks of abuse,” he said.
Jacobs’ interest in the issue was piqued when Bryce Link, an official at the Buffalo Fiscal Stability Authority, began researching use of the cosmetic surgery rider by employees of the school district as well as the city, and found a significant increase in the district.
Jacobs is asking the district and the city comptroller to investigate.
In a letter to Superintendent James A. Williams, Jacobs wrote: “We are in the midst of a fiscal crisis and we were forced to lay off many employees this year. The millions spent on cosmetic surgery could have saved jobs. I want to make sure these are legitimate expenditures and that this benefit is not being abused.”
A few unions in the district have a cosmetic surgery rider on their health insurance, but officials say that teachers or their dependents account for 90 percent of the people getting the procedures. Teachers can choose from four health insurance plans. One of them, a traditional plan with BlueCross BlueShield, includes the cosmetic surgery rider, according to Barbara J. Smith, the district’s chief financial officer.
A relatively small number of people — about 500 — are getting the procedures, which is less than 2 percent of those covered by health insurance through the district, Smith said. That works out to an average of nearly $18,000 in elective procedures last year per employee who used the benefit.
Last year, the cosmetic surgery procedures accounted for 9 percent of the district’s total spending on health benefits for employees and retirees.
Philip Rumore, president of the Buffalo Teachers Federation, said the union has agreed to give up the benefit.
“We’ve already told them we’re going to give [it] up in these negotiations,” he said. “We’ve told everybody it’s going to be gone in the next contract.”
Smith said the issue of the rider came up during the district’s budget talks last spring.
“We asked the unions to forgo the cosmetic surgery rider for one year, so we could use the money to reduce the number of layoffs,” she said. “They weren’t interested.”
Rumore emphasized that the benefit is a negotiated item — one that his union is willing to forgo, but only as part of contract negotiations.
He said he does not know what caused the dramatic increase in procedures over the past few years. “Maybe it’s because everybody knows it’s going to be gone,” he said. “I would imagine that’s probably the reason.”
The last teachers contract in Buffalo expired in 2004. There are no active negotiations taking place right now to hammer out a new agreement, but Rumore said he expects “very serious” negotiations to begin by the end of the year.
Eight doctors accounted for 95 percent of the billing for cosmetic surgery to the district last year.
Dr. Kulwant Bhangoo billed the district $4.3 million last year — more than double the $1.8 million he billed in 2008. He has his own practice on Cazenovia Street in Buffalo.
Two other doctors each billed about $1 million: Dr. Daniel Buscaglia of Cosmetic Vein and Laser and Dr. Samuel Shatkin of Aesthetic Associates Centre.
Many retirees also have the benefit, but only a handful use it, meaning that current teachers or their dependents account for most of the procedures.
BlueCross BlueShield of Western New York has taken steps to contain the costs of the procedures. Until early this year, doctors could charge as much as they wanted for the various procedures, union and district officials said.
“Previously there were no set reimbursement rates for these procedures, so there was a big difference in what doctors’ rates were,” Smith said. “[This year] BlueCross BlueShield set a fee schedule for some of the procedures and limited the number of times some procedures could be reimbursed.”
The insurance company also began requiring that a “licensed medical professional” perform the procedures, according to a letter to the district from an insurance consultant.
The consultant, John G. Berger Jr. of Lawley Benefits Group, indicated in the letter that the average cost per procedure was down 18 percent this year, compared with last year, and that there seems to be a “slight reduction” in the number of procedures this year.
Smith said it’s too early to know what the overall cost to the district will be for 2010.
JJ-
I really want to meet some of your friends or acquaintances, who are 27 y/o making $125,000 plus a $60K bonus.
OT
BUT HAY, NJ State Troopers charities – you can stop calling me with your HEAVY attitude…looking for donations. This crap has been going on for YEARS. The thug on the line today made me ask “hello” 5 times before answering, then wouldn’t identify himself immediately, THEN when I didn’t respond to his script, he repeats in a parental tone fully expecting me to comply with canned response. That’s when I hung up.
The “hello 5 times” is indicative of an outbound predictive dialer system. It usually means they have dozens of low wage agents making a massive volume of calls. Agents will be compensated on how effective they are at eliciting donations. The company running the boiler room ops will be taking a sizable cut as well. Your philanthropy would be better used elsewhere.
It is called “predictive” because a computer actually makes a call before there is an agent on the phone to handle the call. Only after the computer has determined there is a human on the other end of the line, will they patch the call through to an agent. The rationale is that by wasting your time, they save theirs.
Barbara [140],
I had them hang up on me.
As you are aware, it’s a scam. I told the thief that I thought they were doing a great service and I was prepared to make a substantial donation. I then asked where he was calling from, he said New Brunswick. What a coincidence, I told him, I had a meeting in NB the next day. I wanted to personally drop off my donation. When I asked for the address, he hung up on me.
Confused 138
One doctor did $4.3 million in billing? And what kind of nationality is that name?
Remember, it’s for the children!!!!!!!
#132 – Moose says: “You can’t unring the bell. Both sides have violated the “Rule of Law”; the only question is the proper sanction. ”
You still don’t get it! Not paying isn’t illegal. There is a specified remedy in the contract for nonpayment. There is also a specified standard to be met by the mortgagee for documentation in pursuing the remedy for nonpayment. Rules, they keep order in society.
We have no debtors prisons! What do you believe the purpose of judicial foreclosure to be? Judicial foreclosure is for the protection of the debtor! It is designed to protect the debtor from being taken advantage of by lenders!
Don’t get me wrong, I am no bleeding heart. I have likely aided in the eviction of more than 1,000 people over the years.
142. Wantan
yeap, I always ask then to send me some literature with an address. I have yet to get anything in the mail. I like the “goomba” accent, I guess they review Sopranos episodes during the training.
juice (99)-
At some point (and a point not too far in the future), I guarantee you I’ll very slowly start averaging into TBT and its brethren.
The endgame of this whole QE2 idiocy will be the death of the bond market. And, as BC mentioned yesterday, when the bond market goes, it’s all bets off.
pain (101)-
You should ask her how she feels about living in a refrigerator box.
“Starting to rebuild it now, but i don’t think the wife will ever forgive me for making her live in a low end Bergen town.”
moose (108)-
Finally…something you and I agree on.
143.dan says:
October 28, 2010 at 7:11 pm
Confused 138
One doctor did $4.3 million in billing? And what kind of nationality is that name?
Remember, it’s for the children!!!!!!!
I have never known anyone in the private sector who had cosmetic medical insurance. It’s obscene.
And the beat goes on:
MOSCOW – Two volcanoes erupted Thursday on Russia’s far-eastern Kamchatka Peninsula, tossing massive ash clouds miles (kilometers) into the air, forcing flights to divert and blanketing one town with thick, heavy ash.
The Klyuchevskaya Sopka, Eurasia’s highest active volcano, exploded along with the Shiveluch volcano, 45 miles (70 kilometers) to the northeast, the Russian Emergency Situations Ministry’s branch in Kamchatka said, adding that flights in the area had to change course.
Ash clouds from the remote volcanoes billowed up to 33,000 feet (10 kilometers) and were spreading east across the Pacific Ocean, vulcanologist Sergei Senyukov told Rossiya 24 television. Streams of lava flowed down the slopes of Shiveluch.
#143, the name seems Indian…
Heard from a friend that knew an Indian surgeon in FL making 10M+/yr – it was ten years ago, and my friend may have been exaggerating.
Sure glad this is just a subprime problem which is contained. In the meantime, the bank lobby is writing Tarp-2 as Jamie is getting ready to stuff BAC with billions. BAC must go, thereby creating the next doomsday scenario. Financial Armageddon 2 is coming to DC. Does Timmy get on his knees and beg?
Get out of the dollar.
Disclaimer- None required
As I have Cablevision , I have lost access to Fox networks. Now for the most part that is not a big deal in this house with the exception of Mrs Fabius having to go to hulu as opposed to the DVR for a few shows. But as a baseball fan I was missing the World Series.
Cablevision sent me an offer were I can sign up to watch the WS online via MLB and Fox, and will credit the subscription to my cable bill. In fact they end up paying me $0.05 on the deal. I have it fired up with 4 camera angles and it is actually pretty cool. Tim McCarver and no ads. But the ads come on ESPN.com were I need to go to get a decent box score and strike zone.
Chi,
saw this and though of you.
“Today’s endowments and their fluctuations exist in a budgetary fantasyland; from the schools’ point of view, individual gifts are literally worthless. It is like writing a check to the Department of Defense.”
http://www.slate.com/blogs/blogs/scocca/archive/2010/10/27/cornell-and-dartmouth-shame-students-for-not-adding-their-real-money-to-the-ongoing-bonfire-of-imaginary-money.aspx
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Funny. The dolts in Charlotte can’t see what’s coming (140 mph freight train), but a bunch of schmoes on a blog in NJ already see it as a foregone conclusion.
They keep saying financial services have vacuumed up all our best and brightest. However, I’m still searching for evidence of that.
The vampire (aka Jamie Dimon) needs to drink. Prepare the victims in Charlotte; Jimmy Cayne has been sucked dry.
Allen Iverson…broke:
“Allen Iverson has agreed in principle to a $4 million, two-year contract with the Turkish professional team Besiktas.
Iverson is expected to officially sign with the club this weekend and will begin his overseas career the week of Nov. 8. His management team put out a release Thursday night.
“He’s ecstatic,” Iverson’s manager, Gary Moore, said by phone. “He’s very excited, very happy the people in Turkey want him, the people in Turkey appreciate what he brings to the game, and he can’t wait to get over there.”
The 2001 NBA MVP has been out of work since leaving the Philadelphia 76ers in March to deal with family issues. Moore said not a single NBA team contacted Iverson in the offseason.”
Quote of the week:
“Fighting a structural deficit and unemployment by printing money is a bit like taking a leak in the ocean to warm it up, and you have to be careful because if the wind comes at you it can backfire.” – Nic Lenoir
U.S. on track for “fiscal train wreck”: Roubini