Hidden costs of stockpiling foreclosure inventory

From the Star Ledger:

Even empty N.J. homes need repair post-Hurricane Irene

Once a house has gone through foreclosure — and is therefore likely unoccupied — who watches out for it during storms like Hurricane Irene?

Even before the properties suffered storm damage, the bank-owned houses already had a negative reputation that they are not properly maintained. Linda Fisher, a law professor at Seton Hall, studies low-income neighborhoods where this “foreclosure contagion” effect is particularly common.

“Given that owners of vacant properties tend not to maintain them well, particularly in declining markets, further property deterioration as a result of a natural disaster is going to exacerbate the problem,” Fisher said.

Since February alone, banks have repossessed more than 1,600 houses, according to RealtyTrac.

After weather events like Irene, the task of checking in on these properties often falls to real estate brokers and agents like Bill Flagg who market and sell the houses the banks own. Flagg and his team at ERA Queen City Realty in Scotch Plains have spent all day, every day this week checking in on some 100 houses he oversees throughout the state.

There are downed trees to consider, crushed fences to repair, flooded basements to drain and shattered shards of glass to sweep, as well as concerns over whether the electricity is keeping the pumps going. In one case, the wind blew siding off a property. Flagg couldn’t even get to another house in Lincoln Park because of the flooded roads.

“We check the properties, fill out incident reports, and when there’s damage, we send people out,” Flagg said yesterday as he drove from one house to another on a whirlwind day of site visits. “This stuff takes time because there’s a lot of properties. You can only do so many in a day.”

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40 Responses to Hidden costs of stockpiling foreclosure inventory

  1. grim says:

    From MSNBC:

    Hurricane Irene spells more bad news for East Coast homeowners

    As homeowners along the Eastern seaboard assess the damage done by Hurricane Irene, they may have to brace themselves for more bad news.

    The hurricane is likely to roil an already uncertain real estate market in communities from North Carolina to Vermont, where residents have already seen their homes severely damaged or even destroyed.

    Experts say the storm could delay pending homes sales and, in the longer-term, potentially depress home values. For homeowners teetering on the brink of foreclosure, the devastation caused by Irene could be a deciding factor in losing their homes. Insurers say total damages from the storm could be between $7 and $10 billion, according to published reports.

    “There’s so much downward momentum in the real estate market that this is just one more straw on the camel’s back,” said William Harrison, a faculty lecturer at the Moore School of Business at the University of South Carolina. “The Northeast just had the hell scared out of it and fear has a way of translating into lower home prices.”

    Another concern Harrison cited is the impact the storm can have on homeowners on the verge of foreclosure.

    “If a homeowner’s mortgage is already underwater, they’ve sustained $25,000 in damages, and they’re storm deductible is only $10,000, this could be what puts them over the edge,” he said.

  2. jamil says:

    i think what NJ needs now is a big tax increase. It worked out so well in Illinois.
    (IL just had bad luck: emloyment and economy collapsed immediately after the tax hike)

    fabius, over to you

    “In a trend that continues to worsen, more Illinoisans found themselves unemployed in the month of July.
    Illinois lost more jobs during the month of July than any other state in the nation, according to the most recent Bureau of Labor Statistics report
    Illinois started to create jobs as the national economy began to recover. But just when Illinois’s economy seemed to be turning around, lawmakers passed record tax increases in January of this year. Since then, Illinois’s employment numbers have done nothing but decline.
    Data released today by the bureau confirms this downward trajectory. When it comes to putting people back to work, Illinois is going backwards. Since January, Illinois has dropped 89,000 people from its employment rolls.”


  3. Mike says:

    Good Morning New Jersey

  4. Mike says:

    “A conversation with a home owner” (dummy) Saw this on the other site http://www.youtube.com/watch?v=engKtLw0JTM

  5. yo'me says:

    The mortgage industry will take a step toward cleaning up some of its most controversial practices under a deal between a New York regulator and three financial firms, including Goldman Sachs Group Inc.

    Under the agreement with the state’s financial-services superintendent, Benjamin M. Lawsky, the three firms—Goldman, its Litton Loan Servicing business and Ocwen Financial Corp.—promised to end so-called robo-signing, in which bank employees signed foreclosure documents without reviewing case files as required by law. They also agreed to comb through loan files for evidence they mishandled borrowers’ paperwork and to cut mortgage payments for some New York homeowners.


  6. Comrade Nom Deplume says:

    Eric LeGrand was hired by Rutgers as a radio analyst. Hopefully, they find something for him full time. This is common (I recall the Patriots gave Daryl Stingley a front-office position).

    I met LeGrand at a soccer game at Rutgers. Nice guy. To me, it’s a tragedy that decent people like him suffer such setbacks. He seemed upbeat and I hope it lasts for him.

  7. grim says:

    Mike that thing was terrible, they should have went with the more typical overdub of the hitler rant video.

  8. Comrade Nom Deplume says:

    [2] jamil

    “Illinois lost more jobs during the month of July than any other state in the nation”

    I am sometimes guilty of this myself (I try but don’t always catch it), but as correlation doesn’t always show causation, I would not attribute all of Illinois’ ills to their tax increase.

    I would, however, attribute a substantial portion of their pronounced decline to failed liberal policies that resulted in excessive costs and uncertainty for businesses that caused layoffs, depressed hiring and caused some capital flight. Taxes may factor into that mix, but it is nearly impossible to segregate the effects from other forces causing job loss or capital flight.

  9. JCer says:

    Nom, I think Jamil is usually spouting political cr*p, but the only thing I’ll say about unemployment and increased taxes, it isn’t helping the situation and is more than potentially hurting it. Unions, taxes, and increases in the cost of business in a time of uncertainty coupled with lack of demand for products and services, leads to reductions in staff and relocation to business friendly places with better tax structures, and incentives for relocating.

  10. still_looking says:

    Grim, 8



  11. chicagofinance says:

    chicagofinance says:
    September 1, 2011 at 9:04 am
    JJ surfaces…..

    Man suffering from long, painful erections ‘tried to rob’ father for drug money

    When you find yourself suffering an erection that lasts more than four hours you should call your doctor — not rob your father.

    An Upper East Side man who suffers from a condition called priapism — which causes painful erections that can last for hours — was busted for allegedly trying to steal money from his father to buy painkillers he hoped would grant him relief, according to sources.

    David Miller, 30, was so hard up for drugs that he allegedly broke into dad Tommy’s place on York Avenue on Aug. 23, pulled a knife and snarled, “I want you out, and I want money!”

    Tommy Miller
    His father stood firm, however, calling cops and having him arrested on charges of burglary and attempted robbery, according to court documents.

    The elder Miller said his son became addicted to painkillers because of his excruciating erections.

    “My son has a very rare disease, he has a priapism, which means he gets an erection that lasts five or six hours, and it’s very painful,” Tommy Miller, 57, said. “They gave him oxycodone. That’s his problem.

    “He’s addicted to drugs now.”

    Miller’s father said his son has suffered for years.

    “He’s been sick since he was a little boy. He has an enzyme deficiency,” he said. “I had him arrested. I bailed him out.”

    Miller is waiting to be sprung from Rikers. Bail was posted at $25,000 bond or $5,000 cash and was still being held as of yesterday.

    This wasn’t the first time he has gotten into trouble.

    On May 1, his father posted $3,500 bond after Miller was busted in another incident on charges of attempted robbery and weapons possession just three blocks away.

    In that case, Miller was accused of brandishing a kitchen knife and demanding cash from a man sitting on a bench.

    He allegedly yelled, “Give me $20! Give me $20!”

    Instead of giving in, the victim tackled Miller to the ground before calling cops.

    Miller has a rap sheet going back to 2006, when he was busted for allegedly assaulting a girlfriend and spitting in a cop’s face.

    He has 11 prior arrests, for theft, assault, burglary, petit larceny, violating orders of protection, trespass and criminal possession of stolen property.

  12. 3b says:

    Power is on and off periodically in the land of Unicorns. since Sunday,discarded the contents of my frig last night; what a a waste of food.

  13. chicagofinance says:


    The recession has hit everybody really hard… ……………….

    My neighbor got a pre-declined credit card in the mail.

    Wives are having sex with their husbands because they can’t afford batteries.

    CEO’s are now playing miniature golf.

    Exxon-Mobil laid off 25 Congressmen.

    A stripper was killed when her audience showered her with rolls of pennies while she danced.

    I saw a Mormon with only one wife.

    If the bank returns your check marked “Insufficient Funds,” you call them and ask if they meant you or them.

    McDonald’s is selling the 1/4 ouncer.

    Angelina Jolie adopted a child from America.

    Parents in Beverly Hills fired their nannies and learnt their childrens’ names.

    My cousin had an exorcism but couldn’t afford to pay for it, and they re-possessed her!

    A truckload of Americans was caught sneaking into Mexico.

    When Bill and Hillary travel together, they now have to share a room.

    The Treasure Island Casino in Las Vegas is now managed by Somali pirates.

    And, finally…. ……………………………………………………………………………………………………………

    I was so depressed last night thinking about the economy, wars, jobs, my savings, Social Security, retirement funds, etc., I called the Suicide Hotline.
    I got a call-centre in Pakistan, and when I told them I was suicidal, they got all excited, and asked if I could drive a truck.

  14. Captain Foresight HEHEHE says:

    Mets deal with Einhorn fell apart – looks like that bum Reyes and his bad hammy will be playing half seasons someplace else next year.

  15. yo'me says:

    US Fed fund rate 0.13%
    Brazil 12%

    LOS ANGELES (MarketWatch) — Brazil’s central bank late Wednesday cut its benchmark Selic interest rate by a half-percentage-point to 12.0%, defying market expectations for no rate change, citing “substantial deterioration” in growth outlooks for major economies. The Banco Central do Brasil said the rate-cut was approved by a vote of 5 to 2, with those voting against the move favoring keeping the Selic rate unchanged. The surprise cut to the key rate, among the highest in the world, follows a series of five rate hikes this year, starting from 10.75%, as Brazilian monetary policy makers aimed to reduce inflationary pressures. Recent data through mid-August put the 12-month inflation rate at 7.1%, well above the 6.5% upper-limit of the bank’s inflation target.

  16. JJ says:

    Issuer name New York State Thruway Authority
    Security type Revenue Municipal Bonds
    Ratings* AAA

    Just figured I show you a new bond issuance that has something we all have not seen in awhile. AAA

  17. The Office of the Immigration Services Commissioner (OISC): London says:


    We are disappointed in your recent decision to not relocate to Chelsea. If there is anything we can do to change your mind, please let us know.


  18. Confused in NJ says:

    MIAMI — Hurricane Katia is moving across the Atlantic with little change in strength while a new storm could be brewing off the Northeast U.S. coast.

    The U.S. National Hurricane Center in Miami said today a low pressure system about 360 miles north of Bermuda stood a 50 percent chance in the next two days of becoming a tropical cyclone, the first step toward a tropical storm.

    Katia was about 1,050 miles east of the Leeward Islands and moving west near 18 mph with maximum sustained winds Thursday near 75 mph. It could become a major hurricane this weekend.

    The hurricane center says it’s too early to tell if Katia will hit the U.S. It is expected to pass north of the Caribbean.

  19. nj escapee says:

    Confused, let’s hope that Katia stays out in the Atlantic and just fizzles out.

  20. A.West says:

    Is your house/yard ok? Buyout? I hope all is ok.

  21. A.West says:

    I think I should post quotes from this every week. Seem familiar?

    “Then you will see the rise of the men of the double standard–the men who live by force, yet count on those who live by trade to create the value of their looted money–the men who are the hitchhikers of virtue. In a moral society, these are the criminals, and the statutes are written to protect you against them. But when a society establishes criminals-by-right and looters-by-law–men who use force to seize the wealth of disarmed victims–then money becomes its creators’ avenger. Such looters believe it safe to rob defenseless men, once they’ve passed a law to disarm them. But their loot becomes the magnet for other looters, who get it from them as they got it. Then the race goes, not to the ablest at production, but to those most ruthless at brutality. When force is the standard, the murderer wins over the pickpocket. And then that society vanishes, in a spread of ruins and slaughter.
    “Do you wish to know whether that day is coming? Watch money. Money is the barometer of a society’s virtue. When you see that trading is done, not by consent, but by compulsion–when you see that in order to produce, you need to obtain permission from men who produce nothing–when you see that money is flowing to those who deal, not in goods, but in favors–when you see that men get richer by graft and by pull than by work, and your laws don’t protect you against them, but protect them against you–when you see corruption being rewarded and honesty becoming a self-sacrifice–you may know that your society is doomed. Money is so noble a medium that is does not compete with guns and it does not make terms with brutality. It will not permit a country to survive as half-property, half-loot.
    “Whenever destroyers appear among men, they start by destroying money, for money is men’s protection and the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper. This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values. Gold was an objective value, an equivalent of wealth produced. Paper is a mortgage on wealth that does not exist, backed by a gun aimed at those who are expected to produce it. Paper is a check drawn by legal looters upon an account which is not theirs: upon the virtue of the victims. Watch for the day when it bounces, marked, ‘Account overdrawn.’

    The rest here:

  22. The Office of the Immigration Services Commissioner (OISC): London says:

    Time for hurricane madness. It’s pretty rare for these storms to make it to the northeast more than once a decade. It would be extremely rare for two storms to do it in the same year. The track of Katia is not conducive to even making it to landfall. I think we have officially entered the ‘hurricane hype’ zone.

    Lucky for us, we still have water, batteries and canned peaches that went unused in Irene.

  23. Confused in NJ says:

    Public Service Electric & Gas has twice as many customers as Jersey Central Power & Light, but JCP&L Wednesday night had almost three times as many customers still without power as PSE&G.

    PSE&G had restored power to 742,000 customers after Hurricane Irene and had 35,500 to go Wednesday night. JCP&L had restored power to about 560,000 customers but had 98,000 to go.

    JCP&L said there are a variety of reasons it is taking so long to restore power, including the severity of the damage, road access and the landscape of its territory.

    State officials agreed those factors had an impact but still said they would be reviewing both utilities’ performances after the recovery effort is over.

    “While PSE&G had more outages, it’s a greater percentage of JCP&L’s area,” said Lee Solomon, president of the state Board of Public Utilities. “For JCP&L, the damage to their area was devastating. The floods, the wind damage, the outages and the difficulty in getting to their areas.”

    Along with blocked residential streets, big thoroughfares in JCP&L’s territory like Interstate 287 and Route 46 were damaged.

    The two companies also have different size work forces, Solomon said.

    JCP&L, which has 1.1 million customers and is owned by Akron-based FirstEnergy, said it had more than 1,700 permanent and temporary employees on the ground in New Jersey.

    Newark-based PSE&G, with 2.2 million customers, had 6,000 employees and added temporary staff after the storm.

    Seems like 6,000 is 3.5x’s 1700. So big issue is PSE&G has more repairmen the JCP&L.

  24. Confused in NJ says:

    20.nj escapee says:
    September 1, 2011 at 1:50 pm
    Confused, let’s hope that Katia stays out in the Atlantic and just fizzles out.

    It’s not just Katia, a storm (unnamed) is brewing North of Bermuda.

  25. nj escapee says:

    confused, just saw that one. looks like it’s shaping up to be another active hurricane season.

  26. nj escapee says:

    we have a front hovering near us. noaa chart says it has 80% chance to form into a tropical depression

  27. chicagofinance says:

    Unintentionally hilarious Vistor’s Guide…..

    Out in Lancaster County and walked past a group of pamphlets…..on touts INTERCOURSE in large red block letters with the tag line right below….”…Slow Down the Hurry!”…..WTF? LOL!

    Anyway, as you can see following the link, you open the booklet to get a map with a big finger that says ENLARGED AREA…..

  28. Sai says:

    Completely off topic – How do you find a good renovator? I assume referrals? Anyone have a good experience with one and willing to share? Thanks.

  29. Confused in NJ says:

    The number of New Jersey homes and businesses without power in the aftermath of Hurricane Irene has been reduced to about 70,000.

    The state’s three major utility companies say more than 1.5 million customers were without power at some point during the storm or the widespread flooding that followed.

    Jersey Central Power & Light said it had about 63,000 customers still without power as of 3:30 p.m. today.

    PSE&G is restoring electricity to 7,500 customers from what it calls the worst storm in the company’s history.

    Atlantic City Electric has only a handful of customers still out as a result of the storm.

    The companies say outage numbers tend to fluctuate after a large storm because they often have to turn off power briefly to some customers as they make repairs.

  30. Nicholas says:

    Angies list?

  31. Confused in NJ says:

    Interesting comment from a Sparta resident:

    I’m in Sparta and I still have no power. No flooding but just trees down. Have not seen a JCP&L truck in days. It looks like a war zone – wires all over the place and tops of poles just hanging in the roadways. I called them this afternoon and they said they have “no notes or updates in their system but power should be restored by Tuesday”. TUESDAY? A washed out section of Rt 287 was rebuilt in 1 DAY and I can’t get power back for 10 days – let alone see ANY activity yet???

    I’m starting to think all the utility trucks went to South Jersey to make sure that was ready for Labor Day.

    This would indicate that the real JCP&L issue is lack of resources to save money, and screw New Jersians. I’d say NJ folks need to march on the BPU.

  32. Confused (33)-

    I’m sure a package bomb to JCP&L’s main office would get their attention.

  33. That Unabomber guy was onto something…

  34. schabadoo says:

    I’d say NJ folks need to march on the BPU.

    I can’t believe that rant didn’t mix in this gem I saw:

    “I’ve heard that they’ve prioritized restoring power to urban areas first, to minimize ‘unrest’.”

  35. Stu (#89, last thread)-

    Post of the year so far.

    “Having 6 hour stiffies in Rikers is a recipe for disaster.”

  36. Latest Charles Hugh Smith:

    Finally serious economists are considering a position I have been maintaining and writing about since the 2008 financial meltdown. Whatever its name— erasure, repudiation, abolishment, cancellation, jubilee—debt forgiveness, will have to eventually emerge forefront in global efforts to solve an ongoing systemic financial crisis.

    ‘On a grand scale the only way to erase counterfeit money and (counterfeit) assets of hundreds of trillions of dollars is to erase the debts associated with those fake assets. (Let me underscore again, these are not “toxic” assets, they are fake assets.)… Forgiveness in general, and forgiveness of debt in particular, stand as virtues if they free us up to acknowledge, address, and learn from our culpability, start anew, and create forward.’ (The Big Squeeze, Part 3: The Quiet Rebellion: Civil Disobedience, Local Markets, and Debt Erasure (January 29, 2011)

    Debt forgiveness, therefore, accomplishes two important things. It eliminates the increasing and outsized portion of productive enterprise to pay off unproductive obligations, and it clears the ground for new opportunities, new thinking, invention, and entrepreneurialism. This is why the ability to declare bankruptcy is so essential in the pursuit of both happiness and innovation.

    Currently we are mired in a “new normal” and calls for “austerity” which are nothing more than the delusional efforts of a status quo to avoid the consequences of its own error and fraud and to profit evermore. So bedazzled by the false wealth created by debt multiplication and its concomitant fantasy of ever-higher returns, this status quo continues to be stupidly amazed that people are not spending and that the economy is not picking up. But how could it be otherwise?

    Productive wealth has been trapped in a web of parasitic theft, counterfeiting, liability evasion, non-regulation, and prosecutorial non-accountability. All the fundamental attributes of a functioning exchange economy have been warped to reward creative criminals. I spoke extensively about this in my posts from 2008. ”


  37. Just Toast says:

    Can anyone comment on a background check / credit check company in NJ called Adam Safeguard? I think they are in Toms River – are they legit, do they do good work?

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