From the NY Times:
Help for Distressed Homeowners
LUIS CEREZO’s eyes welled up as he awaited the outcome of his latest attempt to resolve the 18-month backlog of mortgage payments he owes on the town house in Elizabeth where he and his wife and son have lived for the last 16 years.
“I couldn’t sleep last night knowing that today we’ve got to make the decision, do we stay in the house or not,” said Mr. Cerezo, holding hands with his wife, Marjorie, after the two met with a Bank of America mortgage specialist to plead their case for a loan modification.
The Cerezos were among the hundreds of people who filtered through a three-day homeowner assistance program held by Bank of America at the Hilton Hotel here in early August. A second Bank of America event was scheduled for the following week at the Atlantic City Convention Center, and several more will be held throughout the country this year. Wells Fargo held a similar public workshop at the Meadowlands Exposition Center in Secaucus this month. The goal of these sessions is to use in-person meetings to help underwater or delinquent homeowners find a solution short of foreclosure.
“We’re a bank,” said Tamika Eubanks, a vice president of Bank of America in charge of the recent New Jersey events. “We’re not in the business and have no desire to foreclose on anyone’s home. We want to do everything we can to keep you in that house.”
Preparing for the Newark session, the bank contacted 6,000 customers who lived within a 30-mile radius of the city and were more than 60 days in arrears on their mortgage payments, urging them to attend. By the start of the event, 375 people had registered for meetings with one of 50 bank officers on site. The workshops also involve independent financial counselors, so participants can get help with other money issues. The process takes three to four hours, with about 40 percent of cases being resolved on the spot, Ms. Eubanks said.
…
Wells Fargo will hold 33 “home preservation” workshops around the country this year. For its program at the Meadowlands on Aug. 8 and 9, the bank contacted 38,000 customers, 760 of whom registered to attend. The bank’s last New Jersey workshop, in Newark in January 2011, drew 542 customers. Marie Day, a regional service director for Wells Fargo Home Mortgage, said that two-thirds of those who attend these events “will find an option that doesn’t include foreclosure.”
…
The Cerezos had been hoping to get an answer before leaving the Bank of America workshop in Newark, but were told the wait would be a bit longer, because the Federal Housing Administration holds their mortgage. Even so, Favio Cerezo said, the session provided the family with some relief.“They gave him a lot of hope that there’s not just one way out,” he said, speaking of his father. “It looks like it’s going to be accepted. Now we just have to wait.”
For those following San Bernadino’s attempt to use eminent domain as a part of their foreclosure remediation better take a look at this. Turns out San Bernadino didn’t bother to do much analysis, and instead simply took the Zillow ZESTIMATE as proper valuation!?!
From HousingWire:
CoreLogic data shows San Bernardino County overestimates extent of negative equity
When San Bernardino County officials formed a joint powers authority to consider ways to solve the negative equity crisis in its community, they didn’t have very reliable data on the subject.
The JPA approved unanimously a formal request for proposals to be drafted by staff during a hearing Thursday. But at that hearing, just about everyone pushed back against the idea of using eminent domain to seize underwater mortgages so a group of investors can cut the principal and profit off the refinanced loan.
Mark Dowling, CEO with Inland Valleys Association of Realtors, ripped the county officials for not even gathering proper data on the issue.
A half-page data set circulated by the county uses what many at the hearing Thursday called Zillow estimates unreliable on home values in the area. The county claims 60% of borrowers in the surrounding metros of Riverside, Ontario and San Bernardino making up the Inland Empire owe more on their mortgage than their home is worth.
CoreLogic pulled some data at HousingWire’s request Thursday afternoon. According to their numbers, roughly 43% of the mortgages in San Bernardino County are underwater.
…
More interesting is the amount of home loans more than 90 days delinquent. CoreLogic data shows roughly 26,500 of the 309,000 mortgages in San Bernardino County have missed at least three payments, for a severe delinquency rate of 8.5%. And that’s on the way down. The amount of severely problematic loans dropped 28% from one year ago in San Bernardino County, according to CoreLogic.
No data set is perfect, and certainly as we’ve seen, no housing program is either. But Dowling couldn’t believe the county would move forward to consider such a controversial idea without gathering the numbers first.
From Bloomberg:
S&P downgrades Revel credit quality after gaming revenue much lower than expected
Revel Entertainment LLC’s $850 million term loan fell to 75 cents on the dollar today after Standard & Poor’s cut the corporate credit ratings on the resort and casino operator to CCC from B-.
The debt, due in February 2017, traded as high as 99.25 cents on March 14, according to data compiled by Bloomberg. The loan was cut to CCC from B today.
Gaming revenue at the Atlantic City, New Jersey-based company has been “significantly below” expectations, S&P said in a report today. Financial requirements under the credit agreement may be breached if operating performance doesn’t improve, according to the ratings company.
“The downgrade reflects our view that a strong opening for the Revel Resort was critical to the company’s ability to ramp up cash flow generation to a level sufficient to service its capital structure,” S&P analysts led by Jennifer Pepper wrote in the report.
…
“The company will deplete its excess cash balances in 2013 and not have enough borrowing under its current $50 million revolver to meet fixed obligations thereafter” if operating performance doesn’t improve, according to S&P.
Rent free the NKI….18 months of no payments? Too bad they don’t tell the complete story of the cash out refi and the ensuing spending spree. On a personal note a family member of mine a prop flipper and expert at equity extraction and spending sprees has a rental rental house down the shore, seems it went this season unrented and will be going back to the bank.
Purchased for 82,500 but 320,000 outstanding on the note?
Where did the 237,500 go?
4. Too bad DMV records aren’t online to tell the part of the story about the Escalade with the spinners.
Long Branch is going to bond 25 million and lend it to a developer as part of a payment in lieu of taxes deal to finish 600 condos at Pier Village. Sounds like s shite sandwich for anyone that pays taxes in that town.
Can you get a 403k or 203k loan on top of your underwater mortgage? Up to $35,000 in renovation loan.This keeps on getting better
6 – Christie should hand over AC to the Barrys.
I’m going to see a house today that sold for $759,000 in July, 2007 and is currently listed at $600,000. In November, 1996, it sold for $267,000 which means, at 3.5% appreciation, it should go for around $465,000. This is the definititon of oblivion.
re #6 – The 25 million dollar bond repayment via payment in lieu of taxes is contingent upon finishing different phases of the project, with something like an immediate increases in taxes of nearly a million a year and the payment in lieu increases as they finish different phases of the project as they sell the Condos. I gather that if the Barry’s cannot sell the first batch of finished of Condos the rest won’t break ground. These are the same projects they planned to break ground on 4 yeas ago, Pier Village III and Beach Front North II. The town is also still studying running a Ferry from NYC to Long Branch from a new to be built ocean pier. This new pier for the proposed ferry will cost $100 million, might as well build shopping and amusements too on the pier. It seems Long Branch is hell bent on gambling that the NYC crowd will attempt the two hour train commute or perhaps and hour and a half or more Ferry ride to Manhattan on the open ocean.
any articles around on the Long Branch /Barry ‘s Finance Caper
Freedy –
http://www.app.com/article/20120817/NJNEWS/308170091/Long-Branch-council-says-Pier-Village-plan-calculated-necessary-risk?odyssey=nav|head
juice box [10]
Train commute from Long Branch to Penn Station is an hour 20, not 2 hrs – which makes some difference. High speed ferry, in principle, can make it a 40 min trip to the downtown piers – the problem is it is a catch 22 thing; to be comfortable and seaworthy in rough weather it should be large, at least 200-300 passengers chipping in probably $30 each way. How does one get such a critical mass quickly (smallish ferry will be out of business at least 15 days a year, and ride will be very bumpy for another 50 or 70.)?
Every real estate story always starts off with a sob story from some person who deserves no sympathy. 16 years? Surely a responsible party could easily sell. Oh that’s right, they always neglect the few hundred thousand dollars spending binge that these people went on.
I love watching Kitchen Nightmares. You get a couple of yuppies who think they can just jump into the restaurant business. They sign a lease, and somehow, swindle the bank to loan them a million bucks using their home as collateral. It’s a complete disaster.
234k in remodeling, did they gut the whole place & start over twice. This is such bull.
Twice? It was a townhome. I’m sure that’s enough money do it 5 or 6 times over.
[4] grim – You beat me to it.
Purchased for 82,500 but 320,000 outstanding on the note?
Where did the 237,500 go?
Oblivion is nigh. We will all be swept under the waves.
Ben 16 nothing but the best!
Imagine how easy it is to pay off an $82,000 mortgage? What kind of handout are these people hoping for?
Very cool. Going to try this for sure.
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Jill: if u r around went to the house in wt with the pool. They just dropped the price to 415. Still way over priced!! 2 beds down stairs 1 bed upstairs and that has only a half bath. Just butt ugly all around. Drove around rest of town and a little disappointed to see some areas that appear run down. Also seeing the gary thing dumpy houses not cleaned or lawn mowed but pricey car in driveway. Just not feeling the love today. Oh and for you other would be buyers out there a realtor told me today it is no longer a buyers market but is now a real estate market!!! ??? I mentioned the almost nj 10 percent uneployment rate and I got the eye blink!!
This should get FabMax and Seif’s juices flowing:
http://victorfleischer.com/archives/299
Romney is claiming that he paid at least 13% in taxes every year. I call bullshit. As discussed here, Romney had a capital loss carryover in 2010, which means that he realized so many capital losses in 2009 that he couldn’t use them all to offset capital gains.
Now that Fabius has a stiffie, let us read further:
What’s interesting is that Romney’s claim could be literally true but misleading — which means that Romney is full of bullshit, but not a dirty liar. Suppose, for the sake of argument, that a wealthy taxpayer earned $1 million in speaking fees (ordinary income), had a portfolio of investments that increased in value from $100 million to $150 million, and realized $10 million in capital gains and $15 million in capital losses. Net income for tax purposes for the year would be negative, and the taxpayer would pay close to $350,000 in income tax, and would carry forward a capital loss of $5 million. This would show up as a high tax rate – 35% of the $1 million in ordinary income — but doesn’t fairly reflect his economic income.
Romney’s claim may be literally true only because our method of tax accounting doesn’t calculate economic gains until those gains are realized through a sale or some other disposition. Romney may have paid tax at a rate higher than 13% on his 2009 return, but the dollar amount was likely to be embarrassingly small as a percentage of his economic income and wealth. ”
Got that? In other words, Romney should not have been taxed on his taxable income (earned income and realized gains less deductions and losses), but that he should have been taxed on unrealized gains, and even on his accumulated wealth.
The author goes on to label this “injustice.”
To be fair, the author doesn’t say Romney lied. Only that because of his wealth and unrealized gains, Romney was misleading when he says his effective tax rate is XX%.
Is it any wonder we can’t find agreement when we can’t agree on what color or shape the conference table is?
Fabius is quick to tout the differences between US and European taxpayers.
http://www.npr.org/2012/08/18/158573973/italian-yacht-owners-weigh-anchor-to-dodge-taxes?sc=17&f=1001
I have always maintained that when it comes to tax evasion, we are amateurs compared to Europeans. I think this furthers my argument.
Okay, not all americans are amateurs.
http://taxprof.typepad.com/taxprof_blog/2010/07/sen-kerry-1.html
vb [some earlier thread]
Follow-up to the realtor telling you the high tension line in Chatham/New Prov/Berk Hts is to be removed: as could have been expected, it will not. Actually, the old towers will be replaced with the new ones, and the voltage will be upped from 138 kV to 220 kV. This is highly unlikely to help the properties next to the wires suddenly appreciate – unless the curative powers of EMF become popular.
Nom #23: I don’t know if you noticed this, but Rmoney never says “income taxes”. It’s always just “taxes.” He could be talking sales taxes…property taxes…and still be paying 0% income tax — and not be lying. It depends what the definition of “taxes” is. /*snerk*
Also seeing the gary thing dumpy houses not cleaned or lawn mowed but pricey car in driveway.
Second only to the new pool in the back yard alongside a 30 year old white formica kitchen and original baths.
I wonder what in my browsing pattern attracts the ads for discount caskets (all the time), and today I’ve got the one about training to become a gunsmith… Probably, some NJ RER keywords…
I just wanna say that your blog is very great. If you post more articles like these, I’ll follow your blog to read more interesting stuff.
Hey grim 4 & Ben 20,
It went to their lifestyle. But you already knew the answer that their narcissistic consumption means we have to bail them out, didn’t you?! sarc off. Ok, maybe they had medical emergencies – aaah probably not. sarc off, again.
Handout they are hoping for? None. They expect it. Conclude when the facts do stare!
To think, the house they lived in might well have been one of those COAH homes, too. It really pays better to be poor. Just get mother-state to give you stuff for being an under achiever. Aaah. regression to mediocrity at its best!
To quote Marie Antoinette: “LET THEM EAT CAKE!”
grim (4) wrote:
Purchased for 82,500 but 320,000 outstanding on the note?
Where did the 237,500 go?
Ben (20) wrote:
Imagine how easy it is to pay off an $82,000 mortgage? What kind of handout are these people hoping for?
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