BUBBLETALK: Latest thread to talk about the housing bubble ponzi scheme

February 07, 2007

BUBBLETALK: Latest thread to talk about the housing bubble ponzi scheme

Post stories and links and housing crash word from the street, chat about random things, and above all keep it clean

351 comments:

1 – 200 of 351 Newer› Newest»

Anonymous said...: phoenix:
01/01: 48,213
01/03: 48,621
01/05: 49,348
01/06: 49,614
01/09: 49,954
01/10: 50,152
01/14: 51,072
01/20: 51,671; January 22, 2007 1:34 PM
Anonymous said...: Hey, those "cash back" market peak deals are what has been upholding the statistics. Take those away and the downward momentum picks up substantial speed. And that's already happening with the subprime lenders leaving the marketplace.; January 22, 2007 1:36 PM
Anonymous said...: i couldn't get into the market if i wanted to......prices are still way too high for my income.; January 22, 2007 1:53 PM
Anonymous said...: Bio, chemical, nuclear wmd? What about financial weapons of wmd, particularly those of the self-inflicted variety? Oh wait, this was all masked under pro-growth, anti-regulation policies.

Just think of what these scam deals are going to do to neighborhood valuations as they go into foreclosure and hit the auctions on a courthouse steps near you... Overnight comps are going to be reset downwards as these financial wmds go off all over the country. Lots of people will go from being home rich to house poor overnight. In a stunned daze people will ask "How did this happen?" And the light will shine on those who looked the other way and allowed this to happen.; January 22, 2007 2:08 PM
Anonymous said...: Just wanted to report... talked to a good friend after church services yesterday. Asked him how work was going (I have been away for the past 2 months) He looked at me and said "what work?" Said he's never seen "it" this bad. He's a residential home builder. 25+ years. We're 60 miles north of Detroit. A snapshot of life in the trenches.; January 22, 2007 2:42 PM
Anonymous said...: Take away the cash back over-appraised sales figures, and the builder incentives that aren't being recorded, and we may likely already be down 10%+ nationwide; January 22, 2007 3:32 PM
Anonymous said...: Keefy, I found some hot stock picks for you!

http://tinyurl.com/y95hlv

watch the video.; January 22, 2007 3:41 PM
Anonymous said...: I 'could' get into this market if i wanted to....but choose not to because prices are still too high!

Patience!!!!; January 22, 2007 4:04 PM
N-FO said...: Markets are rarely as GOOD or as BAD as the masses proclaim.

http://drbrightside.blogspot.com/; January 22, 2007 4:56 PM
Anonymous said...: NEXT YEAR THE MORTGAGE COMPANIES WILL LOBBY WASHINGTON DC TO BAIL THEM OUT; January 22, 2007 7:50 PM
Anonymous said...: "Hard assets said...
I heard my first national ad. for a law firm......"

Gimme a break! Slimeball IS, as slimeball DOES! They are just following the money! And this money trail is going to grow in direct reverse to the housing collapse. BIG TIME!

Don't ever think for one minute that

1. A lawyer is human, or has one iota of morals, compassion, or humanity! (If I thought for a second that any of my excellent attorneys possessed those qualities, they would be immediately fired! Those are LOSER qualities in a courtroom)

2.Lawyers do public services out of the goodness of their hearts!. They do NOT! They win legal cases, that’s how they earn a living, BY WINNING A CASE IN COURT!

Remember, when 'Acme Demolition vs. Little Sister of the Poor Foundling Home' hits the docket, somebody is representing Acme, homeless orphans be damned!

I don’t mean to attack your sincere appreciation of the RESULTS that may come from this law firms efforts. Portraying lawyers as good/bad guys is wasted effort. Portraying them as White Knights is beyond wasted! They’re just money-grubbing lawyers, period!; January 22, 2007 8:54 PM
Anonymous said...: http://www.msnbc.msn.com/id/16757133/

HAHAHAHA
Freaking Ridiculous; January 22, 2007 9:44 PM
Anonymous said...: How do you tell the difference between a dead lawyer and a dead snake laying across the road?????

The snake has skid marks in front of it!; January 22, 2007 10:41 PM
Forensic Mortgage Loan Audit said...: http://avenue-s.org/Benvani.html
scroll to the bottom for page 2
Here for all your expert scrutiny is the 10th wonder of the world: The Worlds Largest Pyramid. Built in the USA.; January 22, 2007 11:27 PM
Anonymous said...: The reality of the housing market is in foreclosures. Check foreclosures in your zip with Keith's link.

While you are at it check 90210 or any other zip where homes are the most expensive!

This mess will be like the running of the bulls!!!; January 22, 2007 11:36 PM
Anonymous said...: Q:What do you call 500 dead lawyers at the bottom of the ocean?

A: A good start.; January 22, 2007 11:56 PM
Anonymous said...: Whats the difference between God and a lawyer

God doesnt think He's a lawyer; January 23, 2007 12:21 AM
Anonymous said...: "Lots of people will go from being home rich to house poor overnight.."

Nah, they were never "home rich" to begin with. It was all on paper and in their imaginations.

Their house will go down by 50% and they'll be just as "rich" as they were yesterday.; January 23, 2007 1:47 AM
Anonymous said...: That's enough lawyer jokes - in other news, the conference-board leading economic indicators report, that has a low but definite influence on the markets was postposed again. As per the usual schedule it was due 18th-Jan. - postponed to today, its postponed again to Tue.

http://www.conference-board.org/utilities/pressDetail.cfm?press_ID=3045

The press release blames database and technical systems issues for the delay. Cockup or conspiracy ?
Either which way, the data gathering processes in the USA are increasingly looking ThirdWorldish to me; Nobody believes the CPI, the unemployment, the employment numbers, the NAR or the Commerce Department real estate stats - heck there have been 3 recent instances where the weekly natural gas inventory reports from the Energy dept. have been delayed by 10, 12 mins..

I can tolerate incompetence but god help us if the stats distortions are due to the same pressures that were exerted on those Soviet or Chinese reports about progress towards their 5 Year Plans or towards their 'Great Leap Forward'.

-K; January 23, 2007 1:47 AM
Anonymous said...: I posted this below, but this story is pretty far out. Some local pols "helped" a developer get the greenlight on projects and make some fast moola. How much good could this and other squandered tax money have done? We believe it when we're told we the govt. can't afford to help people in need. Come to find out our hard-earned dollars go straight to influential rich bugs. Part two is in today's Washinton Post.
http://tinyurl.com/2x9x4y; January 23, 2007 2:14 AM
Anonymous said...: How many lawyers does it take to stop a runaway semi doing 90mph with a full load of live pigs.

Never enough!; January 23, 2007 2:16 AM
Anonymous said...: The Benvani page was unreadable. Could you summarize? It looks like one person was severely ripped off - how does that tie in with the pyramid (geometric growth) diagram?; January 23, 2007 2:23 AM
Anonymous said...: Q: What do you call a Lawyer with balls on his chin...

A: Member of the Bar; January 23, 2007 2:58 AM
Anonymous said...: Q: What's the difference between a porcupine and a bus full of lawyers?

A: On a porcupine the pricks are on the outside!; January 23, 2007 3:06 AM
Anonymous said...: Q: What do you call a lawyer with his brains knocked out?

A: A F--king Senator; January 23, 2007 3:07 AM
Anonymous said...: “Homeowners aren’t the only losers when foreclosures happen. Banks themselves stand to lose a bundle on loans that go bad and collateralized homes worth barely more than the ground they stand on, said Kirk Sampson, a Cincinnati lawyer who has filed foreclosure cases for lenders for 32 years.”

“‘Lenders are getting killed by this stuff,’ Sampson said. ‘Lenders lose a lot of money on foreclosures. By the time they complete the foreclosure process in Ohio, they take a huge bath - 50 cents on the dollar sometimes.’”

“Among lenders, the biggest losers are those that lend to the riskiest customers, so-called ’subprime’ borrowers with the worst credit.”

“The combination of easy credit and free spending is fuel on the foreclosure fire. ‘It’s a social epidemic, but one that will eventually run its course because lenders will realize that their rate of return on these loans is not what they expected and they’ll stop making these types of high-risk loans,’ Sampson said.”; January 23, 2007 3:37 AM
Anonymous said...: Do realtors suffer from some extra type of gene? Check out this 'renewed confidence' crap from the Naples Board of Realtors...

"“New listings are up from third quarter, reflecting both sellers’ renewed confidence in the market as well as new investor/developer units being added to the marketplace.”"

They must be ignoring the auctions going on in their backyard, sellers motivated no doubt, by their renewed sense of desperation...; January 23, 2007 3:56 AM
Anonymous said...: Whats the difference between a lawyer and a catfish? One is scum sucking bottom dweller and the other is just a fish!!; January 23, 2007 4:58 AM
Anonymous said...: Rhode Island is one of five states in the country — the others being New York, Michigan, New Hampshire and Massachusetts — that recorded a decline in house prices from the second to third quarters of last year, according to the Office of Federal Housing Enterprise Oversight.

In Rhode Island, nearly 16 percent of all house-purchase loans in 2006 were “interest only,” according to LoanPerformance. An interest-only loan allows the borrower to pay only interest, or a share of it, each month, for years, without paying down the principle.

But people who thought they were lucky to get 100-percent financing on their houses are winding up with “negative equity,” meaning that they owe more than the value of their property, said Peter G. Berman, a bankruptcy lawyer at Berman & Raskin on Providence’s East Side.

“Now, they can’t borrow their way out of the problem,”

http://www.projo.com/
business/content/
BZ_FORECLOSE21_01-21-
07_F040EPA.1960d75.html

What is an Interest Only Mortgage?

An interest only mortgage is almost exactly what it sounds like. There is indeed a principle amount that goes along with it and you will indeed be held responsible for the reimbursement of that principle loan. As the layman would say, if you borrow $100 and you only pay the interest for a while, you still eventually have to pay the $100 back. What an interest only mortgage does is allow you to, for a certain period of time, only pay towards the interest of the your loan. It doesn’t cut down the principle at all, at least not until the designated period is up (usually 5 years).

What Are The Long Term Implications?

Speaking of the long term is where the interest only loan begins to get scary. Imagine that you take an interest only loan for $100,000 and begin making payments. Because you are paying only the interest the payment would drop from the average fixed rate payment of around $600 per month to $500 or so for the interest only loan.

You continue in this manner for five years and then the remaining balance is converted into a fixed rate loan. You still have an outstanding balance of $100,000 but now you only have 25 years to pay it off instead of 30. In the end you will wind up paying $8000 to $10,000 more over a 30-year period.

www.bestsyndication.com/?
q=012007_interest_only_loan
s.htm; January 23, 2007 5:48 AM
Anonymous said...: Housing Prices Drop For First Time In 13 Years

Massachusetts' housing market had its worst year in more than a decade, with sales and the median price for single-family homes dropping to levels not seen since the mid-1990s, a firm that tracks real estate transactions said Monday.

The median price -- the point where half of homes sell for more and half sell for less -- dropped 5.8 percent, from $345,000 in 2005 to $325,000 last year.

www.thebostonchannel.com/
consumer/10814809/
detail.html; January 23, 2007 5:56 AM
Anonymous said...: Although a borrower's credit history is of primary importance to the lender, when it comes right down to it, it is the property itself that must provide the security for the loan. At the most basic and darkest level, if a borrower does not make the payments, the property will be taken away by the lender and sold on the courthouse steps to the highest bidder. The lender wants to make sure that the value of the subject property is accurate.

While appraisals have a subjective side to them, solid appraisals from reputable, experienced appraisers should reach similar conclusions with respect to value. Appraisers with limited experience or appraisers who are simply trying to satisfy their customers may not put adequate time, research or attention to detail into their work and, therefore, the validity of their results is questionable.

Under the pressure of flat or falling values, we are seeing many refinance situations where, on first glance, the appraisal confirms the expected value of the home but a subsequent review by a second appraiser uncovers the fact that the original appraisal left out critical information that affects the true value of the property.

For example, to justify the value of a home that is adjacent to a large box store, the appraiser used a comparable sale that was in an upscale neighborhood and did not mention the subject property was next to a commercial development. Needless to say, as a result of a careful review by a second appraiser, the value of the subject property was significantly reduced. Another situation uncovered the fact that an appraiser had used the value of a property that actually had two homes on it to justify the inflated value of the home that he was appraising.

In these times, investors are paying particular attention to values and are making it a common practice to order a second appraisal. This is especially true for refinance loans, regardless of loan amount, that are requesting high loan-to-value ratios.

Home buyers and refinancing home owners can expect increased scrutiny of appraisals prior to granting the final loan approval.

Bottom Line indiscretions are easily overlooked when home prices are going up year after year. However, when home values are flat or falling lending standards are tighten.

www.santacruzsentinel.com/
archive/2007/January/21/
biz/stories/02biz.htm; January 23, 2007 6:57 AM
Anonymous said...: Builder leaves subcontractors unpaid

Tradesmen say they're owed more than $1 million

Imagine hiring a dozen crews to build at least two dozen homes and then running out of money before you can pay them for their services, and you can imagine the mess that Construction Compliance Inc. faces.

The company, which has some 90 active building permits in Charlotte County, has apparently been placed in financial limbo after many of its subcontractors -- who claim they haven't been paid for some $1 million in work -- filed liens against the homebuyers.

At least one bank involved in financing CCI's home construction projects has ceased releasing cash advances on the work on at least one of the homes.

Meanwhile, work appears to be slowing to a standstill on many of CCI's unfinished homes located in Rotonda Sands.

"I'm literally in the dark," said CCI subcontractor Joel Deriso, the owner of Arcadia's Other Side Sod corporation. "I know that I'm being cheated out of a lot of money. I know that there are a lot of people like me."

Deriso said he wants the problem exposed so more subcontractors don't lose in the months ahead.

http://www.sun-herald.com/
Newsstory.cfm?pubdate=
011507&story=tp2ch7.htm&
folder=NewsArchive2; January 23, 2007 7:02 AM
Anonymous said...: Subcontractors Learn Hard Lesson

The market for new homes is predicted to thaw out this spring.

In the meantime some smaller builders are struggling to pay bills until home sales pick up, especially sales for higher priced houses.

r priced houses.

It's a lesson in economics some subcontractors are learning the hard way – one which shows the system isn’t always fair

Drywaller Jim Tracy’s six employees wouldn’t work for him if he didn’t pay them.
So Tracy can't cover his frustration over not being paid about 13-thousand dollars by a home builder months after completing work on a 300-thousand dollar house.
Tracy says "We had to dip into our savings quite a bit to come up with the money just to keep afloat because my suppliers expect me to pay my end. My guys have families, too, so I paid them."

About eight subcontractors thought they had been protected by liens that had to be paid off when the house was sold.

But the drywaller was shocked to find his lien paperwork was no good because the house has been foreclosed on by a bank.

Real estate attorney Tom Penke represents the builder, Pearl Construction.

"My client, the builder, lost the house and that means all of the subcontractors lost their interest in the house," says Penke.

http://www.wowt.com/news/
headlines/5284481.html; January 23, 2007 7:09 AM
Anonymous said...: Go to www.foreclosure.com and check your zip code. You just might be shocked at what you see.

The Seattle zip I checked had 40 in Fall '05. Now there are 295.

Furthermore, the MLS shows only 43 properties "for sale" in that same zip.

Inventory of available properties may be a LOT higher than we think.; January 23, 2007 7:20 AM
Anonymous said...: LONDON - Location, location, location. Almost anywhere else, the tiny dilapidated studio wouldn't attract much more than mice. But this is London and the 77-square-foot former storage room — slightly bigger than a prison cell and without electricity — is going for $335,000.

http://preview.tinyurl.com/3b4ed3; January 23, 2007 11:24 AM
Anonymous said...: What does it really mean when a lawyer takes a case on a contingency fee basis?

Simple. If the lawyer doesn't win the case, he doesn't get a dime.

If the lawyer does win the case,YOU dont get a dime!; January 23, 2007 2:22 PM
Anonymous said...: How many lawyers does it require to screw in a lightbulb?

None.

They only screw their clients!; January 23, 2007 2:24 PM
Anonymous said...: From a different blog, housing doom, found this link

http://www.wtopnews.com/index.php?nid=25&sid=1039584

which indicates, according to the analyst, the Washington DC metro area will rebound. Personally I don't see it. I feel like my wife and I have missed the boat. I have a good job, and make a decent salary, but no wheres near the money to take on a $400k to $500k mortgage which is the going rare for a single family home in this area, unless you want to commute 50+ miles. I think the first time buyers, even those with growing families like my own have been priced out of the market, unless there is a serious correction.; January 23, 2007 3:04 PM
Mammoth said...: Here you go, Keith.

Tiny London Apartment (77 square feet) on sale for $335K
http://tinyurl.com/3b4ed3

Unbelievable.; January 23, 2007 3:08 PM
Anonymous said...: On a different blog, housing doom, found the following link

http://www.wtopnews.com/index.php?nid=25&sid=1039584

In short the analyst, from Freddie Mac predicts a 'housing recovery' in the Washington DC metro area. Personally I don't see this happening. I guess it is myopic and self indulgent, but for myself, my wife and I have been priced out of the market. In the DC area a single family home is in the neighborhood of $400k to $500k. My wife and I have children so a starter 'condo' is not going to work out, since there is not enough living space to justify the cost, for a place I would just end up selling. Anyhow, my self indulgence aside, even with price decline how is a first time buyer, in particular one who is not going to get any outside help, going to buy into this market? Unless there is a major correction with prices going back to the CPI, the DC area is out of reach. My wife and I are contemplating moving out of this area for this exact reason.; January 23, 2007 3:09 PM
Anonymous said...: Go to www.foreclosure.com and check your zip code. You just might be shocked at what you see.
============
I did that, 32801. What I saw were a lot of high prices, yet.; January 23, 2007 3:30 PM
Anonymous said...: Another mortgage lender in deep doodoo.
http://www.bradenton.com/mld/bradenton/news/local/16522506.htm; January 23, 2007 3:44 PM
Anonymous said...: A must read

op-ed regarding Mexican Gangs efforts to randomly "Cleanse" LA of all blacks and whites through murder and intimadation. There is a Picture of a BillBoard advertisement paid for by a TV Station that says

Los Angeles of Mexico,

with the CA crossed out in red.; January 23, 2007 4:37 PM
Anonymous said...: Hard assets said:
>I'm not a big fan of our present "sue >them" and get rich society

They'll only get a few pennies on the dollar. The rest goes to agressive billing and $500 lunches.

As well as a host of other techniques (I'm sure) to squirrel the money away for later retrieval.; January 23, 2007 5:40 PM
Anonymous said...: biz.yahoo.com/pz/070123/112322.html

Homebuilder WCI pre-announces lower results.
"Results for the fourth quarter will be below prior expectations due to a higher level of defaults ....recording of significant impairments and write-offs,'' said Jerry Starkey, President and CEO of WCI Communities. ``The operating environment in Florida continued to be challenging during the fourth quarter and resulted in cancellations outnumbering new orders in that market"

Homebuilders meantime were upgraded and were bid higher. But what an upgrade. The upgrade by Goldman Sachs was from SELL to NEUTRAL on the basis that the "the risk/reward for SHORT-SELLING wasn't there any longer"

With friends like that..

-K; January 23, 2007 7:18 PM
Anonymous said...: Those amounts listed in the foreclosure listings are the debt being foreclosed on. Unless it is a tax lien as indicated the foreclosure amount is the debt on the property. If you want the property you have to do a deal with the lender. I just heard lenders are now beginning short sales on foreclosures. ie.. foregiveness of debt income to the borrower.; January 23, 2007 11:06 PM
Anonymous said...: The roof, the roof, the roof was on fire! The roof, the roof, the roof was on fire! They didn't need no water let the motherf-er burn...

“As the investigation continued Monday into the huge blaze that burned The Paramount condominium project in Escondido last week, officials were not releasing any hint of what caused the fire.”

“The $6.6 million project between Centre City Parkway and Escondido Boulevard is a significant piece of the downtown area’s revitalization plans. Texas-based developer D.R. Horton, Inc., has not publicly said yet whether it will rebuild.”

“‘They were just talking (Friday) about they would like to build again,’ said Escondido Mayor Lori Holt Pfeiler. ‘They just don’t have the timing yet.’”

“There also has been a lot more action and people at the condo site since the blaze than she has seen recently, Crown Books manager Miriam Ruvinskis said. ‘The construction was so slow,’ said Ruvinskis. ‘Lately it was very, very slow. You got used to it. You just see the buildings there, no people.’”; January 24, 2007 12:17 AM
Miss Goldbug said...: Anon said: "i couldn't get into the market if i wanted to......prices are still way too high for my income".

Prices will revert back to the basic principle of 2x income.; January 24, 2007 2:31 AM
Anonymous said...: Look at me!

Gold; January 24, 2007 3:17 AM
Anonymous said...: The bull market in residential mortgage-backed securities in recent years appears to have run its course, according to a new report published by Standard & Poor's Ratings Services.

As evidence, S&P pointed to slowing home price appreciation, diminished profitability for mortgage lenders, widening credit spreads, and an acceleration of negative rating actions. Issuance will decline in 2007 by as much as 10%-15%, bringing the dollar amount to $900 billion-$950 billion, S&P said.

mortgageservicingnews.com/
plus/#3

The motive for most lenders are profit, so how long are lenders willing to lower their margins to keep their doors open in this fierce competition market?

In the past, mortgage companies often went out of business when the market slowed, but now they're cutting employees in an effort to continue operating.

The overall trend for the mortgage industry is downsizing with large mortgage lenders cutting contract labor and bringing more functions back in house.

Lenders know that the days of easy credits and high profit subprime loans are gone as yield spread tighten.

However since most subprime loans carry temporary interest rates that were set when rates were extremely low, many lenders are hoping that borrowers who were living beyond their means can still tap into their equity so that lenders can still profit from the fee to restructure the borrower loan in today higher rate environments.

But not all borrowers have equity to tap into. Most recent borrowers who got into the game late are finding that their only option is a short sell.

Since lenders knows that defaults and forced buybacks of loans that failed to perform will cut into their profit margins, lenders are frantically pumping up the housing market not to protect these "Johnny Come Lately", but to avoid squeezing their profit margin even further.

Lenders are in race because a slow down of refinances and tightening of finances for subprime loans will cause more delinquency further cutting into lender profit margin.; January 24, 2007 4:29 AM
Anonymous said...: Found a new theme song for all the Realtors out there:

http://www.youtube.com/watch?v=nF-ZuON5fJk; January 24, 2007 4:34 AM
Anonymous said...: Mortgage giants turn from profit to loss:

http://www.builderonline.com/industry-news.asp?sectionID=26&articleID=424859; January 24, 2007 4:40 AM
Anonymous said...: Mortgage fraud could become a felony punishable by 10 years in prison in Arizona.

A day after the Republic's special investigation into the cash-back mortgage scheme, Sen. Jay Tibshraeny of Chandler introduced today a bill he's had in the works. The legislation, Senate bill 1221, would make it easier for prosecutors to go after mortgage fraud in Arizona.

"For most people, buying home is the most important investment they will make, and we need to protect the public from predators who are more interested in making money," said Tibshraeny.

Cash-back deals are the most prominent mortgage fraud being committed in Arizona today. The fraud involves obtaining a mortgage for more than a home is worth and pocketing the extra money in cash.

The scheme can inflate home values across neighborhoods. Homeowners stuck with overpriced mortgages may never recover the difference. Ultimately, lenders end up with bad loans. All hurt Arizona's real estate market, the largest segment of the state's economy.

http://www.azcentral.com/
news/articles/
0122mortgagefraudonline.
html; January 24, 2007 5:29 AM
Anonymous said...: Rose Mortgage Company shut its doors this week, sources have informed Housing Wire. The company was a subprime wholsesaler operating in 10 states, including Illinois, Wisconsin, Michigan, Kentucky, Ohio, Indiana, Colorado, California, Florida and Arizona.

The company was founded in 2000 as a family business, led by Bernie Glavin Jr., and at of the start of 2005 had funded more than 25,000 subprime loans.

In 2004, Rose Mortgage was one of the leading subprime wholesale operations in the Midwest, with wholesale manager Cheryl Rubenzer named “Wholesale Manager of the Year”

The Mortgage Bankers Association has said it expects hundreds of mortgage lenders to go out of business this year, as the mortgage lending industry sheds what MBA economist Doug Duncan has called “excess origination capacity” created during the recent housing boom.

http://www.housingwire.com/
2007/01/23/subprime-
specialist-rose-mortgage-
closes-doors/#more-298; January 24, 2007 6:22 AM
FlyingMonkeyWarrior said...: Housing Cracks Extend to Banks
US STEPS TOWARD BANANA REPUBLIC
Many might recall my frequent comments over the past couple years about the United States gradually resembling, if not becoming a Banana Republic. Hats off to Marc Faber, who recently has written (click here) in a thorough fashion so as to qualify the issue according to several criteria. The prime identifying characteristics are a spoiled political system, corrupt wealthy elite in power, control exerted by foreign entities, huge wealth inequities and a shrinking middle class, decayed infrastructure, urban wastelands with filthy pockets, primitive segments of the economy, low capital expenditures, capital flight externally, reliance upon foreign capital, heavy monetary inflation, outsized federal budget deficits, excessive import dependence, elite accounts in foreign locations, lowly paid common working class, large police and security forces, enormous prison population, proliferation of gambling casinos, and a weak currency. Some of the last few items are my additions beyond Faber's list. The United States has all of the above with no exception, as few might debate. If not today, then certainly the US has set upon on an unobstructed pathway.
http://tinyurl.com/39jnsu; January 24, 2007 3:58 PM
Anonymous said...: Grand villa in Bucharest centre can buy them for 1,900,000 euros. Several real estates and properties in Romania to selling. Kontakt-me: EU-Capital@web.de; January 24, 2007 5:09 PM
Mammoth said...: Keith,
You asked, “Anyone watch the state of the union? What's the word on the street?”
-----------------------
Watched the State of the Union Address and the rebuttal that followed. Here are the main talking points, in the order they were presented:

a. Work to balance the budget
- After a multi-year mad spending spree that has run up record deficits year after year.

b. Improve education
- Despite study after study proving that dumping additional money into education does not equate with students’ improvement in learning.

c. Affordable health care
- Hel-lo! This has consistently ranked as one of Americans’ top concerns. Has this concept just now finally dawned upon the president’s weak mind?

d. Immigration
- See (c) above. ‘Nuff said?

e. Energy independence
- During the rebuttal, the commentator pointed out that Bush has brought up this topic during each of his previous State of the Union Addresses, and that we are no closer to energy independence now than we were when he took office.

f. Bush then spent ~5 minutes whipping up a fear-frenzy, by talking about how all the terrorists are out to get us and how we need to be on the offensive. Noted three direct-name references to “9-11” and numerous other indirect references. Although he came across as transparent to me, no doubt he appeared quite convincing to the brain-dead masses. (Yes the terrorists are indeed out to get us, but we need to stop giving a reason for more to join their ranks. Obviously the president hasn’t figured out that ‘more of the same’ won’t help.)

g. Iraq
- (f) was a segue to his failing sales pitch for sending another 20,000 soldiers to Iraq. Still trying to connect Iraq with 9-11.

h. Pep talk
- Gave public ‘attaboys’ to a number of outstanding individuals strategically placed near where Mrs. Bush was seated - a female entrepreneur, the NYC hero who risked his life a few weeks ago to save a man who fell on the subway tracks, and a soldier who was injured in Iraq. Noted that the president tried to cover all the major voter blocs - a woman, a black, a white, a soldier, and an invalid.

No doubt all of the president’s ‘yes-men’ congratulated him - “heckva job, Bushie” when he was done, and he went to bed smiling while the commentators proceeded to filet the guy. At this point in time he has zero credibility.

-Mammoth; January 24, 2007 7:18 PM
Anonymous said...: How will global warming and climate change impact any housing bubble? That has yet to even be explored. But you can now get a climate appraisal on your address if you want one. Homeowners now have more to think about than falling or rising prices, they have climate change to consider. And if you live on the shoreline, you could just be submerged this century.; January 24, 2007 7:48 PM
Anonymous said...: On another note: Why things will be different this time...; January 24, 2007 8:31 PM
Anonymous said...: This if from LA Times.

More Californians at risk of losing homes
By David Streitfeld, Times Staff Writer
January 24, 2007

In Default
click to enlarge

Graphic
Troubling trend
click to enlargeThe number of Californians defaulting on their mortgage loans is rising rapidly, according to figures released Tuesday, providing striking evidence that more people are at risk of losing their homes.
Default notices jumped 145% in the last three months of 2006, accelerating a trend that began in late 2005 as home sales started to cool.

It was the largest number of default notices in any three-month period since 1998.; January 24, 2007 11:15 PM
Anonymous said...: Since nobody has yet posted this:
Mortgage Banker Association weekly survey
www.mortgagebankers.org/NewsandMedia/PressCenter/47886.htm

1. 30 yr FixedMortgage rates up to 6.22% from 6.19% last week. That's higher than this time last year. So much for "rates are still low".

2. Refinance mortgages index dropped by 9.8% WoW. Purchase index dropped by 8.4% WoW - both on seasonally adjusted basis.

3. Another one bites the dust - Mandalay Mortgage closes as per the broker forums.

Enquiring minds want to know - why would a Cali mortgage company name itself after a large city in Myanmar ( nee Burma)? Curious..

O did I mention that delinquencies rose to 2.5% YoY in 2006; the highest in 5 years. This is getting all too predictable.

-K; January 25, 2007 4:18 AM
Anonymous said...: Today, Thu, Jan 25, 2007
• BZH NVR Beazer Homes swings to loss; housing recovery not yet in sight
at MarketWatch (Thu 10:30am)
• NVR NVR 4Q Profit Falls
AP (Thu 10:23am)
• RYL Ryland Takes Optimistic Stance
at TheStreet.com (Thu 10:21am)
• HD W.R. Grace sales rise but legal costs drag down earnings
bizjournals.com (Thu 10:12am)
• CTX DHI KBH LEN PHM TOL Home sales plunged in '06, but prices may have hit bottom.
at CNNMoney.com (Thu 10:12am)
• MTH Meritage Homes Corporation Earnings Call scheduled for 10:00 am ET today
CCBN (Thu 10:00am)
• BZH Beazer Homes Slides to 1Q Loss
AP (Thu 9:59am)
• RYL New Star Analyst Rankings for RYLAND GROUP INC
StarMine (Thu 9:58am)
• NVR Home builder NVR's net falls 39%
at MarketWatch (Thu 9:51am)
• NVR NVR Q4 earnings fall
at Reuters (Thu 9:34am)
• NVR InPlay: NVR misses by $0.72
Briefing.com (Thu 9:09am)
• HD Outlook 2007: Interview with Linda Kaplan Thaler
at Fortune (Thu 9:02am)
• BZH BEAZER HOMES USA INC Files SEC form 8-K, Results of Operations and Financial Condition, Financial Statements and Exhi
EDGAR Online (Thu 9:00am)
• FNM Fannie Mae Redemption
PR Newswire (Thu 9:00am)
• HD Home Depot's Newfound Austerity
at BusinessWeek Online (Thu 8:08am)
• CTX DHI HOV LEN MTH RYL TOL Ahead of the Bell: Homebuilders
AP (Thu 7:18am)
• BZH Beazer Home revises profit outlook, posts quarterly net loss
at MarketWatch (Thu 6:31am)
• BZH Beazer Homes Reports Fiscal First Quarter 2007 Financial Results
Business Wire (Thu 6:15am)
• KBH KB HOME Files SEC form 8-K, Change in Directors or Principal Officers
EDGAR Online (Thu 6:00am)
Wed, Jan 24, 2007
• HD LOW [$$] Home Depot CEO Takes Stand on Pay
at The Wall Street Journal Online (Wed 11:11pm)
• HD LOW [$$] Lowe's Expansion PlansNow Include Mexico
at The Wall Street Journal Online (Wed 10:53pm)
• DHI [$$] Housing Glut Gives Buyers Upper Hand
at The Wall Street Journal Online (Wed 10:40pm)
• CTX MTH RYL Earnings drop at home builders Ryland, Meritage
at MarketWatch (Wed 6:37pm)
• DHI Centex Shares Slump on Loss, Outlook
AP (Wed 6:32pm)
• MTH Meritage Posts Steep Profit Drop; January 25, 2007 3:39 PM
FlyingMonkeyWarrior said...: This is about a 4 million dollar Real Estste Office, Downtown Orlando, Fl.
iw

Stirling Sotheby's showplace in the sky opens in April

$4 million marketing mecca will soon open atop a new office tower in downtown Orlando.

Stirling Sotheby's International Realty's Global Real Estate Gallery will immediately rank among the world's most unusual real estate offices when it opens in April, predicts Roger Soderstrom, Stirling's founder and owner.

The 16th-floor penthouse gallery under construction on the north tower of Cameron Kuhn's Plaza development at Orange Avenue and Pine Street will have 20,000 square feet of marketing space, including a 10,000-square-foot, wraparound terrace for special events.

Soderstrom said today's real estate market requires "dynamic new strategies."

"What we're doing here is connecting all the dots, bringing people worldwide together," he said.

The gallery will be filled with high-tech equipment, including more than 30 flat-panel plasma screens ranging from 27-inch touch-screen units to an 84-inch video wall.

Clients will be able to take virtual tours of properties and projects worldwide, Soderstrom said.

"We'll utilize the Sotheby's International network as well as overseas brokers," he said.

Developers will be able to use the gallery for special events and project debuts, Soderstrom said. The penthouse has a full kitchen for catering and can accommodate as many as 250 people, he added.

The gallery won't be just for selling real estate, Soderstrom said: He plans to partner with architects, designers, interior decor studios, marketing companies and home-product suppliers to showcase their goods and services.

Within the next few months, Stirling's new auction division will use the gallery for its inaugural sale.

Soderstrom said investors will be invited to participate in the televised auctions online, via telephone or in person. The auctions will involve not only luxury homes but luxury goods and furnishings from all over the world, he said.

The gallery will be staffed by as many as 35 agents, he added.

Mark Edson, a former Disney executive who has been with Stirling since 2004, has been appointed the gallery's managing director.

Soderstrom started Stirling International Realty in 1989. The brokerage did about $9 million in sales in 1990, its first full year. Last year's sales totaled about $990 million.

Soderstrom, who affiliated the brokerage with Sotheby's International Realty early last year, hopes the gallery will be generating $1 billion a year in sales within two or three years.

Currently, the Lake Mary-based brokerage has nine Central Florida offices with a total of 260 agents.

When the gallery opens, Stirling will have two downtown locations.

"We'll be keeping our office at Central and Rosalind," he said. "There's so much walk-in traffic at that location -- it's unbelievable the business that comes in the door."

Jack Snyder can be reached at jsnyder@orlandosentinel.com or 407-420-5094.; January 25, 2007 4:22 PM
Unknown said...: People keep comparing the real estate market to the past stock market. It's not even close! There is not a real estate bubble in Bend Oregon. Now is the time to buy! Check my blog at http://bendoregonrealestateexpert.blogspot.com/

Jim; January 25, 2007 5:57 PM
Anonymous said...: Enquiring minds want to know - why would a Cali mortgage company name itself after a large city in Myanmar ( nee Burma)? Curious..

Seriously?

It's a name dude. The owner of it probably stayed at Mandalay Bay for a weekend and thought the name was cool. Not everything is a conspiracy. Geez.

You kooks worry way way too much.; January 25, 2007 8:21 PM
Anonymous said...: Go to www.foreclosure.com and check your zip code. The Seattle zip I checked had 40 in Fall '05. Now there are 295.

WHOA!!! DUDE!!! Like 295 foreclosures in one zip code!!! Totally gnarly man.

Ax yourself how many people live in a zip code. Answer is around 45,000. So 295 foreclosures out of 45,000 residents!!! WOWeee WOWzers!! It's 1931 all over again.; January 25, 2007 9:00 PM
Anonymous said...: >>WHOA!!! DUDE!!! Like 295 foreclosures in one zip code!!! Totally gnarly man.<<

Yeah, like, it's only like an increase of over 600% dude. Whoa! No trend there!; January 25, 2007 9:52 PM
Anonymous said...: Here's some good news:

http://tinyurl.com/2kltfp; January 25, 2007 10:41 PM
Anonymous said...: Fifteen lenders down.; January 25, 2007 11:09 PM
Anonymous said...: No sooner that mortgage-implode adds one to the list, YET another goes down.

Millenium BankShares corporation are closing down their mortgage subsidiary
http://tinyurl.com/ys5zbh

This is also on housingwire.com..

Mortgage rates went up AGAIN today - intraday at that ! I thought I saw a rate of 6.32% APR quoted - That's up from 6.23% just a couple of days ago.

-K; January 26, 2007 2:02 AM
Anonymous said...: Here in Boise the realtors are quite delusional. In Boise proper homes have their selling price set at twice what they were only five years ago. Outside of Boise in Meridian there are new subdivisions that are almost entirely empty.

Check out this guys web site:

http://www.boiseblog.com/; January 26, 2007 4:28 AM
Anonymous said...: Perfect face for the housing crash in this story!

March 14, 2006
Basketball Prank
On March 4, University of California Berkeley (Cal) played a basketball game against the University of Southern California (USC). With Cal in contention for the PAC-10 title and the NCAA tournament at stake, the game was a must-win.

Enter "Victoria."

Victoria was a hoax UCLA co-ed, created by Cal's Rally Committee. For the previous week, "she" had been chatting with Gabe Pruitt, USC's starting guard, over AOL Instant Messenger. It got serious. Pruitt and several of his teammates made plans to go to Westwood after the game so that they could party with Victoria and her friends.

On Saturday, at the game, when Pruitt was introduced in the starting lineup, the chants began: "Victoria, Victoria." One of the fans held up a sign with her phone number.

The look on Pruitt's face when he turned to the bench after the first Victoria chant was priceless. The expression was unlike anything ever seen in collegiate or pro sports. Never did a chant by the opposing crowd have such an impact on a visiting player. Pruitt was in total shock. (This is the only picture I could find.)

The chant "Victoria" lasted all night. To add to his embarrassment, transcripts of their IM conversations were handed out to the bench before the game: "You look like you have a very fit body." "Now I want to c u so bad."

Pruitt ended up a miserable 3-for-13 from the field.; January 26, 2007 6:26 AM
Anonymous said...: Just found this on Iamfacingforclosure.com:

"This Account Has Been Suspended
Please contact the billing/support department as soon as possible. "

I wonder if he's finally been taken down...; January 26, 2007 7:57 AM
Anonymous said...: Wachovia closes its subprime mortgage lender
Wachovia Corp. has closed a subprime mortgage lending unit it inherited in its 2004 SouthTrust Corp. acquisition, the lender reported on its Web site.

The Charlotte bank is closing EquiBanc Mortgage after an "intensive strategic review" that "altered the company's approach to the origination of non-conforming loans," according to a posting on EquiBanc's Web site.

The unit was the bank's only business dedicated to loans to customers with suspect credit, the site said.

The subprime business has been struggling lately because of faulty credit among clients and rising interest rates.

Wachovia, the nation's No. 4 bank by assets, last year agreed to sell off a business that services subprime loans.

That business was the last vestige of the Money Store Inc., a California-based subprime lender it shuttered in 2000

http://www.charlotte.com/
mld/charlotte/business/
16549456.htm; January 26, 2007 8:52 AM
Anonymous said...: Fitch Ratings on Thursday cut its rating outlook for Fremont General Corp. and its subsidiary, industrial bank Fremont Investment & Loan, to "Negative" from "Stable" based on its exposure to the subprime residential mortgage market.

The ratings service also affirmed the companies' long-term issuer default ratings of "BB-" and short term ratings of "B".

The service said mortgage repurchase requests caused by rising early payment defaults have "adversely impacted virtually all subprime mortgage originators." Fitch said, as a result, pressure on profits will most likely continue, at least in the short term.

Fitch also said if operating performance at Fremont General continues to go down through the next year, it could start to affect the company's liquidity and capital.

http://www.businessweek.com
/ap/financialnews/
D8MSGJN81.htm; January 26, 2007 8:59 AM
Anonymous said...: You are on an island with a Lawyer, a pedophile, and Osama and you have a gun with only two bullets in it, who do you shoot first?

You shoot the lawyer twice.; January 26, 2007 10:04 AM
Anonymous said...: Oh man this week keeps getting better and better for the bears ... KB home under SEC investigation:

KB home; January 26, 2007 12:07 PM
Anonymous said...: It Looks liks aaron krowne is going to have a busy day.; January 26, 2007 2:03 PM
james dean said...: Re: Bend, Oregon IS NOT bubblicious

Dude, you're on drugs. Check Moodys report on Bend. At least most bubble areas have jobs. Good luck.; January 26, 2007 2:39 PM
Anonymous said...: It looks like Casey Serin at www.iamfaceforeclosue.com got his account suspended (presumably for nonpayment). It will be interesting to see if he manages to get that paid off so we can watch his trials and tribulations.; January 26, 2007 2:46 PM
Anonymous said...: Casey's site has gone down. Here's why.; January 26, 2007 4:42 PM
Anonymous said...: Few expect Ben Bernanke & Co. to change interest rates at its next meeting - and some are starting to think the Fed may stand pat for all of 2007.

The Federal Reserve is widely expected to leave a key short-term interest rate unchanged for the fifth consecutive time when it wraps up a two-day meeting on Jan. 31.

According to interest rate futures listed on the Chicago Board of Trade, investors are pricing in a 98 percent chance that the nation's central bank will keep the federal funds rate, a key rate that affects what consumers and businesses pay on various types of loans, at 5.25 percent.

On Friday the fed funds futures market was pricing in a slight chance of an interest rate increase by the end of the first quarter.

April fed funds futures were last down 0.005 points at 94.745, which implies a 2% chance that the Federal Reserve will raise its target for overnight rates to 5.5% from 5.25% by its policy-setting meeting in late March.

In other words, Fed Fund Future has priced in a zero chance that Fed will cut rate in 2007.

Bernard Baumohl, managing director of The Economic Outlook Group, echoed the view in the fed funds futures market.

"December's strong durable goods and new home sales reports raise a fundamental question," Baumhol said.

"At what point does good news on the economic front become bad news for the stock and bond markets?"
According to Baumohl, the answer depends on whether the economy still has sufficient labor and capacity resources to fuel growth.

"With both consumer and business spending accelerating and domestic resources starting to thin out, the Federal Reserve has to be more concerned that inflation pressures will shortly start to percolate again," Baumohl said.

"If that were to happen --- and we believe it will--- the Fed will have little choice but to resume tightening again, probably by spring,"

http://www.marketwatch.com/
news/story/treasurys-
flatten-data-linked-
selling-runs/story.aspx?
guid=%7BB37AC736-C27C-4B52-
8C00-A8B767FBD221%7D

This will further tighten the yield spread and decrease earning for companies like banks.

Subprime lenders will be effected the most by the tightening of yield spread.; January 26, 2007 8:54 PM
Anonymous said...: 4th qtr 2006 PMI U.S. Market Risk Index

Sacramento-Arden-Arcade-
Detroit-Livonia- Roseville, CA 604

San Diego-Carlsbad- Warren-
Troy- San Marcos, CA 603

Oakland-Fremont-
Hayward, CA 603

Santa Ana-Anaheim- Portland-
Vancouver- Irvine, CA 602

Nassau-Suffolk, NY 601

Riverside-San Bernardino-
Ontario, CA 600

Los Angeles-Long Beach- Seattle-
Bellevue- Glendale, CA 597

Boston-Quincy, MA 595

Providence-New Bedford- Chicago- Naperville-
Fall River, RI-MA 595

San Jose-Sunnyvale-
Santa Clara, CA 592

San Francisco-San Mateo-
Redwood City, CA 588

Edison, NJ 586

Fort Lauderdale-Pompano
New Orleans-Metairie- Beach- Deerfield Beach,
FL 579

Washington-Arlington- Charlotte-Gastonia-
Alexandria, DC-VA-
MD-WV 568

New York-White Plains-
Nashville- Davidson-
Wayne, NY-NJ 566

Cambridge-Newton- Houston-
Sugar Land- Framingham,
MA 563

Las Vegas-Paradise, NV 550

Newark-Union, NJ-PA 549

Miami-Miami Beach-
Kendall, FL 535

PMI Winter 2006 Report; January 26, 2007 9:30 PM
Anonymous said...: I was so excited about the foreclosure rate on the NYT business section this morning I almost missed the NY Metro section article about the cost of living in Long Island. Did anyone else read? In 2000 60% of houses on LI were considered affordable for people making 100K/year. In 2006 only 2% were? No pay increases, no jobs in LI, Hi taxes. What happens when all the young people leave because they're priced out - will LI homes be worth much? Won't this play out everywhere. Also NYC homebuilders are complaining they can't get enough construction workers. Could that be because legal citizens that do construction can't afford to live there?; January 26, 2007 10:22 PM
Anonymous said...: What's with all the realtor association print and radio ads? Driving to work this morning and I hear this ad -- not by a particular realtor but some assn. They babbled on and on about how you shouldn't sell your home yourself because you have to get the comps and that a realtor can get you 16% more than if you sold it yourself. Meanwhile - I haven't seen a single house in my area sell and have seen a few more signs go up.; January 26, 2007 10:30 PM
thomas_paine said...: I hear lots of banks are sitting on loans that should be, but are not, in foreclosure.

They are avoiding foreclosure since there are soooo many, and the market is so bad.

Does anyone know how to find the actual number of bad loans banks are sitting on, but refusing to let to go to foreclosure?

Does anyone know where to find these numbers?; January 26, 2007 10:55 PM
Anonymous said...: Interesting stats.

FRAUD: WHERE IT HAPPENS

States with the most serious mortgage fraud problems:

Fraud index1
1 Florida 224

2 Utah 209

3 Georgia 193

4 Colorado 175

5 Illinois 163

6 Missouri 135

7 Texas 126

8 California 122

9 Michigan 117

10 Ohio 112

1-100=average

Where mortgage fraud occurred most often in 2005:

Applications 59%

Tax, financial statements 22%

Verification of deposits 16%

Appraisals, valuations 14%

Verification of employment 13%

Escrow, closing 7%

Credit reports 4%

Doesn't add to 100% because most incidents involved more than one type of fraud

Source: Mortgage Asset Research Institute; January 26, 2007 11:51 PM
Anonymous said...: Q: What do you get with 100 lawyers run in a blender?

A: A useless mass of excriment.....

Oh yeah...sorry, redundant!; January 27, 2007 12:26 AM
Anonymous said...: Although 2006 saw existing home sales decline by 8.4% (the biggest drop in 17 years) and new homes sales fall by a stunning 17.3% (the largest in 16 years), Wall Street Pollyannas stressed that opinion and sentiment trumped data. For example, based solely on a 7.9% decline in existing home inventory, perennial real estate shill David Lereah (chief “economist” for the National Association of Realtors) claimed “It appears that we have established a bottom.” (Mr. Lereah has seen more bottoms than a diaper attendant in a hospital nursery.)[link]; January 27, 2007 12:59 AM
Anonymous said...: What’s the difference between a dead lawyer on the road and a dead skunk on the road?

Vultures don’t gag on the skunk.; January 27, 2007 4:19 AM
Anonymous said...: Q.What do you say when you find a lawyer buried up to his neck in the sand.

A.Damn, never enough sand!; January 27, 2007 4:27 AM
Anonymous said...: I was wondering about the lawsuit thing. I'm pretty sure this will work. Some FB old lady will be on the stand and go "He told me my mortage payments were going to be 600$ a month. All the sudden its 3000... I just don't understand..

I'm sure that some of those are true but half the other greedy people were buying SUVs and being "in your face" about their great home purchase for the last five years.

And the dang government is talking bailout already..

Its just disgusting.

I mean why not commit fraud.; January 27, 2007 4:32 AM
Anonymous said...: re : mozo maz
Thanks for the markit link on the ABX. Lots of reading there for insomniacs.

Since its a new concept, "an index, sort of like the S&P 500 for (residential) mortgage backed securities", I've ploughed thru the issue documents filed with the SEC on a couple of the MBS's that comprise the index. I seriously wonder if the buyers of the MBS understand what they are getting.

As I understand it, they take loans in various quantities of fixed rate, adjustable rate, conforming, non-conforming, a variety of adjustable rates, some interest only as well, of various loan to value ratios, 1st or 2nd liens, all loans sold to people across the spectrum of credit ratings.

How on earth does any rating agency issue a rating on this mess of potage ?

The MBS packaging is reminiscent of insurance certificates, or natural gas royalty streams but underlying this is such a different animal !

Then having put this concoction together, they split it all up AGAIN, in 15 tiers with the lowest tier first in line for losses if there is a shortfall, the 2nd lowest 2nd and so on..

Did I mention that they then hedge the whole thing with an interest rate swap agreement, where they will get paid if LIBOR rises too much, and pay up otherwise.

Jeez ! I'm bright and I can follow this shit - But I have total uncertainty on quantifying where the risks lie, on constructing a WHAT-IF analysis ! Never mind computer models, I see no history and almost 10 dimensions at the least - dnd I couldn't just say let the market price the risk, the market in the underlying MBS is pretty illiquid which prevents an accurate realtime valuation AND won't let get out at an accurate price if I get cold feet and want to exit the market.

But as per their blurb, there was 1.5 trillion tied up in this in just the 3rd quarter of 2005 !

The proof as ever will be in the pudding at which point it will be way too late. That ABX chart shows a drop off a cliff in the last week; down to 97.5 I see.

That markit website is going to be a regular stop-off. Wish their charts were better though.

-K; January 27, 2007 5:25 PM
Anonymous said...: More news on mortgage fraud. Hopefully, all states will inact same.

Legislation makes mortgage fraud a felony

--------------------------------------------------------------------------------
LORETTA PARK - STANDARD-EXAMINER
Utah is ranked No. 2 in mortgage fraud, a rating that a local legislator hopes his bill will change.

House Bill 25 passed the House unanimously Friday and is now on its way to the Senate for consideration.

Under provisions of the bill sponsored by Rep. Paul Ray, R-Clinton, mortgage fraud would become a second-degree felony with a possible sentence of 1 to 15 years in the Utah State Prison.

Currently, the state does not have any specific law outlawing mortgage fraud, Ray said. Instead prosecutors file other charges relating to mortgage fraud, he said.

Ray believes the bill will not face much opposition in the Senate.

The only thing that may prove a glitch is the provision for ongoing funding for one prosecutor and two investigators to the tune of $379,000 a year, he said.

But that cost will be offset by the savings Utah consumers will see once they are no longer No. 2, Ray said.

Because of Utah's rating, mortgage loan rates are about a quarter percent higher in the state than anywhere else nationally.

Chief Criminal Deputy Attorney General Kirk Torgensen said having one prosecutor and two investigators dedicated to these cases will be "a tremendous help."

Torgensen said that most cases have at least two people involved. Some include identification theft, but others are more complex.

One scheme involves a person getting an appraiser to appraise a piece of property far above its value and then getting a loan on that value, Torgensen said.

Other mortgage fraud scams involve lack of licensing, he said.

Bill: House Bill 25, Mortgage Fraud
Sponsor: Paul Ray, R-Clinton

The bill would make mortgage fraud a second-degree felony with a possible sentence of one to 15 years in the Utah State Prison.

This story appeared in The Daily Herald on page A3.; January 27, 2007 10:35 PM
Anonymous said...: Watch out Gregg Swann! They are coming after you!!!

Mortgage fraud is target of measure in Legislature

Posted: Friday, Jan 26, 2007 - 03:24:56 pm MST

PHOENIX — A bill has been introduced in the Legislature to address Arizona’s growing problems related to mortgage fraud in which nefarious lenders have used applications to commit identify theft or targeted senior citizens, Hispanics and low-income families with hidden extra charges.

The bill, introduced by Sen. Jay Tibshraeny, R-Chandler, would make home mortgage fraud a felony with penalties of up to 10 years in prison. It’s similar to laws recently passed in Colorado and Georia.; January 27, 2007 10:37 PM
Anonymous said...: Texas going after mortgage fraud.

Bill would increase penalties for mortgage fraud
The Business Journal of Phoenix - 1:44 PM MST Tuesdayby Mike SunnucksThe Business Journal
Print this Article Email this Article Reprints RSS Feeds Most Viewed Most Emailed
A state lawmaker wants to increase criminal penalties for mortgage fraud.

State Sen. Jay Tibshraeny, R-Chandler, has introduced a bill to make committing home mortgage fraud a felony with penalties of up to 10 years in prison.

Home mortgage fraud and predatory lending has been a growing problem in Arizona, especially in the Phoenix area, which has seen strong population growth and a roller coaster real estate market in recent years.

Some nefarious lenders have used mortgage applications to commit identity theft. Others have targeted senior citizens, Hispanics and low-income families with hidden fees and charges.

The Arizona plan mirrors recently passed laws in Georgia and Colorado.; January 27, 2007 10:40 PM
Anonymous said...: I am sorry, but on your list of cities
with fraud, below, you left out what
is sure to become known as a huge
case of rampant fraud: Portland, Oregon.

I was born and raised in Portland, I
am 62, was in real estate briefly in
70's, and have rented quite a few
houses over the years, and there is
something so dirty going on there,
I can't believe it. Just watch and
wait. It's going to smell, smell,
smell. PKK; January 27, 2007 10:50 PM
Anonymous said...: FYI
Here's a common fraud scenario:

• A shady investor gets a house at a bargain price. He slaps a coat of paint on it, cleans up the yard and does some minor renovations.
• The investor then gets an unethical appraiser to present an overinflated valuation for either a fee or a cut of the action.
• The shady investor finds an unseasoned buyer, ideally an immigrant or first-time buyer, whom he steers toward an equally shady mortgage broker or real estate agent.
• The broker or agent assists the buyers in falsifying documents to show they qualify for the loan. The mortgage broker uses the inflated value to roll the buyer's costs of the down payment and closing costs into the deal.; January 27, 2007 11:55 PM
Anonymous said...: And here I thought the bubble was contained to CA, NV, AZ, and FL.

From the Dayton Daily News:

DAYTON — Foreclosures are up 42 percent in the U.S., with Ohio ranking eighth in the nation in 2006, according data released by RealtyTrac.

With 81,517 foreclosures filed last year, the state's foreclosure rate jumped 64 percent over 2005. One in every 59 homes sold last year have fallen into foreclosure, according to data from RealtyTrac, the publisher of a national database of foreclosed properties.

Dayton ranked 15 among 100 largest metropolitan areas with 8,493 foreclosures. That figure represents a 43 percent increase over 2005.

Officials with the Columbus-based Coalition on Homelessness and Housing in Ohio said the state is poised for even higher foreclosure figures in 2007 as many of adjustable rate mortgages, also known as ARMs, are coming due early this year.

"The way lenders got (home buyers) in the beginning was to give them this easy street financing that just goes berserk when the rates explode," said Suzanne Gravette Acker, communications director with COHHIO. "Lots of people this year are going to find their mortgage doubles or even triples."

Among other regional metro areas, Indianapolis ranked third, with one foreclosure for every 23 households; the Cleveland/Lorain/Elyria/Mentor area was 14th with one for every 40 households; Columbus was 19th, with one for every 45 households; and Cincinnati ranked 49th, with one for every 87 households, according to the data.; January 28, 2007 12:09 AM
Anonymous said...: If anyone thought that PMI would save you, you better think again!

=========================

Understanding PMI (Private
Mortgage Insurance)

One of the most frequently misunderstood aspects of mortgaging a home, especially for first-time buyers, is Private Mortgage Insurance (PMI). The most common misconception is that PMI is a mortgage life insurance policy whereby the mortgage would be paid off should the borrower die. It is not.
Instead, PMI is an insurance that most lenders require of all borrowers who put less than 20% down. It's purpose is to protect the lender against losses should the borrower default.

Virtually all conventional mortgages with less than a 20% downpayment will dictate the inclusion of PMI. FHA mortgages, which are insured by the Federal Governement, require a different type of insurance with different coverages. The cost of PMI will depend on a number of factors, including the insurance carrier and the size of the loan, but monthly payments for the insurance will generally fall into the $25 - $100 range for median priced homes.

What's In It For Me?

When confronted with PMI for the first time, many buyers will ask "If I'm paying the premium but it is the lender who is protected, what's in it for me?" Simply, the ability to purchase a home with less than 20% down. Lenders have found that those who put down less than 20% are far more likely to default than those who put down more. With the protection of PMI, lenders are ableto make more loans (and more buyers are able to buy homes) with downpayments as low as 5% or 10%. This is especially important to first-time buyers, where liquid cash for downpayments and closing costs is often tight.

Unlike the mortgage insurance on FHA loans (which remains through the life of the loan) PMI is, under certain circumstances, cancellable. A new law, the Homeowners Protection Act of 1998, simplified this cancellation process greatly. Where once it was an involved process to get the PMI removed from the loan, the procedure is now much more "owner-friendly". With all qualifying loans that originated afer July 29, 1999, a homeowner has the right to request cancellation when the mortgage balance is less than 80% of the orignal purchase price or appraised value (whichever is less). In order to request cancellation, the loan must be current with no delinquencies in the last 1-2 years. In addition, an appraisal of current value (at the homeowner's cost) may be required.

The Homeowners Protection Act also stipulates (in the case of most loans) that when the balance reaches 78%, cancellation is automatic. Again, the loan must be current for the cancellation process to begin.

Tips on PMI

+ Obviously, your first goal should be a 20% downpayment level since this achieves a number of goals. First, it eliminates the cost of PMI entirely. Second, it lowers your monthly payment (since you have financed less). Third, it allows you to buy more house since the money that would have been for PMI can now be for a higher mortgage payment.

+ There are plans which allow you to avoid PMI by getting an immediate 2nd mortgage when you purchase the home. For example, you would get a first mortgage for 80% of the purchase price (no PMI), a 2nd mortgage for 10% of the purchase price and put 10% down in cash (commonly known as an 80-10-10 mortgage). The benefit here is obvious (you avoid PMI) but there are several potential downsides:

1) The 2nd mortgage will be at a rate higher than the 1st mortgage, eating up some of your payment savings.
2) The 2nd mortgage may have a variable rate, meaning that your payment can increase.
3) The 2nd mortgage may have a balloon payment, meaning that the new balance will become due and payable long before the 1st mortgage is paid off.

Summing Up

Although at first glance PMI appears to benefit only the lender (and paid for by you!) there actually is the big advantage of the ability for a homebuyer to purchase a home with a much smaller downpayment. Just be certain to keep a close watch on your equity so that you can cancel the PMI at the first possible opportunity.

Related Topics:
Budgets; January 28, 2007 5:24 AM
FlyingMonkeyWarrior said...: Orlando's Own, Home Grown, Mr. Ponzi, according to the Writer of this Orlando Sentinel article about this mogul, who is known for catapulting the Backstreet Boys and 'N Sync to international fame.
This Article Will be deleted by the paper two weeks from today, fyi.
I have posted some hilites below.
iw

Pearlman's money woes follow him downtown, {Orlando, FL}

Pedro Ruz Gutierrez | April Huntand Erin Ailworth, Sentinel Staff Writers
Posted January 28, 2007
"While Pearlman's public persona is that of a man whose life seems lifted from a Horatio Alger story -- a life filled with glitz, glamour, and financial success beyond most people's dream -- Integra's recent dealings with Pearlman . . . would indicate that his outward mask conceals the fundamental economic instability more common to a Ponzi scheme," wrote David Wells, a Jacksonville attorney in a lawsuit filed by the bank.

Countrywide Home Loans, meanwhile, filed suit Friday to foreclose on property Pearlman owns at the upscale Mosaic at Millenia condominiums in south Orlando. Records show Pearlman obtained two 30-year loans worth $326,554 from the mortgage lender for two condo units Dec. 22, 2005.

The suits are the latest in a string of financial troubles plaguing the music-entertainment mogul, who is known for catapulting the Backstreet Boys and 'N Sync to international fame.

But now creditors and investors across the country are chasing Pearlman, leading one attorney to describe him as having sunk from a rags-to-riches Horatio Alger character to an apparent Ponzi-scheme operator.

Three of his most recent lawsuits involve financial institutions that have filed foreclosures against the pop impresario, his airline and his Orlando property-management company, F.F. Station LLC.

One suit, by Bank of America, seeks to foreclose on Pearlman's Church Street complex that is home to several of his companies.

Records show Bank of America lent F.F. Station $26.5 million in May 2005 as part of Pearlman's efforts to refurbish Church Street, once a landmark Central Florida attraction.

Further compounding his financial woes, a lawsuit filed in Orlando's federal court last month by Integra Bank of Evansville, Ind., accuses Pearlman of defaulting on nearly $20 million in credit and loans.

The legal action seeks control of 190,000 shares of Trans Continental Airlines, Pearlman's flagship company that he used as collateral for the loans.

Neither Pearlman nor the attorneys listed for Bank of America or Countrywide could be reached for comment Saturday. Neither could Orlando Mayor Buddy Dyer, who reluctantly finalized $1.5 million in incentives for Pearlman's Church Street venture.

http://tinyurl.com/2nc3bt; January 28, 2007 6:59 PM
FlyingMonkeyWarrior said...: (Ponzi Con't)
iw

Countrywide, Mason said, named everyone with judgments against Pearlman. "They do that just to be sure they don't have any problems collecting their money and foreclosing against him."

Mason said Pearlman has gotten himself "into more damned debt than he can imagine."

"He's being sued right now by I think about four or five banks around the country," Mason added. "We're going to pursue him until the last drop of blood is out."; January 28, 2007 7:01 PM
Anonymous said...: Bubble Bubble toil and trouble; January 28, 2007 11:10 PM
Anonymous said...: You think Lawyers are Scum now just wait til the " I didn't understand my loan doc's" crowd starts!; January 28, 2007 11:42 PM
Anonymous said...: A day after the company reported its first-ever quarterly loss, officials with Dallas-based Centex Corp. said they expect to take more write-offs because of the soft homebuying market.

The big homebuilder, which has already cut 17 percent of its staff, also plans more job cuts, Centex chief executive and chairman Tim Eller said Wednesday in a conference call with analysts.

Centex is predicting that it will break even during the current quarter. But the company is still looking for ways to cut costs, including staff reductions, Mr. Eller said.

"We have aligned our workforce with our current sales pace," he said. "There will be more reductions in the [current] ... quarter."

In early 2006, Centex had more than 17,000 employees nationwide, including more than 3,000 in the Dallas area.

http://www.dallasnews.com/
sharedcontent/dws/bus/
stories/
012507dnbuscentex.
1670132d.html; January 29, 2007 2:25 AM
Anonymous said...: HouseValues also said it is exiting the mortgage lead generation business and is scaling back or eliminating other noncritical operations.

The company said the moves are expected to result in a 12 percent overall reduction of its work force, or about 60 workers

http://yahoo.reuters.com/
news/articlehybrid.aspx?
storyID=urn:newsml:reuters.
com:20070124:MTFH55809_2007
-01-24_22-04-
02_WEN2727&type=comktNews&r
pc=44; January 29, 2007 2:29 AM
Anonymous said...: The Silicon Valley Housing Report

In this report you will see facts, based on the available data, that you will not find anywhere else.

Vast majority of economists and statisticians who prepare housing reports are "professionals" that get paid to talk up the game.

This is a NO BULL! report. The purpose of this report is to not only present the facts but also a commentary on the mindset of people who live there.

Just to give you some flavor of the facts, how many people know the following (all home prices are median price)?

http://www.safehaven.com/
article-6795.htm; January 29, 2007 6:24 AM
Anonymous said...: FOR THE LAST five years, speculators, big developers and homeowners have gorged on Los Angeles real estate.

The huge run-up in prices — more than 135% from 2001 to 2006 — has greatly increased the spending power of property owners.

Yet there has been a worrisome consequence: Working and middle-class families are moving out — and failing to move in — because they cannot afford a house here.

Long term, that's not good for the local economy. As perverse as it sounds, what L.A. needs now is a real estate bust.

Most companies require a broad range of workers, from highly skilled tradespeople to technicians and middle managers.

These are the workers, especially if they live elsewhere or don't own a home here, whom executives frequently complain are difficult to recruit or retain in Southern California.

When executives find their employees cannot afford houses in an area, they often move their companies to where they can.

Nissan and Countrywide, for instance, have announced plans to shift operations or expand in less-expensive areas.

Until the last few years, the Inland Empire offered a viable alternative for workers seeking to buy a home and executives looking to build a workforce.

In the early 2000s, the area enjoyed steady growth in such higher-wage sectors as business and professional services, averaging about 5% annually.

More upwardly mobile families were moving in than out. By contrast, growth in these high-wage sectors was barely 1% in more expensive Los Angeles and Orange counties combined.

By 2005, however, rising home prices in the Inland Empire threatened even this middle-class bastion.

Since then, prices have begun to drop and home inventories to swell, two positive developments that may make the region more affordable for middle- and working-class home buyers.

http://www.latimes.com/
news/opinion/sunday/
commentary/la-op-kotkin28jan28,0,195862.
story?coll=la-sunday-
commentary; January 29, 2007 6:33 AM
Anonymous said...: Mandalay Mortgage Closing Its Doors

Mandalay Mortgage, Woodland Hills, Calif., a top-30-ranked subprime wholesale originator, is closing its doors at the end of the month and will stop funding loans, sources familiar with the situation have told MortgageWire.

At deadline time, company officials had not returned telephone calls about the matter. A source close to the situation said the company "will fund out everything" it has "in the system." One executive said Mandalay sent out e-mail messages informing employees about the closing on Wednesday evening.

Mandalay is the eighth nonprime lender of note to fail within the past 60 days. (For more details, see the Jan. 29 issue of National Mortgage News.)

http://originationnews.com/
plus/#5; January 29, 2007 6:38 AM
Anonymous said...: Ace MBS Classes Downgraded

Four classes of Ace Securities Corp. mortgage-backed securities have been downgraded by Fitch Ratings, and three classes have been placed on Rating Watch Negative.

The downgrades were as follows: series 2002-HE3, class M-2, from A to BBB (and removed from Rating Watch Negative), and class M-3, from BB to B; and series 2004-HE1, class M-5, from BB to B-plus, and class M-6, from BB-minus to B.

The securities placed on rating watch were class B-2 of series 2005-HE2, class B-2 of series 2005-HE3, and class B-1 of series 2005-RM2.

In addition, the rating agency affirmed the ratings on 55 other classes from six transactions.

Fitch said the negative rating actions were taken because monthly losses have generally exceeded the available excess spread in recent months, causing a deterioration in the amount of overcollateralization.

http://
mortgageservicingnews.com/
plus/; January 29, 2007 6:49 AM
Anonymous said...: Fitch Eyes Societe Generale MBS Classes
Seven classes from two Societe Generale Mortgage Securities issues have been placed on Rating Watch Negative by Fitch Ratings.

The affected classes are as follows: series 2006-FRE1, classes M-9, M-10, M-11, and M-12; and series 2006-FRE2, classes M-9, M-10, and M-11. In addition, Fitch affirmed the ratings on 18 classes from the two deals.

The negative rating actions were attributed to "early trends" in the relationship between serious delinquency and credit enhancement.

"Both transactions have delinquency figures well above the industry average," the rating agency said.

The transactions are backed by 30-year fixed- and adjustable-rate mortgages originated or acquired by Fremont Investment and Loan.; January 29, 2007 6:51 AM
Anonymous said...: GMAC's Mortgage Ills May Be Costly for GM

The decision General Motors Corp. made late last week to delay its fourth-quarter earnings report reflects in part the toll a volatile U.S. mortgage market has taken on its recently divested GMAC Financial Services lending unit. And that volatility could prove costly for the world's largest auto maker, some industry watchers said.

GM, which announced Thursday that it wouldn't report its results as scheduled tomorrow because of accounting problems and the need to finalize GMAC numbers, sold 51% of GMAC for $14 billion to Cerberus Capital Management.

http://users1.wsj.com/
lmda/do/checkLogin?mg=wsj-
users1&url=http%3A%2F%
2Fonline.wsj.com%2Farticle%
2FSB117003002189890643.html
%3Fmod%3Dhome_whats_news_us; January 29, 2007 7:01 AM
Anonymous said...: 39 U.S. CMBS Deals Placed Under Analysis

NEW YORK--(BUSINESS WIRE)--Following its monthly surveillance review of $415 billion in U.S. CMBS transactions with 395 transactions having been assigned a SMARTView date,

Fitch Ratings has designated the following U.S. CMBS transactions as 'Under Analysis' having been identified by Fitch's automated algorithms:

http://home.businesswire.
com/portal/site/moreover/in
dex.jsp?epi-content=
GENERIC&newsId=200701250056
30&&newsLang=en&beanID=1868
105982&viewID=news_view; January 29, 2007 7:04 AM
Anonymous said...: BankUnited: Problem loans will rise this quarter

BankUnited ex-pects its problem loans to keep rising during the current quarter, perhaps to 0.8 percent of total assets, and then level off or start declining.

Several seasonal factors are producing what BankUnited expects will be a spike in loans that are three or more payments late, said Alfred Camner, chairman and CEO of the Coral Gables-based savings bank and parent BankUnited Financial Corp. (NASDAQ: BKUNA). More BankUnited customers are missing mortgage payments

http://southflorida.
bizjournals.com/
southflorida/stories/
2007/01/29/story11.html; January 29, 2007 7:08 AM
Anonymous said...: National City Global Insight Housing Over Or Under Valuation Graph; January 29, 2007 7:36 AM
Anonymous said...: IRS and FBI report real estate fraud on increase

Mortgage flipping -- buying a property inexpensively, then selling it quickly at a high profit using straw borrowers and falsified loan papers -- and other types of real estate fraud have been increasing in recent years, according to the Internal Revenue Service.

The IRS, during its last fiscal year, started more than 300 real estate fraud investigations nationwide -- up more than 100 from just two years earlier.

And the FBI had 818 pending mortgage fraud cases during its last fiscal year, up from 534 two years earlier.

In addition to property or mortgage flipping, mortgage frauds may include professionals in the business who falsify documents for loans to qualify customers who shouldn't be. Others in the industry might switch settlement statements, obtaining more money on a loan than is necessary and stealing the excess. Still others might use fake credentials to get customers.

These crimes obviously harm the banking industry, which loses money when loans go into default, said FBI Agent Suzanne Kennedy, acting supervisor of the squad that handles mortgage fraud.

"Ultimately, all the costs come back in higher interest rates for legitimate people who do it the right way," Agent Kennedy said. "The bottom line is, we're all going to end up paying."

www.post-gazette.com/
pg/07029/757714-30.stm; January 29, 2007 7:54 AM
Anonymous said...: The number of mortgage default notices nearly doubled in Marin County in the fourth quarter of last year, mirroring an escalation in foreclosure activity throughout California, according to data released Wednesday.

Marin had 101 default notices during the quarter, up from 51 in the last quarter of 2005, according to DataQuick Information Systems, a La Jolla-based research firm.

The numbers continue an upward trend in the county, which had 89 default notices in the third quarter of last year, up from 56 in the previous third quarter of 2005.

The climb in defaults comes against a backdrop of flattening - but still very expensive - home prices in Marin.

The median price of a single-family home in Marin slipped to $855,000 in December, tumbling from a peak of $979,000 last April.

Linda Munoz, a broker with All California Mortgage in Larkspur, said Some prospective homeowners, hobbled by bad credit or unsteady incomes, accept risky mortgage deals that leave them with more debt than equity.

"You're paying the minimum they're allowing for, but you may not be able to cover the interest you're gaining on the loan," she said. "Probably a lot of this has to do with people getting into loans they can ill afford and dealing with people who are more interested in selling the loan than how the customers are going to be at the end of the day.

Nearly a third of California homeowners who received default notices ultimately lost their homes to foreclosure in the fourth quarter of last year, DataQuick said.

http://www.marinij.com/
marin/ci_5082667; January 29, 2007 8:06 AM
Anonymous said...: "All banks are experiencing some level of increased foreclosures and it is having an effect," said Bruce Balmas, senior vice president in charge of mortgage for all of Southeast Michigan at Fifth Third Bank [Nasdaq:FITB]. "We will take a foreclosed house and sell it at the current market rate and those levels are down as much as 15 to 20 percent.

"Falling property values have as much an effect on us financially as homeowners."

The problem shows up on the way to banks' bottom lines. Troy-based Flagstar Bancorp Inc., for example, in the first three quarters of 2006 increased its provision for loan losses - essentially the rainy-day fund to cover estimated losses in the loan portfolio - 34 percent from the same period of 2005 to $17.2 million.

Repossessed assets at Flagstar [NYSE:FBC] from the end of 2005 to the end of 2006 jumped 49.8 percent to $71.5 million, according to U.S. Securities and Exchange Commission filings.

http://www.mlive.com/
mbusinessreview/oak/
index.ssf?/mbusinessreview/
oak/stories/
20070125_foreclosures.html; January 29, 2007 8:11 AM
Anonymous said...: Hi Keith,

How about some anaylisys/comments om the UK bubble? Any data on the correlation of the economies?When weill their crash start?; January 29, 2007 12:26 PM
Anonymous said...: The Silicon Valley Housing Report

In this report you will see facts, based on the available data, that you will not find anywhere else.

http://www.safehaven.com/
article-6795.htm
++++++++++++++
Thanks for this excellent article, which I believe is applicable to the country as a whole. After the stock market crashed, investors needed somewhere else to invest their money and they chose housing, thus driving up housing prices. But now the housing bubble is bursting and many investors will get burned because they didn't sell their over-priced homes in time....; January 29, 2007 6:07 PM
Anonymous said...: http://washingtondc.craigslist.org/mld/apa/270244391.html

What's the deal with these setups where they have a rental "open house" and try to collect applications? I went to look at a rental yesterday and it turned out to be like this. I thought that it was odd that they seemed to want people to compete for the rental when there are so many on the market. Is this an effective technique for rental or a scam? The listing seems too good to be true - I can picture hearing later in the week "oh well the house is rented, but now I'm going to try to sell you {some useless thing}

Anyone heard of this?; January 29, 2007 8:38 PM
Anonymous said...: Keith,

What happened to your forclosure.com link? This should be at the top of your page just below the Shiller graph that shows the truth about the housing bubble.

Before anyone talks about how good there area is doing they should check there area foreclosures by zip code.

Foreclosures are the real story and if you track any zip code you can see this.; January 29, 2007 10:57 PM
Anonymous said...: Here is crazy tenant story that should serve as a warning to any would-be "real estate" investors. Renting property is hard:

http://economicdespair.blogspot.com/2007/01/you-can-always-rent-your-unwanted-flip.html; January 30, 2007 4:47 AM
blogger said...: gold link and foreclosure.com link are on the right sidebar by blogroll

I took 'em off the top to put up the denver homeless shelter link. figure we'd do our part; January 30, 2007 11:25 AM
Anonymous said...: I'm not in the 70% crash is coming boat like you nutjobs, but letters like this certainly do make your point about the lack of intelligence displayed by realtors.

From the Las Vegas Review Journal on Jan 30th:

To the editor:

OK, by now even the most casual observer is aware that the Las Vegas real estate market is not doing well. We have been bombarded by your newspaper, network news, and the Internet telling us over and over again how bad things are.

It seems as if almost every day you run an article predicting the percentage that the market will decline and quoting the same experts (over and over) with their personal opinions (which is all they are -- no one has a crystal ball).

Enough already. The sellers know the market is tough, and it is very depressing for them to see article after article about how bad things are and how much worse things may get. Prospective buyers who read your articles predicting a "possible 5 percent to 10 percent decline" in prices are smart enough to figure out that maybe they should wait to purchase. You keep saying the average home price is around $300,000. If I were a prospective buyer and saw that a 10 percent decline was expected this year, I would wait a year to buy and save $30,000.

Perhaps all the negative news and press is partially responsible for prolonging this real estate decline. You are creating a surge of "fence sitters" when you predict to buyers that more money can be saved if they wait. If you could you just refrain from running an article every day about the dismal market, maybe things could turn around.

Las Vegas is a great place to live. Let's focus on the positive.

Karen Newkirk
THE WRITER IS A LOCAL REALTOR; January 30, 2007 3:38 PM
FlyingMonkeyWarrior said...: Warning: Do not read this if you are a worry wart.
IW

Russian scientists 'alarmed' as millions of birds begin falling from world's skies

The United States, also, continues to keep the dire situation facing our World's avian species from this virus from their citizens, even as more reports of mass bird deaths continue to rise in their country, including the latest report from their Western Regions which are reporting this week on the deaths of hundreds of ducks.

Based on an extrapolation of reports of birds falling from the air dead, from Asia, Europe, Africa, Australia and North America, Doctor Scientist Kiselyov estimates that the World's avian population have sustained losses in the past month he estimates at 2 million.

Doctor Scientist Kiselyov, in these reports, further agrees with the United States estimate of over 62 million human deaths, World-Wide, from this new variant of the H5N1 Bird Flu virus, and that the Americans based upon the reports from Harvard University.

Most perplexing in the United States, however, were the American propaganda media organs not reporting to their citizens the shocking warnings issued this week by their own Military Leaders: “A government report says an outbreak could kill 2 million people and lead to quarantines, travel restrictions and an economic downturn.

The White House on Wednesday unveiled a foreboding report on the nation's lack of preparedness for a bird flu pandemic, warning that such an outbreak could kill as many as 2 million people and deal a war-like blow to the country's economic and social fabric. It urged state and local governments to make their own preparations beyond the federal efforts. (Source: Bird Flu News)

In the government's first detailed look at the potential effects on public health and U.S. society as a whole, the report said a full-blown pandemic could lead to travel restrictions, mandatory quarantines, massive absenteeism, an economic slowdown "and civil disturbances and breakdowns in public order."

What can be said of these strange Western (American) people; other than it is as if they would welcome mass death as a respite from their lives of needless consumption, and in perverse justification of their inaction in the face of such a dire threat.

http://english.pravda.ru/science/earth/86777-0/; January 30, 2007 4:43 PM
FlyingMonkeyWarrior said...: From MSN Money Section.
iw

State of the nation? Broke

When President Bush gave his State of the Union address Tuesday night, he called for a balanced budget. Too bad that nobody's using an honest definition of "balanced." What you can count on is that the deficit is disastrous and the debt is piling up.
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By Jim Jubak

If you or I managed our money the way that U.S. government manages our money, we'd be headed for bankruptcy.

Imagine if someone you knew:

* Took on a mountain of debt -- to buy a house, say -- at a floating interest rate and never bothered to ask if the future payments would be affordable. That's exactly what the U.S. government does.
* Used his annual bonus to make the down payment on a Porsche Cayenne and never worried that his current spending had created a huge future obligation for years of high payouts. That's exactly what the U.S. government does.
* Ran up big credit card debt because the money he was saving for his kids' college education easily balanced out that debt. That's exactly what the U.S. government does.
* Just kept on spending not only every bit of the monthly paycheck but every dollar that credit card companies and banks would lend, despite knowing that he would have to pay for college and retirement one day. That's exactly what the U.S. government does.

And then, of course, just like most deadbeats, what does the government do after mismanaging our money? It lies about how bad the problem is and clings to the hope that money will fall from the trees to bail it out.
Truth and the budget numbers
I hope you remembered this when you listened to the Jan. 23 State of the Union address from President Bush and the rejoinder from the leading lights of the Democratic Party. I didn't hear an honest number out of anyone's mouth. And it's not as if the White House and members of Congress didn't know better.

David Walker, comptroller general, delivered a primer on how to tell the truth on the U.S. budget in testimony delivered to the Senate on Jan. 11.

http://tinyurl.com/24vqrm; January 30, 2007 5:10 PM
FlyingMonkeyWarrior said...: FORECLOSURES SOARING
By ELIZABETH WOLFF
New York Post

January 28, 2007 -- The number of New Yorkers forced into foreclosure is skyrocketing, especially in Nassau County, where foreclosures have jumped a stunning 82 percent in the past year.

According to foreclosure tracking firm RealtyTrac, the number of city foreclosures went up 15 percent in 2006 from the year before, while Long Island jumped 55 percent. The national rate surged by 42 percent.

"People in general are living outside of their means," said wealth manager J.J. Burns. "This generation wants everything now. People are not saving for the rainy day."

http://tinyurl.com/2cq3do; January 30, 2007 5:13 PM
Anonymous said...: Who Runs The World And
Controls The Value Of Assets?
By Joan Veon
1-29-7

Today, after the conversion of Iraq to the Banklords, only five countries in the world are without a central bank: Iran, North Korea, Sudan, Cuba and Libya . All of these just happen to be on George Bush's "Evil of Axis" list.

http://rense.com/general75/wrus.htm; January 30, 2007 6:32 PM
Anonymous said...: Hi HP'ers. You may want to check out this MSM article covering a securities fraud trial going on in South Carolina.
thestate.com/mld/thestate/16576578.htm
On trial is the former President of Carolina Investors. The case involves the largest financial collapse in the state's history. CI's parent company, HomeGold, a subprime lender, bilked the subsidiary when it couldn't pay its operations. (Homegold is also OOB.) The combined failure of these companies robbed 8000 hard working people out of some $277 million. How very sad...; January 30, 2007 7:07 PM
Joe said...: LETTERS: Spare us bad news about (Las Vegas) housing market

OK, by now even the most casual observer is aware that the Las Vegas real estate market is not doing well. We have been bombarded by your newspaper, network news, and the Internet telling us over and over again how bad things are.

It seems as if almost every day you run an article predicting the percentage that the market will decline and quoting the same experts (over and over) with their personal opinions (which is all they are -- no one has a crystal ball). more

- Karen Newkirk, Realtor; January 30, 2007 7:19 PM
Anonymous said...: Here is crazy tenant story that should serve as a warning to any would-be "real estate" investors. Renting property is hard

Typical of this place. Take one extreme example and extrapolate that to be the norm.

One investor gets a bad tenant, therefore investing in real estate is a bad idea. I also saw a gruesome accident on the freeway this morning. Guess I shouldn't drive anymore since people get killed doing it.; January 30, 2007 8:03 PM
Anonymous said...: Where the f*ck is Richard?; January 30, 2007 8:23 PM
Anonymous said...: KEIF,

One of your Democrat heroes, John Edwards built himself a new home. You remember Johnie E right? The multi-millionaire lawyer lamenting how the have nots in America are getting screwed by the big bad rich people? The class populist who made a fotune suing doctors and increasing medical malpratcice insurance to the point of bankrupting doctors all across the land? Yeah that guy.

Well Johnie E built himself a 28,000 sq ft home. No that's not a typo, it is TWENTY EIGHT THOUSAND square feet.

Another great example of the liberal "do as I say not as I do" mantra.

http://hughhewitt.townhall.com/g/
8a740f4f-d604-48fa-a537-102a86c7a2e7; January 30, 2007 8:34 PM
Anonymous said...: Shiller's latest housing numbers flawed?; January 30, 2007 8:52 PM
Anonymous said...: A FEW MORE TIDBITS ON CRIMINAL MEXICAN INVADERS.

Twelve Americans are murdered every day by illegal aliens which
translates to 4,380 Americans murdered annually by illegal
aliens
(Rep. Steve King, R-Iowa)

Thirteen Americans are killed by drunk illegal alien drivers for
another annual death toll of 4,745. That's 23,725 since Sept. 11,
2001.
(Rep. Steve King, R-Iowa)

Eight American children are victims of sexual abuse by illegal
aliens every day a total of 2,920 annually.
(Rep. Steve King, R-Iowa)

K-12 school expenditures for illegal aliens cost U.S. Taxpayers
$7.4 Billion a year
(US Rep.. Gary Miller)

Illegal aliens consume $3.7 Billion annually in Medicare and
Medicaid benefits since 40% of illegal aliens are on U.S. Welfare
(Federation for American Immigration Reform)

$1.6 billion is spent annually in prison costs to house, feed and
clothe illegal aliens who fill 32% of our federal and state prisons
(Fox News Channel O'Reilly Factor)

$10 billion dollars are sent back to Mexico annually by illegal
aliens (according to the Pew Hispanic Center), an amount which
now makes it Mexico's 2nd largest industry.

Leprosy, (Hansen's disease), was so rare in America that in 40
years only 900 people were afflicted. Suddenly, in the past three
years America has more than 7,000 cases of leprosy. Leprosy
now is endemic to northeastern states because illegal aliens and
other immigrants brought leprosy from India, Brazil, the
Caribbean, and Mexico
(Thomson American Health Consultants; 2003)

Tuberculosis was virtually absent in Virginia until in 2002, when
it spiked a 17% increase, but Prince William County, just south
of Washington, D.C., had a much larger rise of 188%.
(American Medical Association (JAMA) June 2005)

Illegal aliens make up 32% of State & Federal Prison populations
(FNC O'Reilly Factor)

There are an estimated 240,000 illegal alien sexual predators
currently in the USA
(Violent Crimes Institute - May 2006)

Over 1,000,000 sexual crimes are estimated to have been
committed in the USA over the past seven years by illegal aliens
(Violent Crimes Institute - May 2006)

90% of all crime in Brooks County Texas is committed by illegal
aliens
(Brooks County Sheriff's Department April 2006)

In the Jan/Feb of 2006, of the 120,000 illegals caught in the
Laredo sector, 2,500 of them were from the Middle East!!!

A large, but unknown, number of al Qaeda terrorists and Chinese
nationals are infiltrating our country virtually anywhere they
choose from Brownsville to San Diego. One al Qaeda terrorist
was held for several weeks after being captured on our border
and is currently under FBI custody.

A large number of Islamic individuals have moved into homes in
Nuevo Laredo and are being taught Spanish to assimilate into
the local culture.
--unbelievable!

Texas Border Sheriffs have found uniform patches from an elite
group of Islamic suicide bombers
(Verified by Israeli intelligence); January 30, 2007 9:19 PM
james dean said...: It's a standoff between buyers and sellers. If it continues, buyers will just look elsewhere for cheaper housing and move and find new jobs. Sellers have an option too, just NEVER sell!

I dont know what all the fuss is about.; January 30, 2007 9:39 PM
Anonymous said...: Legal Question:

My neighborhood is full of investors trying to sell (27 of 160 homes) nothing is moving. These flippers agreed not to sell for a year. They are all selling before the year is up. The builder is not enforcing these agreements. Do I have any rights against the builder to enforce the agreements with the flippers? They are getting ready to drive the prices in our neighborhood into the toilet. My husband and I may have to relocate. We won't be able to sell with all the flippers on the market as well. Do we have any options?

Guess what...we are in Scottsdale.
Thanks for your help.; January 30, 2007 9:46 PM
foxwoodlief said...: Market is still strong in Austin. Homes are still selling if priced right, and they are not cheap by Texas standards. The one thing I've learned living here for almost a year is that the job market is definitely in favor of the employer. We've met a lot of people with degrees and they say, "Austin is a great place to live, bad place to find a job. Lots of people with degrees working at a bookstore." Employers here have such a high supply of highly qualified workers as well as continous supply of new grads from the local Universities that it is an abnormal market. I met nurses who told me they took a year off to have a baby, moved to Austin, called on positions and were never called in because they'd been off for a year. No need with the supply of applicants they take the cream of the crop.

That is the downside of Austin, even professionals find that the city is filled with nepotism, people take jobs beneath their education level, and then deal with high home prices and taxes compared to more vibrant Houston, San Antonio or Dallas.

People ask why do so many people move to Arizona? Jobs. Professionals at least can move there and almost name their terms due to the shortage of professionals and highly skilled workers. There are also a lot of service jobs and until the last three years two people working at McDonalds could buy a house there...not at the moment, but maybe again in a few years.

I still am not sure of what the hell is happening on the ground. I see both sides of the coin and it still seems to be a toss. I do know that homes are selling in Phoenix (was just there and saw first hand), also know there are bargains from builders but not steals as those prices are still high by historic standards there, rents are high and climbing. Places that were for rent downtown two years ago are on average $200 a month higher today. Then there is the reverse where if you want to commute there are 3000 sq ft homes for rent for the price of a 2/2 apartment in central Phoenix.

People still seem to be moving there, especially I noticed with Florida plates!

With my wife's job relocation back to Phoenix I'll miss Austin but not the schizoid economy of Texas. What is worse, lower home prices or high property taxes?

Still, I won't buy in Phoenix until I think the prices reflect value. Living in Austin even with the high home prices and taxes reminds you of economic fundamentals and that quality can be built for reasonable dollar amounts.

I hope interest rates rise, not fall, as that will speed the correction that is needed since price is inverse to those rates. I'm sure they will try to engineer a fall in rates to keep the home prices stable until inflation can eat away the difference.; January 30, 2007 10:19 PM
Anonymous said...: "Where the f*ck is Richard?"

Lurking and preparing for the die off.

Cheers; January 30, 2007 11:42 PM
Anonymous said...: Cancellations of purchase contracts in housing not counted by Government show massive slow down in hosing – ‘customers walking away’
Karen Gibson
Dec. 27, 2006

The sales of new homes in the U.S. rose more than forecast last month. But behind the scene the picture is different. Remember how auto manufacturers gave out the zero percent interest rates from 2001 till 2005 and created their own graveyard. That is exactly what is happening in new home market today.

The 3.4 percent increase to an annual sales pace of 1.047 million followed a rate of 1.013 million the prior month. But it mostly driven by lowering of prices and real attractive incentives by the builders to get rid of the inventory.

In reality, th number of homes completed and waiting to be sold rose 51 percent to a record 169,000 in November from the same month last year. Sales of new homes were down 16percent in November from the same month last year.

But what is most significant is the cancellations of purchase contracts in housing not counted by Government. It is growing sharply. There is even more inventory than actual inventory numbers suggest.

Homebuilders are scrambling to get rid of the inventory as the prospective buyers are canceling their purchase contracts.; January 30, 2007 11:47 PM
Anonymous said...: A large number of Islamic individuals have moved into homes in
Nuevo Laredo and are being taught Spanish to assimilate into
the local culture.
--unbelievable!

Texas Border Sheriffs have found uniform patches from an elite
group of Islamic suicide bombers
(Verified by Israeli intelligence)
+++++++===
Hon Jew,
This should have been at the top of your post.
iw; January 31, 2007 12:17 AM
Anonymous said...: james said:
It's a standoff between buyers and sellers. If it continues, buyers will just look elsewhere for cheaper housing and move and find new jobs. Sellers have an option too, just NEVER sell!

I dont know what all the fuss is about.

here's the little fuss:
the Seller brings home $2,000.00
a month, and his housing expense is 2,500.00 a month, so even if he/she stops eating, watching TV, walks to work and only uses a pay phone, he cant contiue drawing $500.00 a month from his Credit cards, cause by next month they will all be maxed out; January 31, 2007 1:27 AM
Anonymous said...: I assume most of you flunkies are single men correct? Make that single men with no prospects. Good luck finding a woman worth having that will take a second look at you while living in an apartment.; January 31, 2007 3:10 AM
Anonymous said...: Well, according to The Sovereign Society the current size of the derivative market is $400 trillion, or 7 times the entire net worth of the world. One-third of the $400 trill is in the hands of 3 U.S. banks: Chase, Citibank, and Bank of America. Warren Buffet says it's "a mega-catastrophe waiting to happen."

By rank:

1) JP Morgan Chase $53,046,000,000,000
2) Citibank $23,297
3) Bank of America $22,376
4) Wachovia $4,082
5) HSBC $3,450
6) Bank of NY $860 billion
7) Wells Fargo $812
8) State Street $474
9) National City $251
10) PNC $166
11) Lasalle $115
12) Mellon $115
13) Suntrust $115
14) Nat'l City Bank of IN $109
15) Keybank $97
16) Northern Trust $67
17) U.S. Bank $52
18) Lasalle Bank Midwest $49
19) Merrill Lynch $53
20) 1st Tennessee $30
21) Fifth Third $28
22) Regions $27
23) Deustche Bank $31
24) Fremont $25
25) Branch $24

1-888-708-4959; January 31, 2007 3:46 AM
Anonymous said...: Definition of a realtor or a lawyer....."Arrogance based on nothing!"; January 31, 2007 5:48 AM
Anonymous said...: Countrywide said about 5 percent of borrowers in its $1.3 trillion loan servicing portfolio were delinquent at the end of 2006.

In other words, Countrywide has about $65 billion in delinquency.

Countrywide is hardly the only mortgage lender that foresees trouble collecting from its borrowers.

Washington Mutual Inc., a bank based in Seattle, earlier this month said weak subprime mortgage credit chopped roughly $160 million out of fourth-quarter profit.

When permissive lending and skyrocketing home values lured home buyers to the mortgage market, lenders jumped in to serve the demand.

Now, with too many players in too small a space, Mozilo said as many as 40 or 50 mortgage lenders a day are going out of business or putting themselves up for sale.; January 31, 2007 6:27 AM
Anonymous said...: Will Chinese 3-year bills compete with US Treasury causing US rate to go up?

China central bank to issue 3-year bills in open market

THE central bank, seeking new ways to cope with the flood of funds pouring into China's money market, said on Monday it would begin to issue three-year bills regularly in its open market operations on Thursdays.

The bank issued three-year bills in an open-market operation last Tuesday for the first time since May 2005. Analysts said its decision to make the issue of such bills routine was part of efforts to absorb excess funds more effectively. "The central bank doesn't want a large amount of bills maturing at the same time. By diversifying its money market operations, it can smooth out liquidity flows over the longer term," said a trader at a big US bank in Shanghai.

http://www.bruneitimes.com.bn/details.php?shape_ID=
19020; January 31, 2007 6:57 AM
Anonymous said...: re anon 3:46

You can go directly to the treasury website for derivative information - no need for SHILLings and sovereigns.

The Q3FY2006 report is at :
www.occ.treas.gov/ftp/deriv/dq306.pdf

Look at page 22. A few things:

1. Most important is that we are talking NOTIONAL numbers here. Whilst I don't disagree that derivatives market size is gigantic - truth and data integrity behooves one to mention that its a notional number, and just like convex wing mirrors "objects notional appear larger than they are"

By NOTIONAL I mean - consider a interest rate swap ( to hedge against rising variable interest rates ) contract of $100 million NOTIONAL where party X pays 5.32% fixed interest over 5 years to party Y and the counter party pays back variable rate LIBOR +.0042% interest over the same period, payments made semiannually. In no sense is either party on the hook for $100million. The loss/gain - the amount at risk - is the 5.32%-LIBOR+.0042 x $100 million in this instance - a substantially smaller figure than $100 million.

2. The report I'm linking to is just for banks in the USA.

-K; January 31, 2007 7:04 AM
Anonymous said...: The number of vacant homes waiting to be sold surged 34% to 2.1 million at the end of 2006 compared with the end of 2005, by far the fastest increase ever recorded, the Census Bureau reported Monday.
A year ago, 1.57 million homes were vacant and awaiting a sale.

"We have more than a million housing units of excess supply," said James O'Sullivan, an economist for UBS. "If you are looking for evidence that the worst is over for housing, you're not going to find it in this report. This argues that housing starts need to go down more."

http://tinyurl.com/25ce4b; January 31, 2007 7:12 AM
Anonymous said...: Fast forward to 2009:

President Crazi of Iran today proclaimed March 8th a national holiday marking the destruction of Israel from a nuclear weapon. President Crazi took great delight the weapon came from the United States, bought in exchange for gold during the U.S. garage sale held to raise money to buy food for it's starving masses and broken economy. "It would've taken us another 20 years to develop a weapon ourselves. But thanks to the U.S. collapse, we were able to get what we wanted at a price we wanted within a matter of months. We've invited the Bush family, now of South America, to come to the festivities to thank them for making all of this possible. But we're unsure as to whether or not they'll come or continue to hide."; January 31, 2007 12:01 PM
Roccman said...: ********HON JEW*********

Where did you get the info from Nuevo Laredo?

Since the early 1990's I have watched a continual migration along I-10 of late 1970s Toyota pick up piggy backed with the same model truck with both beds loaded and blue tarped.

EVERY DRIVER I LOOKED AT WAS OF ME Origin.; January 31, 2007 2:07 PM
Anonymous said...: Housing panic is running cold

Bring back more pictures of pretty girls with big assets or ugly realtors with bad facelifts, fake tans (Fake n Bake) and jeweled Rolex's as they drive their Hummers to the poor house! :); January 31, 2007 3:49 PM
Anonymous said...: Just saw an ad that say's, Buy a house get a 'Hummer'!

Pretty soon that will mean something totally different!; January 31, 2007 3:51 PM
Anonymous said...: I'm in Arizona and have a friend who's a small builder. He just closed a deal by doing the following: Combined deposit from two separate deals into one (in other words, it was an investor and he canceled one deal) -- the deposits were 10% each, so the investor had some skin in it. Then he paid 2% of the sales price toward closing costs, gave 10% cash back, plus another 8% in "incentives". So, to close one house, originally listed at $400,000, he had to (1) cancel one contract, (2) effective reduce the price by 20% = $80,000. Effective sales price $320K, county recorder's price $400K. Nice trick.; January 31, 2007 4:17 PM
Anonymous said...: Damn it where's that Depression already? Oh I know, I know there numbers are lies and to be ignored. Only data derived from bloggers is to be trusted.

By Chris Isidore
January 31 2007: 10:13 AM EST

NEW YORK (CNNMoney.com) -- Economic growth picked up in the fourth quarter, the government said Wednesday, a surprisingly strong showing for the last three months of the year.

The reading means the economy grew at a slightly stronger pace in 2006 than in 2005, but that's unlikely to spur the Federal Reserve to change its recent policy of holding interest rates steady, economists said.

Gross domestic product, the broadest measure of the nation's economic activity, grew at an annual 3.5 percent rate in the quarter, according to the government's first reading for the period. That compared to 2 percent growth in the third quarter.; January 31, 2007 4:26 PM
Anonymous said...: Mortgage apps up this week. All to be ignored of course as REIC lies.

January 31 2007: 7:47 AM EST

NEW YORK (Reuters) -- Applications for U.S. home mortgages increased last week as both home purchases and refinancing picked up, an industry group said Wednesday.

The MBA's seasonally adjusted purchase index advanced 1.3 percent to 408.0, which was 6.4 percent below its year-ago level. The purchase index is considered a timely reading on U.S. home sales.

The group's seasonally adjusted refinancing application index grew 4.9 percent to 1,940.2, sending it 11 percent higher than a year earlier.

Four-week moving averages of these three readings, which smooth volatile weekly readings, were up 2.2 percent for the market index, 0.1 percent for the purchase index and 4 percent for the refinance index, according to the MBA.; January 31, 2007 5:56 PM
Anonymous said...: I don't mean to be a pessimist, but how on earth can we only drop 10 - 20% on housing for a bottom? I don't see how people can hold up these housing prices even if they drop by that much. I wouldn't be surprised if housing goes back to early 90's or even late 80's pricing. QUite honestly, I don't understand how people could have missed out on this dangerous bidding up of houses, and the debt fallout will be tremendous!

And a bailout? I don't see how Congress can bail out the flippers short of hyperinflation (which would lead to economic problems that NO one is able to handle at the federal or state level) or confiscation of property (given the political environment here, this would be a grave mistake).; January 31, 2007 6:31 PM
Anonymous said...: A nice reply, K. Indeed leverage use at the moment, by hedge funds & others, is considerable. The unwinding of that leverage should a meltdown (LTCM or some other type of disaster) could cause an avalanche. Your example, cited $100 million and just a portion of that. Do you think that's a fair application considering we're talking about figures in the trillions? Or, where would we be today if the derivative market wouldn't have been allowed to grow at such a rate (from $1 billion in 1988 to $400 trillion today)? How necessary is it for derivatives to be allowed to continue to grow at such a pace? For some derivative charts showing their growth, scroll down this link to "An Explosion in Derivatives".

http://www.oftwominds.
com/blog.html; January 31, 2007 7:10 PM
Anonymous said...: http://tinyurl.com/22ukl5

Median houshold income of home buyers in the US in 2006 was $72K. Median price was $215K.

This seems like a good ratio of income to pucrhase price to me and doesn't scream for a major decline in prices.; January 31, 2007 7:21 PM
Anonymous said...: Anon "January 31, 2007 3:10:27 AM"

Nope - married.
Renting a house for cheap.
Stress free.
with profit from sale in 2005 gaining 5% + interest.

I'd hope all the single guys that are wise enough to visit this blog know to stay away from the type of women who are completely clueless about the state of the housing market, and will judge a man on the property he "owns".

Anon "January 31, 2007 3:10:27 AM"

You have got to be a real estate agent. Shouldn't you be out selling houses/mortgages rather than trolling blogs?

Oh wait, that's right. Nobody is buying. Shouldn't you be looking for another job? You must be a go getter if you are up at "3:10:27 AM". Unless you are awake fixating on the fact that your meth addiction isn't getting fed because nobody is buying real estate.

Sorry Toots. I hear banks are hiring for help managing foreclosures. You might want to look into that job instead. At least you'll have a steady paycheck for the next couple of years.; January 31, 2007 7:56 PM
Anonymous said...: rdub,

I can only imagine the homely beast you must have wed.; January 31, 2007 9:06 PM
Anonymous said...: Anon "January 31, 2007 3:10:27 AM"

You have got to be a real estate agent. Shouldn't you be out selling houses/mortgages rather than trolling blogs?

Oh wait, that's right. Nobody is buying. Shouldn't you be looking for another job? You must be a go getter if you are up at "3:10:27 AM"

Idiot renter,

1. That timestamp is London. I live in the Pacific time zone, which you uneducated dolt is 8 hours behind London.

2. I'm not a real estate agent. Despite what you cretins believe, non-real estate agents also think you people are insane.; January 31, 2007 9:36 PM
Anonymous said...: LOL,

That is too funny...

I'll leave rock throwing to the anon's.

They've got more free time to think up clever insults and retorts anyway (when they should be looking for honest work).; January 31, 2007 9:36 PM
Anonymous said...: And a bailout? I don't see how Congress can bail out the flippers short of hyperinflation (which would lead to economic problems that NO one is able to handle at the federal or state level) or confiscation of property (given the political environment here, this would be a grave mistake).
++++++++++
I think the banks will be saved first; otherwise, the game is over. The finances of millions of individuals will hit the wall. I expect the bankruptcy bill will be amended shortly after the crash....; January 31, 2007 9:44 PM
Anonymous said...: Why don't you anon's at least use a clever moniker?

That way we can tell if we are being insulted by two different people, or just one person who can't come up with all their creative retorts in the same posting.

I now understand what you are saying though about the timestamp. Thank you for blessing me with my lesson for the day. It is appreciated.

"2. I'm not a real estate agent. Despite what you cretins believe, non-real estate agents also think you people are insane."

You must just be a worried home owner then. I don't blame you.
There is a lot to worry about.
If you're not nervous, then you're not paying attention.

If you weren't worried about your financial well being, you wouldn't be at this blog.

Unless you just get off on insulting strangers, then my bad - please continue.

Ok - I swear I'm done.; January 31, 2007 9:56 PM
Anonymous said...: More potential problems for cash strapped borrowers. Beware!!!

Kicking Them When they Are Down: Foreclosure Scammers
By Chris Robertson | bio
This week, the AP reports on efforts by eight state legislatures to stop a new wave of fraudsters who are targeting desperate homeowners facing foreclosure. These scam artists knock on doors, cold-call and post flyers in the neighborhood offering to "rescue" the homeowner from their lenders.

In reality, their "solutions" are worse than the homeowner’s problems. In the worst cases, the homeowner ends up not only losing their house but still owing their entire mortgage to the bank. In the best case, they give the "rescuer" a few hundred dollars, and then never hear from him again. Of course, these aren't petty theives stealing in the dark of night. These fraudsters work in plain sight and the courts even assist them by enforcing arcane contracts that the homeowners did not understand.

The opportunity for foreclosure fraudsters is now huge, given that the number of foreclosures nationwide has jumped 46% this year. (I, along with two co-authors, are now investigating the causes of this spike, using a survey of 2000 homeowners in four states.)

Our friends at the National Consumer Law Center have been leading on this foreclosure fraud issue for several years (see their report (pdf)). We at the Harvard Legal Services office have also developed a concise single-sheet guide for the homeowner facing foreclosure. I'd be happy to provide a copy upon request.

Below the fold: legislative solutions to the scammer problem.

In my view, one of the most egregious methods is to impersonate a government agency, by using an official-looking seal, name, and address, in order to draw a consumer into a position of trust. (For example, the NCLC exposes (PDF p. 55) one group that called itself the "United States Homeowners Protection Agency" and even used an address just down the street from the White House.) In a similar vein, I routinely receive mailings from the "National Student Loan Agency" trying to finagle me into refinancing. When it comes to stopping scammers, this is low-hanging fruit.

Then there are the “foreclosure rescuers” who swoop in to buy the house for cash “as-is.” (You may have seen advertisements on late-night TV offering to train these guys.) This is a ridiculously quick way for the “rescuer” to take tens of thousands of dollars of the homeowners’ equity. Given the present rules of our game, however, these investors arguably perform a worthwhile service – they offer financial liquidity that the homeowner desperately needs. (Though if you were to take the amount of profit that the investor makes and spread it over the amount of time before the house is flipped, in many cases it will be equivalent to a loan with thousands of percent interest.) Moreover, in many cases, the homeowners have better options available to them.

While states can (and should) implement policies to prevent this particular scam tactic or that scam tactic, it may be more worthwhile to try to address the fundamental problem. The problem is not just that some people are naïve, that some people are irresponsible, and that some people are evil. Rather, the problem is that the current process of foreclosure puts intense, artificial time-pressure on the homeowner, which culminates with a sheriff’s sale on the courthouse steps. Such a forced sale inevitably brings far less than the house is worth. The scammers thrive in the shadow cast by that ugly outcome.

Why not instead have a soft-landing law that allows homeowners to make an orderly process of divesting themselves of the house, paying off the loan, and preserving whatever equity they have? After all, the mortgage lender only has a right to recoup its security interest – it should not also have the right to destroy the homeowner’s equity (the portion of the house value beyond that security), by demanding an extremely fast sale. Instead, we need something like the automatic stay that kicks in during bankruptcy. It needs to be just long enough to allow an orderly sale, but without the expense and baggage that comes with a full-scale Chapter 13 petition. (Some people already use Chapter 13 for this purpose, but it is dramatic overkill.) This same stay could prevent the fraudsters from meddling, since any contracts concerning the property would be subject to review by a trustee. To fund this process and to create the right incentives, the trustee would get a small cut from the final sale.

Such a soft-landing provision would be good not only for the homeowner, but also for their neighbors. What do you think happens to your property value and for the quality of your neighborhood when the guy next door is forced out at a sheriffs' sale? Moreover, given the billions of dollars that the federal and local governments have invested to encourage home ownership -- through tax breaks, loan gaurantees, subsidies, etc -- it seems a little silly just to turn our backs when homeowners get in trouble.

login or register to post comments
Jan 30, 2007 -- 09:36 PM EST; January 31, 2007 11:56 PM
Anonymous said...: re anon 7:10
Thanks for the oftwominds link. From there I got to the BIS site and got their data on worldwide derivatives exposures for 1H2006.
www.bis.org/publ/otc_hy0611.pdf

I need to absorb this before I comment specifically. Generally:
1. I too think that we'll get a derivatives blowup and a worldwide financial crisis. Even if I reduce that notional amount by an order making it 40 trillion not 400 trillion, that's still a lot of trillions :-)
2. While I mentally reduce the contract exposure size by an order of magnitude down from the notional amount, I'm aware that the capital that supports this reduced exposure is still pitifully thin so the risk is still there.
3. The treasury points out that only a few institutions are engaged in derivatives. With concentration comes the issue of correlated risk. More off the wall, I wonder if we'll get closed loop deals like party A has counterparty B -> C -> D -> ... X -> A ! Life will get interesting then.
4.Something ELSE can incapacitate one of these few counterparty institution. I'm watching Nikko Cordial in Japan with interest. They've been fined, they been stopped from conducting biz.. sh*t they might even get delisted, they opened limit down yesterday in Japan ! WTF is going to happen there ?
THAT sort of event can cascade I reckon. But I can't demonstrate the "HOW" of this to my satisfaction. But now I have that BIS and treasury derivatives data I should be able to make more progress.

-K; February 01, 2007 12:00 AM
Anonymous said...: rdub said:

"Why don't you anon's at least use a clever moniker?"

You mean like this?; February 01, 2007 12:53 AM
Anonymous said...: Richard: I expect you to die off first, since you are a cheerleader for it.; February 01, 2007 1:55 AM
Anonymous said...: anon said:
I assume most of you flunkies are single men correct? Make that single men with no prospects. Good luck finding a woman worth having that will take a second look at you while living in an apartment.

"real men have debt"; February 01, 2007 2:31 AM
Out at the peak said...: I was just talking with my financing friend and he is really appaled how banks are now allowing for 7-10 year auto loans. He claims they are only doing that because it's the only way to keep vehicle prices high. Just based on that, he's worried about the economy because of the implications of that behavior (the low collateral in the later years of the loan, etc).

I tried to explain to him that that banking activity that is just one small thing that is going wrong that is making us a very bad debtors nation.; February 01, 2007 3:37 AM
Anonymous said...: Housing Wire has learned that Cleveland-based Deep Green Financial Inc., an online home equity lender, has shut its doors.

The company was founded in 2000 and originated more than $5 billion in home equity line facilities to more than 65,000 customers in 47 states.

Deep Green Bank Mortgage is a partner of Deep Green Financial, and Deep Green Financial is owned by Lightyear Capital.

The company provided consumer direct lending services through its website and through partners such as LendingTree, Priceline and Costco.

http://www.housingwire.com/
2007/01/31/deep-green-
latest-lender-to-
exit/#more-347; February 01, 2007 5:36 AM
Anonymous said...: The past week saw more consolidation in real estate finance.

EquiBanc Mortgage Corp., a nonprime wholesale lender owned by Wachovia Corp., shut down last week, the company said on its Web site.

Mandalay Mortgage notified its brokers that it has exited the nonprime wholesale mortgage business. A message on its Web site said no new loans will be funded after Jan. 31.

Millennium Bankshares Corp. announced it would wind down its mortgage operating subsidiaries. The chief executive said the company was concerned about earnings volatility in the mortgage sector.

http://www.rismedia.com/wp/
2007-01-30/mortgage-
consolidation-gains-steam-
speculations-rise-about-
acquisition-involving-
biggest-us-residential-
lender/

This Week saw more consolidation in real estate finance as
Cleveland-based Deep Green Financial shut its doors.

JPMorgan is putting $4.5 billion of subprime mortgages up for sale, and this week is not over yet.; February 01, 2007 7:08 AM
Anonymous said...: Fitch FRE places on rating watch negative.

The mortgages underlying the 'FRE' transactions were originated or acquired by Fremont Investment and Loan and are also serviced HomEq Servicing Corp.

Series 2005-FRE1, class M-10 is placed on Rating Watch Negative because of current trends in the relationship between serious delinquency (DQ) and credit enhancement.

This transaction has 7.51% of the current collateral balance in foreclosure (FC) and REO.; February 01, 2007 7:17 AM
Anonymous said...: Since July, when ABX indexes based on 20 sub-prime mortgage securitizations created in the first half of 2006 debuted, the annual cost of credit-default-swap protection on BBB bonds bought with contracts tied to one of the indexes has about doubled to more than 3 percentage points, according to Barclays.

The percentage of borrowers as of September who had fallen at least two months behind on sub-prime mortgages taken out last year was the highest ever, twice the average, according to data compiled by Zurich-based UBS AG. Credit-rating companies Standard & Poor's, Moody's Investors Service and Fitch Ratings have grown more skeptical about how the riskier loans will perform.

http://www.bloomberg.com/
apps/news?pid=20601103&sid
=aNoc4LFUSOKw&refer=us; February 01, 2007 7:25 AM
Anonymous said...: Doral Financial Corp. was downgraded last Friday by Standard & Poor's and Moody's Investors Service amid concern over mounting losses, liquidity issues, litigation and management turmoil.

The Caribbean is home to more than just sun and fun. Doral Financial is one of the leading mortgage banking institutions in Puerto Rico. The firm writes, buys, and sells mortgages on single-family residences and issues mortgage-backed securities for sale and investment.

It also purchases and sells the servicing rights to residential mortgage loans, construction loans, and loans secured by commercial real estate.

http://www.doralbankny.com/; February 01, 2007 7:37 AM
Anonymous said...: First Mariner lost $3.9 million in 4Q

First Mariner Bancorp's profits during the real estate boom has turned sour, resulting in increased set-asides for bad loans and contributing to a nearly $4 million fourth-quarter loss, the bank reported yesterday.

The bank boosted its reserve for delinquent mortgages by $4 million as it struggled to deal with the repurchase of loans it made last year, Hale said. He said loans made primarily in Northern Virginia were a source of trouble for the bank as rising interest rates and falling values slammed homeowners and real estate investors.

First Mariner issues mortgages and then sells them to financial firms, which have the option of sending the loans back within 90 days if they are deemed too risky.

"We think the worst will be about $30 million that could potentially come back to us," said Edwin F. Hale Sr., First Mariner's chairman and chief executive.

"We don't expect next year to be a great year for banks - any banks," Hale said. "It will be mediocre at best."

http://www.baltimoresun.com
/business/bal-bz.
mariner31jan31,0,3664298.
story?coll=bal-business-
headlines; February 01, 2007 7:48 AM
Anonymous said...: Bank of America to cut 550 jobs, 110 in Charlotte

Bank of America announced plans Wednesday to cut 550 jobs nationwide, including 110 in Charlotte, as part of its ongoing efforts to improve efficiency.

The nation's second-largest bank, which employs more than 203,000 people worldwide, will eliminate 250 positions in technology operations and 300 jobs in the treasury services unit, bank spokeswoman Shirley Norton said.

Technology operations has been trimmed in recent years as some functions were sent to a subsidiary in India.

www.myrtlebeachonline.com/
mld/myrtlebeachonline/news/
local/16591707.htm; February 01, 2007 7:58 AM
Anonymous said...: GSAMP MBS Classes Under Review

Five classes of GSAMP Trust series 2006-S3 mortgage-backed securities have been placed under review for possible downgrade by Moody's Investors Service.

The affected certificates are classes M-5, M-6, M-7, B-1, and B-2. Moody's said the actions were taken because credit enhancement is low given the projected losses on the underlying pool.

"The pool of mortgages has seen a spike in losses in recent months with high loss severity," the rating agency said. The transaction consists of subprime second-lien fixed-rate loans.

mortgageservicingnews.com/
plus/#1; February 01, 2007 8:09 AM
Anonymous said...: Moody's Downgrades Homestar ABS Class

Class M-5 of Homestar Mortgage Acceptance Corp. asset-backed pass-through certificates, series 2004-3, has been downgraded from Baa2 to Ba3 by Moody's Investors Service.

The downgrade was based on deteriorating credit enhancement, the rating agency said.; February 01, 2007 8:10 AM
Anonymous said...: CSFB MBS Class Downgraded

Class DB3 of CSFB Mortgage Securities Corp. mortgage pass-through certificates, series 2002-22 (groups 3 and 4), has been downgraded from B to C/DR6 by Fitch Ratings.; February 01, 2007 8:11 AM
Anonymous said...: Fitch Downgrades RALI Classes

Two classes of Residential Accredit Loan Inc. mortgage pass-through certificates have been downgraded by Fitch Ratings.

Class B-2 of series 2004-QS6 was downgraded from B to C/DR4, and class B-2 of series 2004-QS9 was downgraded from B to C/DR4.

In addition, Fitch upgraded nine classes in three RALI transactions and affirmed the ratings on 160 classes in 36 RALI deals.

Fitch attributed the downgrades to high delinquencies and losses.

The loans in the securitizations consist of 15- and 30-year fixed-rate mortgages extended to prime and alternative-A borrowers, primarily on one- to four-family residential properties.; February 01, 2007 8:13 AM
Anonymous said...: Reperforming Loan Classes Downgraded

Two certificates from Reperforming Loan REMIC Trust Certificates series 2003-R4 have been downgraded by Moody's Investors Service.

Class B-3 was downgraded from Ba2 to B2, and class B-4 was downgraded from B2 to Ca. Moody's also confirmed the rating on class B-2 of the transaction.

The downgrades were attributed to credit enhancement levels that are low in view of projected losses on the underlying pools.

The transaction consists of securitizations of reperforming loans insured by the Federal Housing Administration or guaranteed by the Department of Veterans Affairs, virtually all of which were repurchased from Ginnie Mae pools.

"Frequencies of loans into default appear to be significant for FHA/VA collateral, causing erosion in credit support," Moody's said.; February 01, 2007 8:15 AM
Anonymous said...: Kieth:

The housing crash is over- Emmitt Smith said he was going to buy all the vacant properties...; February 01, 2007 2:57 PM
Anonymous said...: Just had an real estate 'clerk' during a walk-thru ask me, "Do you think you would qualify"?

My exact response was, "Now your worrying if someone qualifies....is this something new"?

She said, "Well,standards for qualifying have changed due to too many people getting in over their heads"!

My response, "Well depending on how many sales you've had, you better hope I qualify huh"!; February 01, 2007 4:26 PM
Anonymous said...: LIES LIES LIES!!!

By Mary Umberger
February 1, 2007, 12:46 PM CST

A widely watched housing indicator edged higher in December, suggesting that the wilting real estate market has stabilized, according to the National Association of Realtors.

The Realtors' Pending Home Sales Index increased nearly 5 percent in December. It was at its highest level since June, though it was down 4.4 percent compared with December 2005.

The index measured 112.4 in December; an index of 100 is equal to the average level of contract activity in 2001, the first year of the survey. A home is listed as pending when a contract is signed but the transaction hasn't closed.; February 01, 2007 7:31 PM
Anonymous said...: DHI (D R HORTON) is up another 3.5% today, 15% YTD and 35% over the past 6 months.

DOW in record territory yet another day.

NASDAQ is up 2.4% YTD.

And you nutcases are talking about a global depression and a housing crash.

Ohhhhh Kaaaayy.; February 01, 2007 8:33 PM
Anonymous said...: Anon 12:01:33 1/31/07,

Please don't tease us. I can only think of a few better case scenarios. One ofcourse being.... All the jews from Europe and America being in israel at the time.; February 01, 2007 9:28 PM
Anonymous said...: Keith,

Here's the latest Olbermann video on Bush's claim of thwarting four "terrorist" plots. Apparantley he made this claim during his state of the jewnion address.

javascript:msnvDwd('00','25906c38-31c5-4036-a67b-594f3372f4fc','us','News_Comment - Analysis','c1149','msnbc','','16895809','Presidents and terrorism'); February 01, 2007 9:45 PM
Anonymous said...: "Out at the Peak said...
I was just talking with my financing friend and he is really appalled how banks are now allowing for 7-10 year auto loans."

I had to take my wife in for a routine required yearly physical today, so having a lot of time to kill I scouted a few dealerships for a new pickup. The old one (97'/96000m) I will ride till she drops, but why should I tell them!

Anyway, after getting some promo literature from one sales rep, AND deflecting his irrating but constant requests to know what kind of monthly payments I was aiming for (always pay cash, or have my own preapproved financing) I asked what incentives were
available!

At the end of his not very impressive spiel (not really much in the form of rebates and cash backs), he adds what I am sure he figured would be the clincher: up to 12 YEAR FINANCING if I go thru the dealer's bank/broker.

I wanted to laugh in his face so bad I think I hurt myself holding it in!
Even with ZERO financing, the heap will not be worth anything that is owed on it after 36 mos/3years. That’s how long I get my pre approved auto loans for from my bank!

I cringe to think how many refi dimwits are jumping on this for dealers to even have the balls to make the offer. Obviously a lot!

"Stupid is as stupid does"; February 02, 2007 3:13 AM
Anonymous said...: "I cringe to think how many refi dimwits are jumping on this for dealers to even have the balls to make the offer. Obviously a lot!"

Don't worry, soon there will be the 1,000 year loan. Of course your great, great, great, great, great, great, great, great, great, great, great, great, great, great, great, great, great, great, great, great, great, great, great, great, great, great, great, great, great, great, great, great, great, great, great, great, great, great, great, great, great, great, great, great, great, great, great, great, great, great, great, great, great-grandkids (all 5,278 of them) will be teased by their peers for still having to pay off the loan. All that will be left is the pleather (split 5,278 ways that ain't much.) Of course the lender will take the 1,000 years' of payments as income received now, and the CEO will say how great earnings are and how he deserves every cent of his exorbitant pay package.; February 02, 2007 6:20 AM
Anonymous said...: Uh oh! The con is up for the REIC! Back to the deep fryer jobs...

“It has been estimated that 90% of all people who obtained these ’stated’ income loans lied on their mortgage application about how much they made. On October 1, 2006, the IRS updated their capacity to respond to lenders’ requests verifying borrowers’ ’stated’ income. In short, what used to take months to respond to will now take two days. Inside of 48 hours, the ’stated’ income will be verified as false. How will these people qualify then?”

“According to RealtyTrac, lenders who foreclose on a property in Ohio get 57% of appraised value when they sell the property. That amounts to a 43% hit on principal!”; February 02, 2007 6:28 AM
Anonymous said...: ESCONDIDO: 122-unit D.R. Horton Paramount Condominiums four-alarm blaze, was an arson fire.

Police and fire investigators have determined that the Jan. 18 Paramount Condominiums blaze was either "recklessly" set, or caused by someone.

http://www.nctimes.com/
articles/2007/02/01/news/
top_stories/
01_21_821_31_07.txt

"Obviously DR Horton has the most to gain from this fire. Even if there is no insurance money, this project is effectively frozen and all subcontracts voided. When the market turns around, the project may again be pumped back to life, but Escondido will be stuck with a black hole at its center until or if that happens."; February 02, 2007 6:43 AM
Anonymous said...: “Higher-end homes will continue to stay off the market unless homeowners are desperate. Cole just handled the sale of a Birmingham home for more than $600,000 where the owner still had to bring nearly $80,000 to the closing to cover the shortfall in what he owed to the bank.”

“‘If buyers don’t buy now,’ says Cole, ‘they’ve got to be crazy.’”; February 02, 2007 6:48 AM
Anonymous said...: ala westchester chick and bernake real return of 1 percent above distorted inflation number fantasies, and political ny hack appologists citing a triple of real estate prices in 4 years rather than 65. the triple means triple yearly tax also, or why the great vampire state, became unlivable, in the "boom" economy wait till they prorate 2 years of taxes after it does not sell for 15 at 1/4 what value you pay taxes upon!; February 02, 2007 6:56 AM
Anonymous said...: Crazy not to buy?

“Some Pfizer employees are already meeting with Realtors about listing their homes, fearing a glut of houses in an already slow real estate market will drive prices down or make it difficult to sell their properties.”

“‘We do have a number of Pfizer clients who own two properties - they bought a home last year and haven’t sold their (other) home yet,’ said (realtor) Martin Bouma in Ann Arbor.”

“Bouma said the day the news broke, he had several non-Pfizer clients calling in a panic, wanting to lower their homes’ prices to sell it quickly before a perceived glut of Pfizer homes hit the market. ‘I said, ‘Take a deep breath and let’s keep this in perspective.’”; February 02, 2007 6:59 AM
Anonymous said...: There's always that waiter job.

One in seventy Californians now holds a real estate license, which means that one in seventy Californians weeps whenever the National Association of Realtors releases its monthly sales data.

In the month of December, for example, existing home sales in California tumbled 15% from the year before, continuing a dismal trend of falling sales volumes.

www.agorafinancial.com/
RudeAwakening/RAissues/
2007/JanFeb/RA013107.html; February 02, 2007 7:08 AM
Anonymous said...: Bank Losses Reflect Housing Slowdown

First Federal Bancshares of Arkansas announced fourth quarter losses of 25 percent.

"We see 2007 as a challenging year for the banking industry in Arkansas," said First Federal CEO Larry Brandt in their earnings release.

First Federal's nonperforming assets grew

"This (nonperforming assets) can be a problem for banks because the assets owned -- either real estate or loans -- are stagnant and earning them nothing," said Tim Tarvin, clinical law professor at the University of Arkansas. Tarvin teaches bankruptcy courses at the law school.

Increases of nonperforming loans are due primarily to the single-family speculative construction loans, the release said.

The bank said certain homebuilders were experiencing extended marketing time for the sale of speculative homes and inadequate cash flow to service the interest owed on loans.; February 02, 2007 7:45 AM
Anonymous said...: Those "stated income" loans always made me wonder WTF was going on. I remember the very first time I shopped for a mortgage online and there was an option whether I would document my income or just state it. I'm thinking, how would anyone give me a $300,000 loan without seeing some proof of whatI make, it just made no sense. I needed to show proof of income whenever I rented an apartment, yet a bank would give me a mortgage without?

Guess it wasn't such a good idea after all.; February 02, 2007 3:55 PM