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:

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Anonymous said...: Class:
What's wrong with this picture?

http://www.zillow.com/Charts.htm?
chartDuration=1year&zpid=61749484

How does a home jump $64K in price in one month? Looks like some serious cashback fraud action going on here.; February 02, 2007 4:03 PM
Anonymous said...: Just went to look at a condo in my neighborhood (around University of Florida, home of the Gators).

1250 sq. ft.
Asking price: $299,000
$240/sq. ft.

Two years ago, same location, same age, same builder:
1300 sq. ft.
Sold for $184,000
$140/sq. ft.

No housing bubble in Gainesville.; February 02, 2007 5:16 PM
Anonymous said...: lest we forget the frontrunning brokers and the concerted effort to keep jq public out of the mls pages, that tell price and locations and sometime pictures; February 02, 2007 6:49 PM
Anonymous said...: “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.’”
+++++++++++
Hmm....This is happening alreadey? We may have a housing bubble "panic" all over the country sooner than we think....; February 02, 2007 7:12 PM
Anonymous said...: in the dust bowl depression the okies voted with their feet and went to affordable ??!!! california (does not account for heating and cooling expenses (0$ POSSIBLE) or food as fruit$; February 02, 2007 7:15 PM
Anonymous said...: or the screwey inflation numbers that do not account for food,(hamburger from 99 cents a pound to a rare low of 1.99 a lb, or fuel and energy,(gasoline from 99 centsgal in 01 to 2.35 today or heatings , insurances, healthcare, or the double in house prices, thus rents and taxes, all not accounted for, yes the economic numbers say all is well and expect more of the same!!!???; February 02, 2007 7:21 PM
Anonymous said...: in, of and at secular long term bear market in interest rates!!??; February 02, 2007 7:23 PM
Anonymous said...: Just went to look at a condo in my neighborhood (around University of Florida, home of the Gators).

What's the discrepency between between what the mortgage payments would be and what the current rental price is?

Any sub-prime lenders still in business in Gainesville?; February 02, 2007 7:31 PM
Anonymous said...: Am I the only one who finds that "Slade" character, the mortgage broker wannabe, from the program "Housewives", the most obnoxious and pretentious person ever? Man, how I want to see that guy get screwed on this housing bust. What about all those other materialistic women from the program...from which planet those people come from? I just can't stand those phonies!; February 02, 2007 10:13 PM
Michael Burke said...: Real estate in the Jesey Shore area is starting to show promise. There are several towns that are still affordable for the working class and are moving in the rightdirection. I am exited about what the next year or two has to offer!!!; February 02, 2007 11:49 PM
Anonymous said...: Good article about appraisers under the gun to keep values up.

Pressure mounts on appraisers to inflate values, poll finds
Originally published February 2, 2007

With home prices softening and sales volumes sagging in many local markets, real estate appraisers say that pressure on them to inflate values has reached pandemic proportions.

A new survey of the national appraisal industry found that 90 percent of appraisers reported that mortgage brokers, realty agents, lenders and even consumers have pressured them to raise property valuations to enable deals to go through. That percentage is up sharply from a parallel survey conducted in 2003, when 55 percent of appraisers reported attempts to influence their findings and 45 percent reported "never." Now the latter category is down to just 10 percent.

Both surveys were conducted by October Research Corp., a Richfield, Ohio, firm that publishes Valuation Review, a popular industry newsletter. The latest survey involved 1,200 appraisers representing a statistical cross-section of the industry in 50 states, the District of Columbia and Puerto Rico. The results have a margin of error of 2.8 percent.

"I call it a perfect storm scenario," said Alan Hummel, senior vice president of Forsythe Appraisals of St. Paul, Minn., one of the largest property valuation firms in the country with 40 offices and 190 licensed appraisers. Forsythe was a co-sponsor of the new research study.

"You've got a situation where sales are down so everybody in the deal needs it to go through" at the contract price - the mortgage broker, the Realtor, the lender, and even individual sellers.

Loan brokers are now routinely "dialing for values," said Hummel. "They call up appraisers and say, we've got this sale at $335,000 at such and such an address. Can you get to that number?" If an appraiser answers yes, he or she gets the assignment. If not, the appraiser is bypassed.

Worse yet, said Hummel, when an appraiser comes back with a market value estimate that is lower than the sales contract price, the appraiser may not get paid for the work, and frequently is blackballed by the mortgage broker or realty agent.

The survey found that 75 percent of appraisers reported "negative ramifications" if they refused to cooperate and come in with a higher valuation. Sixty-eight percent said they lost the client - typically a mortgage broker or lender - after their refusal to fudge the numbers, and 45 percent reported not being paid.

Hummel said realty agents may retaliate against noncooperative appraisers by telling local mortgage brokers or lenders, "Look, I'm not sending any more [home purchaser] clients to you if you continue to use that appraiser."

Though mortgage brokers were ranked the most common source of pressure - 71 percent of appraisers said brokers had sought to interfere with their work - realty agents came in a close second at 56 percent.

Both numbers were up significantly from where they were in the 2003 survey. Also identified as sources of pressure were consumers - typically home sellers (35 percent), mortgage lenders (33 percent) and appraisal management companies (25 percent).

Mortgage brokers represent the biggest problem, said Hummel, because they are generally lightly regulated at the state level, often wield the power to bestow or withhold appraisal assignments at the application stage, and ultimately "if the deal goes south two years from now, they're long gone" from the transaction.

On the other hand, lenders, including banks and mortgage banking companies, "have more skin in the game" - they are more intensely regulated and can be forced by bond market investors to "buy back" defaulting mortgages that have inflated appraisals or other defects.

Hummel emphasized that the responsibility for the problem of pressure rests not only with loan brokers, realty agents and lenders, but with the appraisal industry itself. Large numbers of newcomers with inadequate training and little experience flocked into the appraisal field in recent years - drawn by high housing sales volumes and constantly escalating prices.

Now that sales are down, said Hummel, "you've got more appraisers out there who think, gee, if I don't [cooperate], maybe I'm not going to get any more work." The vast majority of appraisers resist the pressure they receive - from any source - and simply refuse to submit valuations they know to be inflated, he added.

Bottom line in Hummel's view: Congress needs to enact legislation making pressuring appraisers to distort their valuations, or interfering with appraisals in any way, a federal offense, subject to criminal penalties. And state regulators need to step up enforcement against fraudulent appraisals, pressure tactics and appraisers who give in.; February 02, 2007 11:57 PM
Anonymous said...: hamburger from 99 cents a pound to a rare low of 1.99 a lb

Another tell of the low income nature of the socialist HP renter. Tell me do you also use coupons to get that $1.99 down to $1.79?

Talk about low end.; February 03, 2007 12:02 AM
Anonymous said...: jealous you can't have his lifestyle? you're right living in a 1 bed / 1 bath is way better than an OC gated mansion; February 03, 2007 12:04 AM
Anonymous said...: Would someone please tell me why people continue to buy real estate in Florida? If it's not hurricanes, it's tornadoes:

http://news.yahoo.com/s/ap/20070202/ap_on_re_us/severe_weather

LADY LAKE, Fla. - Disaster crews with dogs went from one pile of debris to another in a search for bodies Friday after powerful storms, including at least one tornado, smashed hundreds of homes across central Florida and killed 19 people or more.

It was the deadliest combination of thunderstorms and tornados to hit Florida in nearly a decade, cutting a 40-mile swath of destruction across four counties just before daybreak, terrorizing residents of one of the nation's biggest retirement communities, and leaving trees and fields littered with clothes, furniture and splintered lumber.; February 03, 2007 12:17 AM
Anonymous said...: Sh*t kickin' story:

http://www.itulip.com/
forums/showthread.php?t=883; February 03, 2007 1:40 AM
Anonymous said...: “With home prices softening and sales volumes sagging in many local markets, real estate appraisers say that pressure on them to inflate values has reached pandemic proportions. A new survey of the national appraisal industry found that 90 percent of appraisers reported that mortgage brokers, realty agents, lenders and even consumers have pressured them to raise property valuations to enable deals to go through.”

“‘I call it a perfect storm scenario,’ said Alan Hummel, senior VP of one of the largest property valuation firms in the country. ‘You’ve got a situation where sales are down so everybody in the deal needs it to go through’ at the contract price - the mortgage broker, the Realtor, the lender, and even individual sellers.”; February 03, 2007 3:45 AM
Anonymous said...: “Tony Hughes, economist at Moody’s Economy.com, told the conference: ‘There’s a chance that the commercial banking sector is acutely at risk if there’s a blow up in housing.’”

uh, that might mean Chase, Citibank, Bank of America...; February 03, 2007 4:04 AM
Robert said...: re: stated loans.

Self employed. I just bought a house last summer. Because my FICO score was over 800, the bank said stated or tax returns made no difference on the rate I would get. I should ask whether that is still true.

On another topic, I chickened out of building a much nicer house. Good idea since I could not sell my old house for what I wanted and am now renting it out.

My new house lets me walk to work. Loving it.; February 03, 2007 4:29 AM
Anonymous said...: Finally someone's looking at some hard time!

“A Brandon mortgage broker and his longtime friend face felony charges stemming from allegations he defrauded dozens of elderly residents and corporate lenders out of more than $408,000.”

“Authorities arrested Michael W. Danish on Thursday morning at his home. He remained at Orient Road Jail late Thursday with bail set at $500,000. Investigators said that between 2002 and 2004, Danish bilked more than 40 victims with the help of Donna Whitlock, a Tampa title agent.”

“Investigators said Danish targeted elderly, naive borrowers. He filled out loan papers supplied by Whitlock, who notarized loan documents without the borrowers present, investigators said.”

“Joseph Wilson, a financial crimes investigator with the Florida Office of Financial Regulation, said Whitlock told him she knew the practice was illegal but Danish asked her for a favor. It was ‘common business practice for people you know,’ Wilson said she told him.”

“If convicted, Danish and Whitlock each face up to 65 years in prison and $825,000 in fines.”; February 03, 2007 4:35 AM
Anonymous said...: Good God! In one comment Ed might have surpassed David Learah:

“Lenders and brokers defended the creative loans, noting that they have helped hundreds of thousands of families own their own homes. ‘The problem is that many consumers have not prepared an exit strategy,’ said Ed Smith Jr., CEO of Plaza Financial Group Inc. of San Diego.”

Hmmm.... had they been bright enough to forsee an exit strategy may be necessary, then they probably wouldn't have taken you up on your mortgage products, Ed. But then that wouldn't have meant a sale/commissions/fees, etc., which I'm sure were your motivations.; February 03, 2007 4:48 AM
Anonymous said...: California's 2006 foreclosure rate of one foreclosure filing for every 86 households -- or 1.2 percent of households -- ranked 14th among the states.

Stockton in the Central Valley was ranked as the city having the nation’s 11th largest ratio of the number of foreclosures to total housing stock in 2006, according to Realty Trac.

Its figures show there were 5,153 homes that went into the foreclosure process in Stockton last year. That works out to one for every 37 homes.

Other Central Valley cities tracked were Sacramento, ranked 32nd in the nation with 10,637 homes in foreclosure last year, or one for every 61 homes.

Fresno ranked 39th in the nation with 3,673 homes in foreclosure or one for every 74 homes.

Bakersfield was ranked 42nd. It saw 2,964 homes going into foreclosure in 2006, or one for every 78 homes.

http://www.centralvalley
businesstimes.com/stories/
001/?ID=4177; February 03, 2007 6:03 AM
Anonymous said...: U.S. blue-chips eased on Friday after data showing moderate job creation in January suggested the Federal Reserve will not cut interest rates

Mortgage giant Freddie Mac reported that 30-year, fixed-rate mortgages averaged 6.34 percent this week, up from 6.25 percent last week. It was the fourth consecutive weekly increase and pushed these mortgages to the highest level since they were at 6.40 percent the week of Oct. 26.; February 03, 2007 6:21 AM
Anonymous said...: Bubble, Bubble, Toil, and Trouble

The rapid rise of real estate prices in recent years has led to fears of a housing price bubble.

But, to determine whether there has been a bubble–and whether the bubble is bursting–one needs to know what home prices “should” be.

The authors estimate a simple model of home prices and find that prices were, on average, above their predicted levels during 2000–06.; February 03, 2007 6:25 AM
Anonymous said...: Ever figure out why, that when you find mls listings they do not include addresses, or were you being front ran on price, id refuse to deal with those people, as i find the prices being unfavorably altered against ones benifit, and that happens whenever the public access is hindered; February 03, 2007 6:57 AM
Robert said...: re: homebuilder stock. Most of these are still down significantly from their highs of a year ago.

There is some (IMHO reasonable) speculation that the downturn will lead to some consolidation. Since the industry is fragmented, consolidation should lead to higher valuation. A lot of the recent losses by home builders are caused by them writing down bare land or exiting from option agreements and writing those down. For example, the one I own, HOV, wrote down $350 million in land last quarter. They think that will be their only write down this cycle. Since homebuilders have low fixed costs (eveything is subbed out), they can weather a downturn relatively well with a little cash in the bank.

Further supporting the consolidation argument: as they reduce starts and sell inventory, they will build cash.

As a boomer, I've seen this housing cycle before. I was in Colorado Spring when it was the foreclosure capital of the country.; February 03, 2007 3:52 PM
Robert said...: A little more perspective. I think that the 80's real estate crash was worse than this one will be because it was so much more widespread. Reagan was wringing stagflation out of the economy and it was brutal. As I mentioned in another post, Colorado Spring (with infinite land to build on) was the foreclosure capital of the country in the late 80s because of the defense draw-down.

Clearly, certain areas are in for a rough ride. SoCal etc because housing is not affordable and the industrial heartland because of job losses. Here in Omaha, jobs are plentifull. In part because people do not want to move here. Because of that, I make more here than I could in the Springs or even SoCal.

Housing is very affordable. Omaha is overbuilt right now, so it is a buyers market, but prices are relatively stable bacause they run so close to the actual cost of building a house.

One thing to keep in mind in overbuilt areas, and I expect to see this in Omaha, is that the boom cycle of building is followed by a magnified bust as the construction trades go without work.

One interesting factor in this bust cycle is that many of the construction workers can go back to Mexico and live in that lower cost area until the jobs come back. It will have a depressive effect on the local economy. But it will not show up in the social service accounts or unemployment numbers like the last construction bust did since so many of those jobs are off the books.; February 03, 2007 4:15 PM
Robert said...: Another one:

Some perspective re the dot.com bust. In 1996 I left my comfortable aerospace job in Colorado Springs to work a startup in Denver. In 1998 we merged with a well funded start-up in Seattle and moved there. Three years later, I inherited the remnants of that business as the techie who could keep the software going. This was April 2001. It was a travel internet software/call center package. 9/11 eviscerated that segment of the market and customer after customer closed their call center. Competing products are offered from places like China and Sri Lanka. So now I am back in defense work making what five years ago would have seemed like an amazing of amount money. Since I was working in a dot.com and had a bunch of shares and a few options, I did not invest in dot.com stocks. So my 401K dropped about 20% from its high and fully recovered by 2003. Note that the high my investments saw was lower than that seen by those chasing the dot.com stocks, so the down-side was limited. As a boomer, I built that 401K over a number of years.

This web site and others has the flavor of f*ckedcompany.com. (which I followed closely in the dot.com days).

Similarly, I have a set of single family real-estate investments in central Oregon and Colorado Springs. At the depth of the dot-bust, we had to sell the Seattle area house. These have seen what I believe to be slightly excessive increases over the last few years. I think we can count on a 3-5% real rate of return on single family housing. Anything more than that is gravy. If you cannot make your payment with the rental income (with 20% down) then it is likely a bad investment. So, even if they go down by 20%, it is not a big deal to me. Been there, done that kind of a thing. The key thing is to buy after the bust and not get caught up in the speculative frenzy. I believe that a lot of investors like me will move into the frenzied markets and buy distressed properties at a price that allows them to rent them out and make the payment. If the market does not get there, then IMHO, I believe that it will continue to be stressed and suffer downward price pressure. There is a message for renters here: if you are in one of the unaffordable (because of speculation-not job loss) areas, then prices will eventually come down and at least touch the rental-equivalance line (or get close). That is the time to buy. OTOH, if you are a J2EE developer with struts and Flex experience, maybe you want to come to Omaha and buy now. Did I mention that I walk to work?

One thing that renters may not realize is that, if you get in at the right time, have a good interest rate, itemize deductions, and keep it for 5 years, you almost live for free. That is because of the 3-5% real rate of appreciation in the underlying asset (3-5% is higher in those areas with land use restrictions which includes many of the superheated markets right now). As an inverstor, since we own in nice areas, after retirement, we can move into each of the properties, live there for two years doing the home improvement thing and then sell them and not pay capital gains. If you are in for an even longer term, then lock in todays rental pricing for the duration of your ownership of the home. For example, our CSP houses rent for 20% more now than they did 9 years ago, BUT THE MORTGAGE PAYMENT IS STILL THE SAME. In 6 years, the mortgage payment will be 0, but the rental income will be up another 10%.

I do believe we will have a nation-wide correction in the specualtive areas (SoCal, Miami, Las Vegas etc) and the overbuilt areas (Omaha, others?) but that sellers will hang on for most of 2007 before surrendering. After huge numbers of sub-prime loans go into foreclosure, the housing will drop, and in some cases crash in price. That is the time to buy. Be saving up your down payments, look for quality properties and go with conventional financing, even if it is a 40 year mortgage! As a boomer (53) I am a big fan of 15 year mortgages. Younger folks in for the long haul can go longer term. Ands always, always, always be saving up your next down payment. I have almost $400K of equity in real estate and drive a 10 year old car with 130K miles on it.; February 03, 2007 5:02 PM
Anonymous said...: anon said:
Ever figure out why, that when you find mls listings they do not include addresses, or were you being front ran on price, id refuse to deal with those people, as i find the prices being unfavorably altered against ones benifit, and that happens whenever the public access is hindered

----------------------------------
Right On!..
i'm a RE investor and avoid doing business with Realtors, not only because of the unnecessary middleman expense / overhead, but to a large degree for the precise reason you mention..
Wouldn’t it be cool if we can start a little revolution and everyone that reads this blog to only respond to ads with addresses?.
Rule, no address no ringing phones!; February 03, 2007 8:48 PM
Anonymous said...: what's up with aunt hilary getting in on the real estate business? she announces her candidacy, and one of the first things she does is make sure banks cant get into the business? the NAR is something like her 4th biggest contributor, while private banks are 12th or something..; February 03, 2007 10:48 PM
FlyingMonkeyWarrior said...: This is almost as funny as the Jamba Juice Fart Comment I posted on the Casey pan handle thread!
I hope you LOL too, dear HPers.
iw

The Dumbing Down Of
America - Courtroom Testimony
2-2-7

These are things people actually said in court, word for word, taken down and now published by court reporters who had the torment of staying calm and quiet while these exchanges were actually taking place.

ATTORNEY : When is your birthday?
WITNESS : July 18th.
ATTORNEY : What year?
WITNESS : Every year.
____________________________________

ATTORNEY : What gear were you in at the moment of the impact?
WITNESS : Gucci sweats and Reeboks.
_____________________________________

ATTORNEY : This myasthenia gravis, does it affect your memory at all?
WITNESS : Yes.
ATTORNEY : And in what ways does it affect your memory?
WITNESS : I forget.
ATTORNEY : You forget? Can you give us an example of something you forgot?
___________________________________

ATTORNEY : How old is your son, the one living with you?
WITNESS : Thirty-eight or thirty-five, I can't remember which.
ATTORNEY : How long has he lived with you?
WITNESS : Forty-five years.
_____________________________________

ATTORNEY : Are you sexually active?
WITNESS : No, I just lie there.
_____________________________________________

ATTORNEY : What was the first thing your husband said to you that morning?
WITNESS : He said, "Where am I, Cathy?"
ATTORNEY : And why did that upset you?
WITNESS : My name is Susan.
______________________________________

ATTORNEY : Do you know if your daughter has ever been involved in voodoo?
WITNESS : We both do.
ATTORNEY : Voodoo?
WITNESS : We do.
ATTORNEY : You do?
WITNESS : Yes, voodoo.
______________________________________

ATTORNEY : Now doctor, isn't it true that when a person dies in his sleep, he doesn't know about it until the next morning?
WITNESS : Did you actually pass the bar exam?
___________________________________

ATTORNEY : The youngest son, the twenty-one year-old, how old is he?
WITNESS : Uh, he's twenty-one.
________________________________________

ATTORNEY : Were you present when your picture was taken?
WITNESS : Would you repeat the question?
______________________________________

ATTORNEY : So the date of conception of the baby was August 8th?
WITNESS : Yes.
ATTORNEY : And what were you doing at that time?
WITNESS : Uh....
_____________________________________

ATTORNEY : She had three children, right?
WITNESS : Yes.
ATTORNEY : How many were boys?
WITNESS : None.
ATTORNEY : Were there any girls?
______________________________________

ATTORNEY : How was your first marriage terminated?
WITNESS : By death.
ATTORNEY : And by whose death was it terminated?
______________________________________

ATTORNEY : Can you describe the individual?
WITNESS : He was about medium height and had a beard.
ATTORNEY : Was this a male or a female?
______________________________________

ATTORNEY : Is your appearance here this morning pursuant to a deposition notice which I sent to your attorney?
WITNESS : No, this is how I dress when I go to work.
______________________________________

ATTORNEY : Doctor, how many of your autopsies have you performed on dead people?
WITNESS : All my autopsies are performed on dead people.
______________________________________

ATTORNEY : ALL your responses MUST be oral, OK? What school did you go to?
WITNESS : Oral.
______________________________________

ATTORNEY : Do you recall the time that you examined the body?
WITNESS : The autopsy started around 8:30 pm.
ATTORNEY : And Mr. Denton was dead at the time?
WITNESS : No, he was sitting on the table wondering why I was doing an autopsy on him!
______________________________________

ATTORNEY : Are you qualified to give a urine sample?
WITNESS : Huh?
______________________________________

As for the last!!!
ATTORNEY : Doctor, before you performed the autopsy, did you check for a pulse?
WITNESS : No.
ATTORNEY : Did you check for blood pressure?
WITNESS : No.
ATTORNEY : Did you check for breathing?
WITNESS : No.
ATTORNEY : So, then it is possible that the patient was alive when you began the autopsy?
WITNESS : No.
ATTORNEY : How can you be so sure, Doctor?
WITNESS : Because his brain was sitting on my desk in a jar.
ATTORNEY : But could the patient have still been alive, nevertheless?
WITNESS : Yes, it is possible that he could have been alive and practicing law.; February 04, 2007 12:37 AM
Anonymous said...: Would someone please explain to me about the viability of mutual funds? I mean, if my mutual fund goes under, does that mean my short-term Treasuries account with it also disappears in the bankruptcy? Just wondering....; February 04, 2007 4:48 AM
Anonymous said...: Robert,

I spent 3 months in Omaha on a project back in 2001. Decent town but I can se why nobody wants to move there...B-O-R-I-N-G!! And cold too.

J2EE developer jobs? Lots of money? Shortgae? HUH? According to the nutjobs here and their fello morons in the Democrat party the only jobs left in America are burger flipping jobs. All tech jobs are in India or China. What gives?

And what's up with the 10 year old 130K car? This seems to be a rite of passage into HPworld. I've read of bragging rights over a 20 year old Ranger pick-up here. It's like some perverse reversal of LA where everyone tries to show off their new car, instead here you show off your shitmobile.; February 04, 2007 3:56 PM
Anonymous said...: A "sudden and swift" decline in new-home demand caused profits for Standard Pacific Homes to plummet 72 percent in 2006, with the company racking up $98 million in losses during the final three months of the year.

"Our bottom line results fell far short of our expectations for the year," Chairman and CEO Stephen Scarborough said in a company statement.

"The sudden and swift decline in demand in most of the major housing markets across the country last year gave rise to significant price reductions and incentives to move inventory."

http://www.ocregister.com/
ocregister/money/homepage/
article_1562254.php; February 04, 2007 6:08 PM
Anonymous said...: Has the housing market reach Bottom Yet?

Standard Pacific Homes of Irvine, Calif. one of the largest national homebuilders with 14 communities in Colorado reported huge losses for the fourth quarter of 2006.

Though the picture was gloomy for Standard Pacific's Colorado division, the situation was even worse in the company's other large markets: Florida, Arizona, California and Texas.

In Arizona, orders were down 80 percent for the fourth quarter. In Texas orders were down 30 percent.

charlotte.bizjournals.com/
denver/stories/2007/01/29/
daily43.html; February 04, 2007 6:17 PM
Anonymous said...: Standard Pacific Corp. says it will sell six homes in an Elk Grove development by auction next month.

It’s believed to be the first time during the current housing slump that a new home builder has resorted to auctioning off its homes. The practice was common during previous housing slides.

http://www.centralvalley
businesstimes.com/stories/
001/?ID=4147; February 04, 2007 6:24 PM
Anonymous said...: Auction capitalizes on housing surplus because "People think there's a deal"

Is there a deal or is it just another tactic used in desperate time?

Valley home sellers frustrated by a lack of action on their listings will soon have another selling tool: the auction block.

More than 100 homes are expected to go up for bid in a mass housing sale set for next month in downtown Phoenix.

Housing auctions, popular during the economic downturn in the early 1990s, are re-emerging as sellers look for different ways to make their home stand out from competing listings. In the Valley, more than 40,000 resale homes are on the market, 10,000 to 15,000 more than historic inventory.

The Scottsdale-based company is trying to collect 125 to 200 houses with prices ranging from the $100,000s to multimillions in the first of what it hopes will be a regular series.

http://www.azcentral.com/
arizonarepublic/news/
articles/
0202auction0202.html; February 04, 2007 6:39 PM
Anonymous said...: Greed and Fear rule as Bargain Investors buy back into home builder stocks, but are Growth Investors going to stay?

During the nation's multiyear housing boom, when the real-estate world captivated investors, it seemed as though the shares in the sector moved in only one direction: up.

Yet the stocks peaked in the summer of 2006, when the market finally ran out of steam and nervous investors rushed for the exits.

Most builders were caught flat-footed by a pullback that's been anything but gradual. Companies have been wrestling with an evaporation of speculative demand, buyers spooked by the market's shaky direction and a glut of unsold homes.

During the go-go years, many builders engaged in off-balance sheet joint ventures to bolster land positions.

But in recent months they've bounced back as the industry has hoped against hope that the worst is behind it.

How can builders continue to cut their production when bargain investors are buying back builders stocks?

For a builder cutting production could means less revenue, which is something Growth Investors are not looking for.; February 04, 2007 7:26 PM
Anonymous said...: Real estate auctions at an auction house, just like foreclosure auctions on the courthouse steps, are by and large a waste of time for the bidder. You are NOT going to get any bargains, and the higher the "buy it now" price, and the more outrageous the appraisal of value by the seller, the higher the final bid will be.

Why? Its called shilling. That’s where the seller has a legal representative, (or even himself/herself if its not illegal in that state,) as a "shill". The shill's job is to drive the bid up to a pre-determined price,(if there is not already a reserve price,) and then let it go. Bid doesn't go high enough, the seller, through the shill, retains possession. Foreclosing banks do it all the time up at the courthouse.
The last time I was at a tax foreclosure sale, of the over 1600 properties up for sale, only 6 got any bids by the time they got to number 906(the one I was interested in, I lost, I left.).

Auctioneers typically charge a flat rate for a real estate auction vs. the 10-35% cut they get for household-antiques-cars, etc. Kinda like Ebay. It’s a lot cheaper to retain control of your possession by shilling, and still "feel the waters", so to speak.

Bottom line, don't waste your time! We have a long way to go before desirable properties will be absolutely and honestly let go at auction. The owner will have to be dead, and the bank failed for that to happen.; February 04, 2007 7:48 PM
Anonymous said...: Catch 22

If home builders do not cut thier production then they will need to continue to offer more incentives to new home buyers.

This in turn will give more competition to the current home speculators who have brought homes in recent years.

As the glut of new homes continue to raise so will the glut of resale homes.

In turn these resale homes will become foreclosured homes which could lead to a glut of foreclosure auctions homes.

The catch 22 is these foreclosure auction homes will then be able to compete with the best incentive home builders can provide.

Not like the fake current homes auction taking place today, these glut of foreclosure auction homes will be sold for pennies to the dollar.; February 04, 2007 7:50 PM
Anonymous said...: Why it's different this time...

Part one - geopolitical effects, the nature of employment and the U.S. economy.; February 04, 2007 8:36 PM
Anonymous said...: Standards for home loans are changing

Thanks to relaxed lending standards, in recent years borrowers with bad credit -- such as a bankruptcy or a delinquent loan on their record -- found it relatively easy to get home mortgages.

Such "subprime" borrowers generally have to fork over higher interest payments to compensate the lender for the added risk of default they represent. So lots of subprime borrowers kept their house payments lower by taking out exotic mortgages such as adjustable-rate, interest-only, or negative-amortization mortgages.

Now, with interest rates and home foreclosures rising, the lending industry is dealing with the fallout of its creativity.

Some mortgage companies have gone under.

And, would-be homebuyers with blemished credit records are finding buying a house has become more difficult and more expensive.

http://www.belleville.com/
mld/belleville/business/
16614337.htm; February 04, 2007 9:11 PM
Anonymous said...: The following data does not support Federal Reserve cutting interest rate by end of 2007 if the job numbers continue to be revised upward.

December was revised upwards to a very respectable 206,000 (from 167,000), while November was upwardly revised to 196,000 (from 154,000).

Revisions showed the country added 410,000 more jobs last year than previously thought.

The forecast had been for jobs to grow by 150,000 in January, but January number was came in at 110,000.

How could the job numbers come in so low during critical time when the market was watching for the job numbers then revised higher when the market forgot about the previous months job numbers?; February 04, 2007 10:01 PM
Anonymous said...: Last Anon,

You're right in that some standards are changing, namely subprime loans. But other products will soon fill that void.

Nigel; February 04, 2007 10:16 PM
Anonymous said...: Comissions job are not counted in the Job numbers.

Loan Volume Decline Equals More Pink Slips

The Bureau of Labor Statistics reported Friday; employment in the mortgage finance industry fell to 494,700, which is lower than one month and one year earlier.

Based on a report also released on Friday, the Mortgage Bankers Association (MBA) projected the number of mortgage originations this year will fall once again.

Based on this trend it is likely that a record number of originators will be forced out of the mortgage origination field in 2007.

According to the MBA’s report mortgage volume will continue to decline throughout 2008. “Total originations in 2007 are projected to decline by about 5 percent to $2.39 trillion from an estimated $2.51 trillion in 2006.

They should decline by an additional 4 percent to $2.29 trillion in 2008,” the report said.

The report also indicated that refinance volume should be hit the hardest; “the end of 2006 pickup in refinance activity reflects borrowers paying off ARM loans that either had already or were about to reset to higher payments,” and therefore is unlikely to continue throughout 2007.

http://originatortimes.com/
content/templates/standard.
aspx?articleid=
2283&zoneid=1; February 04, 2007 10:28 PM
Anonymous said...: Consider a hypothetical North County home buyer, Karl, who purchased a $550,000 home in 2004, with 10 percent down and a $500,000 adjustable-rate mortgage. With an initial interest rate of 4 percent, his monthly payment was $2,387. But as rates marched upward, his mortgage interest rate has risen to 6 percent, or $2,998 per month, an increase of 25 percent.

Karl, unfortunately, is not alone.

The popularity of adjustable-rate mortgages has increased dramatically. In 2001, ARMs represented about 12 percent of all mortgages, according to national mortgage buyer Freddie Mac. But in 2004, the figure had risen to 33 percent. Last year, it dropped to 28 percent.

In California, borrowers flocked to them. In 2005, roughly 60 percent of all the mortgages taken out in the state were ARMs, according to research from First American Real Estate Solutions, a real estate research company.

That means that millions of homeowners are facing increased monthly mortgage payments.

As much as $1.5 trillion in adjustable-rate loans nationwide could "reset," or readjust, this year, according to the Mortgage Brokers Association in Washington, D.C. Of that figure, the association said as much as $800 billion will reset into higher payments.

http://www.nctimes.com/
articles/2007/02/04/
business/news/
14_08_092_3_07.txt; February 04, 2007 10:44 PM
Anonymous said...: I see people that bought many years ago and they have done well. The problem is they have re-invested all their profits into more real estate and now are starting to see their wealth deteriorate.

One example is a neighbor of mine bought a house in San Diego County in the late 1980's for $140K. They paid off their mortgage over about 15 years and were living free and clear.

Then, in 2004 when they saw major appreciation on their house, they sold it for about $600K and used that money for a down payment on a $1.4 million McMansion.

That is great and all, but they went from having zero mortgage to having an $800K mortgage, which they can barely afford since they are retired.

http://forums.craigslist.org/?ID=57355545; February 05, 2007 12:32 AM
Miss Goldbug said...: To my shock and amazement, I heard today on TV that last month the government passed a law that PMI is now tax deductable. Has anyone else ever heard this? I dont know if its true or not.

If true, this is big news and the Feds know the housing gravy train is now toast and can see the train wreck before their eyes.

Anyone else have any info on this development?; February 05, 2007 3:11 AM
Anonymous said...: A chart from 1956 to 2006 that showing that more homes are sitting empty then before.

It blows the theory that the run up in housing price in the past five years were due to increase in population.

http://interestrateroundup.
blogspot.com/2007/01/
empty-homes-everywhere.html; February 05, 2007 3:23 AM
Anonymous said...: FMW.....outstanding post!!!!

Lawyer jokes, it's just too easy!; February 05, 2007 3:57 AM
Anonymous said...: Brokers responding to a survey conducted by Campbell Communications say they submit 50 percent of their subprime Form 1003 applications by fax or on paper, mainly because many of the lenders they work with don’t accept electronic submissions.

WIRE FRAUD - 18 USC 1343, makes it a Federal crime or offense for anyone to use interstate wire communications facilities in carrying out a scheme to defraud.

A person can be found guilty of that offense only if all of the following facts are proved beyond a reasonable doubt:

First: That the person knowingly and willfully devised a scheme to defraud, or for obtaining money or property by means of false pretenses, representations or promises; and

Second: That the person knowingly transmitted or caused to be transmitted by wire in interstate commerce some sound for the purpose of executing the scheme to defraud.

§ 1343. Fraud by wire, radio, or television

Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice, shall be fined under this title or imprisoned not more than 20 years, or both. If the violation affects a financial institution, such person shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.; February 05, 2007 4:18 AM
Anonymous said...: Flipping is nothing more then a speedy re-sale.

So a typical mortgage broker may be approved to sell subprime loans to a dozen or more lenders, they regularly use only three or four.

And the most important factors in a broker’s selection of a specific subprime lender generally relate to quick service.

Illegal flipping is when the re-sale relies on inflated appraisals, fake documents, sales to straw buyers who represent original sellers, and phantom second loans.

In some cases, illegal flipping involves a series of instant sales and re-sales with a single property and an inside group of buyers and sellers.

The insiders move the title back and forth among themselves, in each case raising the sale price and thus creating a fictional basis for larger loans.

For this flipping process to work lender needs subprime lender that can provide quick service.; February 05, 2007 4:37 AM
Miss Goldbug said...: Here is an interesting video about new homes in El Dorado Hills, CA where the wind factor is shaking the homes apart. I dont have the link, but go here for the video cbs13.com - the article is called: "High cost homes blown apart"

This should do some collateral damage to home prices in that region.; February 05, 2007 4:39 AM
Anonymous said...: Investors and issuers of residential MBS will be getting more active this year in monitoring securities backed by subprime mortgages, as well as subprime loan purchases, for any potential problems arising from poor underwriting.

Defaults on mortgages to people with poor credit histories or large debt burdens rose in November above their worst levels during the last recession six years ago.

The percentage of subprime mortgages packaged into bonds and delinquent by 90 days or more, in foreclosure or already turned into seized properties climbed to 10.09 percent from 9.08 percent in October.

The default rate fell to 5.37 percent in May 2005 from 10.05 percent in November 2001, when economic growth resumed.

Defaults on subprime loans have surged as rates on ones made in 2002, 2003 and 2004 adjust higher as their fixed-rate periods end following an increase in short-term interest rates from the lowest in 45 years.

Subprime mortgages made in 2005 and 2006 are suffering from slumping home prices and looser lending standards.; February 05, 2007 4:44 AM
Anonymous said...: The Rebar Group scandal had triggered a run on The Chinese Bank, a subsidiary, and the bank was found to have a high ratio of bad loans.

Taiwan authorities are seeking help from Singapore to arrest Rebar Group founder Wang You-theng and his wife, Chin Shyh-ying, who left Los Angles Wednesday for a destination in Southeast Asia, after leaving behind huge debts in Taiwan.

Two subsidiaries of the Rebar Group, which consists of 120-odd subsidiaries, applied for insolvency protection Dec. 29.

Wang and his wife fled to Shanghai on Dec. 30 and then entered Los Angeles on Jan. 13.

The insolvency announcement of the two Rebar subsidiaries -- China Rebar Co. and Chia Hsin Food & Synthetic Fiber Co. -- prompted a run on The Chinese Bank, another Rebar affiliate, which lost NT$32 billion in deposits in three days.

The bank run led to the exposure of the Rebar financial flop, which has in turn triggered a financial storm in Taiwan.

The couple own OmniBank in Los Angeles, which is being managed by Chin Shih-ping, executive vice president and brother of Wang Chin Shih-yin.

Rebar Group is estimated to undermine the overall profits of the entire banking industry by 27 percent this year, according to market insiders.; February 05, 2007 5:47 AM
Anonymous said...: US monitors Omni Bank as Rebar scandal snowballs
US Treasury Department officials have begun monitoring the operations of Omni Bank in California at the request of Taiwan's finance officials amid the snowballing Rebar Asia Pacific Group scandal.

http://www.taipeitimes.com/
News/front/archives/2007/01
/25/2003346228

Omni Bank Shines in a Niche Market
Headquartered in Alhambra, CA, Omni Bank, with assets of $202 million, has branches in Monterey Park, Rowland Heights, and San Jose.

These are areas in the San Gabriel Valley near downtown Los Angeles, areas that have long attracted Chinese and other Asian immigrants.

Several Omni products target recent immigrants, especially those without a U.S. credit history.

Quite a few customers work for traditionally small businesses, such as restaurants, and some may not have a well-established income record.; February 05, 2007 5:48 AM
Anonymous said...: CCI loan crisis casts wide net. Distress goes beyond Coast Bank or Southwest Florida lots

The loan crisis between Construction Compliance Inc. and Coast Bank of Florida is wider than one bank or one geographic area.

A CCI customer who immigrated recently from CHINA and some of his friends have a total of seven CCI homes with construction at a standstill, a story common to the St. Petersburg builder's customers, who are carrying loans on 482 properties in Southwest Florida.

Some of the properties of Caijun Sun and his colleagues were not financed by Coast, but by Ohio-based National City Mortgage. Chris Kemper, a spokesman for National City Bank -- one of the nation's 10 largest financial institutions -- confirmed that National City Mortgage has made loans to CCI customers. He declined to say how many, for what amount or where the construction sites were.

http://www.axisoflogic.com/
artman/publish/
article_23897.shtml; February 05, 2007 5:50 AM
Anonymous said...: $1.2 Billion Dollar Fraud Scheme Alleged in Southern California

The case has been assigned to Judge Dallas Holmes of the downtown Riverside Superior Court in Riverside, California, for trial.

The plaintiff intends on working with alleged victim-lenders and governmental agencies in an effort to prevent hundreds of foreclosures and additional damage as a result of the alleged fraud.

The victim lenders are alleged to include Bay Capital Mortgage, Community First Bank, GMAC Mortgage, Suntrust Mortgage, Aurora Loan Services, Home Eq Servicing, and SLS Loan Servicing.

Numerous credit card companies are alleged to be affected by the currency scheme as well.

Riverside County Superior Court Case No. RIC463483 (Anonymous Investor v. Jovane Investments, et al.) was filed by an investor who claims to have suffered $3,000,000 in damages on her case alone.

The plaintiff seeks to have the matter certified as a class action later this year because there are another alleged 400 investors in the alleged scheme.

The amended complaint, filed on January 12, 2007, alleges that the operators of the Jovane Investment firm of Murrieta, and related businesses, including Stonewood Consulting, Inc., Pacific Wealth Management LLC (Nevada), Oetting Enterprises, and Sunburst Financial Systems, Inc., engaged in a real estate scheme involving perhaps as many as 5000 home loans in the Southern California region.

It is alleged in the complaint that defendants allegedly involved in the scheme would artificially inflate the values of the homes, complete 125% loan to value mortgages in certain cases, give escrow kickbacks to sellers who received as much as $100,000 more than an asking price, and sell the investors on the idea of giving up excess proceeds out of the sale to investment companies for a great profit over a period of years.

In some cases, $50-60k-a-year salaried employees had mortgage obligations that were more than $20,000.00 a month because they owned 5-8 homes.

The defendant companies are alleged to have taken money from other investors to pay the mortgages on behalf of plaintiff and others. The scheme is alleged to be a traditional Ponzi scheme.

http://www.prnewsnow.com/
PR%20News%20Releases/
Legal%20And%20Law/
$1.2%20Billion%20Dollar%
20Fraud%20Scheme%20Alleged%
20in%20Southern%
20California; February 05, 2007 5:53 AM
Anonymous said...: 8 more banks probed for Non Performing Loans deals
The Financial Supervisory Commission (FSC) has referred top executives of eight more financial institutions for investigation involving questionable non-performing loans (NPLs).

http://www.chinapost.com.tw
/news/archives/business/
200723/101619.htm; February 05, 2007 5:54 AM
Anonymous said...: Troubled loans on the rise at BankUnited

In a report to clients, Raymond James & Associates analyst John A. Pandtle repeated a sell recommendation on BankUnited shares, citing the rising number of bad loans on the horizon and slower loan growth.

Pandtle said while he has long regarded option-ARM loans to be risky ``in a rising interest rates and an overheated housing market, the magnitude of this quarter's asset quality deterioration is surprising even to us.''

In a clear signal that Florida's housing market is weakening, BankUnited Financial on Monday reported a significant spike in problem loans.

Nonperforming assets more than doubled to $45.1 million for the December quarter from the prior quarter and more than quadrupled from a year earlier, said the Coral Gables-based parent of BankUnited FSB, the largest Florida thrift.

BankUnited reported the troubled loans as it posted record net income of $27.4 million for its fiscal first quarter that ended Dec. 31, up 69 percent from $16.2 million a year earlier.

http://www.miami.com/mld
/miamiherald/business/
16522228.htm; February 05, 2007 5:55 AM
Anonymous said...: Sadly, it has been the adults abdicating responsibility which allowed this whole mess to occur. Now there will be a shortage of people taking responsibility for what happened.

Look for this to be a repeating story line over and over and over...; February 05, 2007 12:00 PM
Anonymous said...: 1990 was peak births (by rate and numbers) for the USA.

2008 should be peak enrollments of first-years, and around that time and a little after should be peak college populations.

Populations (at coll's and uni's) will drop off more slowly than they rose.

Meanwhile, 2008 will be a bad year for real estate.

So maybe those GF's from South Florida who bought condo conversions at inflated prices in Gainesville, FL will make some money. There will be more students, and more demand for rentals... for a while. In fact, I bet in 2008, the Realtors will have a good year, what with rent pressure up and national prices down, it will never have been a better time to buy... except that the rent rate is inflated. Five years after that, the newly minted landlords will wonder why their "investment" grew on average slightly below the rate of inflation. Oops.

I predict "repartments" on some of the myriad condo projects being built in G'ville right now. With scholarship money due to be cut, the kids don't have the cash they once did, which means them illegally doubling up in "collegiate living" apartments and not filling out the middle market below the "luxury" level. "Luxury" may do well (not if you own b/c the builders made them of crap, but if you are the PMC renting yes, you'll do well) b/c lots of spoiled rich kids will not get into their first choice school during a time of peak enrollments.; February 05, 2007 1:43 PM
Anonymous said...: Get your red hots!
Get your red hots!

This week Bob Toll & Toll Brothers report...; February 05, 2007 2:27 PM
Anonymous said...: During the nation's multiyear housing boom, when the real-estate world captivated investors, it seemed as though the shares in the sector moved in only one direction: up. Yet the stocks peaked in the summer of 2006, when the market finally ran out of steam and nervous investors rushed for the exits.

WTF are you smoking friend? Stocks bottomed last summer not peaked. The peak was in Jan/Feb '06. Unless you live in Australia that ain't summertime. And since that bottom, the sector is up 30%.

Another example of someone with absolutely no idea what they're talking about yet feels compelled to lecture others.; February 05, 2007 3:12 PM
Anonymous said...: People are really getting mad at me for talking about housing...; February 05, 2007 5:49 PM
Anonymous said...: Most of those Floridians hit by the devastating tornadoes over the weekend didn't have insurance, because it was canceled or couldn't afford it. Those homes were huge, but they couldn't afford insurance. Now, they are all waiting for the government to bail them out with taxpayer money. How long this situation can go on? How can those homes be so expensive and yet no company is willing to insure them? Why people keep moving to a hurricane state if they can't get home or business insurance? We are still in January, way before the hurricane season.; February 05, 2007 8:25 PM
Anonymous said...: You know I sense lots of anger from homeowners. If all is so groovy for them, why are they angry? Their conscience must be telling them something....maybe it's trying to say:

-It's too good to be true!
-I would never buy at these prices!
-My kids will never be able to live around here!
-I couldn't afford to buy at these prices!
-The bubble sitters are right!

Otherwise, if you simply get pleasure at others misfortune (which is very rare in reality), you are poor by any measure.; February 05, 2007 9:48 PM
Randy said...: I think various markets in the U.S. will improve while others drop. The significant event will be those markets with hyper-inflated prices will have a 20% or more correction.

http://lrandysview.blogspot.com/; February 05, 2007 9:51 PM
Anonymous said...: Where is all this talk about inflation coming from? I booked a flight last week from LAS to Denver for $140 return including everything. I can'r recall the last time I flew anywhere for under $200.; February 05, 2007 10:26 PM
Anonymous said...: To all you dog-ass bald-headed realtwhores and all you imbeciles, morons and blithering idiots. Renting is the most brain-dead thing you can do. Only you pea brained renters cannot understand the benefits of home ownership. Ah, nevermind you dipshits.; February 05, 2007 10:36 PM
Anonymous said...: "Where is all this talk about inflation coming from? I booked a flight last week from LAS to Denver for $140 return including everything. I can'r recall the last time I flew anywhere for under $200."

Sure, what about health-care, housing, price of metals, gas, value of dollar against commodities, tuition, hotel rooms, deficit, bank fees, etc? Do you think that inflation rates are not manipulated by government? Do you think that Chinese crap sold at Wal-Mart reflects the true inflation? Just because the government subsidizes corn with your tax money, putting corn on everything we eat, doesn't mean that food is cheap. They are just transferring money from your taxes or cutting back on infrastructure and social services to create the illusion that food is cheap. Check the ingredients of everything you eat: corn syrup (HFCS), glucose, modified starch, maltodextrin, crystalline fructose, ascorbic acid, lecithin, dextrose, lactic acid, lysine, maltose, MSG, polysols, caramel color, xanthan gum. All contains subsidized corn, including beer, animal feed (your beef or chicken), chicken nugget, coating on cardboards, toothpaste, disposable diapers, trash bags, glossy covers of magazines, charcoal briquettes, matches, batteries, wallboards, joint compounds, linoleum, fiberglass, adhesives, etc. And now the government and lobbyists are pushing methanol from guess what...corn! Wall Street, corporations, and the government have been peeing on our backs for years and saying that's raining. No wonder 75% of American live from paycheck to paycheck and 40% can't afford health insurance. But there's no inflation...yeah, right!; February 05, 2007 11:18 PM
Anonymous said...: For recent homebuyers, conscience is trying to say:

-I am in over my head, and for what? To pay double the real price of renting (include tax deduction!) for something with no 10 year appreciation potential and 50% potential of huge FURTHER depreciation in some markets relative to investment capital, to run up credit cards to support my McMansion lifestyle, and now my heating bill! OMG...; February 06, 2007 12:24 AM
Anonymous said...: APOCALYPSE POSTPONED!!!!!!!

http://www.mokagirls.net/; February 06, 2007 1:25 AM
Anonymous said...: "I booked a flight last week from LAS to Denver for $140 return including everything. I can'r recall the last time I flew anywhere for under $200."

Two things: 1) Oil has fallen from $80 to $58. 2) This is a slow season for flying right now.; February 06, 2007 1:29 AM
Anonymous said...: Blowfly, you've obviously spent too much time goin' down on yourself.; February 06, 2007 1:30 AM
Anonymous said...: The future on display in Colorado?

“Also, there was a lot of what can euphemistically be called ‘creative financing’ flying around Colorado in the past few years. John Green, a regional economist who lives in Fort Collins, said the biggest culprit in the foreclosure boom is the no-money-down mortgage.”

“‘Without a doubt,’ Green said promptly. ‘To put money down, you have to have money. This is like going to Central City with a couple of bucks and playing roulette and thinking you’re going to be rich.’”

“Green said he couldn’t even pin down a price range of houses for people in foreclosure. ‘I can’t say it’s people in $200,000 houses or $600,000 houses,’ he said. ‘It seems to be pretty much across the board.’”

“Green said the foreclosure problem is a combination of unscrupulous lenders and gullible borrowers. ‘We had a very large number of mortgage companies out there sucking people in,’ Green mused. ‘I wonder how many of them have gone bankrupt.’”

“‘We have had clients whose homes have depreciated before,’ said Allen. ‘What they could do was sell the house, walk away and start over with a little bit of money.’ What’s different now is that some people have gotten in so deep that even if they sell their homes, they are still in the hole.”

“‘Selling their homes does not seem like a very good solution,’ she said.”

“‘You’ve got a recipe for foreclosure,’ Green said. ‘For a lot of people, their answer is to let the bank eat it. So they walk away from their homes.’”; February 06, 2007 2:26 AM
Anonymous said...: All kinds of things here... believe or not "It's new"!

“J.P. Morgan economist Haseeb Ahmed said the overhang of vacant housing stock could erode existing home values as sellers slash prices to move their vacant properties. Economists fear that many vacant homes are owned by speculators who are stuck with investment properties that they can’t sell and may be under increasing pressure to drop their prices. ‘We are concerned that there could be downward pressure on prices for awhile,’ Mr. Ahmed says.”

“The homeowner vacancy-rate increase ‘does temper your outlook’ for new construction, says David Seiders, chief economist at the National Association of Home Builders in Washington. ‘There clearly are uncertainties about how this is going to work its way out,’ says Mr. Seiders. ‘I keep preaching to builders it’s not time to ramp up production.’”

“The owner of a vacant home, could be more willing to drop the price to minimize the cost, than a homeowner who lives in the home and doesn’t have to sell. Jon Estridge owned a pair of investment homes in Virginia that sat empty for several months last year. When the market slowed, it was difficult not only to find buyers, but also to find tenants who would pay enough rent to cover his mortgages.”

“‘It eats you alive,’ said Mr. Estridge. ‘The market is going down, and you are paying a mortgage.’”

“He eventually sold one home last spring, after dropping the price. He bought the property for $395,000 and sold for about $35,000 less. The other home sold for $260,000 in late August after he dropped the price by about $30,000.”

“‘I think a persuasive case can be made that the reason we are seeing such extraordinarily excessive vacancy is because of the heavy investor demand over the past few years,’ said Richard DeKaser, chief economist at National City Corp.”

“‘This whole thing has been new,’ says Mr. Seiders. ‘We’ve never seen this kind of investor activity and we’ve never seen this kind of (vacancy) resale. It’s an extra complication moving forward.’”; February 06, 2007 2:34 AM
Anonymous said...: D'oh!

"“A Commerce Department report showing the homeowner vacancy rate rose to 2.7 percent in the fourth quarter, well above the year-earlier level of 2 percent. Goldman Sachs analyst Jan Hatzius noted that the vacancy rate had fluctuated between about 1 percent and 2 percent for the past 50 years.”

“‘By itself, this would point to a fairly enormous supply overhang and little prospect of a bottom any time soon,’ Hatzius wrote in a research note.”"; February 06, 2007 2:40 AM
Anonymous said...: “Just how bad was the loan underwriting at Mortgage Lenders Network? One servicing official who worked there told us the privately held non-depository funded a ‘a ton of bad loans.’ He said underwriting was so poor that a 27-year old who claimed to be making $14,000 per month was approved for a $500,000 mortgage on a stated-income loan. The mortgage is now in default.”; February 06, 2007 2:49 AM
Anonymous said...: To my shock and amazement, I heard today on TV that last month the government passed a law that PMI is now tax deductable. Has anyone else ever heard this? I dont know if its true or not.

If true, this is big news and the Feds know the housing gravy train is now toast and can see the train wreck before their eyes..

1. Uhm a quick google search would answer whether it's true or not.

2. Good news in that it will stop people from avoiding it by taking out a HELOC or 2nd mortgage when buying a home.

3. ANY tax cut is good news. The less money the governmnet steals the better off we all are.

4. The Fed doesn't make write tax laws you moron and had nothing to do with this.; February 06, 2007 2:50 AM
Anonymous said...: Well, here's one of the losers

“Capital Alliance Income Trust Ltd., a mortgage REIT, released a shareholder letter to address recent organizational changes and operational challenges that the company faces to restore profitability in 2007, dated February 2, 2007.”

“As we enter 2007, approximately 34% of CAIT’s mortgage loans are non-performing assets (as measured by mortgage payments delinquencies in excess of 60 days). Due to the partial financing of the mortgage loan portfolio with debt, non-performing mortgage loan balances are currently estimated at approximately 51% of total shareholder equity and approximately 95% of common shareholder equity.”

“Until this situation improves, management will focus on curing these delinquencies, in order to restore income and protect shareholder value. Until these ratios improve, operating income and new business initiatives will remain constrained.”

“2006’s fourth quarter financial results will require additional loan loss expenses (reserves) to account for the mortgage portfolio’s identified losses. If the residential housing market continues to soften or if the economy slips into a recession during 2007, additional reserves may be needed.”; February 06, 2007 2:56 AM
Anonymous said...: Time for an HP "Code Red":

“In his 37 years in the mortgage business, Bert Morrison has never seen anything like it. The owner of Quality Funding Group in Rancho Bernardo said that scores of customers have come to his office wanting out of their adjustable-rate mortgages.”

“In San Diego County, borrowers took out 173,033 adjustable-rate loans worth more than $75 billion to buy or refinance their homes between 2004 and mid-2006, according to (analyst) Christopher Cagan.”

“Cagan’s research has led him to paint a dire picture. Of the above loans, he said, 66,726 are at a risk of resetting to a monthly mortgage payment that the borrower can’t afford. And almost half, or 30,209 loans, are at risk of default and foreclosure, costing lenders more than $5 billion.”

“Morrison said that the situation will likely get much worse before it gets better. ‘There is going to be a lot of blood in the streets,’ he said. ‘You ain’t seen nothing yet.’”

http://www.nctimes.com/articles/2007/02/04/business/news/14_08_092_3_07.txt; February 06, 2007 3:38 AM
Anonymous said...: “‘Coast Bank has become the poster child for many banks having problems in Florida,’ said Miami banking expert Ken Thomas. ‘This is a national story. Everyone around the world is talking about the housing crisis in America. There hasn’t been a bank failure since June of ‘04. The question is: Is this going to be the first casualty?’”; February 06, 2007 3:54 AM
Anonymous said...: People are really getting mad at me for talking about housing...
+++++++++++
Yep, my sister won't speak to me any more about housing. I don't know what's killing her worse: the fact that the housing bubble is going to burn her or the fact that her little sister actually knows more than she does about housing....; February 06, 2007 4:57 AM
Anonymous said...: saw a nice place in ny, with an asking price 50% below the original one, i would buy the place i live in again, only if it fell 75% from the asking price of the house across the street, at 80% decrease id leave 50% of its value to the death tax when they change the tax schemes again, id just consider it disposable.; February 06, 2007 6:17 AM
Anonymous said...: Concorde Acceptance Corporation, a subprime mortgage banking operation, has stopped funding new loans.

The company will shut its doors after funding the loans currently in its pipeline, according to an industry source.

Concorde Acceptance operated in 28 states, and was formed in 1997 by the Crown Group, a now-defunct holding company.

The lender was originally funded through an exclusive warehouse credit agreement with Banc One Capital Corporation

http://www.housingwire.com/
2007/02/02/concorde-
acceptance-latest-lender-
to-close/; February 06, 2007 6:40 AM
Anonymous said...: welcome to the world of bank mergers or your corporate directors sell your bank at bottom dollar taking stock at merger from a bank at top dollar and take payments, options and jobs with the new bank, maybe you will sharehold a profit 7 0r eight years later, or 50% of the wall street economy as suckers, with protections in real estate, bubble making again suckers??!!; February 06, 2007 7:19 AM
Anonymous said...: unless the markets are in a rumored secular bear, then its a profit in an average 17 years, starting! from the compound growth at the low; February 06, 2007 7:27 AM
Anonymous said...: It would be very big NEWS if subprime lender Novistar has to shut its doors.

Friday night, after the market closed, long-time NovaStar bull Jim Fowler of JMP Securities lowered his rating on NovaStar to a Market Perform, slicing earnings per share estimates for the fourth quarter by 51% and a 17% reduction for the year.

He also took his machete to next year's earnings, which he reduced by 29%. He also mentioned the "D" word. ("D," of course, refers to dividends, which have been driving investor interest in NovaStar all of these years, especially now with the yields hovering at 22%.)

In changing his rating and cutting numbers, Fowler cited his "outlook for worsening industry trends" and stressed that his outlook "is not unique" to NovaStar, given that the subprime mortgage market "is under siege from faltering credit."

But a deeper read of his report has issues that are specific to NovaStar, as well. For example, he says if it starts experiencing "an atypical deterioration in credit quality (versus other subprime mortgage lenders), bond investors would likely require higher yields to purchase its securities, if they purchased them at all.

If this were to happen, NFI would also likely have lower originations and/or raise loan yields to attract investors -- both of which would likely negatively impact earnings."

He further points out that NovaStar is also "dependent upon the equity markets for capital that it uses to invest in portfolio assets.

If the equity market was shut off to NFI, it is likely they would achieve slower portfolio growth, and possibly portfolio shrinkage, that could result in lower earnings and dividends."

http://biz.yahoo.com/
seekingalpha/070108/
23673_id.html?.v=2; February 06, 2007 7:28 AM
Anonymous said...: The bond market is signaling heightened fears about the ability of America's more financially stretched borrowers to keep up their mortgage payments.

The weak U.S. housing market has cut the value of some homes to below the amount the owners owe on their mortgages, making them prone to default. The risk is showing up in the subprime-mortgage market, which serves borrowers with the worst credit histories. Default rates in this market are rising. Meanwhile, hopes that the Federal Reserve would cut interest rates soon, easing pressure on borrowers, have faded in recent days.

Wall Street's worry about mortgage defaults is showing up in a set of indexes called ABX-HE, administered by Markit Group Ltd. These indexes track the cost of using financial contracts known as credit default swaps to buy insurance against defaults on securities backed by subprime mortgages.

Friday afternoon, the ABX-HE 06-2 index for buying protection on low-rated, or BBB-minus, subprime mortgage bonds stood at 90.34, down from 95.25 at the end of December and 98.2 at the end of November. It was the lowest level since this version of the index began trading in July. A decline signals that sellers of these insurance contracts are demanding larger payments to compensate for what they see as a higher risk of mortgage defaults, which would reduce the value of mortgage securities.

The turmoil is notable because credit markets otherwise look stable. Treasury bond yields remain low and capital is abundant for corporate borrowers.

Mark Adelson, head of structured-finance research at Nomura Securities International Inc. in New York, said the market is "worried about the potential of an approaching storm." He said weak home-sales numbers reported Thursday were one immediate cause of the latest downward lurch in the ABX indexes.

"There has been a wake-up call this month," says Alan Fournier, managing member of Pennant Capital Management LLC, a hedge-fund manager based in Chatham, N.J. Mr. Fournier says his firm has been buying protection against subprime-mortgage defaults since mid-2006. Hedge funds are believed to have been among the big buyers of this protection, a way of betting that defaults will increase.

At the end of 2006, borrowers were two months or more behind in payments on nearly 6% of the subprime home loans packaged into mortgage securities last year, according to David Liu, a mortgage analyst at UBS AG in New York. The first-year delinquency rate was about three times the rate on such loans packaged in 2003 and 2004, when home prices were soaring.

When home prices are rising rapidly, people who fall behind on their loans often can sell their houses for enough money to pay off their debt or else refinance into a less costly loan. In a weak housing market, it becomes harder to sell homes quickly or refinance. More people lose their homes to foreclosure.

Mr. Liu says many subprime lenders, faced with slowing demand and shrinking profit margins, tried to maintain volume by making riskier loans even as the housing market was faltering in late 2005 and 2006. Many borrowers with relatively low credit scores were able to borrow as much as 95% or 100% of the home's estimated value without having to provide pay stubs and tax documents to prove how much money they make.; February 06, 2007 7:38 AM
Anonymous said...: why sell an oc mansion when the guy in the same building next door may pay ten times the property tax because he is a newer buyer? lets think get an easy 2 mill for a starter house in warm winters and take profits to where im, a big money buyer jacking the property taX UP ON ALL THE neighbors, due to irrational spendings? where?, the money is taxed leaving the country, florida? hurricanes and tornados, guess than where!~!; February 06, 2007 7:43 AM
Anonymous said...: at least the misinformation and conspiracy theories are not hidden anymore? who realy knows thre realities; February 06, 2007 7:47 AM
Anonymous said...: Week by week subprime lenders falling one after another, who is next?

Concorde Acceptance
Deep Green Financial Inc
Mandalay Mortgage
EquiBanc Mortgage
Clear Choice Financial Inc
Funding America
Banco Popular
Mortgage Lenders Network
Sebring Capital
Alliance Home Funding LLC
Harbourton Mortgage Investment Corporation
Ownit Mortgage Solutions; February 06, 2007 7:49 AM
Anonymous said...: With temperatures as low as 42 below zero, more pressure will be put on higher crude oil price.

Subprime borrowers will take a double as gas price and interest rates go higher.

http://news.yahoo.com/s/ap/
20070206/ap_on_re_us/
arctic_blast; February 06, 2007 8:00 AM
Anonymous said...: Demand for most loans was ``somewhat weaker,''

More U.S. banks tightened lending standards for home loans in the past three months than in any quarter since the early 1990s, according to a Federal Reserve survey.

Almost two-fifths of banks said mortgage demand weakened from the previous three months, the Fed said in its January quarterly survey of senior loan officers. A

bout a net 15 percent of domestic banks tightened standards for approving mortgage applications over the prior three months.

http://www.bloomberg.com/
apps/news?pid=20601068&
sid=aTnJPvRlbmNs&refer=
economy; February 06, 2007 8:05 AM
rrrrrtwo said...: I am graduating from Law school and My wife and I are moving to Salt Lake City- we plan to rent for a year or two until things clear up in housing- any indication on when purchasing a home will be safe again? It seems like the rental market might be the place for the next year or two?; February 06, 2007 8:22 AM
Anonymous said...: Is there anyone on this blog that has an IQ of 80 or higher? Reading your moron drivel makes me want to chuck it up. Renting is good? I bet you're sleeping on mom's sofa!
Freakin' uneducated hoi polloi.; February 06, 2007 1:55 PM
Anonymous said...: -42 weather? HUH? I thought we were in the midts of a global warming crisis.

Mr. Gore, you got some 'splainin to dooo.; February 06, 2007 2:48 PM
Anonymous said...: Anon7:49 and the post about the first bank failure are right! Check out the implode-o-meter:

http://ml-implode.com/

Full article on iTulip:
http://www.itulip.com/forums/showthread.php?t=883

Keith - how about a top post on this? Bloggers are going to spot this trend before the MSM, it seems.; February 06, 2007 3:14 PM
Anonymous said...: "Global Warming" does not mean "we'll never have winter again". "Climate change" does not say anything about the daily weather.

The greenhouse effect is only around a degree or so, thus the last couple of years have been the hottest on record. Yet it does still snow!

Consider - large systems, when undergoing phase changes, exhibit chaotic behavior. Hence, large temperature swings and more intense storms are likely. Some of this winter's weird weather is due to a strong El Nino, which happens without global warming. Another way to look at it is additional energy put into the climate system - could result in a stronger El Nino, for example.
Usually scientists say "to the best of our knowledge..." Even with a preponderance of evidence confirming Global Warming, researchers still refrain from claiming 100% accuracy (but note that 90% confidence levels are usually considered adequate). In any case, this is not a question of a particularly hot or cold day in any one town or region.; February 06, 2007 3:30 PM
Anonymous said...: careful, creampuff! you'll get the crazies who want creationism taught in the schools instead of evolution.; February 06, 2007 3:38 PM
Anonymous said...: Climate change" does not say anything about the daily weather.

Oh really? Then why is it every summer when a heat wave hits Boston and NYC the media go into "see global warming's real" mode?

Can't have it both ways. Can't point to global warming because it's hot in the summer but then when it's bitter cold say it doesn't count.; February 06, 2007 3:48 PM
FlyingMonkeyWarrior said...: Global warming means extreme weather, it is a synonym for Climate Change.

omg you guys are point counter point when you do not understand the scientific term's basic definition.

Now, it is no longer a “theory” the experts are just trying to figure out how bad and how soon.
Jeez.

iw; February 06, 2007 4:57 PM
Anonymous said...: They all blame global warming on burning things! What about all those billions of people out there? Don't we exhail CO2, carbon dioxide! What's up with dat?; February 06, 2007 5:20 PM
Anonymous said...: This is awesome. Global warming causes record cold temps. You couldn't write shit this funny if you tried.; February 06, 2007 8:34 PM
Anonymous said...: Keith. Why is there such a mindset that housing is considered an appreciating asset?
Is this mindset a result of inflation?
Why is housing the only thing that goes up in price as it's quality deteriorates?; February 06, 2007 9:32 PM
Anonymous said...: "Global warming causes record cold temps. You couldn't write shit this funny if you tried."

I was referring to the unusual heat wave last month. According to NASA and the National Climate Data Center,
2005 was the hottest year on record:
http://tinyurl.com/pksae
That is until 2006:
http://tinyurl.com/ypmpvw

Gee I wonder what will happen in 2007? I know - becuase of a couple of cold days, the trend will magically reverse! Just like the plummeting graphs for housing prices and sales!; February 06, 2007 9:40 PM
Anonymous said...: That is why global warming was rebranded to "climate change". This way they got it covered no matter what happens. Earth is warming, A-HA climate change. Earth is cooling, A-HA climate change. More rain, climate change. Too little rain, climate change. And on and on.

No matter what happens they can point to "climate change" as the cause. And guess what, climate is always changing. Year to year, decade to decade, century to century things change. No winter is ever the same, no summer is ever the same. So there will always be "change" and hence there will always be a crisis and hence there will always be a need for more government regulation and higher taxes to "solve" the "problem".

From a marketing perspective this is genius. And it is working just as planned judging by the moronic posts here buying into this global brainwash.

Hmm I see tomorrow will be 3 degrees warmer than today...you guessed it climate change...; February 06, 2007 10:29 PM
Anonymous said...: http://www.rasmussenreports.com/
Bush_Job_Approval.htm

44%

A few more months of Nancy and Harry's garbage and he'll be over 50%.; February 06, 2007 11:53 PM
Anonymous said...: Holy Crap, DOW closed at 12,666. Mark of the beast! Get out now!!; February 07, 2007 12:09 AM
Anonymous said...: don't worry, any moment and shrub will want to sell US ports to the terraists again...; February 07, 2007 12:10 AM
Anonymous said...: February 06, 2007
By RICH LADEN,THE GAZETTE

In the first month of the year, there was better news for the local housing industry.

Last month’s single-family home sales in the Colorado Springs area dipped 0.4 percent when compared with the same month a year ago, according to figures released this week by the Pikes Peak Association of Realtors.

The housing industry usually doesn’t cheer fewer home sales, but January’s slight decline is the best year-over-year performance for the housing market since May 2006. It’s also a big improvement from late last year, when sales fell by double-digit percentages each month.

Median home prices rose 1.9 percent to $209,900 in January, a small gain compared with recent months, yet still better than some cities around the country where prices have dropped.; February 07, 2007 12:17 AM
Anonymous said...: Portland, OR real estate market is the next one the media will highlight as in a meltdown. Listings are soaring, foreclosures beginning to rise, vacant homes for sale soaring, downtown units for sale are soaring and prices are still at Manhattan levels and about to plunge, CA flippers are all trying to get out at the same time, and hundreds more units are being completed or with permits to build!!!

Not only that, it rains all the time here!!! Every day! 365 days a yr. Don't come here! You'll hate it!

It's going to be ugly, friends.; February 07, 2007 1:05 AM
Anonymous said...: "This is awesome. Global warming causes record cold temps. You couldn't write shit this funny if you tried."

It's "ocean warming", including the disruption of the North Atlantic Gulf Stream flow from melting Arctic ice cap. Human activity at best has had a modest incremental effect on atmospheric conditions.

"Ocean warming" itself is probably a result of a complex, long-term interplanetary orbital (Jupiter...?) effects on solar equatorial forcing and geophysical forcing on the Earth's crust, i.e., increased seismic and volcanological activity. restricting auto emissions and other fossil fuel emissions will likely have no effect at all.

What we ought to be concentrating on is how to adapt to a Little Ice Age period over the next few decades, including the exacerbating effects from "Peak Oil", falling crop yields, deforestation, desertification, loss of arable land and food production, mass population migration, etc.

Oh, Hell, it's a lost cause. There are just too damn many of us and not enough finite resources to go around. We're just incredibly vulnerable parasitic specks of organic material on an infinitesimally small rock in a virtually infinite universe our puny brains will never EVER comprehend. A city-sized asteroid could wipe us out in the next minute, and all of our grand accomplishments as a somewhat-advanced animal species will be annihilated and forever rendered cosmic dust.

Just party until you die of metabolic expiration, thirst, hunger, run out of gasoline, and/or until your blood turns to ice.

What difference does it make? We're all born with a death sentence and 100% probability of oblivion at some point. We're just a random accident of biology, and bacteria are likely to survive us.; February 07, 2007 1:33 AM
Anonymous said...: Plain and simple, If Al gore is pitching Global Warming like a snakeoil salesman that should be proof enough that it's Bulls**T!!!; February 07, 2007 3:25 AM
Anonymous said...: They say they have proof that the world is warming due to cause and effect of man.

But, they can't accurately figure out the weather more than a few days in advance! This year was forcast to be a El Nino year, but a small blurb in the N.Y. Times say's that they think it won't be....their not sure!!!!!!; February 07, 2007 3:29 AM
Anonymous said...: That blithering A**hole Al Gore (inventor of the internet) was caught in a lie when he said in a 2006 interview, "we have a few short years to fix global warming or we will all cease to exist"!

Q: "How long have you been talking about this?"

Al's answer, "for over 30 years!"; February 07, 2007 3:37 AM
Anonymous said...: "From a marketing perspective this is genius. And it is working just as planned judging by the moronic posts here buying into this global brainwash."

OK, you win. Thousands of researchers the world over have published volumes of independently peer-reviewed articles for the sole purpose of hoodwinking us. After all, Big Business is always honest and the invisible hand of Free Enterprise would never allow wanton environmental destruction, much less stand by during the greatest mass extinction of all time while denying and obfuscating scientific fact!; February 07, 2007 4:31 AM
Anonymous said...: "Don't we exhail CO2, carbon dioxide! What's up with dat?"

Maybe you're joking, but that's a legitimate question. Cow farts and ant mounds contribute methane, a greenhouse gas. Cement production is also bad. Without looking it up, I'm pretty sure the answer is that industry and automobile/trucking exhaust simply account for the largest share of greenhouse gases.
And of course, Mr. Snark-Alec, you're welcome to be the first one to STOP BREATHING to reduce global warming - step right up!; February 07, 2007 4:39 AM
Anonymous said...: Customers Lose Hundreds Of Thousands After Bank Shuts Down.

This last bank to fail was Utah's Bank of Ephraim in June 2004.

The last major U.S. bank failure occurred in July 2001, when Superior Bank in Chicago was closed.

LAWRENCEVILLE, Pa. -- Some lost hundreds of thousands of dollars in the blink of an eye when a bank in Lawrenceville was forced to shut down, accused of operating in an unsound and unsafe manner.

Dozens of Metropolitan Bank customers are now trying to recoup some of their cash, which totals over $1.2 million.

There's no guarantee how much of the money would be recovered though.

"You sort of trusted your neighborhood bank," said customer Allan Becer. "It's been there for a long time, since the 1890s. You're sort of trying to work within your neighborhood at the bank where you grew up, and you don't expect this is going to happen."

Metropolitan Savings Bank is a one-location community bank. It's unclear what went wrong, but the FDIC has said it was mismanaged.

ww.thepittsburghchannel.com
/news/10946286/detail.html; February 07, 2007 7:46 AM
Anonymous said...: Trouble in subprime land? It's everywhere, and it's finally catching up with NovaStar.

A compilation of delinquency data provided by the subprime mortgage provider shows that delinquencies in all outstanding pools of mortgages NovaStar has packaged and sold, as of the end of January, have leaped to 8.7%, or roughly double from a year earlier -- and a mere 2.83% at the end of 2004.

Subtract out the most recently originated pool and the delinquencies jump to 9.33%. They leap to 11% in pools at least a year old.

Those less than a year old, meanwhile, have ratcheted up to 6.54%, or more than triple a year ago. (On all of those, the majority are more than two months late.)

According to NovaStar's SEC filings, once it sells these loans, they are subject to recourse by the buyer if "defects" are found in the loan documentation and underwriting process.

Historically, NovaStar hasn't had much in the way of recourse, so it hasn't set up any reserves.

But it also hasn't seen delinquencies quite like this. (Translation: recourse on even a small fraction of the $12.4 billion of loans the company had sold as of Sept. 30 could cause a big dent in NovaStar's balance sheet.)

financial.seekingalpha.com/
article/26143; February 07, 2007 7:56 AM
Anonymous said...: Traders are focused on 4 things this week and these 4 things will continue to be the market's primary drivers.

The first is the overall health of the US economy.

The second is the G7 finance ministers meeting this weekend.

The third focus is the ECB meeting on Thursday.

Finally, the fourth market mover this week is oil prices.

Short yen traders are liquidating their positions ahead of the meeting which explains the dollar's underperformance against the Yen despite its out performance against the Euro and British pound.

Although we do not think that the G7 will raise an official concern about the Yen's weakness, the fact that the yen dropped close to 400 pips in the less than 48 hours after the April 2006 G7 meeting is enough reason for some USD/JPY bulls to take profits here.

www.ameinfo.com/109834.html

Paulson told Congress today that there was no evidence of Japanese intervention to unfairly depress the yen’s value and that the currency was traded on competitive markets.

``It is desirable for exchange rates to reflect fundamentals, but I cannot comment on which level reflects fundamentals,'' Japan's Finance Minister Koji Omi said.

The Bank of Japan's monetary policy should ``support economic growth,'' Omi said in an interview in London late yesterday. He added that rates ``are low if you look at them from a long-term perspective. I don't consider the present situation to be normal.''

http://www.bloomberg.com/
apps/news?pid=20601080&sid=
aHcs9h11Co5M&refer=asia; February 07, 2007 8:15 AM
Anonymous said...: "Fear and Greed" & "the Path of Less Resistance"

It is the biggest worry in the corporate bond market these days: What comes down must go up.

The interest rates corporate borrowers pay on their debt have fallen in the past few months. Not only is inflation tame -- which helps hold rates down -- but corporate defaults have sunk, making lenders willing to take more chances with their money for less return.

With so many investors flush with cash, they have been throwing it at corporate bonds, pushing their prices up and their yields down. As a result, even the shakiest corporate borrowers aren't paying a lot more than the government pays for a loan.

Now, some analysts and investors are warning the cycle will eventually run its course, meaning higher corporate borrowing rates, which could affect the ability of some companies to thrive, and a hit for investors betting on corporate debt.

"It's like there's no fear of the downside," said Jeffrey Rosenberg, head of credit strategy research at Banc of America Securities in New York.

Some money managers are taking a more cautious stance. Thomas Atteberry, a fixed-income manager at First Pacific Advisors LLC in Los Angeles, has reduced his portfolio's allocation to corporate bonds rated A or lower to 3 percent from around 25 percent in early 2003.

"We're not taking the credit risk because we don't think we are being compensated enough for it," he said.

http://www.post-gazette.com
/pg/07037/759868-28.stm; February 07, 2007 8:27 AM
Anonymous said...: Good Morning, this is Blowfly the master of class I'm back to suck some soul to your ass!

Everyone here knows that mentally defective renters just don't get it. I'm sick of the lamebrained diatribe sending the message "Renting Is Good" and "Don't catch a falling knife" instead of the truth which is “Buy or die”.

Of course renting is very good when you are dirt poor, wasted on crack or crystal meth. Take a trip to jig-town and take a look at your average renter - not a pretty picture. So go ahead jackass meatheads stay in your decrepit, dilapidated, dirty and dishevelled rental pigpen shacks. I'm going to enjoy my luxury condo fully owned by me the master. Nevermind you retards, just remove yourself from the gene-pool – do us all a favor.; February 07, 2007 1:32 PM
Anonymous said...: “The biggest problem: Its mortgage portfolio is packed with risky loans known as option ARMS. All of FirstFed’s mortgages are for homes in California, where prices have cratered and foreclosures have skyrocketed. Also, 80% of its loans have little or no documentation to prove the borrower’s income or assets, according to a recent company presentation.”

“The bulk of FirstFed’s income is derived from noncash earnings, largely from the deferred principal on its option ARMs. That so-called negative amortization constituted $223.9 million, or 68.4%, of the bank’s income before taxes in 2006, compared with 1.3% in 2004. In essence, FirstFed is booking profits on money it hasn’t collected.”

----------------------------------

What a disaster!; February 07, 2007 2:05 PM
Anonymous said...: Barry Ritholtz has a "Foreclosure Heat Map" up on his website

"Foreclosure Heatmap
in Real Estate
I am working on a new research project involving foreclosures in the sub-prime market. I keep coming across some really intriguing data sets.

Courtesy of a RealtyTrac, below is a "Heatmap," showing the foreclosure filings on a per capita basis. The Redder the state, the more per capita filings there are.

Kinda surprising the way the concentration shakes out, ain't it? Colorado leads the nation, followed by Nevada, with Texas and Florida not too far behind."

http://bigpicture.typepad
.com/comments/; February 07, 2007 2:13 PM
Anonymous said...: My first introduction to the global warming scam was when I was 12. I had a paper delivery route and remember putting together the Sunday paper which came in 3 separate sections and part of my job was to put the 3 together before delivering.

Anyway on the front page of Section 2 was a big headline about Global Wwarming and how it was going to destroy the planet. As a 12 year old I'm thinking holy shit, this does not sound good. So I read the article and damn near went crying to my mommie thinking the end of the world was near. I'm 33 now and what do you know, 21 years later nothing has happened. New York isn't underwater. The polar ice caps are still there. North Dakota still has cold winters (uhm what was it there yesterday -35?). Nothing has changed.

Everything that article said that scared the shit out of me was a complete and total lie. And the lie continues today perpetuated by idiots like Al Gore.; February 07, 2007 2:37 PM
Anonymous said...: I'm a non-bitter renter who really almost bought a house recently but hasn't done so.

In the focus on bitter renters vs. screwed owners, we've missed an important subthread: Location still matters, maybe even more than resetting ARMs or granite counter tops. I can't imagine ever buying a house in an outer exurb because it would kill you to clean/run/maintain it if you were also commuting two-plus hours a day, but obviously millions of Americans don't agree with me. Now that the housing market is in trouble, it looks like the exurbs are going down first, to wit:

http://money.cnn.com/2007/02/06/real_estate/exurbs_housing.reut/index.htm?cnn=yes; February 07, 2007 3:15 PM
Anonymous said...: Just like housing was not as wonderful as the MSM portrayed it 3 years ago, it's not as bad as you are protraying it now.

In Las Vegas in 2004 prices went up 50% so said the headlines. But no one house's value actually went up 50%. What happened was newer and bigger homes were being built so the median price was up by that magic 50%.

Since I was surrounded by new construction at the time, my 10 year old 3000 sq ft, $250K home was all of a sudden surrounded by new 4500 sq ft $700K homes. Looking at just median price for a zip code would give the impression my home is worth $500K, WOO HOO my home doubled in price. But there was no way I could have ever sold it for that much. $350K is more like it but in the media hype it was worth $500K nonetheless.

Now my home has supposedly "dropped" to $350K and it appears like I "lost" $150K. But I never had that $150K to begin with. So I didn't lose anything.; February 07, 2007 3:59 PM
Anonymous said...: 1. jig-town? LOL!!!

2. exurbs getting spanked. Good news for me as I want to move out to the exurbs, mainly to get away from the JIGs referenced in #1.; February 07, 2007 5:07 PM
Anonymous said...: Bush cuts renewable energy research budget:

http://www.denverpost.com/ci_5164448?source=rss; February 07, 2007 6:32 PM
Anonymous said...: Bush cuts renewable energy research budget:

Good. The federal govt should not be spending money on that. If there is a profit to be made, private industry will figure it out on its own and for a lot less money than if the gubermint is paying.; February 07, 2007 6:57 PM
Anonymous said...: "My first introduction to the global warming scam was when I was 12."

Thank god for the blue states, which pretty much carry this country on the back. Without the Americans with brains in those blue states, this country would be nothing but a bunch of Republican Jesus freaks (Rove's whores) who believe that global warming is a scam. Man, put the bible down a little, turn the Fox channel off, and go get a MBA (if you can), because you need to exercise that brain.; February 07, 2007 7:15 PM
Anonymous said...: I'm 33 now and what do you know, 21 years later nothing has happened. New York isn't underwater. The polar ice caps are still there. North Dakota still has cold winters (uhm what was it there yesterday -35?). Nothing has changed.
++++++++++
Obviously you haven't seen Al Gore's movie AN INCONVENIENT TRUTH or read books on the subject of Global Warming. A LOT HAS CHANGED on the Earth over the last two decades and scientists all over the world have been measuring all the climate changes. Maybe you better do some research before you start accusing people of lying to you....; February 07, 2007 7:17 PM
Anonymous said...: Bush cuts renewable energy research budget:

Good. The federal govt should not be spending money on that. If there is a profit to be made, private industry will figure it out on its own and for a lot less money than if the gubermint is paying.

>> We are already subsidizing oil production. Duh, ever heard of Iraq, Iran, Kuwait, the Middle East crisis? The war on terror? You are plain ignormint.; February 07, 2007 7:39 PM
Anonymous said...: Bush cuts renewable energy research budget:

Good. The federal govt should not be spending money on that. If there is a profit to be made, private industry will figure it out on its own and for a lot less money than if the gubermint is paying.

>> Oh, and lest I forget...the devastation caused by Carbon emissions? The tax cuts for the oil companies? Duh, duh, duh. I am starting to think Republicans are dumb.; February 07, 2007 7:41 PM
Anonymous said...: All the predictions of global warming have come true:

Eastern seaboard of the US will be under water by 2000...oops no that hasn't happened.

The polar ice will melth...oops no that hasn't happened.

There will me more hurricanes than ever....oops 2006 was the quietest year for hurricanes in decades

Millions will starve to do the inability to grow food due to warming temps...oops no 2006 saw the most wheat grown in the world EVER which was more than 2005 which was more than 2004 which was more than 2003

Islands all over the pacific will be under water casuing millions of refugees...oops not one single inhabited island is under water and not one single refugee due to climate change exists

Polar bears will be extinct by 2000 due to global warming....oops that didn't happen either

So spare this bullshit about Al Gore and his wild predictions. I've heard it all before; February 07, 2007 8:13 PM
Anonymous said...: Sweet site you got here! But, I'm pretty sure the market has bottomed and it's only up, uP, UP from here!; February 07, 2007 8:25 PM
Anonymous said...: Nancy pelosi wants her own plane. Hmmm wouldn't this burn a lot more fuel and cause a lot more of that global warming than if she were to fly on Delta like the rest of us peons?

And isn't this going to cost a ton of $$? I thought Dems were all about cleaning up DC. I guess cleaning up DC requires a private jet these days.

Yet another example of do as I say not as I do.

http://www.washingtontimes.com/national/
20070207-123706-5963r.htm; February 07, 2007 9:01 PM
Anonymous said...: Listen up asinine, deranged, dim-witted, imbecilic, moronic, retarded and witless dipshits. If you are not to birdbrain and know how to read, here is what intelligent people should know:

"After reaching what appears to be the bottom in the fourth quarter of 2006, we expect existing home sales to gradually rise all this year and well into 2008," NAR chief economist David Lereah said in a statement.

Renting is good?

Idiots!!!; February 07, 2007 9:17 PM
Anonymous said...: Keef, check out this video about immigration!

http://tinyurl.com/2t6quj; February 07, 2007 9:59 PM
Anonymous said...: http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/02/07/BUGV8NVQNO1.DTL

Good stuff I say!; February 08, 2007 2:30 AM
Anonymous said...: We're going to bottom at 1995 prices folks. [And take that in real dollars.]

You read it here first.; February 08, 2007 2:39 AM
Anonymous said...: OH MY GOSH! OCEAN LEVELS ON THE RISE!

BULL!

My father was born in 1932 his brothers '17 and '19

Born and raised in the Thomas bay area, south of Trenton Maine.
When they (all) were growing up they remember a tree stump in the bay inlet. It was level with the tide at high tide, and stood about 3" inches above at low tide. At a recent 2005 family reunion we all looked at the same stump they as kids remember playing around!

Same depth No change!; February 08, 2007 3:20 AM
Anonymous said...: Anyone ever think the flamers are just for-hire Republican pawns. I am not going to fight you. Global Warming is scientifically agree upon. And if you listen to David Lereah you must be delusional, stupid, or part of the NAR.

You know it's too bad - if it wasn't for the internet, you may actually be able to brainwash the masses. Your reign is over. Good luck decimating the environment and the average Global citizen in the future.; February 08, 2007 4:18 AM
Anonymous said...: Looks like the illegal Mexican bubble is continuing to implode along with the housing bubble:

http://www.azcentral.com/news/articles/0206az-arrests-border06-ON.html; February 08, 2007 4:30 AM
Anonymous said...: The desperation of HP deniers is amazing. In miami they (REIC and deniers) are flagging Craigs List R&R postings that deal with how bad the market is and or what a crappy town Miami has become etc. A friend told me this, I tried it and sure enough the post (something like the drop in real estate prices will affect our local economy) was flagged in minutes! Its amazing. Do me a favor fello HP'ers post on the Miami R&R Craigs list board. Let them know we know and that we do not like censorship!; February 08, 2007 5:34 AM
Anonymous said...: The future, as the U.S. government attempts to inflate away the debt?

Hyperinflation has bankrupted the government, left 8 in 10 citizens destitute and decimated the country’s factories and farms. Pay increases have so utterly failed to keep pace with price increases that some Harare workers now complain that bus fare to and from work consumes their entire salaries.

Citing a leaked central bank document, Reuters reported Tuesday that prices of basic items like meat, cooking oil and clothes had risen 223 percent in the past week alone. Soaring costs have made it impossible for both national and local governments to meet budgets and for businesses to afford raw materials, while subsidies for basic commodities have drained the government treasury and promoted corruption.

Seeking to revive farm production, for example, the government sells gasoline to farmers at a bargain rate of 330 Zimbabwe dollars per liter — and farmers promptly resell it on the black market for 10 times that, leaving their fields idle.

The central bank’s latest response to these problems, announced this week, was to declare inflation illegal. From March 1 to June 30, anyone who raises prices or wages will be arrested and punished.

Efforts to suppress dissent are rising: in recent weeks, trade union officials were seriously injured in police beatings, arsonists burned the home of a leading pro-democracy activist and church leaders were arrested while meeting to discuss the economic crisis. Foreign journalists remain barred from the country under threat of imprisonment, and harassment of Zimbabwean journalists has sharply increased.

The black market, which already flourishes beyond the reach of tax collectors and regulators, is likely to grab an even larger share of the economy when the government freezes prices in March, because stores will be unable to make a profit selling products at government-fixed prices.; February 08, 2007 5:42 AM
Anonymous said...: Fitch: Mortgage Guaranty Insurance Corporation (MGIC) Lands on Rating Watch Negative.

Sales of existing single-family homes fell 23 percent during 2006 in California, according to a report released late Tuesday by the California Association of Realtors.

The survey, which examined trends in buyer and seller behavior during 2006, found that nearly 43 percent of borrowers in 2006 used a second mortgage to finance their purchases, more than triple the amount reported in 2001 and the highest percentage since 1982.

“Home buyers with zero-down payments increased significantly from 4.5 percent in 2000 to 21.1 percent in 2006,” said CAR vice president and chief economist Leslie Appleton-Young. “Two out of five first-time buyers made a zero-down payment on their home purchase, while just one in 10 repeat buyers purchased their home with no down payment.

Home sales in California finally fell in 2006 after four years of historic expansion, according to the CAR.

Not surprisingly, the Central Valley region had the largest decline in sales activity among the three primary regions in California.

Other findings of the CAR study included:

Two of five first-time buyers (40.9 percent) made a zero-down payment on their home purchase, while just one in 10 repeat buyers (11.3 percent) purchased their home with no down payment.

The typical first-time buyer had a median age of 35, earned an annual household income of $80,000, and purchased a home with a historically high median price of $450,000.
The typical repeat buyer had a median age of 45, earned an annual household income of $120,000, and purchased a home with a historically high median price of $618,000.
After peaking in 2005 at $220,643, the median net cash gain by sellers from all home sales declined 8.4 percent to $202,000. It was the first time since 1997 that the median net cash gain fell. The median net cash gain for single-family detached homes increased 1.6 percent to $250,000, while the median net cash gain for condo/town homes declined 2.7 percent to $180,000.

http://www.housingwire.com/
2007/02/07/report-calif-
housing-market-slowing-
dramatically/; February 08, 2007 7:46 AM
FlyingMonkeyWarrior said...: Pelosi wants a private military jet that is pimped out, so ahe does not have to subject herself to the dangers of public transportation. It has a crew of 17, with an entertainment/movie center and a master bed room.
source, CNN; February 08, 2007 1:18 PM
Anonymous said...: The desperation of HP deniers is amazing. In miami they (REIC and deniers) are flagging Craigs List R&R postings that deal with how bad the market is and or what a crappy town Miami has become etc. A friend told me this, I tried it and sure enough the post (something like the drop in real estate prices will affect our local economy) was flagged in minutes! Its amazing. Do me a favor fello HP'ers post on the Miami R&R Craigs list board. Let them know we know and that we do not like censorship!
================================
Sounds like "Bagdad Bob" has resurfaced in South Beach. He wants the sheeple to believe him and go to slaughter so he's censoring listings on Craig's List. Typical REIC whore!; February 08, 2007 1:20 PM
Anonymous said...: I agree with you Lefties out there. I make plenty of money and would have no problem with $10/gallon gas - and it would clear the freeways of those little people.

After all, we need to do our part to combat global warming and, while $10 gas is just a start (i.e., we'll need to double or triple electricity and natural gas prices too), it is a small step in the right direction.

Now you all repeat after me: "I too am willing to pay $10/gallon to do my part to help solve this problem."

See, that wasn't too bad. Now let's SAVE THE WORLD!!; February 09, 2007 3:13 AM