May 15, 2007

HousingPANIC Stupid Question of the Day

With foreclosures soaring, ARMs resetting, REIC jobs disappearing, gas prices spiking and incomes staying flat, would you guess Desperate Homedebtors are struggling to make their homeowners association, property tax and home insurance payments too?

It's not just China and hedge funds that won't be getting their money. It's the insurance companies, the condo associations and the 50 states too.

Got popcorn?

25 comments:

Frank said...

Ha! It'll be nice to see the HOAs not getting their money, especially most are run like Hitler's Gestapo.

States are slowly passing laws to restrict the unchecked power of these hitleresque associations. I think we'll see a lot more of this as people can't make the association payments and they try to foreclose on *everyone*.

What disgusted me most of all was in Phoenix after 9/11. HOAs were fining people for flying American flags and the state legislature actually had to step in and bar HOAs from doing that. If that isn't disgusting, I don't know what is.

Anonymous said...

Can condo associations go bankrupt? Or will they have to raise dues on everyone to make up for the dues they're not getting from failed flippers?

Anonymous said...

http://www.washingtonpost.com/wp-dyn/content/article/2007/04/06/AR2007040601977_pf.html

Here is a post article on the topic from a month back.

Friends in my old condo complex who are on the board are seeing an uptick in late payments. Currently they are doing just as the post article says. They are just sending notices & dipping into reserves. They do not want to go into the expense of legal action unless the sum is huge. If they foreclose then they must stand behind the mortgage lien holders. Basically, an association will just raise the monthly fee on all the responsible owners who pay to compensate. But if a critical mass of owners refuse to pay and/or if they need to do any special assessments then the association will be forced to foreclose as such costs just could not be passed on in monthly small increases.

Its just another aspect of the bubble that all the responsible and honest people will clean up & pay for while the lazy, deadbeats & greedy get off Scott free!!

Anonymous said...

frankie,

Comparing an HOA who fines you for not cutting the grass with the gestapo who oh I dunno killed million of people makes you today's ASSHOLE OF THE DAY.

Anonymous said...

That's why WalMart sales were the worst in like forever.

Stuck in So Pa said...

Don't think for one minute that the states (or counties, or cities, or towns, or parishes, or school boards, whatever) are going to take decreased revenues lying down, or at all!

One out of every 6 homes in your area foreclosed and the bank went under, no problem!

Like an HOA dealing with fliptards and raising fees on everybody else, the tax bastards will simply raise property taxes on everyone else to pay for those so needed and deserved pay raises, pension increases, and cradle to grave benefits for the all-powerful public 'service' and teacher’s unions!

Here in my area, the property taxes are really getting out of hand and a lot of elderly on fixed incomes are hard put to come up with their tax payments. One arrogant official told me "they just need to budget better". I replied: “How? This month we eat next month we don't because that money has to go towards property taxes?" This is not a bubble area; most people can’t sell their places for close to their assessed value, if they could sell
at all, much less show a profit on the sale, adjusted for inflation. God, I wish some of those “busloads of flippers” I hear about would hit this area. I would be so out of here!

Anonymous said...

>> ...would you guess Desperate Homedebtors are struggling to make their homeowners association, property tax and home insurance payments too?

Yes. I'm man enough to admit I was in that exact same position until 5 months ago. I finally sold my home and found financial freedom...

Mammoth said...

Here’s one that will make renters glad they’re renting, but please remember – “Thou Shall not Gloat.”

Last weekend I received a notice from the insurance company (State Farm) stating that “due to the risks of being situated in an earthquake zone,” they are increasing my homeowner’s insurance. The new rate is 20% over last year’s.

WTF! Can they get away with this? Was thinking about firing off a letter to the Washington State Attorney General, or whatever entity oversees insurance companies here. Do any of you HP-ers out there know who to contact? It’s probably a lost cause, but as a true Hp-er I’m gonna at least try to give a shot at keeping my hard-earned money.

Mind you, this is the Seattle area, so probably State Farm is also setting it’s sights on homeowners (and homedebtors) all over the West Coast. Methinks the insurers feel that they have gotten away with as much gouging as they could in the East and Southeast under the premise of flood risk, so now they intend to soak those on the western side of the country.

For all of you geology buffs out there, the strongest earthquakes recorded in the continental US occurred not in the west, but in eastern Missouri back in the winter of 1811-1812. One of those four earthquakes was over 9 on the Richter scale, and it rang the church bells in Boston. Try Googling “New Madrid Earthquake” and read up on it. Wonder if the insurers are going to jack up the homeowner’s insurance rates there next?

Wouldn’t want to be in St. Louis when the New Madrid Fault decides to slip again…although in the aftermath, after all the shooting has died down – yes indeed you will be able to pick up some very cheap real estate with pennies on the dollar.

-Mammoth

John M said...

Wall Street at least is determined that they won't be holding the bag. Have a look at the (slightly toned down now) Bloomberg article that originally had the self-explanatory title "Bear Stearns Funds to Transfer Subprime-Mortgage Risk With IPO". I've got more links to this puppy at a post " Toxic Waste? Just Everquest It!". P. Jackson at HousingWire seems to have been first up on the blogs sounding the alarm on this issue. Let's all keep an eye on this one.

Anonymous said...

My brother bought his latest house in Ladera Ranch (trendy new name for Mission Viejo, CA) back around Labor Day, 2005. I'm not sure about his HOA, but I do know he's been putting his property taxes on his HELOC ever since he moved in. It's sad because he did put down a respectable down payment from the sale of his previous house. I don't know how aware he is, if at all, that he's eating up his equity with his property taxes.

Anonymous said...

Did you mention the stock market sharply rising, consumers buying, low unemployment and impressive global growth. Doesn't make for dramatic blogging.

Joey in NH

Anonymous said...

Raising Taxes....isn't that what liberals are all about.

After all, it is not fair some people have more money than others. They just got lucky. We need to redistribute the wealth. And we need more social programs - because we have big hearts (with other people's money)...

Marky Mark

Anonymous said...

Too many homes and not enough owners to pay the dues. Too bad

Anonymous said...

Dateline Scottsdale...

While at the bank yesterday ordering some Yen, a woman rushed in and started going on and on how she tried to pay her mortgage, but the check didn't clear and now she is going to be 30 days late which will ruin her credit rating and that she is trying to refinance, her payment is $4900+ and she was straped. I was amazed to watch this all play out, I can only imagine what is going on behind the scenes.

Going to have to take some popcorn and hang out at my local Bank of America, very entertaining.

Small Hat

Anonymous said...

she looks like she could use some sexual healing....

Anonymous said...

>> Too many homes and not enough owners to pay the dues. Too bad.

Too bad indeed. It's time everyone OTHER than your average Joe learn how to "make-do" with less. I have, and frankly, it's not that bad.

Anonymous said...

Can condo associations go bankrupt? Or will they have to raise dues on everyone to make up for the dues they're not getting from failed flippers?
. . . . .
Last weekend I received a notice from the insurance company (State Farm) stating that “due to the risks of being situated in an earthquake zone,” they are increasing my homeowner’s insurance. The new rate is 20% over last year’s.

________________

+++++Bingo--and the fear of having to pay flippers' monthly dues scares me so much I'm thinking about selling my condo!

+++++Same problem with earthquake insurance at my Seattle condo. Lloyd's of London is REALLY raising our rates. Our HOA is considering dropping the coverage (which I personally believe is too risky and I will move out if they do).

Lost Cause said...

Ladera Ranch is the new name for Horno, California.

Anonymous said...

The most obvious sign of the flippers in our neighborhood are all the yards overgrown with weeds. They can afford to buy a new H2 but can't pay a landscaper. Guess you can't finance that.

Another neighbor in a $3M home didn't pay their real estate taxes for 2 years, total of about $23K. Yet they have a Mercedes Coupe, Range Rover and Escalade.

I just don't get it, I own my home (outright) and car (Honda), yet these people look down their nose at me because I don't live in a $3M home.

I can't wait to have the last laugh...

Small Hat

Lost Cause said...

Do any of you HP-ers out there know who to contact?

Here in California, I had to complain to the Department of Corporations, as the Insurance Comissioner was busy taking bribes from the industry.

Anonymous said...

HOA's reserve fund goes missing? special assessments follow, inc. name change??, votings to evict any one attempting to reprepresent the association? is called ownership?, politicians?, bled by the lawyers, and had to pay twice?

Anonymous said...

condo association dues encapsulate dues that you would normally pay if you were a homeowner with no association - i.e. trash, water, maintenance, including replacing your roof, termite damage, insurance, etc...

Of course none of you are privy to this cuz you all are bitter renters anyway.

Anonymous said...

I just don't get it, I own my home (outright) and car (Honda), yet these people look down their nose at me because I don't live in a $3M home.

I can't wait to have the last laugh...

=======
You're already having it. They are losing, you are winning, plain and simple.

TM said...

"Here in California, I had to complain to the Department of Corporations, as the Insurance Comissioner was busy taking bribes from the industry."

Actually, the CA DoI has a strong history of being on the side of consumers (Quackenbush excepted).
Sounds crazy, I know, but it's true.

Also, in CA earthquake coverage is mostly written through the State-operated California Earthquake Authority. So, on your Acme Insurance policy, the EQ coverage segment is likely underwritten by the CEA. It can be a little confusing, but your beef might by with the CEA.

Sorry, wandered off topic.

Anonymous said...

Thank you 10:10 pm, I feel better now. :)

Small Hat