Maybe Time or Newsweek will put the biggest story in the world on their cover soon? Maybe?
Bonfire Of The Builders - By rushing into the mortgage business big-time, homebuilders helped fuel the housing crisis
A diverse cast of characters combined to launch the once-in-a-lifetime housing boom of the past five years. Traditional mortgage companies and banks unleashed a barrage of loans, many to borrowers with iffy credit histories who didn't bother to read the fine print about upwardly mobile interest rates. Wall Street egged on the often-reckless underwriting by buying vast quantities of home loans for repackaging as securities. Now that the boom has fizzled and foreclosure rates are rising, the important role of large homebuilders as lenders is also coming into sharper focus.
13 comments:
I have read on and off, my dad's copy etc, and my own since about 88. Starting around 2002 it started to go downhill.
This year and partially last year it is so downhill it is not even funny. Businessweek is a shadow of its former glory. Where they used to have good articles, now they have trash.
It seems to me that they are catering to older generation executives who like to read blah blah. For example there was one article talking about the merits of flying business, first class, business class only planes, or leasing your own. Yeah right, as if this is going to be interest to many. Maybe a couple of flippers would be interested...
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I have a question to ask HP'ers
Do any of you have relitives that are FB'S? IE: ARM's IO-ARM's..?
I do and tried to no avail to help them by saying refi and get out of it now while you can..this was only 6 months ago...Amazing what has transpired in the last 6 to 7 months...but we here seen the writing on the wall.
And as noted major LIBOR jump the last few days...and the ARMS reset Schedule kicks in next month...I would say we are still in the beginning stages of this mess.
Why on earth would an FB, who is stuck in an IO, Neg AM, Option Payment loan want to refi ? The payment on a traditional 30 year fixed would sink them. They're F'd because their home is too expensive; the refi will only speed up the inevitable-- FORECLOSURE.
I propose public flogging for any FB who uses the line "Well I got into credit trouble, because I got tricked into one of them subprime loans."
That subprime loan allowed that FB to live out his pipe dream a little longer.
Do any of you have relitives that are FB'S? IE: ARM's IO-ARM's..?
Yes, unfortunately. It's sad but my brother is a lost cause.
And as noted major LIBOR jump the last few days...and the ARMS reset Schedule kicks in next month...I would say we are still in the beginning stages of this mess.
Bingo. Jumped a half a point in a day! That's going to knock out a lot of people.
I have a question to ask HP'ers
Do any of you have relitives that are FB'S? IE: ARM's IO-ARM's..?
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My parents own 3 homes, all free and clear all bought pre bubble. Live in one, rent one for positive cash flow. The 3rd is the "family" vacation home where anyone in the family is welcome to use it. Sits on a lake 2 miles from a ski area. I really dig my parents for that one!
My sister rents. My brother is cheaper than I am (if that is possible) and has owned his home for 10+ years in a bubble market. Bought it for practically nothing at the bottom of the last housing recession and from what he tells me is almost paid off. No helocs or any funny business like that.
I bought in 2001, sold in 2006. I made the equivalent of 3 years net salary and have been renting since.
Nope, this family has its head screwed on right as far as real estate goes.
I read this series in business week. It was about a 20 page feature with around 8 articles. Basically, it was the cliff's notes version of HP. Nothing I read surprised me but I was relieved by everyone else's awareness.
BusinessWeek has been a lot better at covering housing than a lot of their competitors have. If you look back, they're the ones that wrote articles like this months ago that were outing the Realtwhores for their deceptive sales practices:
http://tinyurl.com/39fmsp
The captain of the Titanic wondered if his socks would get wet too!
I think things are finally reaching the point where the MSM can no longer ignore the 800 pound gorilla in the room. I read the following article in Money this morning. I think it's probably one of the gloomiest articles I've read there. They're usually full of happy-happy, joy-joy fluff.
http://tinyurl.com/2mpvsq
Mortgage meltdown contagion
August 10 2007: 11:33 AM EDT
NEW YORK (CNNMoney.com) -- The outlook for the housing market looks even bleaker than it did a week ago. Last Friday we reported that foreclosures were skyrocketing, home prices falling and recovery forecasts were being scaled back.
And now this week, the mortgage meltdown spread to the financial markets with ebola-like speed, sparking fears that tighter credit will have a broader impact on consumers, markets and the economy...
Hey K, love the blog, as always, but I'm not sure BusinessWeek deserves 100% slappage for its past housing coverage. In fact, I think Mara Der Hovanesian was among the best of the journalists in mainstream press in getting after the risky lending market, with well-researched and critical articles, months and even years back.
The general point, that the news should have been less sanguine, still holds. But let's give MDH and her emplyer some credit. They did a LOT more than many of their peers.
Keith,
Business Week has been on this for almost a year now. They've been one of the few MSM business rags to constantly harp and warn about a pending problem in housing.
Of late they've upped the ante and done more articles on the upcoming fallout. BW deserves kudos for talking about this problem way before many in the media would.
I agree folks, businessweek has done a half-decent job of it. Unlike their incompetent peers at Time and Newsweek and Money Magazine.
But it would have been nice to run this cover and this story in February, at the start of the firesale, not today, after it's really just sifting through the ashes.
Reporting the news is one thing (car crash - 2 dead). Giving your readers insights that they can use (why you should wear your seatbelt) is the thing I wish MSM would do more often.
Posted - 08/08/2007 : 4:24:26 PM
I just completed my first 16 hours of 45 hours requird to become a real estate agent in New York. Having been in the mortgage business for the last 6 years I was amazed at the amount of legal liability real estate brokers are exposed to.
Is a 6% commission excessive? I guess it's a matter of opinion. Say a $500,000 Sales Price at a 6% commission from the selling agents side. $30,000 split between the listing side and the seller side. $15,000 to the selling agent of which 50% ($7,500) is commission to the selling broker amd $7,500 to the selling agent.
$7,500 minus gas, marketing, and taxes. In NYC most transactions are sold with two different brokerages, one getting the listing and one making the sale. A seller always has the option of going to a limited service broker but the service is as it's title states...limited service.
I'm amazed that to become a sales agent I have to take 45 hours of training, pass a school exam and then pass the state exam. I then have to take 22.5 hours of continuing education every 2 years in order to renew my license. It just makes me realize how screwed up the mortgage industry really is. In New York as a mortgage broker I only need to take 18 hours of continuing education with no exam needed. How is it possible that the criteria to become a real estate sales agent is more stringent than the criteria to
become a mortgage broker???
Don't get me wrong...the real estate industry is just as screwed up as ours but it's unfair for a RE agent to get thrown under the bus like that. It's like a reporter asking a mortgage broker "Couldn't you write the loan for less than 2 points, a credit report fee, application and processing fee?" Sure you could have but didn't. A seller doesn't have to pay 6% if they don't want to. They can always sell FSBO and open themselves to the liability that real estate brokers do.
Clueless! Outrageous!
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