January 31, 2007

Wouldn't you hate to be The Corrupt David Lereah?

Sure, you made a bunch of money off the backs of suckers and poor people these past few years, helping the evil NAR and realtors (oops, real estate clerks) con folks out of their money. Plus you suckered a bunch of your people into buying your now totally-discredited book.

And yes, your NAR paycheck (surprisingly) still clears the bank every week.

But damn, it must suck to be seen by millions as corrupt, evil, stupid, discredited and pathetic. A big bank balance probably wouldn't make up for the fact that people think you're a joke, a liar and a fraud. What does this poor sap's life hold going forward? What does his family think of him? What are his future job prospects?

Wouldn't it be amazing if he just came clean? One day, he wakes up, can't live with himself anymore, can't stand the lies and deception one day longer, and just comes clean. We can only hope.

David - we know you're reading. It's not too late. America is a forgiving place. Do the right thing baby. Come clean. Tell the truth. Quit the NAR. Do good in life. Be a man.

Or not.

Big hat-tip to the hilarious patrick.net for this TCDL photoshop. Keep 'em coming!

Get familiar with the term and terms of the "Short Sale". You're gonna be hearing that one a lot now

This basically covers why anyone trying to avoid foreclosure via the short sale route is screwed either way...

A short sale of real estate happens when the owner of the home or property owes more on the property than what it sells for.

This can happen when a home owner chooses to sell when property values have dropped drastically or when an owner has taken out equity loans on top of the mortgage loan and the loans equal more than the value of the home.

A short sale can also occur when a homeowner is forced into foreclosure and the bank sells the house for less than the amount still owed. In any case, when all is said and done, the owner comes out owing money instead of earning a profit after the sale of the property.

The credit implications for a short sale are very different for those voluntarily selling their property and those forced into foreclosure.

If the short sale is due to foreclosure, the property owner's credit could be negatively and severely affected.

Often, the bank chooses not to sue, but to take the loss as a tax write-off. In this case, there would be no deficiency judgment on the homeowner's credit report; however, there is another implication. The $30,000 that the homeowner did not have to pay would be considered by the IRS to be income.

Now I've seen everything - bill introduced in Arizona that would make fighting to uphold immigration laws illegal

Yep, unless this ship gets righted and righted soon, the USS America is heading over the abyss.

Some dolt legislator in Arizona, Krysten Sinema, is introducing a bill that would make the Minuteman Project illegal, the group formed to help the government uphold and enforce our immigration laws labeled a "Domestic Terrorist Organization".

So, you got it, those fighting to uphold the laws will be deemed illegal and terrorists, while those BREAKING THE DAMN LAWS, the legislators who look the other way and the illegals themselves, go scott free.

Anyone care? Helllllooooo America - you awake?

Law would make Minutemen guilty of 'domestic terrorism

''Patrolling to detect alleged illegal activity'while carrying any weapon would be felony"

An Arizona lawmaker has introduced a bill to revise the state's statutes on organized crime and fraud by defining "domestic terrorism" in such a way that members of the Minuteman Project or other border-patrol groups could be prosecuted and forced to serve a minimum six-month jail term.

Rep. Kyrsten Sinema, D-Phoenix, introduced HB 2286 in the Arizona House on Thursday.

Future generations will hate you

On crashes, blame and ignoring problems......

People in their 20's who rushed out and bought a home, hearing if they didn't that they'd be priced out of the market forever, now that they're going to lose everything and go bankrupt, they'll hate you.

They'll hate that they got suckered (thank you George Bush and the "ownership society"). They'll hate the baby boomers who didn't save for retirement, yet managed to create the ultimate pump-and-dump, and then bankrupted the US, spending the nation's wealth and future earnings on stupid wars and out of control entitlements.

But alas, this is nothing compared to the hatred and disgust ALL future generations on earth for hundreds and hundreds of years will rightly have for essentially anyone born from 1900 to 2000, especially the incompetent and corrupt world leadership of today.

Why, you ask, will all future generations hate the people and leaders of earth today? Why will everyone in the future think the people of the twentieth century were self-obsessed, greedy, horrible and non-altruistic people?

Because of this.

January 30, 2007

HousingPANIC Homework Assignment - DUE TOMORROW!!!

1) In your local REIC-supported newspaper, pick out any new home or condo development advertisement

2) Give them a call, tell them you're relocating and must buy this week

3) Ask them if they'd consider a bid 30% below the asking price if you come down and buy today (go 50% if you got balls)

4) Quietly wait their response

5) Report back on your findings with details


Countrywide (CFC) misses earnings, guides lower for 2007, yet says things will be rosy in 2008

Yet deep down, Mozilo knows he got out at the nick of time with his millions of option exercises. 2007 will be bloody. And he knows it. Sub-prime is cancer.

NEW YORK, Jan 30 (Reuters) - Countrywide Financial Corp., the largest U.S. mortgage lender, said on Tuesday fourth-quarter profit fell 3 percent as housing market conditions worsened and loan servicing income nearly disappeared.

The company also said it faces a "challenging" year in 2007, and projected a range of earnings per share that falls mostly below the average analyst forecast.

Mozilo: "Looking ahead to 2007, the industry will likely see continued pressure on margins as mortgage origination volumes decline and industry capacity is rationalized. We are also preparing for increased borrower delinquencies and continued credit deterioration. We believe, however, that 2007 will likely be the trough year of the current housing cycle and that 2008 should represent the beginning of upward trends associated with the next cycle."

(Disclosure - I own a July 2007 CFC put - betting the stock falls)

David Lereah vs. Peter Schiff video catfight on Neil Cavuto. Meow!!!

Blowhard homedebtors Neil Cavuto and David Lereah team up to take on Peter Schiff on whether there's a housing crash underway.

Peter talks about prices are ridiculously high, bid up in a speculative mania with lax lending standards, how renting is significantly cheaper than buying, and how Lereah and the NAR are acting like the dot-com stock touters in the '90s. He predicts a collapse of 50% to 70%.

The Corrupt David Lereah spouts about how the media is talking about a bust when it's not a bust, and how their $40 million ad campaign is to counter the bubblemeisters. Pleads that people shouldn't compare the real estate bubble to stocks in the '90s.

Hilarious video. Enjoy!

HousingPANIC Stupid Question of the Day

Why did the mainstream media in general miss the housing bubble?

And why do they continue to embarrass themselves by publishing unchecked the Commerce Department and National Association of Realtors bogus monthly numbers and "we've hit bottom" proclamations?

REIC Advertising?

I sense a change recently, with Rolodex-of-Realtors Catherine Reagor at the Arizona Republic publishing that killer cash-back mortgage fraud expose. But still 99% of what's out there is rip-and-read NAR-endorsed crap. We've got a long way to go.

A long way.

Doesn't March 2006 seem like a million years ago - check out these pre-construction condo party pictures from San Diego (he he he he)

To think less than a year ago drunk sheeple were lining up to plunk down $800,000 on 1-bedroom apartments in San Diego, lured by the promise of models lounging at the pool, and a pot of gold to be made without working.

Alas, there were no models. No pot of gold. $800,000 didn't turn into $1.8 million.

And strangely, when some of the suckers who actually planned on living there moved in, there were no neighbors. Just a bunch of empty pre-foreclosure condos owned by desperate flippers looking for the exits.

Yup, March 2006 was a million years ago. A different world. People were laughing at HP'ers back then.

No more.

January 29, 2007

Won't it be a blast in a few years to go back and read "there is no bubble" articles like these...

A classic from 2005 from San Diego's head real estate clerk (he he he he):

Bursting the housing bubble's bubble

San Diego County has experienced unprecedented increases in real estate values in recent years, with homes appreciating as much as 20 percent to 30 percent a year.Such appreciation has given rise to the notion that there is a "housing bubble" ---- that is, an unsustainable gain in home prices that, in effect, creates a price bubble that will suddenly "pop," resulting in a loss of equity by homeowners.

The housing bubble is an economic myth, particularly in North San Diego County, where demand for housing has long outstripped supply ---- even in today's cooling market. A cooler housing market in which price increases are more in line with other economic growth factors does not signal the bursting of any so-called housing bubble ---- or the end of a vigorous housing market. Housing price increases can level off significantly and still provide good investment opportunities for buyers and sellers alike.

While the home price-to-income ratio is currently above the historical norm in the San Diego region, the more relevant measure of a homeowner's mortgage-serving cost compared with household income is still at a very manageable level. It implies no widespread financial overstretching to purchase a home in our region.

The only threat we face is loss of confidence on the part of those who want to buy or sell homes and other real estate. The plain fact is there is a lot of misleading and jaded information out there.

In the end, it is the marketplace ---- not panicky doomsayers ----- that will determine the future of our region's housing market. Continuing confidence in the viability of San Diego County and the fact that more people want and need to live here is the best evidence there is to disprove any housing bubble.

Kevin Forrester is president of the North San Diego County Association of Realtors.

HP Test: Which ones are lottery tickets, and which ones are new homes?

Hint: Most Americans didn't know the difference the past few years.

And as we all know, with lottery tickets, it's called gambling, where you can lose it all. Same now with homes, as millions and millions will now find out.

One big difference is that in the past you'd have to be insane to take out (or be given) a $500,000 loan to buy lottery tickets. Yet that's exactly what people did on pre-construction condos in Phoenix, Vegas, Boston, DC, Miami, Tampa, Orlando, Sacramento, LA, Portland, Vancouver, Chicago, Boise, Atlanta, Detroit, Cleveland, ...

HousingPANIC Stupid Questions of the Day

1) Inflation or Deflation?
2) Fed Rise or Fed Cut?
3) Gold Up or Gold Down?
4) Stocks Up or Stocks Down?
5) Mortgage Rates Up or Mortgage Rates Down?
6) Dollar Up or Dollar Down?
7) GDP Up or GDP Down?
8) David Lereah Fired or David Lereah Resign?
9) Foreclosures Up or Foreclosures Down?
10) Casey Jailed or Casey Free?

CBS MarketWatch calls out The Corrupt David Lereah for being a discredited liar

I will say this, TCDL is sure good for a laugh. How this man keeps his job I'll never understand though, as his discredited reputation and continual lies are making the NAR and ALL real estate clerks look like fools and liars by association.

Oh, wait, they are all fools and liars.

Realtors' economist stayed sunny all year
David Lereah saw bottom in first quarter, second quarter ...

WASHINGTON (MarketWatch) -- There are two universal truths at the National Association of Realtors: 1) It's always a good time to buy or sell a home; and 2) We've seen the worst of the housing market correction.

The second truth was in the script used throughout 2006 by David Lereah, chief economist for the NAR, even as sales plunged by 8.4%, the fastest decline in 17 years.

With annual sales of 6.48 million, 2006 was the third best ever, but after five years of steady increases, it was a rough year for the industry. Through it all, Lereah never stopped smiling.

January 2006
Lereah's forecast: "The market is in the process of normalization."
Actual sales: Fourth-quarter sales fell at an annual rate of 12.6% to 6.94 million annualized.
Lereah's post-mortem: "The level of home sales activity is now at a sustainable level, and is likely to pick up a bit in the months ahead."

April 2006
Lereah's forecast: "Home sales will move up and down somewhat over the remainder of the year but stay at a high plateau."
Actual sales: First-quarter sales fell at an annual rate of 8.6% to 6.79 million.
Lereah's post-mortem: "This is additional evidence that we're experiencing a soft landing."

July 2006
Lereah's forecast: "The market should even out just below present levels."
Actual sales: Second-quarter sales fell at an annual rate of 6% to 6.69 million.
Lereah's post-mortem: "The market is stabilizing."

October 2006
Lereah's forecast: "We expect sales activity to pick up early next year."
Actual sales: Third-quarter sales fell at an annual rate of 22.2% to 6.28 million.
Lereah's post-mortem: "This is likely the trough in sales."

January 2007
Lereah's forecast: "The good news is that the steady improvement in sales will support price appreciation moving forward."
Actual sales: Fourth-quarter sales fell at an annual rate of 2.3% to 6.24 million.
Lereah's post-mortem: "It appears we have established a bottom."

It's possible that Lereah may be right, finally. The bottom must come some time, why not now, some 19 months after the bubble peaked?

But it's also possible we could be far from the bottom, as in the housing bust of 1978-1982, when it took 42 months for the market to recover.

If so, it could be a long year for David Lereah.

FLASH: 25,000 unused, unwanted, unneeded and unsold spec homes in Phoenix

25,000 homes sitting there empty and unloved, cookin' in the Arizona desert sun, with another 80,000 stupidly and hilariously on the way.

Oh, man, this is gonna get ugly.

I got nothin' else to say.

He estimated that as many as 25,000 unsold spec homes are sitting on the market, the result of buyers backing out of deals when they couldn't sell their existing homes.

Brown and Burger, of the consulting firm Home Builders Marketing, reported that the Valley finished 2006 with a building-permit total of 42,460, a big drop from the housing-boom period.

Builders pulled more than 60,000 permits for new homes in both 2004 and 2005, but this year's slowdown cut the number drastically.

The analysts expect permits to total 41,000 this year and 44,000 in 2008.

January 28, 2007

Housing prices are crashing and crashing hard. You just don't know it yet. "It's going to get bloody"

It should be obvious by now that the Commerce Department and NAR housing reports are laughable.

It should be quite clear that pricing data that doesn't include incentives and cash-back is bogus. And when you see new home sales numbers just dropping slightly, when they don't include the 40% - 50% cancellation rate, you should just laugh and laugh.

You're being lied to Americans, you're being taken for fools and suckers. If you want the truth, it's out there. You just have to look for it.

Here's an illuminating article in the WSJ for starters:

WSJ: Housing Glut Gives Buyers Upper Hand

A quarterly survey of housing conditions in 28 major metropolitan areas by The Wall Street Journal showed that the inventory of unsold homes at the end of 2006 was up substantially in nearly all of the markets from the already plentiful level of a year earlier. The biggest increases were in the metro areas of Miami-Fort Lauderdale, Orlando, Tampa and Jacksonville, Fla.; Phoenix; and Portland, Ore.

The survey also includes recent pricing trends -- nearly all negative -- based on surveys of real-estate agents by Banc of America Securities in New York, a unit of Bank of America Corp., as well as data on late mortgage payments and job-creation prospects from Moody's Economy.com, a research firm in West Chester, Pa. Employment figures have a huge effect on housing demand.

"It's going to get bloody down here," Mr. McCabe says. He estimates that condo prices in Miami-Dade fell between 8% and 10% last year and will drop 20% in 2007. Eventually, he predicts, hedge funds and other investors will step in to buy surplus condos in bulk at huge discounts.

Mr. Dennehy estimates that condo prices have fallen at least 15% to 20% in the county over the past year, though it's hard to measure price changes because sellers often give incentives such as free upgrades or help with closing costs that aren't reflected in the price.

Mr. Otteau figures home prices fell an average of about 10% in New Jersey last year.

In Scottsdale, some sellers are cutting prices by 10% or more, says Dale Pavlicek, sales manager for the Coldwell Banker Residential office there. "There are a lot of vacant homes on the market," he says. Sellers who bought in the past year or two are barely breaking even or are coming to the closing table with money to pay off their mortgage and other costs, he adds.

Liars Loans and Leverage: Fulfilling the "abundance of credit" prophesy of a great financial mania (and crash)

Manias, Panics and Crashes (the HP bible):

The mania part of the story is familiar: a new invention will revolutionize the economic landscape and bring forth unimaginable profits.

The abundance of credit, coupled with leverage (buying with borrowed money), accelerates this process and buying leads to more buying.

Then comes the panic: some event shakes confidence and wakes up investors to the mania that has clouded their judgment. This panic leads to a crash: borrowed money needs to be repaid and investors will sell anything at any price to meet the bankers' needs.

Skip forward to the Late Great Housing Ponzi Scheme:

In 1998, liars' loans — those with little or no documentation — amounted to 24% of all mortgage originations. So far this year, the association notes, liars' loans have shot up to an estimated 62% of mortgage originations.

Interestingly, a recent sampling of 100 stated-income loans by an auditing firm in Virginia (based on IRS records) found that 90% of the income statements were exaggerated by 5% or more, while almost 60% of the stated amounts were exaggerated by more than 50%.

What a housing crash looks like: Here's a few charts from crashing hard Sacramento (c/o excellent Sac Landing blog)


January 27, 2007

HousingPANIC Stupid Question of the Day

Holy crap things are getting really ugly really fast now.

Oh, wait, I didn't ask that in the form of a question. Let me try again dear reader:


Are things getting really ugly really fast now?

Much better.

Seth Jayson at Motley Fool picks up the cash-back mortgage fraud story and runs with it

Gotta love Motley Fool's Seth Jayson (definitely an HP'er), who's done a good job taking HP issues and MSM'ing 'em. His column today takes up the cash-back mortgage fraud cause.

Like we predicted, this story may have started in Arizona but it's going nationwide. The MSM is finally finding the tip of the iceberg. Oh, won't they be surprised on what lies beneath?

Even the USA Today recently did a cover story today on mortgage fraud. Away we go...

Housing Prices, We Ain't Seen Nothing Yet?
By Seth Jayson

At least not if this situation has been repeated all over the country. With amateur home swappers -- oops, I mean "investors" -- obtaining inflated financing and simply pocketing the cash, and neighbors so anchored to what "the other guy just sold for,"

I think we have a long way left before we find the bottom. And it doesn't take outright fraud to skew prices.

I've long been skeptical about the National Association of Realtors' tired party line about a soft landing, as home prices are not being adjusted to reflect the major givebacks desperate sellers were offering in order to attract buyers, from expensive kitchen remodels to luxury cars.

There's an entire industry out there with an enormous vested interest in duping the public into believing that the unprecedented rise in home values was entirely natural and warranted.

And now we're expected to believe that the worst is over. I think we ain't seen nothing yet.

That will pinch plenty of naive consumers who bought too much with fancy financing. What could it mean for loansters like Countrywide Financial (NYSE: CFC), Wells Fargo (NYSE: WFC), Citi (NYSE: C), Novastar (NYSE: NFI), and others? Time will tell. It sure looks like the smaller rats are already diving off the barques.

HousingPANIC Stupid Question of the Day

If 24 year old unemployed kids can get $2.2 million in unsecured loans to buy up houses to scam the system, get cash back and get foreclosed on eventually, how can real people with real jobs who don't want to get foreclosed on or go bankrupt expect to pay legitimate prices for a home?

Thank god for the housing crash. This loose-lending crap will now go away, as the loans go bad, the speculators get killed, and prices will finally come back to where they're supposed to be, not this over-inflated, speculation-driven, liars-loan-enabled BS.

Let's party like it's 1999! Casey's Iamfacingforeclosure.com is back up! But damn, looks like he's getting sued by some whacko

I thought a quick follow-up post was deserved. The kid's got a another whole different problem now, something about doing a deal with some girl who suckered Casey out of the rights to his website (odd, eh?) and Casey disclosed it and their NDA, so she goes nutty and tells his ISP to take his website down, blah blah blah...

Anyway, kid's back up. And yes, I love his blog. Anyone who wants to see the mind of a flipper / failed investor / Robert Kiyosaki follower / total sucker just check out iamfacingforeclosure and enjoy the scheudenfreud. Seriously, the kid has one of the most entertaining blogs out there. In a sick way.

Oh, in regards to the whacko who's about to sue Casey - some girl named PRlinkbiz (aka Erin Morgan) - I think we should go to the defense of a fellow blogger here. Sounds like a real wretch, a user, a poser. Oh, wait, she's from Phoenix! Now it makes sense. Plus she's connected to Kiyosaki, so there's that stench too.

Anyway, see the deal she and some yucky "real estate investor" and Casey (under duress) made, it'll make you feel even sorrier for the kid, even though yes, he's a complete fool for signing it. I have no idea why he ever would, it's that disgusting. But just shows you what kind of sharks and evil people are out there. Erin Morgan, aka PRlinkbiz, you're disgusting. But damn, for Casey to publish their deal and NDA, oh, man, that's ballsy. Or dumb. Or both! But hey, when you're $2.2 million in debt, your world is crumbling fast, what's another lawsuit? Oh, man, the scheudenfreud!

Cheers Casey. Glad to see you back up. Best soap opera on the internet. And HP'ers, like him or hate him, Casey is just one of thousands out there who gamed the system and caused this bubble, and crash. I wish more were coming clean.

Now file for bankruptcy kid, do your jail time, and get on with it.

To whom it may concern,

I am writing this to demand the removal of the content displayed at the domain http://www.iamfacingforeclosure.com/. Casey Serin or domain author has:

- posted confidential information regarding Erin Morgan, Joy OÂ’Day and TAO Realty, L.L.C. despite having signed an NDA. The signed NDA is posted on the site with repeated admissions to the signature of the NDA.

- posted, and allowed his bloggers to post, untruthful and slanderous information in effort to defame the character of the parties aforementioned

- posted a link to a video created and owned by Robert Kiyosaki and / or Cashflow Technlogies / Rich Dad as well as posted, and allowed his bloggers to post, untruthful and slanderous information in effort to defame the character of Robert Kiyosaki

Casey Serin, iamfaingforeclosure.com and applicable persons or entities will soon be party to litigation for his actions. If your company continues to host Casey Serin's blog, your company, by its inaction, could potentially be a party to this litigation as you have been formally notified.

January 26, 2007

Imagine that... Casey Serin's Iamfacingforeclosure.com shuts down, didn't pay his ISP bill it appears...

Ever see that guy's stack of unpaid bills and foreclosure notices? Oh, man, I can't imagine being $1 in debt, let alone $2.2 million.

Anyone got any scoopage report it here. I'll sure miss the kid, hope he finds the $19.95 to keep going (until the Feds come a-callin').

HousingPANIC Stupid Question of the Day

Doesn't it kinda suck that home prices are going to plummet for years and years to come, so anyone who wants to buy now can't, unless they want to commit financial suicide?

Damn, I just want this housing crash over with already. But alas, look to Japan, this sucker is going to take quite some time. Quite some time.

What do you think - 2012 by the time we see bottom?

Love it! Business Week reporter writes how the media SHOULD report the error-prone Census numbers but doesn't

Oh, man, Peter Coy at Business Week just went up a few notches in my book. As HP'ers know, we laugh at the monthly Census and NAR numbers which aren't worth the paper they're printed on - whether you're a bull or a bear. With dubious inputs and massive margins of error, the reports are a joke.

The Census new homes data, not many people know, reports commitments to buy, but doesn't report end sales or closings.

And as we all know, builders are seeing 40%+ cancellations, so the numbers are, you got it, wildly, hilariously overstated. And of course our biggest beef is the price data, which doesn't include incentives or cash-back.

Here's Peter's hilarious re-write of how the numbers SHOULD be reported with the margin of error noted:

Census Bureau Doesn't Know if Housing Starts Rose or Fell in December

Confusion over the state of the housing industry continued today as the Census Bureau once again said that it doesn't know whether the rate of construction of homes rose or fell in the most recent month.

The bureau estimated that starts rose 4.5%, but the margin of error was plus or minus 8.8 percentage points.

The same thing happened for October, where the estimated increase was 6.7% but the margin of error was plus or minus 10.1 percentage points.

On the bright side, we're pretty sure that starts really did increase in September, because the estimated increase then (14.6%) was bigger than the margin of error (plus or minus 7.6 percentage points).

The Corrupt David Lereah says speculators have left the market. Well, here's what happens when that happens - The 1926 Florida Real Estate Crash

There should be no surprises for HP'ers. We've been here before, and we'll be here again... Another good real estate / banking panic to study up on if you want context for our current crash would be the 1926 fun-fest in Florida. Enjoy the read.

The 1926 FloridaReal Estate Crash

Real estate has always been one of the ways to make great fortunes

As a matter of fact, both real estate and stock market have made more millionaires than any other investment.

The sad part is that most speculators in either of the two investments end up losing their shirt!

The era of extreme low interest rates, a smart propaganda that landlords are getting rich at the expense of their tenants, and everybody's dream to own a house, no matter how outrageously it is priced, have resulted in prices going sky high!

In 1926 in Florida the real estate market declined from peak to bottom. Land that was bought for $1 million could, within six months, be resold for $4 million before crashing back down to the pre-boom $ 100,000 level.

The prices were so inflated that to buy a small property in 1926, you would've had to pay the same as you would now have to pay for a luxury home!

In the mid 20's Florida became a popular destination for those who were seeking to escape the cold.

Unfortunately, housing could not keep up with the demand, so prices started to go up as more and more people started to compete for housing.

Soon speculators decided to jump in and before you knew it an flood of money was chasing limited housing. Houses started to double and triple in value.

The only way to realize profits was to sell at a higher price than you paid for the house. For a while everything was great but the supply of fools willing to pay such inflated prices for property eventually came to a halt.

Speculators began to sell their properties to get their profits while they could.
Then everybody simultaneously saw the "bubble," and panic selling ensued. With thousands of sellers and very few buyers, prices started going down and down and down...

That is when the situation abruptly changed and individuals started getting vaporized by the hundreds. Before you knew it, the prices had fallen down to pre boom levels.

If you look at the prices of some houses, you will see that after almost 70 years some houses are still selling for less than what the then owners paid for them.

January 25, 2007

Home sales crash worst in 24 years. The Corrupt David Lereah says: "It appears we have established a bottom. There was no bubble burst in 2006"

Used home sales supposedly down again in December and for all 2006. But we'll never know how much really - NAR numbers after all, with the bogus price data too.

And The Corrupt (and how is this guy still employed?) David Lereah had some gems today!

"It appears we have established a bottom," said David Lereah, chief economist for the NAR. "We are still vulnerable; we are not out of this yet."

"There was no bubble burst in 2006," Lereah said.

Had Enough?

HousingPANIC Stupid Question of the Day

It's significantly cheaper to rent a home today than to rent money from the bank to possess it (mistakenly called "buying" by some people").

As a matter of fact, it's not even close - you can rent for
pennies on the dollar compared to the cost of buying today.

So, now that home values are dropping, and won't be rising again for years and years, and now that there are
millions of unwanted empty homes across the US to choose from, why would anyone consider 'buying' a home today?

California: Home of interest-only loans, the most overvalued real estate in America, and now... exploding foreclosures

Hat-tip to the always excellent TheMessThatGreenspanMade for drawing attention to the DataQuick report.

California is the perfect recipe for housing crash destruction. Home prices totally detached from incomes or rental yields, and homes bought with no money down and interest only payments (70% of San Fran area buyers used interest only last year, 61% in San Jose, 78% in Vallejo!)

So what happens when values start to move south and REIC jobs disappear? It's pretty obvious - a sea of foreclosures. You ain't seen nothin' yet. Millions will now lose their homes. But don't worry, those realtors and mortgage brokers got paid!

FLASH: Illegals being rounded up in LA

761 down, only 20 million to go... Hey, it's a start.

And again folks, I'm all for immigration. LEGAL immigration. ORDERLY immigration. LAW-ABIDING immigration. FAIR immigration. I'm not for anarchy and amnesty and don't understand people who are.

With no homebuilding jobs to go to anymore, even if we don't round them all up, I think a lot will be heading back home anyway. Based on all the Mexican flags we saw at the protests this summer, it looks like they must like it back there better anyway wouldn't you say?

Officials net 761 illegal immigrants - About 450 caught in sweep have already been deported

Federal officials fanned out across Southern California over the past week in one of the biggest sweeps of its kind, arresting 761 illegal immigrants ranging from murder suspects to visa violators.

Ending Tuesday, the raids were part of Operation Return to Sender - a national effort by the U.S. Immigration and Customs Enforcement Agency that has netted more than 13,000 illegal immigrants nationwide since June 2006.

Some 450 of those arrested have already been deported, or voluntarily returned, to their native countries, ICE officials said.

"Anytime we can take 761 people off the street who have violated the laws of this country is a big success," said Jim Hayes, Los Angeles field office director for ICE's detention and removal operations

January 24, 2007

HousingPANIC Stupid Question of the Day

Are homebuilders themselves breaking the law and guilty of mortgage fraud (via known false/over-inflated appraisals) when they offer cash back and massive incentives?

A $500,000 house with $50,000 incentives or cash-back = a $450,000 house, no matter what your loan, mortgage broker, neighbor, builder, realtor or appraiser says.

Let's take the Cash-Back-Carousel-of-Fraud(TM) for a spin. Today's stop: Craigslist Sacramento

Jan-23 ▲■ 35K-40K CASH BACK """ Pre construction Incentives img
Jan-23 WANT CASH BACK? (Sacramento) pic
Jan-23 ■■ 35K-60K CASH BACK --- Preconstruction Investment Incentives img
Jan-22 $475000 No Out of Pocket 475K w/ 25K Cash Back plus 12 month (San Antonio) pic
Jan-22 $20000 CASH BACK! (SAC. AREA) pic
Jan-21 ▊■ 55K CASH BACK ▓ Preconstruction Opportunity img
Jan-20 $389000 New 4bd/3ba home...Buyers receive cash back on any home(comm. rebate) (Sacramento) pic
Jan-19 ▼▼ Pre construction Investment Project ; 35K CASH BACK img
Jan-19 ▊■15% CASH BACK & zero taxes incentives - PreConstruction Deal img
Jan-18 █▲ Pre Construction Deal ~~ 14% CASH BACK img
Jan-18 $300450000 Looking for a home to buy with some cash back can anyone help me. (sacramento area)
Jan-18 $389000 New 4bd/3ba home...Buyers receive cash back on any home(comm. rebate) (Sacramento)

So, have we turned the corner to "fear" yet?

I know, I know, housing crashes play out over long periods of time (see Japan). But good god, how long do we have to be stuck in "denial"?

It's time for "fear".

I think the Sunday Arizona Republic article fanned the fear flames in Phoenix for sure, or at least made people (Greg Swann) think twice about existing in their happy bubble of denial.

January 23, 2007

FLASH: Cash-back mortgage fraud story now sucking all the air out of Phoenix housing market (sorry, Greg Swann, the jig is up)


I can't believe what I'm reading. "Rolodex of Realtors" Catherine Reagor is now channeling fricking Carl Bernstein, and dominating the Phoenix media (and soon to be national media) with this cash-back mortgage fraud exposure in Phoenix.

Someone found housing crash jesus! Now if she'd just admit she's gone from REIC pawn to HP junkie...

This latest follow-up has only one real estate clerk quote, if you can believe that! And a pretty negative one at that. No more cheerleading when the sh*t really hits the fan I guess.

Too bad Greg Swann hasn't done a posting or gotten the message. But of course, he hasn't and he won't, even though it's the biggest story in Phoenix real estate history.

The Phoenix Housing Ponzi Scheme is over folks. Panic is now setting in, the center does not hold, it'll be every man for himself, and you are about to watch something historic. These are important days. God help us all. Duck and cover.

State targets mortgage fraud
Catherine Reagor The Arizona Republic

A wave of mortgage fraud in the Valley has prompted state legislation that would define it as a crime punishable by up to 10 years in prison.

A day after The Arizona Republic's special investigation into cash-back mortgage deals, Sen. Jay Tibshraeny of Chandler introduced a bill that would make mortgage fraud a felony.

"Mortgage fraud hurts everyone," said Tibshraeny, who has been working on the legislation for months. "Buyer, beware of a deal that seems too good. The strings your Realtor or mortgage broker pull may be illegal."

Felecia Rotellini, superintendent of the Arizona Department of Financial Institutions, is leading a new mortgage fraud task force made up of state and federal agencies. She said the proposed legislation would help investigators crack down on mortgage fraud. Rotellini said her agency was deluged with calls Monday from people reporting cash-back deals and other potential mortgage fraud

Valley real estate investor and marketing executive Francine Hardaway said: "Thank God somebody finally blew the whistle on this. As an investor, I see it all over the place."

Don Matheson of Re/Max Excalibur Realty of Scottsdale said: "This is a very big problem and very damaging to our real estate market. We need to catch these people and put them in jail."

Several readers were alerted to the schemes when they saw homes sit unsold for months and their prices reduced. Then, as the housing market was slowing even more, those homes sold for tens of thousands of dollars more than the previous listed price.


DR Horton CEO: "We're in the very early stages" of housing crash, "most of these downturns are longer and deeper"

Someone explain me how stock manipulator and insider-trader Bob Toll will avoid spending quality time with Bernie Ebbers and Scott Sullivan? He sees the numbers, he knows we're in meltdown mode, yet he goes out and pumps his stock (before he sells even more).

Nice to see DR Horton's CEO understand his obligations under the law, and just tell the truth today.

Toll Brothers CEO Bob Toll (looking to dump more shares, skirt the SEC) - "Fifteen months into the current slowdown, we may be seeing a floor in some markets where deposits and traffic, although erratic from week to week, seem to be dancing on the bottom or slightly above"

DR Horton CEO (wanting to avoid jail time): "We're in the very early stages" of the current housing slowdown. "Most of these downturns are longer and deeper, and right now we don't see anything on the horizon that would change that opinion. We continue to see a very challenging industry environment for fiscal 2007."

Phoenix housing crash chart: Median asking price c/o Housing Watch

A, B, see-you-later... And don't forget, these still-inflated asking prices contain the incentives and cash-backs. Take those out (if we could) and this chart is even uglier.

$500,000 asking price home with $50,000 cash back or $50,000 in incentives is really a $450,000 home (if anyone is stupid enough to buy it)

HousingPANIC Stupid Question of the Day

HP Easy Quiz:

"I just bought a house in Phoenix for 30% below asking price!!!"

A) Smart
B) Stupid
C) Really fricking stupid

The key to the out of control housing ponzi scheme: The Corrupt Appraiser and Quid Pro Quo

The Senate 2008 Housing Crash investigation will no doubt focus on this key piece of the puzzle - corrupt appraisers and the disappearance of a crucial check and balance.

See this quote first for some context:

"Every day I would get calls that I needed to do an appraisal for X amount," Wallen said. "There are so many appraisers out there willing to give out whatever value a client wants. That makes it tough for the honest appraisers to compete."

Now ask yourself, what percent of the appraisals done over the past few years were legit? Single digits?

If someone wants to be honest and moral in the appraisal business, well, they're no longer in business. Appraisers were bought and sold by the REIC - corrupt real estate clerks desperate to earn their commission and "make the numbers work" and mortgage brokers earning slam-dunk bonuses for writing up those no-doc, no-down, cash-back, negative-am loans on the inflated amounts.

If you were an appraiser who could make the numbers work, heck, you didn't even need to work anymore. Just go to Zillow.com, do a drive-by to shoot some photos, and you're good to go! I also have to believe there was a lot of cash exchanged under the table between mortgage brokers, appraisers and real estate clerks.

Bottom Line: Millions of homes during the Great Housing Ponzi Scheme sold these past few years an now-wildly-overvalued prices, based on wildly-overvalued-appraisals. But the true appraisal is the simplest one - WHAT WILL THE MARKET BEAR?

I think many a homedebtor and flipper will now find out that that simple number is nowhere close to the bogus appraisal number.

Welcome to the housing meltdown. And you can thank the corrupted appraisers and a quid pro quo system run amok.

There were 22,000 mortgage fraud reports nationwide in 2005, according to the FBI. Appraisal fraud has been involved in up to 40 percent of fraudulent mortgage reports in the past five years, according to the Mortgage Asset Research Institute.

But those numbers may be understated, the institute says, because appraisers aren't typically caught unless the loan goes into default. That typically happens four to five years after the loan is made.

FLASH: Cash-back mortgage fraud scam sweeping Arizona (and the US): "could erode confidence and values in Arizona's real estate market"


Nice again to see the MSM (and the lazy Catherine Reagor!) FINALLY reporting on the meat of the housing bubble ponzi scheme, although the cat is way out of the bag now.

Greg Swann's Phoenix Arizona may in the end be the epicenter of not just the housing bubble, but also mortgage fraud. Why? Because there are no real jobs in Phoenix. Just a bunch of high school GED's gaming the system with mortgage fraud, fake appraisals, and the REIC spinning out of control.

Oh, man, this is going to end so ugly. Someone get the paddywagon, we got a bunch of 'em to put in jail when this is over. And billions, if not trillions, in fraudulent loans. Fannie, Freddie, hedge funds, Countrywide shareholders and China should be a bit nervous right about now.

Valley fighting mortgage fraud wave

A wave of mortgage fraud is rippling through pockets of the Valley, inflating home values through scams called cash-back deals.

Left unchecked, cash-back deals cost homeowners and lenders millions of dollars and could erode confidence and values in Arizona's real estate market.

The fraud involves obtaining a mortgage for more than a home is worth and pocketing the extra money in cash. Neighbors may then discover home values in the area are exaggerated.

Homeowners stuck with overpriced mortgages may never recover the difference. And lenders end up with bad loans that, in the long run, could hurt the Arizona real estate market, the largest segment of the state economy.

"Arizona was like a housing gold rush for speculators from California, Florida and Texas a few years ago," said Detroit real estate agent and fraud activist Ralph Roberts, author of the book Flipping Houses for Dummies. "But home prices stopped climbing, and speculators got greedy. Now the cash-back scam is going to make the savings and loan crisis of the 1980s look like a soft landing"

Valley housing-market experts now believe home values are inflated anywhere from 10 to 40 percent.