February 23, 2007

BUBBLETALK: Fresh thread to talk about the Late Great Housing Ponzi Scheme

Post "Great Unwinding" article highlights and tinyurls, talk about random stuff, have a good chat, keep it clean...


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Anonymous said...

Just a forewarning...

A lot of the worst news is released late Friday afternoon, after market close...

Anonymous said...

From the Government Accountability Office (GAO), the agency’s December report on the government’s financial statements:

“A significant number of material weaknesses related to financial systems, fundamental recordkeeping and financial reporting, and incomplete documentation continued to ... hinder the federal government from having reliable financial information to operate in an economical, efficient, and effective manner.”

The report goes on to say that the federal government cannot reliably report a significant portion of its assets, liabilities, costs, and other related information ...

Cannot reliably measure the full cost of certain programs and activities ...

Has impaired its ability to adequately safeguard significant assets ...

And has hindered itself from having reliable financial information to operate in an economical, efficient, and effective manner.

And that’s just the beginning of the report! The GAO’s conclusion?

“Certain material weaknesses in financial reporting ... prevent us from expressing an opinion on the accompanying consolidated financial statements for the fiscal years ended September 30, 2006 and 2005.

“We are unable to, and we do not, express an opinion on such financial statements. As a result of these limitations, readers are cautioned that amounts reported in the consolidated financial statements and related notes [of the U.S. Government] may not be reliable.”

Anonymous said...

Listen up imbeciles, half wits and obtuse renters in your crumbling, ramshackle and decrepit apartments. How's it feel to sit on this threadbare, decaying and evil-smelling old sofa you retrieved from the dumpster? It takes a completely unhinged hemorrhaging mind to believe that renting is good. Repeat after Blowfly: I am a jackass meathead retarded moron! Ahh finally, the truth!

Anonymous said...

I picked up a homes sales magazine from my local supermarket this weekend. Nice story in there of a couple who rented, had trouble saving any money, unable to afford a "place of their own" and when the baby came the apt. was real tight in space.

They found a loan that offered $0 down and enabled them to buy their first house. So heart warming. I assume they bought in NJ someplace because thats where the magazing came from. I don't know what they bought or what they paid, but they were broke while renting. Now that they bought I can only imagine their mortgage is more than their previous rent, $0 down equals PMI insurance, house insurance, taxes, and of course things will need to be purchased for the house, washer/dryer, fridge, etc... and even some maintenance.

I can only image they are in even deeper now. But hey, their building equity and getting a tax refund.

I would pay to have the same paper publish full financial disclosure to see how their doing 1-3 years down the road.

Everything is always good news in a sales publication, and that is what scares me.

Anonymous said...

"LONDON/NEW YORK (Reuters) -- Europe's biggest bank HSBC said on Wednesday its charge for bad debts would be over $10.5 billion for 2006, some 20 percent above analysts' average forecasts, due to problems in its U.S. mortgage book.

HSBC said in a trading update late on Wednesday that slowing home price growth was being reflected in accelerated delinquency trends across the U.S. sub-prime mortgage market, particularly in more recent loans."

Anonymous said...

My favorite videos:





Spend the 2-4 hours watching all these videos and you'll see that the housing bubble is the least of your worries!

Anybody else have any interesting videos?

Anonymous said...

Hey blowfly.....up the dosage!

Anonymous said...

Dear Striker,




Disclaimer: This is a real shocker.
Who Knew.
I am not agreeing or taking sides ANY SIDES! I am JUST sharing this documentary video.
Who in this video is the racist, if anyone?

Anonymous said...

As a loan officer myself with US Equity Mortgage. I'm really feeling the bubble pains. The office changes pay days often. Things are changing fast. I love your in site on this issue. Check out my sit for more article at www.info-me.info.

Anonymous said...

Zippity doo da, zippity ay!
My oh my what a wonderful day.
Gold is a'rising
Housing got slayed.
Zippity doo da, zippity ay!

Anonymous said...

If housing were a good investment, the government wouldn't have to give the mortage interest deduction to get you to buy it.

It isn't. It will revert to the mean and a bit less (due to negative emotion causing undershoot). You can calculate your ongoing, inevitable, financial loss by the difference between what you paid, and the median trend of housing prices.

Uh oh.

Anonymous said...

Hey blowfly.....up the dosage!

No need to pick on blowfly, the retarded identify themselves! :)

Anonymous said...

ten feet of snow in buffalo might make for cheap beer in the spring, no bubble there

Anonymous said...

Just a few things to note:

Housing Bubble collapse inevitable.

HP'ers will buy 3X's the house at 2/3 of the price in a couple of years, so homedebtors, get real about your "living in mom's basement" comments.

I rent a beautiful, large house near the ocean and pay peanuts.

I almost bought this year but pulled back and glad I did.

Potential homebuyers help each other out now and simply don't buy these pieces of junk for outrageous amounts of your hard-earned money.

Anonymous said...

"LONDON/NEW YORK (Reuters) -- Europe's biggest bank HSBC said on Wednesday its charge for bad debts would be over $10.5 billion for 2006, some 20 percent above analysts' average forecasts, due to problems in its U.S. mortgage book.
Ouch, bad news. BTW, HSBC is the biggest bank in the whole world. Check out the rankings under "Bank" in Wikipedia....

Anonymous said...

One point I'd like to mention is the recent home price to earnings ratio chart that runs from 1953 to present. I've noticed that these peaks have a lot of bilateral symmetry. You can draw a line down the middle of each one, and they are close in mirrored appearance. What this tells me is that the time it took to run up ~= the time it takes to run down. If this is true, are we looking at 5+ years of downhill?

graph link:

Anonymous said...

Striker, unfortunately there's a deliberate plan by corporations to bring more immigrants in to depress wages for bigger profits. Also, the food industry benefits by selling more processed food. There's only so much the normal population can eat per year, so the additional millions of immigrants help to increase consumption. Giants like Coca-Cola, Pepsi, ADM, General Mills, Swift, etc, are very interested in this huge market of immigrants, to the detriment of the rest of the country. Great videos!

Anonymous said...

NEW has lost 34% of it's value in one day. It's current Market Cap is 1.1 Billion so 530 MILLION dollars in value just poofed today for some investors.

I wonder what's going to happen if those mortgages are held by the Chinese and this tips the scales into a full on stampede out of the dollar?

Oh my.

Anonymous said...

How the Fed lost control of money supply.


Anonymous said...

Keep in mind, billions of dollars will be leaving the housing market soon looking for a new home.

1) Bonds? Nah, this is fast money looking for a racy new home.

2) Tech Stocks? Maybe, it fits the mentality of the real estate speculators, to look for opportunity and jump on it quickly.

3) Commodities? Once gold and oil confirm their respective bottoms and start moving up there'll be no stopping them.

4) Cash reserves? Maybe. Certainly there are a lot of stupid people and countries out there that think the dollar is a good value resvoir. But why bother with something that has 0 upside and lots of potential downside.

Anonymous said...

Ok, so NEW ended up 36.21% down for the day. No buyers showed up telling me that no one thinks it has any value or hope of bouncing. Keep in mind this is a company that gives a 25% dividend! Still no buyers.

I think this outlook will infect investors of other sub-prime lenders.

Tomorrow's going to be a sub-prime lender blood bath.

Anonymous said...

LOL! Thanks for selling me all those NEW puts the other day Blowfly.

'Nice story in there of a couple who rented, had trouble saving any money, unable to afford a "place of their own" and when the baby came the apt. was real tight in space.'

The mantra of the housing bubble: "Too poor to rent? Now you can buy!"

Anonymous said...

I rent a stunning home for peanuts as well. In my neck of the woods, there is so much inventory sitting empty you can practically name your price and get a rental agreement.

deepcgi said...

I like BlowFly. He cheers me up, somehow. Maybe, it's the speaking in third person. All that would be better is if he used third person plural.

Anonymous said...

It's OK to spit it out so long as he's not looking.

You can spit it out now.

Anonymous said...

My friend bought a nice place for $500 k. He lost his job as a mortgage broker. He has been trying to sell it for 9 months. He thought he had it sold 2 times but it fell through.

He was really worried that he may have to walk away from it. He said the anxiety is too much for him, and he would be relieved just to walk away.

Does any one else have a story like this?

Anonymous said...

Trollfly - yeah, and what am I?

Anonymous said...

Inflated Seattle Median home prices finally starting to break. $40,000 price drop in median home price in one month!!! Realtors spining like crazy trying to play it down.

"Seattle's median home price in January was the lowest it has been in a year, according to statistics released Wednesday.

The median price of $379,990 was down from $420,000 in December, according to the Northwest Multiple Listing Service.

A seasonal decline is consistent with recent years, but Seattle's January median home price also was lower than King County's median -- a first since at least 2001. King County's median home price in January was up 8 percent from a year earlier, while the median for all 19 counties in the Northwest MLS was up 10.6 percent.

"That's odd," Bob Melvey, assistant manager at Windermere Real Estate's Ballard office, said of the Seattle numbers. "My personal experience doesn't jibe with the stats."


Anonymous said...

"Striker, unfortunately there's a deliberate plan by corporations to bring more immigrants in to depress wages for bigger profits."

More like more workers are needed to fund the retirement of the Babyboomers.

Anonymous said...

don't mind blowfly... he's just got a bitter taste in his mouth from working the glory hole at the peep show ever since his Pets.com stock crashed!

Anonymous said...

if housing is crashing then why has inventory been stable and dropping over the past few months and prices are actually up this month! South Scottsdale.

blogger said...

'REPORTED' inventory in Phoenix may be "stable" at 60,000 but it's at record highs and doesn't include the 30,000 spec homes builders are sitting on nor the FSBO homes. Plus the 50,000 more homes that will be delivered in 2007 adding fuel to an incredible fire

In addition, many have given up after not being able to sell in a year or more.

Any more questions?

Anonymous said...


Dont forget folks - if rentals start going up in price, the feds will HAVE to reflect this in the inflation numbers. Then salarys will start going up (they went up 15% per year in the 70s) WHILE housing prices go down. A great time to buy.

Miss Goldbug said...

Honica- Here's the website with the list of the top 25 sub-prime lenders I mentioned earlier.


Miss Goldbug said...
This comment has been removed by a blog administrator.
Anonymous said...

Wow maybe theyl just give some of those houses away .
Ive never been to PHNX I wouldnt mind staying in A home for A week or two to check it out ,wonder if theyl rent some weekly cause with those numbers theyl need Mexico to move in to fill it up.

Anonymous said...

Look at me Now!


Anonymous said...

Susan Bies, one of the Federal Reserve govenors, has just announced her resignation and will not attend the march meeting. Her full term was to end in 2012.

She was considered the expert on banking and risk assesment....

...makes you wonder just a little bit, if she is starting to see what is coming on the horizon.

also an interesting note from the CNBC article:

"Her departure comes amid an unusual amount of turnover at the central bank. The Atlanta Federal Reserve Bank announced a new president on Thursday and the heads of both the
Chicago Fed and Boston Fed have announced they will step down this year."

Anonymous said...

Whats really big in the Arizona Republic now, are all the ads claiming that will make a fortune from foreclosures. FULL page ads. Do you have any idea how much a full page ad in the Republic is? So apparently there is still plenty of room to cash in on the speculation in Arizona...in one form or another.

Anonymous said...

I see that you subnormal brainless moron renters are trying to entertain yourself with your absurd, inane and idiotic jabber. Since you have already proven to be a mentaly defective nitwit pinhead by renting it's now time for your lobotomy. The next logical step in your inane, pointless existence. Another weekend is waiting for you in your decrepit, dilapidated, poverty-stricken, ramshackle, slipshod rental apartment. Enjoy the rat steak!!!

Anonymous said...

Senator Bernie Sanders of Vermont was on C-span Feb 9, 2007

Treasury Secretary Henry Paulson made a statement that the US economy is doing great.

However Senator Sanders addressed that comment by saying if a single mom who has to work 50 or more hours to provide for her child were here today she would ask Secretary Paulson

"What world are you living on?"

The senator goes on to say if you compare the fact that in his day one person normally the male would be the provider of the household and he would only need to work a 40 hours per week job to provide for the his whole family.

Today both the husband and the wife have to work and some times more then 40 hours per week each to provide the equivalent benefits that a single head of the household did in the past.

Essential Senator Sanders is saying Secretary Paulson only has the rich in mind when he made that statement.

Later after hearing Senator Sanders concern Secretary Paulson stated what he meant by his statement "US economy is doing great" is that the economy could be doing worst if there were allot jobs lost and the US had high inflation.

Perhaps, Secretary Paulson was not aware of the terminology “Housing Affordability Index”

Anonymous said...

The median price of $379,990 was down from $420,000 in December, according to the Northwest Multiple Listing Service.
I live in Seattle and can report that hardly anyone can afford stand-alone SFHs in Seattle OR the pricey condos that have sprung up all over downtown. The buyers, who were mainly speculators, have finally seen the light and disappeared....

Anonymous said...

Finally Congress is catching on were this bubble economy is originating from.

In a letter sent to Paulson on Thursday, House Ways and Means Committee Chairman Charles Rangel, D-N.Y., and other powerful Democratic House members argued that the decline in the Japanese currency, which is sitting near a two-decade low on a trade-weighted basis, is the result of Japanese government policies -- namely artificially low interest rates and failure to stimulate consumer demand.

"These policies increase Japanese reliance on exports to stimulate economic growth," the letter said, likening Japan's tactics to Beijing's economic policies.

"In a word, the evidence is clear that it is not a free market setting the value of the yen, but Japanese government policy as well."

The letter was also signed by House Financial Services Committee Chairman Barney Frank of Massachusetts, Energy and Commerce Committee Chairman John Dingell of Michigan, and Rep. Sander Levin of Michigan, the chairman of the Ways and Means subcommittee on trade.

European officials and U.S. companies have also pressed the administration to pressure Tokyo over the yen.


Anonymous said...

* Subprime has never been more levered -- just as the housing cycle has peaked. Loan-to-value ratios have risen from about 78% in 2000 to 86% today.

* Subprime has never been more dependent on the candor of borrowers. Low-documented loans have doubled to 42% of subprime loans over the last six years.

* Creative loans -- non-interest paying, option ARMs, etc -- represented nearly half of all loans made over the last 12 months.


Anonymous said...

...{T]he decline in the Japanese currency, which is sitting near a two-decade low on a trade-weighted basis, is the result of Japanese government policies -- namely artificially low interest rates and failure to stimulate consumer demand.
Hmm....There's an unsolvable problem here. The Japanese government has kept its interest rates low, true, but no government can force its citizens to stop saving and start spending....

Anonymous said...

What a huge surprise. I mean, who in a million years would have thought folks with lousy credit ratings would have trouble making their mortgage payments.

Apparently, the stock market didn't see this coming, judging by the drop in shares of mortgage lenders, banks and home builders that pulled major U.S. indexes into the red yesterday.

In a sign the U.S. housing market may be sicker than some investors thought, HSBC Holdings PLC said more homeowners -- particularly in the "subprime" market -- are defaulting, prompting it to raise provisions for bad loans.


Anonymous said...

The yen has been widely used as a funding currency -- in which speculators make profits by borrowing (selling) the yen at low costs and reinvesting in higher-yielding currencies and assets, such as the New Zealand dollar, the British pound, and the Icelandic krona.

"yen carry trade": let's say a trader borrows 1,000 yen from a Japanese bank, converts the funds into U.S. dollars and buys a bond for the equivalent amount. Let's assume that the bond pays 4.5% and the Japanese interest rate is set at 0%. The trader stands to make a profit of 4.5% (4.5% - 0%), as long as the exchange rate between the countries does not change. Many professional traders use this trade because the gains can become very large when leverage is taken into consideration. If the trader in our example uses a common leverage factor of 10:1, then she can stand to make a profit of 45%.

The yen carry trade has bolstered U.S. Treasuries certainly in recent years, but in a highly competitive financial world a few percentage points in risk-free profit is never enough.

Thus these funds quickly began to feed more speculative bond, currency, derivative and stock markets. They’ve even provided significant hot-air to inflate the worldwide housing bubble.


Stephen Jen, a currency analyst at Morgan Stanley, argues that by some measures, the yen is now 16% undervalued against the dollar, while the yuan is only 4.7% mispriced.

"The yen is possibly three times more mispriced than the Chinese yuan is," Jen said. "Relative to the yuan, the yen is much more mispriced."


Anonymous said...

Sorry for the length but I thought this was interesting. Housing and stocks are different but bubbles have many similarities.

South Sea Bubble
Dubbed the “Enron of England”, the South Sea Bubble was one of history’s worst financial bubbles.

The mania started in 1711, after a war which left Britain in debt by 10 million pounds. Britain proposed a deal to a financial institution, the South Sea Company, where Britain’s debt would be financed in return for 6% interest. Britain added another benefit to sweeten the deal: exclusive trading rights in the South Seas. The South Sea Company quickly agreed, because of the proximity to wealthy South American colonies. The company planned on developing a monopoly in the slave trade. Additionally it was thought that the Mexicans and South Americans would eagerly trade their gold and jewels for the wool and fleece clothing of the British.

The South Sea Company issued stock to finance operations and gain investors. Investors quickly saw what they perceived as value in the monopoly of the South Seas. Shares were quickly snatched up from the start. The South Sea Company, seeing the success of the first issue of shares, quickly issued even more. This stock was rapidly consumed by the voracious appetite of the investors. Investors had no quibble, despite having a highly inexperienced management team. All they saw was that the stock was going to the stratosphere. Many investors were enamored by the lavish corporate offices that had been set up. This painted an image of success and wealth in the eyes of shareholders. At this point in England’s inudstrial revolution, investment capital was plentiful. It became extremely fashionable to own South Sea Company shares.

The management team of this company started hyping the stock, spouting illusions of grandeur to the investors. Speculation became rampant as the share price kept skyrocketing. It was thought that this company “could never fail”. The management developed rumors that the South Sea Company had been granted full use of Latin American ports, by Spain. The truth was, however, that Spain only allowed 3 ships per year. Unrealistic expectations were the norm among South Sea’s investors and speculators.

Much like Enron, widespread corruption occurred among directors, company officials and their political friends. Ipo’s started everywhere as other companies tried to profit from the stock boom, as well. These companies proclaimed everything from building floating mansions to distilling sunshine from vegetables. These shares were snatched up by speculators as well. Many people became aristocracy almost overnight. Sir Isaac Newton, the scientist, had foreseen a coming stock market crash and sold his shares early with a profit of 7,000 pounds. Aftwerwards, however, Newton saw the bubble keep inflating and bought more shares.

In 1718, Britain and Spain went to war again, stopping all chances for trade. Investors were not daunted, as they kept buying. Investors from other European countries started frantically scrambling for South Sea’s shares, as well.At this point the company leaders realized that the South Sea Company wasn’t generating any profit from its operations. More emphasis was placed on making money from issuing stock than from actual commerce. For example, large shipments of wool were left to decay as a result of careless shipping mistakes. It was at this point that management realized that the shares were incredibly overvalued relative to the profits. They decided to sell while other investors were still unaware that the company was profitless.

Eventually word broke out that the management team had sold out completely. Investors were left holding the bag. Panic selling of the worthless shares immediately ensued. Fortunes were lost in a heartbeat. The stock market crash had started and all other stocks prices were obliterated, as well. Isaac Newton lost over 20,000 pounds of his fortune. As a result of this crisis, he stated “I can calculate the motions of heavenly bodies, but not the madness of people”. Jonathan Swift, who also lost a fortune, was inspired to write Gulliver’s Travels, which is a satire about British society. The British government avoided a banking crisis due to its standing as the financial powerhouse of the world. The government worked to stabilize the banking industry. The issuing of shares was outlawed to prevent any future bubbles. This law was in effect until 1825. Despite all of the efforts of the government, Britain’s economy was in shambles. The economy didn’t fully recover until one century later. Several generations were adversely affected by the stock market crash. The corporate management con artists fled to other countries with their fortunes.

Every bubble and market crash has the same important elements. Greed and unrealistic expectations will continue to foul people’s judgment as it always has.

Anonymous said...

blowfly must be leveraged up to his wazoo, or has foreclosed already and his credit looks like crap. It must be tough to be a looser like blowfly. I tell you what, try to join the republicans because you might get some coins for kissing their butts around. Or you can be Karl Rove's boyfriend, because everybody knows he likes to bite the bed sheets.

Anonymous said...

Countrywide (CFC) Feb40 puts were only 15 bucks each so I bought 5 of them. A the end of the day they are worth 25 bucks.

Monday's upcoming bloodbath hopefully will take CFC further down.

There are a lot of investors out there still doubting the housing crash. I don't mind taking their money.

At one point today NEW was down another 13% into the 16 dollar range.

Anonymous said...

Here's a classic:

"Dave Corey has been flipping houses on the side for nearly 30 years, but the latest slump in the real estate market is taking its toll.

His latest struggle: Unloading a ranch in Ocala, Fla., with three bedrooms, two baths and a two-car garage.

He thought it would be a quick buy, rehab and sell transaction. Instead, it's been buy, rehab...and sit. For 10 months.

After paying $146,000 in January of 2006, he's now out of pocket $160,000 including closing costs and renovations, he said. The list price of $178,900 has drawn zero interest."

Entire story here:


Renter1 said...

BLOWFLY, JA, JA, JA. I pay $ 800 a month per a 2/2 apartment in Miami. We are going on cruise ship vacations, to Orlando and soon to Hawai. I have my wardrobe full with new designer clothing, and we dine out 3 times per week. My neighbor pays $ 2000 per month for the same place (he is buying) and he has to pay big money for his roofing. My landlord just pay for mine, It didnt cost me a nickel. We have been saving and we have almost $ 40k in the bank. and when this market goes down the drain I will buy this place for pennys on the dollar, and perhaps my neighbor's too. Dont be such a looser, and admit it, YOU ARE THE IDIOTic MORON, ja. ja. ja.

damania said...

Striker, check out these videos:

Screwing the 3rd world:

They're going to steal 5 million votes in 2008:


Bubble_Fool said...

This is not related to topic matter, but I looked for an appropriate area of the blogs......PANIC seemed appropriate.

Q. I purchased a home in Spring, TX in summer 2004. The Title agreement said the originator could pass my mortgage on to other lenders if it felt like it. Six months later, my mortgage loan was acquired by CHASE HOME FINANCE (#15 on the Top 25 Subprime Lender list of the main page of this website).

I put about 30% down with a 5.875% Interest rate. If Chase goes down, what happens to ME?

Do they just pass my mortgage on to another lender?

Or What?

Any Comments Appreciated!

Spring, Texas

Anonymous said...

"debt is now seen as success, and saving money is uncool".

Eventually, it'll be "hammer time".

Anonymous said...

Damn, I'm a stupid moron renter who just cashed in his mortgage company puts for big money (I should have waited and made more but so what).

Allright then. Time to retire to the college honey waiting on my stinky, ratted couch I pulled from a dumpster.

Anonymous said...

BLOWFLY'S COVER IS BLOWN----It's none other then NAR,S David Leahra suffering a nervous breakdown.

Anonymous said...

“From 2001 to 2006 much attention has been given to the gold cartel, as they conduct ambushes overnight, pull the rug out from the gold bid at 10 o'clock every morning, dump bullion on the market periodically, promise further central bank gold sales, corrupt their new exchange traded funds as a new hobby, and more sinister games. The sheer size of the outstanding short positions, never with any hope or intention of covering, testifies to the absence of a free market and the institution of a corrupt mangling of the regulatory oversight function. The purpose is to prevent gold from rising in price in any sustained uncontrollable fashion. Treasury Secy Paulson is on record as stating that their objective is to keep a lid on the gold price, which stands as the publicly readable meter on all matters pertaining to inflation and its expectations. The other motive is to screw up the entire perception of inflation and its conceptual understanding, a project which fully deserves the claim "Mission Accomplished" to the masses. An entire generation of indoctrinated economists fills the ranks of colleges and universities.” Click Here

Anonymous said...

i went to a open house auction today what a riot ( but sad in a way)two ladies from across the country bought a pre built Town home sight unseen (on a interest ARM only of course)they were selling it open bid auction style
nex door you had a realator hoping to god the Town Home would not sell minimum bid realator with the open house blaming the media talking about ( the Buble) like they created it (not the greedy realtor ,Banks ect.)then on the other side another realator was holding a open house and trying to pick up buyers for her 8ooK town home 1 block away..and all along upset of the two ladies holding the open house auction this is all better than a "B" movie this is only begining
i see next year realator mud wresling for buyers stay tuned

Anonymous said...

note that the 300% increase in the tax assements due to the increase in house values might add up to an average 80% inflation rate,, or something akin to that, note also that taxes are not calculated in the official inflation numbers, that seem to set interest rates, note also the costs and what and how and by whom it was brought about

Anonymous said...

i do not think weimer germany had those kind of sustained inflation rates, but perhaps the outcome of such a thing, is exactly what the *new world order* people want, as id be sure they have protected themselves

Anonymous said...

that 300% increase in tax assements due to the increase in house values may add up to a sustained 80% a year inflation, if taxes were counted in the inflation numbers, note how this came about, by who, what, when, where and why, and that inflation is what seems to set interest rates and note the moneys out of pocket, for your creation of a better place to live, for yourself, as your put out

Anonymous said...

not sure if weimer germany had such a large sustained inflation rate, but perhaps this is what the *new world order* people want, and had and have prepared themselves for

Anonymous said...

so they can continue their reign above, the rable masses and anarchists of the hoi poloi

Anonymous said...

Comments from Forbes Magazine, or, why I will never take any advice from Forbes seriously ever again from writers like this.
My own commentary added where needed, and they were needed.

Portfolio Strategy
Housing Boom!
Kenneth L. Fisher 02.26.07

Don't buy it. For months now the debate has been over whether America will have a hard landing or soft landing, the answer hinging on how big 2007's housing disaster turns out to be. Well, there won't be any housing disaster.

………..(What has he been smoking or drinkin? I want some too!)

We won't have a landing at all, soft or hard. Right now the U.S. and global economies are both accelerating.


You can see right through the housing crash story by looking at the prices of housing stocks. The market knows what the economic worrywarts do not, which is that the housing sector is already making a comeback.

……….(No, the market only knows fear and greed. Fear and greed are what causes stocks to go up or down, read the book “The Money Game” by Adam Smith and learn more than all of the wall street pros put together. Besides, the market was WRONG about Enron, now wasn‘t it?)

In the last six months housing stocks are up 24%, well ahead of the overall market.
If housing were destined to fall apart in 2007 these stocks wouldn't be so strong now.

…………(Never heard of stock manipulation, huh?)

Did you know that housing sales are up in the last few months, not down, and that inventories are lower than six months ago?


We're accelerating, not landing.

………(I repeat, where?)

This is true not just in housing but also pretty much across the board.

The consensus forecast is for single-digit S&P 500 earnings growth tied to a slowing economy. Disbelieve it. Experts' forecasts have been too low for four years and will be now. First, the accelerating economy will deliver earnings that exceed expectations. Second, the analysts polled for these consensus numbers never factor in the effect of corporate purchases of stock for cash. Whether a company is buying in its own shares or taking over another company, the acquisition of equity stakes (if done cheaply enough) raises earnings per share.

………..(Stock prices go up, but does that mean the companies sold more goods, or the price went up because the stock looks good?)

Not since the late 1950s have sustained fundamentals (low long-term interest rates and low price/earnings ratios) so strongly favored corporations shrinking equity. My firm's count of last year's buybacks and takeovers, less new stock issuance, was $585 billion, or 4.5% of gross domestic product. That will be even higher in 2007 as more players learn this game.
Along with sales growth comes productivity growth. Companies are hiring but not in proportion to the gains in their top lines. The result is higher productivity, which feeds into rising profits and living standards. The Federal Reserve probably won't cut interest rates soon, but it doesn't need to. The economy is humming along without any artificial boost.

………(Housing sales are determined by house buyers, not by estimation by wall street calculations. If people can’t get the loan, they can’t buy the house. Of course, I am using common sense, something that Wall Street seems to be short of. )

Anonymous said...

Consume and conform. Consume and conform.

American women are sooooo stupid.

Anonymous said...

"Anonymous said...
blowfly must be leveraged up to his wazoo, or has foreclosed already and his credit looks like crap. It must be tough to be a looser like blowfly. I tell you what, try to join the republicans because you might get some coins for kissing their butts around. Or you can be Karl Rove's boyfriend, because everybody knows he likes to bite the bed sheets."

Blowfly is HP's version of the gimp from Pulp Fiction.

Anonymous said...
This comment has been removed by a blog administrator.
Anonymous said...

The Bald Clown on Greg Swann's site is suggesting that RE investors in San Diego sell-out and look for greener investment pastures.

Gee, wasn't he saying a month ago that RE investments never go down?

Anonymous said...

Bernie Sanders

At a time when millions of Americans are struggling to keep their heads above water, the last thing we need to do is to make the president's tax cuts for the wealthy permanent. What is needed in Washington instead is the political courage to roll back the tax breaks for the wealthiest 1 percent and stand up for the middle class and working poor.

The president still mistakenly believes the economy is booming as a result of his tax breaks. What he fails to note is that since he has been in office, 5.4 million middle-class Americans have slipped into poverty, 6.8 million Americans have lost their health insurance, median income for working-age families has declined for five consecutive years and 3 million manufacturing workers have lost their jobs.

At the same time, the costs of education, prescription drugs, energy and housing have risen dramatically.

Meanwhile, the wealthy have never had it so good. The richest 13,000 households earn nearly as much income as the bottom 20 million and the top 1 percent own more wealth than the bottom 90 percent.

Which side are we on? The side of that top 1 percent or the side of middle-class and working families?

As a member of the Senate Budget Committee, the choice is clear to me.

I will not be voting for more tax breaks for the outgoing CEO of Home Depot, who recently received a $210 million golden parachute. Rather, I will be voting to substantially increase financial aid for low-income and middle-class families so that every American, regardless of income, can receive a college education.

I will not support a tax cut for the former CEO of Pfizer, who received a $200 million compensation package. Instead, I will vote to substantially increase funding for child care so that working families can find affordable and quality care for their children.

I don't think that the former CEO of Exxon-Mobil, who managed to get a $400 million retirement package, needs more tax relief. In my view, it is far more important that we keep our promises to the veterans of this country who now find themselves on waiting lists to get the health care they need.

Congress must develop the courage to stand up to the big-money interests and roll back the tax breaks for the wealthiest 1 percent, eliminate corporate welfare and address the long-neglected needs of the working people of this country.


Anonymous said...

U.S. stocks fell on Friday after Countrywide Financial Corp. became the latest mortgage lender to warn of rising defaults.

Countrywide, the No. 1 U.S. mortgage lender, said foreclosures hit their highest since at least 2002, while delinquencies hovered near a five-year high, fanning concern over the erosion of the U.S. housing market after two of the top three U.S. subprime mortgage lenders warned on Thursday about the impact of bad loans on their bottom line.

Investors were jolted after Britain's HSBC Holdings Plc and New Century Financial Corp. issued their warnings, which punished shares of major U.S. banks like Citigroup and JPMorgan Chase & Co. for a second day in a row.


Anonymous said...


NOTICE IS HEREBY GIVEN pursuant to a Summary Final Judgment of Foreclosure dated Month Date, Year, entered in Civil Case. No. Year-CA-XXXX of the Circuit Court of the 12th Judicial Circuit in and for MANATEE County, BRADENTON, Florida, I will sell to the highest and best bidder for cash IN THE LOBBY, MAIN FLOOR at the MANATEE County Courthouse, 1115 Manatee Ave. W., Bradenton, Florida, at 11:00 a.m. on the 6th day of March, 2007, the following described property as set forth in said Summary Final Judgment, to-wit:

Anonymous said...
This comment has been removed by a blog administrator.
Anonymous said...

Not to gloat, but "I told you so" - about two years ago, if I remember correctly. Today, nearly one in four mortgages (23.8 percent) in the Vallejo-Fairfield area are expected to be in foreclosure. That's a 405 percent increase since the 1998-2001 rates of 4.7 percent and the highest in the nation. Ain't it great to be Numero Uno?

Remember the slides from the presentation I gave back in 2005 regarding foreclosures in the last six months of 2004? I only wish that I could predict the outcome of horse races and stocks as well as this. Unfortunately, horses and stocks are pretty much based on chance, not stupidity, which makes it much easier to detect and predict the outcome.

My biggest concern is how much will the bailout of the stupidity and greed in the lending industry cost us taxpayers for the rest of our lives - and our descendants' lives? There are billions of dollars in bad paper floating around out there that will eventually end up in some sewer farm to be paid off by us. We are still paying off the bailout of the Lincoln Savings & Loan collapse, which was totally caused by fraud on the CEO's part.

And, by the way, Allen "Everything is Wonderful" Greenspan was a Lincoln financial consultant who pronounced its financial status as excellent just months before the scandal broke. His next job, of course, was chairman of the Fed, probably based on his excellent resume.

Thank you, Mr. Greenspan, for rescuing us from the "Internet bubble" by creating a "housing bubble" that we will pay off for generations - unless China forgives our debt in return for ownership of the United States. Better have our children practice their Chinese.

Last year I relocated to Moab, Utah, and when I returned to Vacaville for the holidays, I noticed, but was not surprised by, the city's new "strip mall," that was supposed to be the resurrection of the Nut Tree, with a conference center, hotel, etc.

Funny how predictable these things are. Project promises and deliveries are rarely even identifiable as coming from the same developers and politicians who originally proposed and approved them. They are just quietly swept under the rug in City Hall, where they are trampled in the endless quest for more, bigger, better, until there is no more and my hometown is just another asphalt wasteland.

Thanks for letting me vent. Unfortunately, this tragic comedy is only just beginning. No one knows what Acts II and III will bring.


Anonymous said...

"1.5 trillion in loans will be adjusting this year (nationwide). They're going to adjust a lot"

There you are, living in the house of your dreams. It cost you $500,000, but you're only paying $1,100 a month after you 100-percent financed your home with an interest-only pay-option adjustable rate mortgage, known as an ARM. Then the market changes.

Your completely financed home, after the market has cooled, is now going to cost you almost $4,000 a month for your mortgage. Welcome to the world of some of Placer County's residents.

According to DataQuick Information Systems' latest report, default notices, the first step in the foreclosure process, have risen 262.4 percent in the fourth quarter of 2006 in the county, exploding from 149 notices in the fourth quarter of 2005 to 540 in 2006. Placer's rise is the second highest increase in the state, according to the La Jolla-based real estate statistics research firm.

To combine with the default notices, median home prices in the region continued a downward trend according to the latest figures released at the end of the year by the Placer County Association of Realtors.

The median home price for the county in December 2006 was $439,700 with 302 homes sold in the month. The median sales dropped 9.3 percent from 2005 when the median price was $485,000 with 315 homes sold for the same month.


Anonymous said...

NovaStar stock takes hit on industry concerns

Stock in other subprime mortgage lenders also declined Thursday as concern grows about foreclosure rates. New Century Financial Inc.'s stock sunk by more than 30 percent.


Anonymous said...

Well, this was fun.

The wife and I went looking at open houses today. We really want to be north, but for a brief moment considered moving to Garfield Ridge.

I checked the crime stats for the west end of G.R. I was appalled by the criminal histories of some of the current residents. Forget that. We will suffer and pay more for living safely up north.

Today we looked in Big Oaks and Norwood Park (not The Triangle, mind you). I am well aware that the farther north you go the farther north the prices go, but I was unaware that the sellers were permitted to leave their houses in such horrible conditions. If the houses were updated and well cared for MAYBE they could fetch the prices they were asking, but not the houses we looked at today.

The first house was allegedly owned by a retired CPD. I almost puked when we walked in. The hard wood was creaky and actually worn out in spots. The wood was pulling away from the base boards, which were loose themselves. NOTHING in the house was updated since the 1970's. The garage looked like it was in a fire or had bad water damage. I'd say there would have to be $50,-75,000 worth of upgrades needed.

We looked at two that were 2 bedrooms. I have learned that there is no such thing as a starter home anymore. If the first three in the Zip code are 606 it's $400,000+. As a young couple why would I spend $400,000 on a 2 bed house? To upgrade to a $500,000 3 bed later? I don't make enough to get the $400,000 one first!

The forth house was nice. It was a short range. The dining table was in the basement! Ok.

The houses north of I-90 were jokes. Two has similar make ups. One was an estate sale and the other the old granny was moved out so the kids can try to sell the house. Both had not been updated since the 1950's! I'm all for nostagia, but these two were just sick. I thought I was back in the burbs walking into my grandparent's house! I was looking for the framed picture of President Dwight D. Eisenhower.

At final open house, a bungalow 2 doors off of Touhy ave, the realtor had to jiggle the stuck screen door several times before he could get it to open. Before we even stepped in, we asked the agent how much they were asking. Without batting any eye, he told us $465,000. We chuckled, turned around and left.

Guess we will continue to rent.

Anonymous said...


We know that its happening. The crash is comming. Now, I ask: What stupid things will politicians propose to fix the "problem". The paper in Palm Beach (palm beach post) now it seems is aware for the problem and is calling for the new Fl gov to call for a one year moratorium on foreclosures and let people refinance for 40-50 and even 100 years. Is that funny or what? Now that would certainly be a ruinous approach. I wonder what other boneheaded things will come out of desperate vote pandering politicans in AZ, NV and Florida.

Anonymous said...

ScotiaMocatta anticipates $676/oz gold, $20/oz silver in 2007
Dorothy Kosich
'09-FEB-07 08:00'

RENO, NV (Mineweb.com) --Canada’s Scotiabank’s bullion division ScotiaMocatta latest monthly precious metals analysis anticipates that gold may challenge $676/oz prices this year, while calls for silver to reach $20/oz “do not seem too farfetched.”

In their February Metals Matter report, ScotiaMocatta advised that “platinum is heading higher again…but it faces considerable overhead supply,” while “palladium looks well placed to continue its advance to $360/oz, especially has fund interest has all but tripled in recent weeks.”

The pace of producer de-hedging is likely to slow this year as the size of the global hedge book has now shrunk. ScotiaMoccata noted that “early forecasts are expected some 98 tonnes to be de-hedged in H1 07, but this may turn out to be a conservative estimate. This is especially so if there is further consolidation in the industry.”

“Gold has launched itself on another up leg and the weight of investment money seems to be a primary reason behind the move, although numerous other factors also support a firmer price,” according to ScotiaMocatta’s analysis. “The big picture outlook for gold is still positive, but a close eye needs to be kept on the dollar. Overall look for gold to make upside progress with $676/oz now in focus.”

ScotiaMocatta also suggested that, as the institutional investment trend to spread risk grows, “Investment demand for gold is expected to increase. Much of this new demand is fairly price inelastic as investors are in for the long term and want gold in their portfolios for diversification. As such gold should benefit as this investment trend spreads throughout the industry from hedge funds to pension funds and also geographically.

“Japan’s vast financial institutions are still thought be pondering on whether to diversify into commodities,” ScotiaMocatta noted. “As such we feel that the weight of money could continue to be a major driving force for gold for a considerable time.”

Their analysis asserted that “robust global growth should prompt good demand for jewelry and keep industrial demand healthy.”

ScotiaMocatta’s analysis found that silver is “trending higher” and benefiting from a broader industrial base. “Earlier expectations that industrial demand would fall due to slower economic growth may prove premature as generally the economic climate favors a ‘strong for longer’ outlook.”

However, with strong investment demand and the on-going growth of the ETF, “silver supply may struggle to satisfy demand, in which case prices are likely to move into a higher trading range,” ScotiaMocatta said. “Expect higher prices, but with it more volatility.”

Although new mine silver production is coming on stream as more base metals mines are commissioned, ScotiaMocatta forecast that mine output is expected to increase by only 2% or just over 400 tonnes this year. “However with the silver ETF now holding 3,642 tonnes and increasing at an average of 330 tonnes a month, there is a distinct possibility that investment demand start competing for the same metal; in which case silver prices may well move into a new higher trading range.”

Silver is benefiting from a broader industrial base. With silver investment demand set to remand strong and the ETF expected to show ongoing growth, silver supply may struggle to satisfy demand,” according to ScotiaMocatta.

Nevertheless, their analysis cautioned that while higher silver prices could lead to liquidation selling and dishoarding “that could create a volatile trading pattern. If rallies above $15/oz fail to gain hold then disappointed liquidation selling may well take prices back to trade around the $12/oz level.”

ScotiaMocatta’s analysis indicated that “overall most aspects of the PGM market look supportive, especially as it looks quite likely that gold will extend its rally, which should support the whole precious metals complex.”

The increased fund interest in palladium suggests something is afoot “and this may well support higher prices in the weeks ahead,” the report noted. Since the beginning of this year, fund buying in palladium has picked up markedly. “Given palladium’s supply/demand prospects are not overly bullish, this is a noteworthy development,” ScotiaMocatta said.

Their analysis raised the possibility that a palladium ETF may be viable. “The long-term outlook for palladium is strong, but it has a heavy stock burden to contend with, so perhaps a palladium ETF may be more workable,” ScotiaMocatta concluded.

Mineweb always carries details of at least 20 independently written top mining, mining finance, metals and mining sector analysis articles on its homepage as well as a fast news feed to keep you right up to date with what is going on in the mining and metals sectors worldwide. These are continuously updated through the day. Click here to go to Mineweb's home page and access the latest news and comments on developments in mining and metals worldwide.

Anonymous said...

Now this is something! An Indian newspaper writer citing similarities between now and previous U.S. stock market crashes. Then to top it off, we get a mention of Mayan prophecy?!?


The rise in gold and relative fall in copper is sign of last stage of the bull market in stocks – the same happened in 1929
Sam Adelton
Feb. 9, 2007

The copper is falling, gold is rising and stocks are full of divergence while some making new highs. The history is repeating as Wall Street rides the ‘Mania High’ of the millennium just like 1929. The 1987 also saw similar things at a much-scaled down level.

The biggest effect is of course on the economy. Copper prices tell us what is happening in the manufacturing and construction sector. The gold price tells us how wild is speculative money these days. When speculation goes crazy and economy tanks, you have the recipe for the catastrophe.

The banks have started moving into the danger zone. The financial services industry, the brokerage and the real estate investment trusts will be worst hit. Eventually the main street will get affected.

The Dow is forming an elliptical top. A final spike and then the bubble burst are likely this year similar to the year 1929. Between 1929 and 1934, Dow gave back 86% of the value. This time it will over many decades because of globalization. When all done, the world will be different – perhaps that is what Mayans predicted for 2012!

Anonymous said...

"Comments from Forbes Magazine, or, why I will never take any advice from Forbes seriously ever again from writers like this."

Forbes has a program with Fox News. Need to say more? I wonder how this people are able to look their kids with a straight face, after lying like crazy day after day, manipulating public opinion, siding with warmongers who only seek profits from disaster, and going against principles. They are able to sell their mothers for a few bucks. A planet full of people like that cannot end up well.

Anonymous said...

Just to show you where we are heading, a Savons supermarket closed down here in California, and guess what was replaced with? A huge Mexican supermarket, called "El Grande". As you can see, the New World Order plan is on track:


Anonymous said...

Lake Forest, Calif.-based Lenders Direct Capital Corporation is the lastest subprime operation to shut its doors, sources have confirmed to Housing Wire.

CEO Michael McQuiggan cited the lack of investor demand for their loan products and the current state of the U.S. nonprime lending industry as factors in reaching the decision to cease wholesale originations. No word was given regarding loans already in the company’s pipeline.

According to the Mortgage Bankers Association, LDCC originated 8,692 loans worth $1.23 billion during 2005, and ranked 197th on a list of the top 300 single-family home purchase loan originators.

The company is the latest Merrill Lynch-associated operation to close up shop in recent weeks, as records obtained by Housing Wire show that LDCC operated under a master loan purchasing agreement with Merrill Lynch Mortgage Capital.


Anonymous said...

Good morning shit-for-brains Ramen noodle eating renter jackasss meatheads! Blowfly's back in town again. So all of you retarded morons gather round and tell Blowfly in your jabberwocky twadle about life in your bedraggled, dilapidated, tumble-down rental apartments. Tell Blowfly all about it you imbecile, witless idiots.

Anonymous said...

A time to buy?
"Much like pregnancy, there will never be a right time to buy a home. As sellers adjust their offering price to today's reality, it may be just the time to beat the springtime activity and become the successful bidder and future homeowner in the Napa Valley."

Anonymous said...

Uh-oh it's starting to happen in mpls....


Anonymous said...

Jabberwocky twadle?

Blowfly's a Fag!

Anonymous said...

Hey blowfly?

How did you get the name blow...?

Anonymous said...

Gimp sighting!!!

Anonymous said...

Homeless in ORD, I rent too. Has anyone ever told you how you are missing out on tax advantages? Hurry and buy anything at any price. Just think, you can use your tax return to put siding on your new house. How wonderful.

Anonymous said...

blowfly, nice choice of words. Look in the mirror.

Anonymous said...

Fan Mail First:

Anonymous February 12, 2007 4:19 PM: witless, dipshit brain-amputee. Your brain probabbly fits into your left testicle.

Anonymous February 12, 2007 4:20 PM: Birdbrain, you are obviously an escapee from a medium or low security mental institution.

Anonymous February 12, 2007 4:44 PM: Dog-faced bald-headed realtwhore.

Anonymous February 12, 2007 5:08 PM: Imbecile retarded little dipshit. For you PHD means pimpin' hoes degree.

This blog is obviously sponsored by the department of welfare. The homeless shelter soup kitchen must have decided to let you bag ladies, derelicts and gutterpups use the computer. How else can anyone explain that I have to read this irrelvant drivel from certified half-baked welfare bums posting as renters. Crawl back into your defiled rathole cardboard box!

Anonymous said...

The gig is up!


As the Scerbos have discovered, the overheated 1999-2005 housing market cooled quickly in 2006.

And real estate experts expect property prices and sales to remain slow in 2007, both nationally and in northern New Jersey.

"A lot happened during the boom, and we have some paying back to do yet," said David Seiders, chief economist with the National Association of Realtors.

Or, in the words of Oradell Realtor Margrit Vogler: "We had a very good run, we saw beautiful price appreciation, but how could it continue like that? If it did, a little Cape Cod would cost a million dollars. Who's going to buy that?"

Anonymous said...

Week after Week, one subprime lender after another close its doors.

Lenders Direct Capital Corp

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

Ownit Mortgage Solutions

Anonymous said...

How housing masked a weak economy
Since 2001, the nation's economic growth has been powered by the real estate industry, particularly mortgage-equity withdrawals. Without housing to prop it up, the economy is in trouble.

By Bill Fleckenstein
"Housing mania will end in tears." That belief served as the headline of my column back on March 7, 2005. Now this scenario is slowly playing out as, directly or indirectly, the noose around the housing ATM continues to tighten.

Withdrawing equity from one's home was the economy, from essentially 2001 through sometime last year. A statistic from a recent report by John Mauldin says it all: Real GDP growth, excluding mortgage-equity withdrawals, averaged less than 1% over the past six years (it averaged a little more than 2.5% a year overall). During the thick of it, the real estate industry was responsible, directly or indirectly, for 40% of all jobs created.

That 40% contribution to job creation has, in the past 18 months or so, declined to about 13% of new jobs. It will soon be responsible for the bulk of job losses, in my opinion. In fact, my friend in the subprime business said that WMC Mortgage, a wholly owned subsidiary of General Electric (GE, news, msgs), is laying off 35% of its work force, taking a $100 million charge and cutting back on its writing of loans.

But what's even more important, he notes: "They (WMC folks) are going to get rid of all 100% financing on all borrowers below 700 FICO. Also, (there will be a) 95% cap on first-time homebuyers. All we talked about is coming to a head. Now watch the home builders suffer."

(Editor's note: A WMC spokeswoman declined to comment on what she called "speculation" about layoffs and said the company is currently adjusting the types of loans it makes and its guidelines for underwriting loans. As for the charge, she said there have been more requests than usual from WMC's investors asking that the company repurchase loans from those investors.)

This is a story with far greater ramifications than just for the subprime sector, and we need to keep that in mind, even as the lunatic fringe -- i.e., the banking industry -- once again lusts after last cycle's winners: the mortgage originators.

In 2000, banks were busy buying brokerage firms, particularly those of a tech bent, such as Montgomery Securities and Robertson Stephens. In past cycles, they wanted to lend to leveraged-buyout artists, and before that there were "oil patch" loans, etc. Banks have an uncanny ability to pour capital into the wrong place at the wrong time. Bottom line: Wherever they are busy making acquisitions will be the source of problems in the next two years.

Home lenders versus the House
I have repeatedly made the point that there are no adults at home in the home-lending business, which is why I found it interesting reading some comments by U.S. Rep. Barney Frank. Though I wouldn't necessarily have picked the Massachusetts Democrat as the voice of reason, in a recent edition of the San Jose Mercury News he shared this novel thought:

"You shouldn't lend (home buyers or re-financers) more than they can afford to pay back, and you don't lend them more than their house is worth. . . . You can't just make a loan and then sell it (to investors, forget about it and expect no legal liability for putting people into a mortgage that never made sense for their situation)."

(The parenthetical material is Frank being paraphrased by the writer.)

Though those comments make perfect sense, and one would think that any lender with a brain would refrain from that kind of risky behavior, we also know that it's exactly what lenders have done. As for the consequences on the other side, my guess is that we'll see an enormous amount of lawsuits brought by folks who say that they were unsuitable candidates for the loans in the first place. (To quote a Jan. 26 New York Times headline: "Tremors at the Door: More People with Weak Credit Are Defaulting on Mortgages.")

Given that Frank is the new chairman of the House Committee on Financial Services, it sounds to me like Congress will be receptive to their arguments -- though that doesn't mean the courts will be. In any case, it seems quite clear to me that new legislation will be enacted. Which, of course, is just another way to tighten lending standards that are already being tightened.

At some point, the amount of damage being done will rapidly accelerate. I am certain that one day, when we look back on this period -- which witnessed the incredible housing-stock rally that ran from summer 2006 through early 2007, before it collapsed -- and we describe it to folks who may not have seen it firsthand, they will shake their heads in disbelief, the same way that folks now look back at the Nifty 50, the stocks that propelled a doomed early-1970s bull market, and ask: How could anyone have been so naive to have believed that concept?

Anonymous said...

A good recap on the state of the Housing Market

Delinquencies on subprime loans reached a three-and-a-half-year high in the third quarter of last year at 12.56 percent of the loans outstanding, according to the Mortgage Bankers Association.

Two subprime lenders, Ownit Mortgage Solutions and Mortgage Lenders Network USA, later filed for bankruptcy.

HSBC's decision to set aside 20 percent more than analysts had estimated for loan losses touched off the steepest one-day drop in its American depositary receipts since June 2004. The ADRs, each representing five shares, fell 2.7 percent Thursday.

In the credit-default swap market, an index based on 20 bonds rated BBB— and backed by subprime loans fell 2.3 percent, according to Deutsche Bank. The decline made swaps linked to the ABX index, created Jan. 18, more expensive.

Loan defaults may weigh on more financial companies. Units of H&R Block, Countrywide Financial, Merrill Lynch, Washington Mutual and Wells Fargo are among the biggest subprime lenders, as ranked by National Mortgage News.

Falling prices for land are also weighing on the industry. The five largest U.S. builders — Horton, Pulte, Lennar, Centex and Toll — recorded a total of $1.47 billion in related costs for the fourth quarter.

There may be more bad news to come as well. The National Association of Realtors said last week that sales of new homes would decline until the fourth quarter because too many had been built.


Anonymous said...

Already 18 sub-prime lenders have gone to the wall.

"Wells Fargo has stopped providing 100% mortgages in California, demanding 5% down."

Borrowers are getting caught short by a changing housing market - one in which home prices have flattened and lenders are beginning to tighten their standards after a long period of making mortgages easier and easier to get.

The challenges are greatest for homeowners whose credit has declined since they took out their last loan and for those who have little if any equity.

Some of these borrowers are still able to refinance but are finding it more costly than they expected.

These new challenges come at a time when many borrowers who took out adjustable-rate mortgages are facing higher payments.

There are about $1.1 trillion to $1.5 trillion in ARMs that will face rate increases this year, according to the Mortgage Bankers Association.

The MBA expects borrowers to refinance as much as $700 billion of those mortgages.

Anonymous said...

Peak Oil is going to cream this financial orgy!

Anonymous said...
This comment has been removed by a blog administrator.
Anonymous said...

Washington Mutual downgraded due to its positions on subprime and option ARM loans that it still holds.

S&P Equity Research downgrades Washington Mutual (NYSE: WM) from Buy to Hold.

S&P analyst, S. Plesser, says, "Although we look favorably on the recent repositioning of WM's balance sheet toward higher-yielding loans, we believe that some residue from its residential mortgage business may end up hurting the thrift in the quarters to come.

Specifically, although WM sold most of its '06 subprime loan production, roughly 8% of loans held are subprime loans from earlier years.

In addition, roughly 28% of loans held are riskier option-ARM loans.

Anonymous said...

Countrywide Financial Corp. and New Century Financial Corp. led shares of mortgage companies down for a third day as rising defaults drove the perceived risk of owning bonds backed by ``subprime'' loans to a record high.

Shares of Irvine, California-based New Century, the second- largest company that specializes in lending to people with low credit ratings, fell $1.41, or 7.7 percent, to $16.81 at 1:58 p.m. in New York Stock Exchange composite trading. Countrywide, based in Calabasas, California and the nation's biggest home lender, fell $1.48, or 3.5 percent, to $40.73.

Shares of other subprime specialty lenders including Fieldstone Investment Corp., NovaStar Financial Inc. and Accredited Home Lenders Holding Co. each slid more than 5 percent during the day. Investors have sheared more than 40 percent this year from the value of New Century, Fieldstone and NovaStar. Countrywide shares have declined about 4 percent in 2007, and IndyMac Bancorp Inc., the second-biggest independent mortgage lender, has tumbled almost 20 percent.

Subprime loans that have gone bad are at the highest level in at least six years, according to a Friedman, Billings, Ramsey Group report. The U.S. Mortgage Bankers Association said payments were late on almost 13 percent of subprime loans in the third quarter of 2006, and Bear Stearns Cos. President Warren Spector predicted last week problems will get still worse this year.


Anonymous said...

Here's another classic from South Florida Business Journal. Geee...I wonder if he used some of the federal proceeds to buy those 4 condos in Miami Beach that also went into foreclosure recently.

"Miami Beach developer finds trouble in Sebring

Built in the mid-1920s, Harder Hall guests included Herbert Hoover and Al Capone.

Miami Beach developer Marc Shenker came to the city of Sebring with a $5.25 million federal loan to renovate and reopen a historic hotel. But now, Harder Hall is unfinished, unpaid vendors are fuming and the city is on the hook for paying back the loan.

Shenker's development company, Joran Realty Corp., filed for Chapter 11 protection in federal bankruptcy court in Miami on Oct. 20. Its biggest creditor was the city of Sebring, which is counting on Joran to reimburse it for the interest payments it's making on the loan from the U.S. Department of Housing and Urban Development (HUD). Joran had drawn on nearly $4.5 million of the loan for renovations of the hotel, city officials said.

"If the developer can't pay the loan back, then the city has to pay it back," said Scott Noethlich, Sebring assistant city administrator. "Our position is the property is worth more than what is owed on the loan."

The City Council voted to foreclose on the property after the developer missed several interest payments, but Joran filed Chapter 11 the next day. The city won't file a foreclosure now because of the Chapter 11 case, Noethlich said."


" Businesses that completed work on Harder Hall may only see half the money they are owed, according to a redevelopment plan filed Wednesday.

Marc Shenker and Joran Realty filed for Chapter 11 bankruptcy Oct. 20, 2006, which requires the company to form a reorganization plan.

Jim McCollum, an attorney representing creditors holding unsecured claims, said the plan submitted Wednesday is substantially different than what Shenker originally promised.

“They misrepresented to the court what they planned to do,” McCollum said. “They said my clients would be paid in full, and now they are changing their story.” About 160 creditors have filed claims against the hotel, including 63 Sebring businesses and 11 businesses and contractors in Highlands County."

Anonymous said...

Vacant homes = more crime. Why don't they lower the prices on these homes so they can be sold?

Vacant Homes Potentially Dangerous

You see them all over Savannah. Vacant houses bringing down the neighborhood.

Many don't just look bad, they are dangerous too.

Fire ravages a vacant home on Bolton street Tuesday. The apparent cause? A homeless person inside trying to stay warm.

That house is now gone, demolished. But many more exist all over Savannah. The ones that remain are homes for trash and vagrants, and scare folks who live nearby.

"At night when me and my daughter come in, its kind of dangerous," says Eve Washington, who lives next to a vacant home. "I'm not sure who's in there. I have a daughter and I'm afraid."

"A vacant property is a target for vandalism," according to Trent Chavis of the City of Savannah Property Management department.

It's a problem Trent Chavis knows only too well. As the head of the city of Savannah's property management department, he sends inspectors out to check on vacant homes to see that they are closed up tight, and make sure no one is living inside.

"The most immediate danger is someone on this property, not even inside," explains Chavis. "A fire can be started from a porch."

For Savannah inspectors it's a continuous battle. They go to places and board the entire area up. But while the locks they put in may still be there, many times, the door has been busted off the latch."

But when it comes to tearing these eyesores down, Chavis' hands are tied by the law.

"We will come and get in touch with the owner and require that it be boarded up," says Chavis. "But as long as the property is structurally sound, then we're not allowed to demolish it."

Chavis believes that keeping some of these historic homes standing is a good idea.

"Nobody wants to take any property, nobody wants to tear any down," according to Chavis. "But we all want to work together to make this a safe and viable property. This is irreplaceable housing stock. Why would you want to tear them down?"

And folks like the Myshrall's agree. They have been renovating homes for years, and found the perfect spot here in Savannah to continue their work.

"A good environment is a healthy environment, that's our motto," says Richard Myshrall. "Its natural, even just the little work we've done here, people are trying to do some on their own. Copycatting in this case is a good thing."

Chavis says if you see any properties that are potentially dangerous, or need to be boarded up properly, call the city's Property Management Department, or 311.

If you see any vagrants or other people inside a vacant home, they are trespassing, and you should call the police. because they can be kicked off, or even arrested.

Reported By: Andrew Davis adavis@wtoc.com

Anonymous said...

This is funny. A Realtor(R) contradicting hiself in the same breath:

"Prices will drop another 10 percent to 30 percent in 2007 and begin to stabilize in 2008, said Kurczak, who has seen this up-down cycle many times in his 16-year career. "This is the storm we're going through right now," he said. "We're at our bottom; the only way to go is up."


Ok we're at the bottom and prices can only go up, uh, but....prices will drop another 10-30%......Am I missing something here?

Anonymous said...

Anonymous said...
Homeless in ORD, I rent too. Has anyone ever told you how you are missing out on tax advantages? Hurry and buy anything at any price. Just think, you can use your tax return to put siding on your new house. How wonderful.

February 12, 2007 5:07 PM

Oh all the time! That and the "you are throwing your money away renting" and the old "It was tough for me too 20 yers ago"

Anonymous said...

New Century Financial Faces Legal Troubles Over Subprime Fallout

Two separate California law firms have filed class-action lawsuits against Irvine, California-based New Century Financial Corp. In the lawsuits, the plaintiffs allege the company mislead investors by failing to report 2006 losses that were attributed to repurchases on subprime home loans.

On Friday, the law firm of Lerach, Coughlin, Stoia, Gellar, Rudman & Robbins LLP, filed its lawsuit in a California federal court on behalf of all investors who acquired New Century Financial stock between the period of April 7, 2006, and February 7, 2007. In a press release, the firm says the company “issued materially false and misleading statements regarding its business and financial results and concealed material adverse facts from the investing public.” In doing so, the lawsuit claims New Century Financial was in direct violation of the Securities Exchange Act of 1934.

California-based law firm Roy Jacobs & Associates also filed a class-action lawsuit against New Century Financial last week. In a release, the firm says “the defendants knew, but failed to reveal that New Century was being forced to buy back substantially more loans than originally had been expected.”

The lawsuits highlighted an exceptionally rocky week in the subprime lending community. During the tumultuous period, investors saw New Century Financial stock prices plummet 36 percent after the company announced it would be restating its financial earnings for the first three periods of 2006.


Anyone wonders if Wells Fargo has anything to hide?

Anonymous said...

The pace of pending foreclosures remained high in January with more than 103,000 foreclosure notices filed, adding to the nearly one million filings reported during 2006.

According to data released today by ForeclosureS.com, nearly every region in the U.S. is facing the prospect of increasing foreclosures, but no region has been more impacted than the Southwest.

Just one month into the first quarter of 2007, already 50,404 foreclosure filings have been reported in the Southwest — more than half the 94,631 filings for the region during the entire first quarter of 2006.

Anonymous said...

Foreclosures Increase 19 Percent in January According to RealtyTrac(TM) U.S. Foreclosure Market Repor

Texas, California, Florida post most new foreclosure filings

California's foreclosure total of 14,430 was the nation's second
highest and represented a 14 percent increase from the previous month.

The state's foreclosure rate of one new foreclosure filing for every 846 households
registered slightly above the national average and 14th highest among the states.


Anonymous said...
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Anonymous said...

A pdf link talking about the FHA losing market share. What's the dif, the taxpayers are gonna pick up the tab in any event.

Anonymous said...


My dream house just opened up for rent literally on the street next to where I work! Just when I thought my commute couldn't get any shorter! $2000/mo. I estimate that it's a million dollar house.

I'm thinking of going for it.

What do you think? It's exactly what I want, and probably half as cheap to rent than buy. But as you say real Americans buy -- I'm so conflicted. Help me out.

Anonymous said...

Hi Guys and Gals,

came across this site at the weekend, pretty much confirmed what i've been trying to explain to everyone that i know for the last year or so (not that that makes the predictions correct yet of course, but still) Great site Keith! I've just moved over from England where things are pretty similar, although we haven't got our own Casey Serin yet - scary times! My overall impression is that the bubble is bigger here, although London could probably give some of your cities a run for the prize.

Anyway, i made it back into the black last month, totally debt free (yay) and am basically on a mega saving drive until such time as i can pick up a nice cheap house with it as deposit. My question is this:

I believe that when this all goes tits up it is going to decimate the US economy and take a big chunk off of markets round the world, so i'm not super enthusiastic about a)savings accounts or b) the stock market, after all if the bank goes you are screwed. I'm thinking gold, in a word. Gold seems pretty high at the moment though - any of you smart folk had any ideas about good ol' gold? I was thinking of getting a couple of oz every month for a few months, then going back to simple cash so as not to put all my eggs in one basket. Am i mistaken in what the value of gold will do if the economy does go pete tong? Could gold actually go down then?

Any advice either way will be interesting as by definition anyone on here is a bit ahead of the curve (apart from blowfly) and don't worry, i'll be taking it with a pinch of salt - also, since i'm English i've never even seen a gun much less fired one, so there'll be no chance of me going postal in "the great gold crash of 2007" ;)

mythium said...

I just ran across this, it's an gad I saw while I was reading email in my my gmail account.


I nearly fell out of my chair reading the description of this fund. It invests in sub-prime mortgages. In California of all places! Is this old news? Why haven't I seen this before? The funniest thing is how they talk about "preserving capital".

Here's a quote:

"Most individual investors today are looking for opportunities to earn more monthly income while maintaining a secure, diversified portfolio.

The Residential Capital Mortgage Income Fund invests in sub-prime loans, secured by trust deeds on California real estate. The Fund currently has over $52 million in assets and has consistently returned over 12% average annualized return, and 13.75% cumulative return, with dividends reinvested, since its inception. The Fund is committed to providing investors with a high level of monthly income, preserving capital, and enhancing the diversification of an investor's portfolio."

Anonymous said...

I was thinking of getting a couple of oz every month for a few months, then going back to simple cash so as not to put all my eggs in one basket.

2oz x 3 months = 6oz
$670 oz x 6 = $4,020

you want a team of experts to help you invest a whopping 4k?

Because maybe you might lose $6-12 hundred dollars?

Is everybody in the UK this spineless?

Anonymous said...

Save some of that gold for me!!

Dont buy all of it!!

Anonymous said...

I am renting (cheap) a waterfront condo, boat slip, etc. in SE Florida watching the RE market slide into the abyss. One Re guru quoted often in the local paper was still saying, as late as last December, that RE prices would not fall as hard here in paradise because of the continuing influx of retirees. Problem is, sky-rocketing taxes, huge assessments, and crime are driving even the retirees who have been here a long time back north.

Take a look at www.craigslist.com and search real estate under Ft Myers and you will find hundreds of posts per day. Most still unreasonably high.

The latest word from the RE guru is that no one saw the crash coming. I don't believe that for a moment.

A recent article stated, optimistically, that we would start to see rents rise, since people cannot afford to buy houes and must rent instead.

Of course, this is not true either. There are way more condos and houses for rent now then there are potential tenants, so rental rates are coming down. I am renting for less than half of what it would cost me to purchase.

When I was looking for a place to live last summer I noticed that a lot of the owners I contacted lived out of state and had never even seen the places they owned. And, most I talked to sounded desperate and bewildered. Those who are in trouble are not big-time investors, but regular people who got in on the real estate boom in Florida at the wrong time and now are left holding properties that are not worth what they paid.

Anonymous said...
This comment has been removed by a blog administrator.
Anonymous said...

"What's the dif, the taxpayers are gonna pick up the tab in any event."

Dollar devaluation is gonna take the hit.

Anonymous said...
This comment has been removed by a blog administrator.
Anonymous said...

"Any advice either way will be interesting as by definition anyone on here is a bit ahead of the curve (apart from blowfly) and don't worry, i'll be taking it with a pinch of salt - also, since i'm English i've never even seen a gun much less fired one, so there'll be no chance of me going postal in "the great gold crash of 2007" ;)"

In past gold bull markets, shares of mining companies have outperformed the bullion price. That may be a good option for some of your funds. Just use someone like Vanguard for your account rather than Bank of America, Citibank, the big guys etc. They're going to get hurt in this downturn and probably look to the Feds for a bailout.

Anonymous said...

"When I was looking for a place to live last summer I noticed that a lot of the owners I contacted lived out of state and had never even seen the places they owned. And, most I talked to sounded desperate and bewildered. Those who are in trouble are not big-time investors, but regular people who got in on the real estate boom in Florida at the wrong time and now are left holding properties that are not worth what they paid."

How many boom and busts has Florida real estate had?!? Probably at least once every generation, and the people buying should no better. The realtor saying "no one saw this coming" is just terrible. Here's hoping he gets sued by previous customers and spends the next 6 years of his life in court and paying attorney's fees.

Anonymous said...

KB Homes reports cancellations at 48%...... Sounds like we are at the bottom! NOT!

Anonymous said...

Are you blithering dim-witted, psychopathic, rabid, dumb-ass, imbecile, retarded, renter idiots out of your f*cking minds? Go crawl back into your crummy, decaying rental shit-shacks. Blowfly rules!

Apollonius said...

I was in the doldrums lately thinking the end would never come and my LL wanted to jack my rent and then the condo glut hit Philadelphia and rentals became plentifully.

Nothing is for sale where I want to buy, yet, but my rent and location is looking up.

Anonymous said...

2oz x 3 months = 6oz
$670 oz x 6 = $4,020

you want a team of experts to help you invest a whopping 4k?

Because maybe you might lose $6-12 hundred dollars?

Is everybody in the UK this spineless?


Firstly, fuck you. We can't all be rich super men like you so obviously are. So rich, powerful and smart that you can't even make up a non-anonymous anonymous internet name! I'm just trying to find out what will give me the best return on my admittedly small funds - do you think there is something stupid about that? Save the pennies and the pounds will look after themselves as my mum said. And you know what? She isn't leveraged to the hilt on a ridiculous mortgage and neither am i, despite making a very good wage for someone in their twenties and having had many opportunities to get in on these "amazing, once in a life time deals". Guess from your bitterness you did. Either that or you're just a prick.

Anonymous said...

Blowfly, your grammar appears to be at a second grade level.

Anonymous said...

andy norwich,

I wouldn't normally give out grand advice like this to a stranger, but since you seem like a nice person and are from the UK I will tell you what I would do with part of your money as a hedge against inflation. Buy a case of whiskey and hide it in your attic. It will be good for barter and will probably be worth more than you paid in a few short years. Just don't drink it all. ;-)

Anonymous said...

Hahaha, in the last 2 years I have paid out just $13,200 in rent, you could say I "lost" that money if you want, but I see it as part of the cost of living like, you know, food and stuff. Then I look at a site like http://flippersintrouble.blogspot.com/, and it just makes me laugh all the way to the bank, with "Homeowners" (Such a funny word for people who are actually bankrupt) who have lost upwards of 150,000 over the same period. Renting is just great right now, I have a decent income so I am saving up a down payment so I can buy a reasonably placed house from the ashes in a few years time. , not only that but I will still have good credit. Who is the stupid one, Blowfly?

Anonymous said...

The rest are looking for side jobs at McDonald's said Home Center President Jason Bosch. "It happened overnight."

Hennigan works in the Norco office, a small building set on a hill off Interstate 15. He's been full-time since August 2005, when he quit his job as a route salesman for Peet's coffee.

Keith, did you write this?

Anonymous said...

"Who is the stupid one, Blowfly?"

More like what does Blowfly contribute to this blog?

Anonymous said...

The commentary on this site is excellent, reasoned and reasonable, except for blowfly. Could you please put out some flypaper and be rid of this pest? I am not a prude, but the profanity serves no purpose and is just plain offensive, especially when the rest of the comments are so cogent. He is not one of us and doesn't belong here.

Chris said...

Keith, I thought with all the talk today about Bank of America allowing people to get credit cards without a social security number (i.e. Bank of America is targeting business from illegal immigrants), I thought you would be all over that story like a fly on you-know-what. Maybe tomorrow?

Anonymous said...

Can anyone provide the link to a home-brew video titled "De-faulting"? Can't find it on YouTube or Google video.


Anonymous said...

uh oh

sounds like there's a movement afoot to put the gimp back in the box...

Anonymous said...


I've been out of town for a week and so missed your newwest crap about how the world was ending. Where was I do you ask?

Nowhere special just skiing in Colorado - Vail and Beaver Creek to be more specific. The land of $85 lift tickets and $25 mountain side burgers/fries/coke.

It is so laughable to read you loons talk about depressions and panics. I had to wait 10+ minutes to get on a ski lift..on weekdays for crying out loud. On Saturday it was more crowded than I ever remember seeing Vail...and this is the biggest ski resort in the country, I had to pay $100+ a day to rent an SUV from Denver Airport. Practically everthing was sold out and that was the going rate.

I don't know what kind of miserable $10 an hour life your readers lead. Maybe in that world things are bad. But all I see wherever I go be it Vail or Best Buy or Chili's or you name a business I see prosperity and nothing but.

Anonymous said...

Hey renters, take your saved up money and go to this auction. This house was confiscated by the IRS and property taxes are only $70K per year. I'll bet you get a good deal and if you protest the property taxes, you might get it knocked down to 50K per year. Also there are a LOT more interesting seized properties here from the various government agences.


Anonymous said...

oversight right on time:

“Many of the people in Arizona who help home buyers finance what is often the biggest purchase of their lives are not licensed. It’s estimated that there are as many as 18,000 unlicensed people taking mortgage applications, negotiating rates and getting loan commissions statewide.”

“But things could change. If House Bill 2320 is passed, it will require the licensing of most of Arizona’s mortgage loan officers and originators and bring more accountability to the industry.”

Anonymous said...

Quick note from a sad renter.

I'm saving my money to buy a McMansion on the cheap.

Now I must return to the sodden, naked wench sprawled across my tattered, smelly old sofa that I found in a dumpster.

Anonymous said...

Could someone provide the link to "de-faulting" (apparently sung to the tune of "Free-falling")? I can't find it on YouTube, google or google video.


stuckinthecity said...

Check out my new thread:

New term: "Naperville Fire"

Anonymous said...
This comment has been removed by a blog administrator.
Hard assets said...

I have sat through two prior real estate down turns, and the bubble wasn't this big! The "now generation" seems to think it all happens in a couple of weeks, then it's back to the up move "flip this house". I hate to be the messenger, but it takes years of pain to see this "ugly monster" through.

You haven't seen the start of the colapse. It is just the first winds of the storm. This is a category 5 heading right at you, and you are sitting in a dive in the Big Easy, all drunk and hoping to get lucky. Well you aren't! The devestation will be worse then New Orleans. You have seen the latest symptoms, the sub-primes under water. So just keep sipping on that cheap scotch, and pretent that you are still "the Donald". When it hits you won't feel a thing, just pain!

Anonymous said...

Please don't blame the Subprime Lenders. The lenders were just trying to help the poor people who don't normally qualify to get into a house. The loose lending standard had nothing to do with profit margin.

``There were huge margins in this business and you pretty much just had to show up to make money,'' said Scott Simon, head of mortgage- and asset-backed securities investments at Pacific Investment Management Co. in Newport Beach, California. ``As the rates have gone up, margins have compressed.''

Fremont General Corp., the third largest provider of subprime U.S. mortgages through brokers and lenders, eliminated ``combo'' programs amid a decline in investor demand for the loans.

Combo programs allow borrowers to use a second loan in lieu of a down payment when buying a home. Santa Monica California- based Fremont General stopped offering the programs because it can no longer sell the loans at enough of a profit, said Trude Tsujimoto, general counsel for Fremont Investment & Loan, which does the company's subprime lending.


Anonymous said...

If it looks like a bubble, smells like a bubble and tastes like a bubble, it must be a bubble.

Or is it?

The smart money now says the U.S. housing market, overall, is not in a bubble. But at least one part of the market certainly looks pretty frothy - the mushrooming "subprime" mortgage market for borrowers who can't get standard loans. Now that bubble seems to be bursting.

Last week, the Senate Banking Committee held a hearing on predatory lending practices, most involving subprime loans.

And on Friday, the Mortgage Bankers Association felt compelled to defend its members with a 13-point "fact sheet" arguing that subprime loans are "not a problem."

In theory, subprime loans can be good. In exchange for higher-than-usual interest rates, loans are offered to people who otherwise could not buy homes because of low incomes or tarnished credit.

But studies have shown that mortgage brokers and other lenders often press subprime loans on borrowers who actually could qualify for conventional mortgages with lower interest rates. Why? Because the lenders pay the brokers bigger commissions on subprime loans.


Anonymous said...

More Mortgage Backed Securities Investors losing money.

Do MBS investors need to loss all of their principle before they learn?

Centex HEL Class Downgraded
Class B-1 of Centex Home Equity Loan Trust series 2002-C has been downgraded from Baa2 to Baa3 by Moody's Investors Service. The downgrade was based on low credit enhancement levels compared with current loss projections, Moody's said. "The credit support has declined because the deal stepped down, allowing a large portion of the credit support to leak out," Moody's reported, adding that the realized losses have caused overcollateralization to fall below the required level. The underlying collateral consists of fixed- and adjustable-rate, first- and second-lien residential mortgage loans.

ABSC Class Downgraded
Class M5 of Asset Backed Securities Corp. mortgage pass-through certificates, series 2003-HE3, has been downgraded from BBB-minus to BB by Fitch Ratings. In addition, Fitch placed the following four ABSC classes on Rating Watch Negative: series 2003-HE2, class M-5; series 2004-HE6, classes M6 and M7; and series 2004-HE8, class M7. Fitch also affirmed the ratings on 184 other classes in 24 ABSC deals. The rating agency attributed the downgrade to a deterioration in the relationship between loss expectations and credit support levels. The watchlist placements were due to "signs of increasing credit risk, posing a potential threat to subordinate bonds," Fitch said.

SURF MBS Class Downgraded
Class B-2 of Specialty Underwriting & Residential Finance asset-backed certificates, series 2003-BC1, has been downgraded from BBB to BB by Fitch Ratings. In addition, Fitch affirmed the rating on class B-3 of series 2005-AB1 and removed it from Rating Watch Negative. The rating agency also affirmed the ratings on 13 other classes from the two SURF transactions. The downgrade was attributed to a deteriorating relationship between credit enhancement and loss expectations.

SURF acts as program administrator for the seller, Merrill Lynch Mortgage Lending Inc., and its loan acquisition program facilitates the purchase by the Merrill Lynch company of eligible nonconforming loans from various SURF-approved originators, Fitch said.

Anonymous said...

ResMae Mortgage Corp., a U.S. home lender to people with bad credit, filed for bankruptcy protection.

Closely held ResMae is at least the 20th mortgage company to be sold or closed as delinquencies rise and the market for home loans to risky borrowers contracts by the most ever.

In bankruptcy court in Wilmington, Delaware, today, Judge Kevin Carey said he'll permit an auction for ResMae's assets to give rivals a chance to top Credit Suisse's bid. If Credit Suisse wins the auction, it would take control of ResMae on March 7.


Anonymous said...

It is not that the US dollar is strong, it is just the Yen is being manipulated by the BOJ.

So should attention be switched to BoJ meeting on Feb 21, when every investors know that BOJ has lost all of its credibility?

Anonymous said...

realityville February 14, 2007 2:32 AM

The masses don't fly to Colorado to ski.

Anonymous said...

realityville February 14, 2007 2:32 AM

The masses don't fly to Colorado to ski.

Maybe in your world of $10 an hour jobs and $650 rents people don't go to Colorado to ski. That makes perfect sense. But you are a member of the working poor. You are a renter. I don't care what you do and aside from socialist blogs like this and idiots like John Edwards, nobody else cares either. You are now and always will be the bottom of society, along with negroes, mexicans and other sub-humans. Please do not assume you speak for the "masses". You speak for a small sub-group at the very low end of the economic spectrum.

Anonymous said...
This comment has been removed by a blog administrator.
Anonymous said...

O.K. all you hypocritical narcisistic global warming lemmings!

If you believe all that Bulls**T spewed by Al (inventer of the internet) Gore. Then you better be walking, riding a bike, a horse or mass transit!
I love the new catch phrase 'carbon foot print', especially from the hollywood lefties! They feel that if they talk about it, then their doing something about it!
Flying around in private jets, some quite large or in limo's. both with capacities of 8 to 20, but they will ride alone or with 2 or 3 others!
They live opulant lifestyles in mansion the likes of us will never see!
Just look at John Edwards new digs........you F**king Hypocrits!

So just because your guilt is so high that your going to impose on me, standards of living from some third rate third world dump that you yourself won't even live up to!

Global Warming is a Socialist bag of political nonsense!

Anonymous said...

To mr Realityville:

Wow. You must have a huge penis, with all that manly talk. You sound like the guy who buys an overpriced condo in some trendy little place just to pick up women, while living paycheck to paycheck after your lavish ski trips.

Here's some facts for you - not all renters make 10$ an hour. I don't own a house, my rent and bills per month are around 500. I'm waiting for the market to bottom out. I'm an engineer and I own 2% of the rather large company I work at. I have an investment protfolio worth around 200k.

So you can continue to bash renters if it makes you feel better, maybe if you do it enough you'll feel good about the flexible rate mortgage you took on that 500k condo.

Anonymous said...


I assume that you may have seen this on CNN- Dark Side of the Housing Boom- shoddy work. If not, here you go...


Anonymous said...


Are you from Massachusetts? The reason that I ask is because only a douche would make a comment like that.

And just for reference, I am not brown, but do consider myself a member of the wporking poor as I only make 150K.

Anonymous said...

wow not only do renters envy and hate people who don't live in a 500 sq ft ghetto apartment, now skiers are the devil too.

I can't imagine what it must be like to live with such anger every day. You people are truly pathetic.

Anonymous said...

I'm an engineer and I own 2% of the rather large company I work at. I have an investment protfolio worth around 200k.


I'm not an engineer, thought about it, but went the finance route. I don't own 2% of my company either. Although I think I do quite well.

I own a home I bought for $240K 8 years ago right after graduation. I knew righly that r/e is the best investment anyone can make long term. I thank my parents for this as well. Instead of a new car for graduation they gave me a downpayment on a home. Luckily for me I was raised by sane people and not someone like you.

Once again listening to my father, every bonus I got went to pay off the mortgage. The original $200K mortgage is now down to $45K and should be paid off within less than 2 years.

Zillow values my home at $722K. Mine is the smallest/cheapest on the block as I am surrounded by $850K+ homes. If I listed it for $700K it would be sold in about 10 minutes.

I have no neighbors. I have a yard. I have a private pool. I have a 3 car garage. You have an apartment with none of that.

You have $200K of investments and rent an apartment for $500. I have a home worth $700K and owe $45K on it. If you sell you pay 35% tax on your proceeds. If I sell I pay 0% up to $500,000 of profit.

Now you were saying about how much better renting is vs. owning.....

amc561 said...

Keith - thought this was interesting... www.hbraffle.com

I heard these people tried selling the house and had no takers so now they are raffling the house.

Anonymous said...

the problem with sarcasm is that most people just dont get it

Anonymous said...

that 700,000 house would pay 50,000 a year in property taxes in new york, by my calculations, at the average income of 27,000 that the fed says is now 50,000 yet no inflation in wages is accounted,

Anonymous said...

is there a market for 125,000 dollar houses that are tax assessed at 500,000 dollars, not including prop13 california

Anonymous said...

Now you were saying about how much better renting is vs. owning.....

February 14, 2007 6:06 PM

every circumstance is different. Sometimes its better to buy, sometimes its not; especially at todays prices in many markets. Keep in mind that most people are renting in the short term, not the rest of their lives. I personally dont see anything wrong with younger people renting in the short term while saving a boat load. Why not put down $100k for example. Cash is still equity in my opinion.

Anonymous said...

Please people, have you not heard of tinyurl.com???

Anonymous said...

Anyone who could afford to buy a house right after graduation probably benefitted from a rich Daddy and no student loans. The high cost of education is another "gift" from our lovely baby boomer parents.

Anonymous said...

Anon @ 6:06 PM
Congrats, seriously looks like you've done very well. I'm glad you're not an engineer b/c I'm afraid that you prob. wouldn't have done too well. I am also an engineer like the person you responded to, however I only recently graduated and did not have the good fortune of being born 8 years earlier. You are one of those lucky few who bought at the right time and the right place.

You turned 240k into 700k in 8 years, that's roughly 200% in 8 years, or roughly 15% a year. Now tell me do you honestly believe that in another 8 years you're place will be worth roughly 2.1 million.

Consider the fact that housing over the long term is inflation +1-2%. So just based on logic and one could reasonably expect either inflation to rise dramatically, housing prices to drop dramatically, or prices to stagnate for a long time (not housing to continue to rise).

Consider for a moment the finance person who would come out of school now like you did 8 years ago, can he now afford the type of place you bought with the same financing? Is he making 300+k now compared to 7-80k of eight years ago (a rough estimate of what you would need to make to afford the place) Consider that unless you've made improvements and put significant cash into your place it is now 8 years older (i.e. more prone to break and malfunction).

You were no financial wizard-just like the majority of people who bought and have seen such an increase in prices. Now if you bought raw land, put a house on it, bought a structurely sound place made significant improvements, maybe. Otherwise you did nothing but sit on it.
It sounds like you've been pretty smart about your money, congrats, I wish more people were like that. However to think that you are soo brillant b/c you bought then is folly. How many dotcom investors were so brillant and then so dumb. I'm not suggesting you sell, I just say gloating about it is a little uncalled for.

I would love to buy a place. Right now, it ain't worth it 300k for a 1 bedroom, nope I don't think so, not when I can rent it for 800/month. At some point it will make perfect sense to buy, just like you did but for right now for those first time buyers its time to rent.

GT said...

how great is this craigslist as?


$309900 RELISTED & REDUCED $100,000!!!

Have you heard about 9301 Baker Street?!
Has escuchado de 9301 calle Baker?!

Anonymous said...

It seems that there are some "big shots" here living the high life out of their HELOCs and credit cards, while bragging about a pathetic skiing trip to Colorado. I've skied many times in Vail, Aspen, Whistler, Lake Tahoe, Chamonix, Las Lenas, Bariloche, and I just spent the holidays in a Brazilian island, called Florianopolis, where I have a second home:


However, I've been renting also in the US, after selling at the peak of the bubble, because I didn't go to a prestigious American BSchool to be dumb.

I rent an oceanfront condo for 1/4 of the total cost at $450k. It has oceanview, pool, gym, private beach, valet, concierge, sauna, tennis, and just 8 minutes from work.

I decided to sell my previous property for a reasonable profit, after I realized that the ROE and the CAP RATE were totally out of wack. With some of the proceeds, I paid cash for another property in the referred Brazilian island, by taking advantage of the exchange rate (not so favorable now) and good prices (not anymore).

To top it off, I have no debt, paid cash for my higher education at prestigious American and French universities (no, I'm not French so save the bashing, have an EMERGENCY FUND that covers 2 years expenses, have a vacation savings account in Euros so I can hedge the dollar on future trips to Europe, a Brazilian savings account to hedge the falling dollar in that country, and my retirement accounts are well funded and diversified (including gold and foreign).

I'm not rich and never had help from parents, but I use financial common sense. Hell, I still cut coupons and love a deal or to beat the system. I don't want to be a slave of a system that needs fools to spin furiously the hamster wheel just to keep up with debt (or ski in Colorado a few days per year). By applying this strategy, my NET WORTH jumped considerably, while enjoying life without debt and in different countries. BTW, only a fool wannabe would pay $25 for a hamburger.

Anonymous said...

Everything is soooooo rosy in America!!! Wall Street, media, and the Fed are hard at work blinding the sheep. Let it go hamsters, spin that wheel faster...faster!!!

Anonymous said...

Can anyone provide the link to the video clip "De-Faulting"?
Can't find it on YouTube, googlevideo.

Anonymous said...

To mr financer,

I'm not bragging. 200k is not very much. That's not the point. If you re-read my post, I was responding to the previous poster (Realityville) who claimed renters are lower class. Shrug. and houses as the best investment possible? Hrmm. Maybe. I'm no expert. But I used to live in San Francisco, and the average growth rate, in house value adjusted for inflation is around 4%, over the last 50 years. And San francisco has the highest rate in the country. So I dunno. Is 4% good?

Congrats your house is worth so much, seriously. You got in at the right time. I've lived most of my life in San Fran and NY, so instead of buying a home I invested my money. Will I buy a house soon? Probably - when I feel the market has bottomed. I'm in atlanta now, so there's a lot more available housing wise. We'll see

Anonymous said...

'm not rich and never had help from parents, but I use financial common sense. Hell, I still cut coupons

Ladies and gentlemen I present to you the typical HP poster...a coupon cutting renter.


Anonymous said...

You turned 240k into 700k in 8 years, that's roughly 200% in 8 years, or roughly 15% a year. Now tell me do you honestly believe that in another 8 years you're place will be worth roughly 2.1 million.

No, I doubt it will be worth 2.1M in another 8 years. But that's not the point. The point is all you renters on here assume anyone who owns is a FB. You assume anyone who owns is in a world of hurt. You also throw out the fact you have rented for the past 10 years for $500 and have a couple of hundred thousand in the bank. My point was that it's nothing to be shouting about. While renting these past 5-10 years you missed out on one hell of an opportunity.

that 700,000 house would pay 50,000 a year in property taxes in new york, by my calculations,

Your calculations are very wrong then.

Consider for a moment the finance person who would come out of school now like you did 8 years ago, can he now afford the type of place you bought with the same financing? Is he making 300+k now compared to 7-80k of eight years ago

My salary was $58K a year when I bought my home. I have no idea who could afford what today and quite honestly I don't care. I was able to afford it. I chose to buy. I made the right decision.

Anyone who could afford to buy a house right after graduation probably benefitted from a rich Daddy and no student loans.

Did you not read the post? They gave me a downpayment of $40K. I could have bought with $0 down just as easily. Their gift made things a little easier. Either way I would have bought something as I knew it would be the best thing I could do.

And no I had no student loans. Full athletic scholarship (hockey), daddy didn't pay a dime. I can see how you engineers are upset though. Here I am getting $100K+ worth of education for free, while you poor saps get saddled with mountains of debt and have to rent for years and years while paying it off. I'd be bitter too if I were in your shoes.

Anonymous said...

Ah so you are a brainless jock then, Hockey scholarship my ass! What about scholarships for people with decent brains in their heads. I say their should be a total ban on athletic scholarships and the money should be used for academic scholarships, after all that is what Universities are for, you fool. How is this for a statistic, the single highest paid employee at my local University is the Football coach, foul, just foul. We spend all this money educating mindless meatheads, making sure they maintain a 2.0, while the people of true intellect are languishing under the yoke of loans, and by proxy the entire nation, as it is brainpower that creates wealth not sweaty beefcakes. You are simply a waste of space. And net worth is not a measure of real worth.

Anonymous said...

Oh and I just noticed, downpayment of $40K from your rich daddy!?, so do you know who paid for your education you foul piece of crap. I did, and everyone else who pays exorbitant tuition, just go throw yourself in a lake and do us all a favor.

Anonymous said...

The problem is, your education wasn't free, you just got everyone else to pay for it.

Anonymous said...

I, as a renter don't have any disdain for owners. I do however have no sympathy for anyone who bought within the last 2 yrs...or so.
Consequently, if you over-paid, or bought beyond your means, or dove into a interest only or ? , and now your paying on ever diminishing value.......I feel your pain, better you than me!

Anonymous said...

"Ladies and gentlemen I present to you the typical HP poster...a coupon cutting renter."

I'm a renter by option, who sold at peak for a profit to beat the system and stay ahead of sheeps like you. And when I cut coupons, it's mainly about the principle, not the money, homedebtor-levered to the wazoo-wannabe.

Yes, I cut coupons, take advantage of sales, always look for deals, and pick up coins from the ground. The same way that Warren Buffett waits 10 years to trade his car, Ivanka Trump flies coach on regular airlines and wear vintage dresses that cost $25.

If you have some time off from that hamster wheel, go read the book, "The Millionaire Next Door", to get back to reality, levered wannabe. You must be that financial genius who pays $25 for a hamburger. How's that NEGATIVE NET WORTH doing? Don't forget: the clock is ticking and your social security won't be around for your $25 hamburgers.

Anonymous said...

The issues of those who still buy the real estate is best investment long term idea and who look down on renters are quite apparent. Have to tell (probably with some exageration) of their metoric rise in wealth due to the genius of buying a house in 1997 or 1998, makes them feel good, superior, wise, who knows. Fairly sad really, instead of blogging should be out there making millions with Carlton Sheets. Then the anti-renter bias. Again, it all depends. Sometimes it makes sense to rent, sometimes not. Currently no. Is real estate the best investment long term? The data show that it is not--only in the asset bubble of the last few years has the trend of barely keeping up with GDP been broken by residential real estate. Now as for the nimrod that believes his house will go up in value in 8 years (real value inflation adjusted), I have news for you Oh mighty real estate investment genius---by the way you notice how buffet lives in a 300k house--guess you are smarter Hockey Jerk?

yep my grandpa rented and clipped coupons, left $4.5 million in his estate in 1987. Not everybody has to consume to show his or her "worth. God the deniers and renter attackers are getting stupider and more insipid. Love their tendency toward personal attacks and a complete incapacity to deal with ideas or facts. I hope they suffer most, of course they are probably too stupid or nasty to notice the collapse around them--the whole not understanding data, cause and effect, history, basic economics, the idea of a discount rate, opportunity costs. Review, learn come back and post.

Anonymous said...

Help the Hockey guy!

Zillow values my home at $722K. Mine is the smallest/cheapest on the block as I am surrounded by $850K+ homes. If I listed it for $700K it would be sold in about 10 minutes.

Ha, ha, ha, he believes a.) Zillow and b.) that its 2004? Ha, ha, ha. I live in D.C area, in Montgomery County (second richest area in U.S.) and a house that Zillow indicated was worth 950k sat on the market and sold for 690--lots of stories like that. How can anybody belive Zillow! Ha, ha what a lame ass. I bet you live in Florida cuase you are so deluded--it will come back, zillow sez o, I just know RE is a great long term intestment,,.........God the house pirce deflation will probably still be denied after prices fall another 30%. You can never loose money underestimating the intelligence of the american people, they also do not like their fantasy of free money and wealth derived from their genius in realestate to be over...

Anonymous said...

Yep, mommy's boy got 40k for down payment + car + allowance + tuition, and thinks that he's made it. Hey, not everybody here rents because has no money to buy. We rent by option. As you said, mommy's boy, you could have bought your home with 0 down...so can we. However, some of us owned property already and sold it at the peak of the bubble for reasonable profits, and/or are waiting for this mess to unfold to get deals and keep a POSITIVE NET WORTH.

According to your story, with the housing market sinking, your net worth will be reduced because the biggest asset you have is a home that's loosing value. For someone who has a background and degrees in Finance/Business like myself, that's totally unreasonable. Even Arnold S., governor of CA, sold some of his Santa Monica properties at the peak of the bubble in order to realize profits. He's a smart business man.

As you said, you have been putting a big chunk of your money in mortgage and now that equity is going down, thus lowering your net worth.

So, don't you homedebtors assume that every renter is broke. Remember: 70% percent of Americans live paycheck to paycheck, even though 60% of them own homes. You're an engineer; you can work these numbers out.

Obviously, the homedebtors who are bitching here are struggling to make ends meet, but still keep the pose by eating $25 hamburgers and charging stupid ski trips on credit cards. Meanwhile, we, "renters-by-option", are laughing all the way to the bank. Hey, maybe we'll buy your home when the market is in the toilet. Keep in touch!

Anonymous said...

"' I'm not rich and never had help from parents, but I use financial common sense. Hell, I still cut coupons'

Ladies and gentlemen I present to you the typical HP poster...a coupon cutting renter.

Sad. "

What an idiot you are. Your statement says more about you than the guy cutting coupons.

Go on now and pay tripple for that first class ticket, just so that you can have a bigger seat for a few hours, you stupid piece of crap! People like you are the reason the U.S. has a negative savings rate.

Anonymous said...

"Listen up imbeciles, half wits and obtuse renters in your crumbling, ramshackle and decrepit apartments. How's it feel to sit on this threadbare, decaying and evil-smelling old sofa you retrieved from the dumpster? It takes a completely unhinged hemorrhaging mind to believe that renting is good. Repeat after Blowfly: I am a jackass meathead retarded moron! Ahh finally, the truth! "

Hey Nutty! Why don't you just post under your real name, you coward?

Flagg707 said...

Uh oh. The Gates Foundation has dumped homebuilder stocks as of its most recent filing:

From Reuters:

I can't wait to see how the REICs will spin this...

Anonymous said...

That Bubble What now? Not in the NYC area there wasn't. Where are those 50% price drops all you nutjobs are talking about?

February 15, 2007

As area home prices continued to drop or stabilize, buyers snapped up homes last month. In Nassau, Suffolk and Queens, buyers signed contracts on almost 2,600 homes in January, a 25 percent jump from a year earlier, the Multiple Listing Service of Long Island Inc. reported yesterday.

In Nassau, the median home price fell to $450,000 in January from $470,000 in December - down 6.3 percent from a year earlier. In Suffolk, the median closing price fell from $398,600 in December to $397,500 last month. But it was up 1.9 percent from a year earlier. In Queens, the median price rose to $485,500 from 477,500 in December, and was p 0.1 percent from a year earlier.

People may have put off home purchases a year ago in hopes of a price decline but have since decided to pursue deals, MLS president Donald Scanlon said.

"A year ago, I think there was a doom and gloom that may have been painted by some of the media saying, 'Prices are coming down. Prices are going to come down. There's a bubble. It's going to burst. The bubble is going to burst.' And I don't think there was any bubble to burst," Scanlon said.

Anonymous said...

February 14, 2007 9:23 PM

Congratulations to you! Theres nothing wrong with your strategy. The only ones who are mad at you are the ones in debt. Tell those to enjoy financing their borrowed money. Have a good nights sleep, you deserve it. (I'm totally and completely debt free too and have a box full of coupons that I use for grocery shopping every week) I laugh when people pay more than me. I look at it as they are subsidizing my savings.

Anonymous said...

February 15, 2007 2:57 PM

thanks "nutjob" I feel better now. The case cracker.

Anonymous said...

those that come in and gloat about their wealth...I mean...unrealized gains (read up on that one homeowners) are drunk on...what's that famous French wine?

Noveaux Rich.

And to those that point to the "blip" gains in housing...

read up on the term "bear trap"

where are all the huge price drops...

well...when we have a Trillion dollars in ARMs upping the rates in the next three years...what % increase in forclosures do you think that we will read about?

I thought an unprecedented 100% increase on 300 Billion in ARMs resetting was pretty disturbing. I guess you didn't. Maybe the figures will start to disturb you more and more.

Anonymous said...

You retarded idiotic moron dumb asses really believe that there is a housing market crash? Only a totally brain-dead imbecile renter could believe such bullshit. Renters in general are known to be obtuse, dimwitted dip-shits. They have no money, lack proper hygiene and usually carry a rancid odor. Go crawl back into your ratty little rental shit-shacks and get out of Blowfly’s way.

Anonymous said...

File this under: "What?" After reading countless articles who's headlines read "Housing Market Recovery Seen," or "Expect Upturn in Housing Market," naturally you'd expect that the article would then articulate that notion with some solid information. Instead I always go on to read how every economic indicator points to the downward motion of the housing market and the experts cited never say anything positive for the housing market in the future.

Knowing that a lot of articles are written by one person and that an editor or someone else writes the headline, I've got to ask how they come to that headline.

It's just funny how that has happened so much that you've got to wonder why.

Essentially people, they are saying "Well, I guess it's so bad now,it's gotta start leveling off soon."

...oh no it doesn't.

What I read is that we truly are poised for a lot of ugliness in housing and that yes, it can and will go much further down.

I got that from reading these articles, not the headlines.

Anonymous said...


I noticed you like to use the word dim-witted. Based on your contributions, you have yet to impress me with your intellegence. Your the genuine dimwit. Truth hurts, doesn't it?

Anonymous said...

Where are those 50% price drops all you nutjobs are talking about?


Oh it's coming

we're going back to 1995 prices (in real dollars for you scamsters out there)

precious metals are a tell. have you seen what they've done since this credit 'boom' began 5 years ago? now housing prices are falling but pm is still rising. that's an even bigger tell.

and remember, something has to be truly hated before the bottom is in. people aren't mailing in their keys yet. but day-by-day, that day is getting closer.

pm holders will be insulated against inflationist attempts, and will ultimately be able to buy your luxury shack for pennies on the ruple (in real terms of course, for you scamsters out there).

Anonymous said...

Wouldn't it be funny if Blowfly is actually a sweetheart of a grandmother living in Kansas who bakes chocolate chip cookies, steaming out of the oven and reads cute little nursery rhymes when not bashing our brains in with insults.

...just a thought

Anonymous said...

Well, no big surprise here, just more crap for the HAMSTERS to deal with:

"Dark side of the housing boom: Shoddy work
(Money Magazine) -- Less than a year after moving into her new 2,100-square-foot house in Lenexa, Kans., Susan Sabin has strung up lemon lights in her front window.

The lemons, she says, go perfectly with the home's most prominent features: jammed doors, warped windows, bent pipes and cracked walls. "The house is essentially splitting in two," says Sabin.

At the peak of the recent housing boom, home buyers scooped up a million newly built homes every year while homeowners poured more than $200 billion into renovations. But now stories of shifting soil, leaky roofs, damaged stucco and other construction defects abound.

Though many builders have worked to improve the quality of their houses over the past decade, says Alan Mooney, president of Criterium Engineers, a national engineering firm, the building frenzy also opened the door for unskilled labor, unscrupulous contractors and untested products.

"When everyone is out there building as fast as they can, that does result in more defects," he says.

Contractor problems rank among the most common consumer complaints, according to the Better Business Bureau, and a recent Criterium Engineers study found that 17 percent of new residential construction projects inspected by the firm in 2006 had at least two significant problems."


Anonymous said...

Man, those Wayan brothers were ahead of their time. Here's a recap, thanks to Wikipedia, of that hilarious sketch from Living Color. Any similarities with the current Housing Ponzi Scheme?

"Homeboy Shopping Network - Two streetwise pitchmen named Whiz and Ice (Damon and Keenen Ivory Wayans) use a QVC-style approach to sell stolen goods. The phrase "Mo' Money, Mo' Money!" was coined in this sketch. The time limit imposed on sales was typically due to the impending arrival of the police."

Anonymous said...

Anonymous February 15, 2007 10:38 AM: Hey brother I'm starting to like you. Let them have it them shit for brains renter scum.
Anonymous February 15, 2007 6:57 PM: You lamebrained, asinine, witless, unhinged, ape-shit renter.

Anonymous said...

This is HIGH-larious. Renters with millions of dollars saved up yet they cut coupons.

Step back and listen to yourselves. You are insane.

Anonymous said...

Talk radio, news at 12 pm in Ft Myers, a large realty agency reports that housing is down by 25% in under two years! (No!!) But, now the sellers can "see the buyers." (Whatever that means). The sellers just have to lower their prices to meet the buyers demands. But, they went on to say, the condo market is REALLY in trouble. I guess the owners of those can't "see" the buyers yet.

Anonymous said...

ILLINOIS: Price up YOY. Yup it's a crash of historical proportions. And what is this? Condo sales are in chicago 2nd best year ever? WTF is going on here? Where is that 50% price crash I'm hearing about these days on HP? Anyone?

SPRINGFIELD, Ill., Feb. 14 /PRNewswire/ -- Condominium sales help bolster an Illinois housing market in transition throughout 2006, while fourth-quarter sales figures were down compared to the same period a year ago. According to the Illinois Association of REALTORS(R) (IAR) fourth
quarter report, total home sales (which include single-family homes and condominiums) totaled 35,186, down 16.0 percent from 41,883 home sales in the fourth quarter of 2005. For the year, total sales were down 8.9 percent in 2006 with 167,860 homes sold compared to 184,199 sales in 2005.
The year-end Illinois median home sale price for 2006 was $203,900, up 1.5 percent from $200,900 in 2005. The median is a typical market price where half the homes sold for more, half sold for less.
The Illinois condominium market showed continued strength in 2006 with 52,787 units sold, the second highest annual level of condo sales reported by IAR and off just 7.6 percent from the record level of 57,155 condos sold in 2005.

Anonymous said...

Sad, more bad news to homedebtor-hamsters with crappy credit scores due to foreclosure or late payments. And also for real estate clerks going back to blue-collar jobs:

"You can be denied or required to pay more for property, auto and other insurance because of your credit history, your education and even whether you're a blue-collar or white-collar worker.

Just as the industry uses supercomputers to model hurricanes, similar technology is being used to model people, assigning them a score for insurability."

Therefore, you next insurance renewal (car, home) will be probably higher or denied. Don't forget that landlords are checking credit reports also, before renting property. That increase is a lot of money in a lifetime. Pay up, suckers!

Anonymous said...

"So, don't you homedebtors assume that every renter is broke."

No. I, a pre-bubble home debtor, do not assume all renters are broke as I myself was once a renter. However, I do know for a fact that many renters I know ARE broke! Dont assume that being a renter by option equates to being financially responsible.

So there you have it, we all dont think renters are broke. We just think some are just plain stupid for not buying a home when they had the income and cash available yeara go AND homes were affordable. That's all.

Anonymous said...

Noveaux Rich.

Uhm if you are going to use bg French words at least know how to spell them.

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