Housing Crash Consequence #2857: Screwed Homeowners Associations

Again, like a broken record, as predicted here, homeowners associations across the land are running into big issues now that the housing gamblers and failed flippers can't pay their monthly nugget - or can't even be found.

Choice A: Cut services
Choice B: Get the demoralized residents to keep up the joint
Choice C: Raise everyone else's HOA fee
Choice D: Go bankrupt
Choice E: All of the above

I'd love to hear what's going on in Failed Flipper monuments like the Third Avenue Lofts in Scottsdale, or the Club at Brickell in Miami for starters. Not quite the HOA-paid-for wine and cheese parties everyone expected, eh?

Foreclosures force HOAs to cut corners on upkeep

Homeowners associations strapped by unpaid assessments related to the foreclosure-ridden real-estate market are mustering volunteer work crews, cutting maintenance jobs and scrimping on landscaping to save money.

Phoenix, Chandler and Avondale are among Valley cities fielding calls for help from HOAs that previously turned only to their own boards of directors and management companies.

Rising Foreclosure Rates Cause HOAs To Fall Into Bankruptcy

ORANGE COUNTY, Fla. -- The Avalon Lakes Homeowners Association was on the brink of bankruptcy. At one time, it had a $140,000 deficit. The subdivision said people who fell into foreclosure stopped paying their HOA FEES.

“The people that weren’t paying, still aren’t paying and we’re basically paying for them,” said Cynthia Weclew, a homeowner.

There are concerns about what will happen to the communal areas of the subdivisions if the HOAs can’t afford the upkeep.

"Home Rage": Banks are now offering foreclosed homedebtors cold hard cash to not destroy their homes before they clear out

Do you have any comprehension now about how ugly it's getting out there?

Thank you realtors. Thank you mortgage brokers. Thank you housing gamblers. Thank you Alan Greenspan.

This mess is only gonna get messier now. The screwed sheeple are getting pissed.

Buyers' Revenge: Trash the House - After Foreclosure Banks Pay People Off To Deter Home Rage

The stucco subdivisions of Las Vegas are caught up in the nation's foreclosure crisis. These days, bankers and mortgage companies often find that by the time they get the keys back, embittered homeowners have stripped out appliances, punched holes in walls, dumped paint on carpets and, as a parting gift, locked their pets inside to wreak further havoc.

Real-estate agents estimate that about half of foreclosed properties to be sold by mortgage companies nationwide have "substantial" damage, according to a new survey by Campbell Communications, a marketing and research firm based in Washington, D.C.

The most practical way to ensure the houses are returned in decent shape, lenders and their agents say, is to pay homeowners hundreds or even thousands of dollars to put their anger in escrow and leave quietly.

HousingPANIC Stupid Question of the Day

Is it immoral to walk away from your depreciating debt-trap and toxic mortgage? And your car? And your credit cards? And every loan you've ever taken out?

Because millions are doing it, and millions more are thinking about it...

HousingPANIC Stupid Question of the Day

If you illegally lied on a mortgage application about your income and assets, and got yourself into a loan and home you couldn't afford on which you couldn't even make the minimum monthly payments...

Is the home really yours to lose?

(hint - it's not your home, it's the bank's. you're not a 'homeowner' and you can't lose something that's not yours. you're in the home illegally, and society will be better off once you lose it and someone who can afford it moves in. you don't deserve a bailout and you'll be better off renting, or buying a home (with non-fraudulent loan documents) that you can afford)

Moral hazard goes off the charts as banks and our goverment talk about voiding contracts and letting teaser rates continue

There are days when the fools in charge of our banks and our government do things so stupid and so short-term, you just have to shake your head in disbelief, and acknowledge the fact that we're run by monkeys. Monkeys trying to win the next election, monkeys trying to earn their next bonus.

This is one of those days.

Goldman Sachs' head Henry Paulson (oops, I mean Treasury Secretary) and the clueless Sheila Baier at the FDIC are due to announce a moral hazard toxic loan "bloodletting over amputation" plan soon.

This "keep your teaser rate" and "Vote GOP" plan would let people who stupidly got into loans and homes they couldn't afford keep their silly teaser rate (just until after Bush leaves office), and people who bought homes they could afford with fixed rate mortgages of course would get screwed in comparison.

Uh, two or three words come to mind:

Moral Hazard.

MORAL HAZARD.

MORAL F*CKING HAZARD!!!!

"Bank Failure" and "Class Action Lawsuits" also come to mind...

Treasury close to subprime aid plan

WASHINGTON (Reuters) - The Treasury Department is finalizing a plan with mortgage industry leaders that will hold interest payments steady for many subprime borrowers facing higher rates and possible foreclosure.

The mortgage representatives and regulators are focusing in on restructuring "2-28" and "3-27" subprime loans, which start with a fixed mortgage rate of up to three years but then reset to a much higher rate.

Foreclosures, mortgage fraud and crime - welcome to America, post-housing-disaster

These two stories really sum it all up. Rampant mortgage fraud, cash-back-at-close scams, realtors, mortgage brokers and appraisers on the take, and now cities (and homedebtors) are paying the price.

Prepare to cringe. Post-housing-crash America ain't gonna be too pretty.

Empty Houses Home to Crime As Loans Fail - Neighborhoods Suffer As Crime Follows Foreclosures Into Vacant Houses

Eighty-five bungalows dot the cul-de-sac that joins West Ontario Avenue and East Ontario Avenue in Atlanta. Twenty-two are vacant, victims of mortgage fraud and foreclosure. Now house fires, prostitution, vandals and burglaries terrorize the residents left in this historic neighborhood called Westview Village.

"It's created a safety hazard. And if we have to sell our house tomorrow, we're out of luck," said resident Scott Smith. "Real estate agents say to me 'We're not redlining you, but I tell my clients to think twice about buying here.'"

"They've seen a lot of prostitution in the area, vagrants wandering in and out of the empty houses and drug activity," said Officer Dakarta Richardson of the Atlanta Police Department. "Some people that I talked to are afraid to walk out of their homes at night."

During the boom, the suburb just south of Sacramento sprouted 10,000 homes in four years, attracting investors from the San Francisco area. Now many houses stand empty, weeds overtaking lawns, signs lining the street: "Bank Repo," "For Rent," "No trespassing -- bank owned property." A typical home's value has dropped from about $570,000 to the low $400,000s.

Miami condo at ground zero in mortgage fraud

At first glance, the 43-story building in Miami's international banking district seems little different from other high-rise condominiums overlooking the turquoise waters of Biscayne Bay.

But the 643-unit condo known as the Club at Brickell is a leader in mortgage foreclosures and it appears also to stand at ground zero in a blizzard of fraud that may lie behind many of the failed loans threatening to bury the U.S. property market.

Mortgage scams involve a cartel of inside players -- colluding property appraisers, real-estate brokers and accountants willing to draw up fake income statements and tax returns -- who recruit people with good credit histories to serve as a decoy or "straw buyer" in a real-estate deal.

The conspirators inflate the price of the property, to get the biggest loan possible, pay the sellers the original price and then pocket the excess loan money as "cash back" at the closing of the deal.

Doug Dewitt, a real estate broker contracted to work with several lenders on the valuation and disposal of foreclosed properties, said nearly 70 percent of the sales or closings at the Club over the last 18 months were questionable.

That works out to more than 200 possibly shady deals in a single building, he said.

The dubious transactions all fit a pattern that Theobald said should trigger "bells and whistles" for law enforcement anywhere -- time and time again properties that failed to sell for months when listed at around $450,000 were pulled from the market and then suddenly sold for more than $800,000.

FLASH: Foreclosures up 100% from last year. Oopsie, you mean those toxic loans had to be paid back?

WWCT?

(translation: what was Countrywide thinking?)

Number of US Homes Facing Foreclosure Doubles in Third Quarter

LOS ANGELES (AP) -- A soaring number of U.S. homeowners struggled to make mortgage payments in the third quarter, with properties in some stage of foreclosure more than doubling from the same time last year, a mortgage data company said Thursday.

A total of 446,726 homes nationwide were targeted by some sort of foreclosure activity from July to September, up 100.1 percent from 223,233 properties in the year-ago period, according to Irvine-based RealtyTrac Inc.

HousingPANIC Stupid Question of the Day

Why are people who listened to realtors on commission and bought homes with toxic loans in 2005, 2006 or 2007 in Phoenix, Sacramento, Tucson, Tampa, Miami, Vegas, Orlando, Ft. Lauderdale, LA, San Diego, Miami, DC, Atlanta, Boston, Naples, Detroit, Stockton, Riverside, Fresno, Jacksonville or Reno (and probably a few more) still paying their monthly mortgage payments, taxes and association fees?

Don't they know by now that they'll probably go bankrupt and be foreclosed on?

Don't they know that they're free to stop making payments today, horde as much cash as they can, and eventually just turn in the keys?

It's too bad so many sheeple listened to realtors on commission these past couple of years, and made the worst financial mistake of their lives

People around the country (and around the world) made some serious financial mistakes the past couple of years. Leverage is wonderful on the way up, but when prices fall soon after "buying", even a small decline can wipe you out with highly-leveraged real estate.

After a lifetime of working and saving, the simple mistake of buying a house at the peak (or even today) is enough to ruin everything. The risk was massive, the reward was questionable, and the warning signs were everywhere, yet the sheeple went ahead and did what they did, and now they're paying the price (or screaming for bailouts).

Millions of people around the world will be losing their houses during this downfall. Foreclosures will skyrocket. Inventory will build. Prices will crash. And it was all so predictable. Classic mania, classic crash. And classic opportunists, idiots and conmen herding the sheeple into the worst financial mistake of their lives.

Those who only bought within the last couple of years, however, face a different story. Since their homes may be worth less than what they paid, they can't sell for enough to pay off their mortgage and could face skyrocketing monthly payments when their loans reset to higher interest rates.

"The people who are in the most trouble are those who bought most recently, because they bought when it was going up and then it went right down," said Hans Johnson, associate director of the Public Policy Institute of California in San Francisco.

A HousingPANIC Public Service Announcement: Desperate Homedebtors, put down the matches and just walk away! Foreclosure yes, arson no!

Well, one way we can get rid of these millions of unwanted, not-needed, toxic-loan or investor-owned homes is to just burn 'em down, one by one. And trust me, that's happening all over America. But come on people! Wise up! Even if you burn the damn thing down you won't be any better off. Just walk away.

Whenever you see the words "suspicious house fire", just follow the money. It's not too suspicious as to why it got torched. Something to do with a homedebtor being over his head.

But as they say today, you make your bed, you sleep in it, until it's foreclosed on, or you burn it down.

Kent County Deputies have arrested the homeowner for the September 1st fire at 6825 Deer Cove Drive.

Cheryl Marie Christman, 38, was arrested and is being lodged in the Kent County Jail for intentionally setting fire to her home. Fire investigators believe that Christman was attempting to collect insurance money because the home was going to be foreclosed four days later.

Christman was arraigned this afternoon for the arson charges. Bail was set at $20,000. Her preliminary court date is set for Oct. 1st at 2 p.m.

CNBC's Diana Olick and others on the Fed cut and the "mortgage despair cycle"

I know the housing cheerleaders are all excited, and desperate homedebtors looking to unload are all in a tizzy, but sorry, bad news. The Fed could (and might) cut to zero, but it ain't gonna help. China and hedge funds ain't gonna buy the CDO's anymore, the Fed funds rate does not set mortgage rates, the toxic mortgages are still gonna reset, foreclosures are still gonna soar, and housing is still wildly overvalued.

And remember, as the stock market soars - stocks ain't houses. Mutually exclusive investment classes. Invest accordingly.

Diana Olick: Since we’re all "Fed, Fed, Fed," it behooves me to weigh in on how a Fed rate cut would affect mortgage interest rates, not to mention the current mortgage despair spiral, as lenders run for cover and investors turn up their collective noses. From everything I hear, it’s not going to do much in the short term, but rather than hear it from me, I thought I’d pose the question to some of my fave experts and let you hear from them:


Bill Seidman/Fmr. Head of FDIC, CNBC Chief Commentator: "If credit is bad, rates don’t count. I don’t care if you lower the rate 100 basis points. It may improve some of the profits of those institutions that lost a lot of money due to bad credit, but it does not address itself to the real problem, which is bad lending. And let me emphasize: it’s not just subprime, it’s substandard lending."

Jay Brinkmann/Mortgage Bankers Assoc.: "The Fed rate cut has already been priced in."

Howard Glaser/Fmr. HUD Official, Mortgage Industry Consultant: "My view is that the effect is likely to be limited – probably a short -term psychological boost more than a fix for mortgage market liquidity... You could lower the rate to zero and those loans (subprime, alt-a) are still not coming back."

A Special HousingPANIC Message to the Toxic Mortgage Gamblers with 3% Teaser Mortgages Resetting to 10% - STOP STRESSING - WALK THE FU*K AWAY AND RENT

Remember in the movie Titanic, when the ship breaks in half and Leo and Kate rush to the top of the boat to give themselves a fighting chance, while others slide down into the cold waters below to their sure deaths?

We're to that point.

It's now every man for himself. Financial survival is the goal. Help the women and children if you can, but if you're dead, you can't be of much help.

And yes, I have a BIG problem with people who sign contracts and walk away from them. Or who borrow money and then don't pay it back. But we're to that point, and I'd rather see banks, hedge funds and corporations screwed over before I see real people take it on the chin. People gotta eat. And when your loan resets from 3% to 10%, you gotta do something.

So if you're a housing gambler or homedebtor who's facing the ARM-reset-disaster, stop stressing, and get ready to walk away if you can't refi. Don't forget to gut the house and put everything on ebay before you move.

And remember HP'ers that it was banker buddies Bush and Greenspan who gave these failed gamblers the green light in the first place.

A HousingPANIC message to the failed Housing Gamblers of America: You made your bet, you lost, now send in the keys and run

Hey, you made a bad bet and you lost. You lied about your income and took out a no-down, no-doc, interest-only, teaser-rate, piggyback negative amortization loan (good god does anyone remember 30 year fixed?).

You bought a mansion you had NO BUSINESS living in at your income level, you bet prices would go up and instead they cratered, and now you can no longer make your reset payment.

Who cares!!! You're not the bagholder! Hedge funds, foreign banks, US taxpayers, insurance companies and people all over the world are! But not you, no way no how!!! Party time!!

So just walk away. Send in the keys. Jingle mail. Ah, the American Dream!!!

Since there's no such thing as personal responsibility, ethics or morals anymore in America, you get off scott-free. Just walk away, stop hemorrhaging cash, and try to keep as many of your ill-gotten gains as you can.

I hope you transferred some of your cash-out-housing-ATM-refi-loot to unmarked Swiss bank accounts. I hope you bought lots and lots of stuff that you can now put on eBay. And a few years from now, don't forget to pull the same scam again!

Sleep tight!

I don't think anyone knows just how bad this mortgage meltdown / ARM reset debacle is gonna be

In come the waves....

Millions of homeowners around the nation are now getting the news in the mail: The interest rate on their home loans is going up, possibly to double-digit levels.

The hardest hit are expected to be people who have less-than-stellar credit and cannot afford to make the new payments. An increase of several hundred dollars a month will force them either to get relief or to default. The prospect of significant and growing losses has already rocked Wall Street and shaken up the broader mortgage markets. And, concerned about the human suffering, policymakers are already searching for ways to help people out.

"The meltdown in the subprime market is the biggest threat to the housing market and the broader economy," says Mark Zandi, chief economist at Moody's Economy. com. "It is at the vortex of the problem."

Over the next several months, banks will be changing the "teaser rates" that homeowners received two years ago.

The peak for resetting loans will be in October, when the rates on some $50 billion worth of mortgages are likely to rise by 2 percentage points or more. This could mean a rise of several hundred dollars a month for many borrowers.

Think it's bad now? You should see the wave of mortgage resets that's about to come crashing on to US shores

The Herald Tribune had a great piece on the wave of payment shock loans resetting in the next couple of years. We're just getting started folks. When this is all over, we'll be shocked at how far home prices dropped, and how many families lost their homes.

You owe it to yourself to read the article. And get ready.

Mortgage renewals set to prick U.S. property bubble

The mortgage meltdown has arrived at something of a turning point.

So far, the loans that have gone bad were among the worst of the worst. Some were based on outright fraud, either by the lender or the borrower. In many cases, buyers were never going to be able to make their monthly payments and were instead banking on a rapid appreciation in home values.

The peak month for the resetting of mortgages will come this October, according to Credit Suisse, when more than $50 billion in mortgages will switch to a new rate for the first time. The level will remain above $30 billion a month through September 2008. In all, the interest rates on about $1 trillion worth of mortgages, or 12 percent of the U.S. total, will reset for the first time this year or next. A couple of years ago, by comparison, only a marginal amount of mortgage debt - a few billion dollars a month - was resetting each month.

So all the carnage in the mortgage market thus far has come even before the bulk of mortgages have reset. "The worst is not over in the subprime mortgage market," analysts at JPMorgan recently wrote to the firm's clients. "The reason for our pessimism is that loans originated in late 2005 and all of 2006, the period that saw peak origination volumes and sharply decreased underwriting quality, are only starting to reset in large numbers."

It isn't hard to figure out what will happen when buyers who were already stretching to afford a house are faced with suddenly higher payments. Many will manage. They will cut back on spending, or refinance their mortgage and get a new one they can afford.

Others, like the buyer I interviewed two years ago, probably planned on selling their homes after a few years all along. For them, the artificially low initial rate was a no-lose proposition.

But there are also likely to be a shocking number of people who lose their homes.

FLASH: And then the hedge funds kept imploding. And imploding. And imploding. Bear Stearns nukes the market (again)

Come on now, you can't be serious! Bear Stearns is the gift that keeps on giving, but the thing is, they're just the tip of the iceberg. Thousands of hedge funds, pension funds and foreign countries will now implode as the CDO-uber-leveraged US housing market melts down.

Just turn in the keys and walk away Jim Cramer says. And that's exactly what folks are doing.

Tilt. Head for the hills. This sucker is gonna blow. Err, make that "blowing", active tense.

Bear Stearns Halts Redemptions on Third Hedge Fund

July 31 (Bloomberg) -- Bear Stearns Cos., manager of two hedge funds that collapsed last month, halted redemptions from a third fund after a slump in credit markets prompted investors to demand their money back.

The Bear Stearns Asset-Backed Securities Fund had about $900 million invested in asset-backed securities, including mortgage bonds, spokesman Russell Sherman said today in a telephone interview. The fund was overwhelmed by redemption requests, Sherman said.

The fund's stumble is a setback for New York-based Bear Stearns and illustrates how the crisis in the subprime mortgage market has spread. The fund had less than 0.5 percent of its assets in securities linked to loans to subprime borrowers, Sherman said. The two funds that collapsed invested almost fully in subprime bonds. Losses have spread to banks, insurers and hedge funds in France and Australia, including one run by Macquarie Bank Ltd.

``This shows you don't necessarily have to be a subprime fund now to be having problems,'' said Bryan Whalen, a portfolio manager in Los Angeles at Metropolitan West Asset Management, which oversees more than $21 billion in fixed-income assets.

Psst.. Hey buddy, want a Countrywide Mortgage Foreclosure? There's $2 Billion of 'em and counting! Get 'em while they're hot!

Check out countrywideforeclosures blog, and check out Mozilo's sickening amount of insider transactions.

Wow.

"Hey, Larry, this is a great new house! It wouldn't be a Countrywide ForeclosureTM would it? You lucky gun!"

Note: I'm short CFC now with put options. And for some weird reason, I have a hankering for an orange.

FLASH: Foreclosures soar a shocking 87% vs. last year. But of course REIC-advertising-supported MSM will report drop in foreclosures today

Here's Yahoo's spin via Reuters (gotta take care of REIC advertisers like LendingTree) and homepage headline:

Home foreclosures fall seven percent

And here's the SF Examiner doing their job, unlike their corrupted peers:

Foreclosure activity rises dramatically - Bay Area defaults, auctions, repossessions nearly triple; nationwide notices are up 87%

And here's some of the lowlights from the actual RealtyTrac report:

RealtyTrac today released its June 2007 U.S. Foreclosure Market Report, which shows a total of 164,644 foreclosure filings -- default notices, auction sale notices and bank repossessions -- were reported during the month, down 7 percent from the previous month but still up 87 percent from June 2006

Nevada, California, Colorado post top foreclosure rates. With one foreclosure filing for every 175 households in June, Nevada documented a foreclosure rate more than four times the national average and highest among the states for the sixth month in a row.

Other states with foreclosure rates ranking among the nation's 10 highest in June were Florida, Arizona, Ohio, Michigan, Georgia, Connecticut and Indiana.

Get ready shoppers for the Great Homedebtor Firesale of 2007 - 20??

It'll all be on sale. All of it.

Got cash?

Foreclosures, foreclosures, foreclosures everywhere