April 30, 2007

30 days ago, HP played this April Fool's prank. Today, The Corrupt David Lereah really DID resign

This stunner off the wires today will blow you away. But hey, we all saw it coming...

New York (Fox News) April 1, 2007

David Lereah, Chief Economist of the National Association of Realtors, resigned his position today, effective immediately, as Lereah was under increasing pressure to resign due to rebellion amongst the 1.3 million strong NAR membership and mocking in the media and amongst housing blogs.

Mr. Lereah held a press conference earlier today at NAR headquarters in Chicago, also attended by his lawyer Lirpa Loof.

"For too long I did the bidding of my evil masters at the NAR" said Mr. Lereah, in a hushed tone to start the briefing. "They marched me out as the bubble grew bigger and bigger, month after month, to say 'it's different this time - the fundamentals have changed - housing prices never go down'. Well, we all know how that line of bull turned out."

"They even had me write a book, which looking back on it must seem like a real hoot, called "Are You Missing the Real Estate Boom", later retitled "Why the Real Estate Boom Will Not Bust". And yes, that book, and my series of misleading quotes to the press as the bubble burst, has made me the laughingstock of the nation, if not the world, and caused irreparable damage to the nation, to families and to our economy."

"But today, everything changes. I have resigned my position with the NAR, I renounce 100% of my quotes and behavior over the past five years, I admit the housing bubble was the biggest con, the biggest Ponzi Scheme in world history, and I ask America for forgiveness."

Mr. Lereah went on to say that he will now be volunteering at a homeless shelter in Phoenix, the epicenter of mortgage fraud, realtor greed, and the housing collapse. His lawyer, Lirpa Loof, also confirmed that Mr. Lereah will be donating all of his book profits, and his entire NAR salary for the past five years, to the homeless.

In a related development, the NAR has hired Mohammed Saeed al-Sahaf as its new spokesman and Chief Economist.

Thank God for REALTORS!!!!!

The Corrupt David Lereah (finally) gets the boot from the NAR. Good f*cking riddance!

Hey, MOVE's stock is only down 95% from the peak. How much damage can a completely discredited carnival barker do? Want a tip? Short MOVE...

Here's a special HousingPANIC going away message for our old friend, The Corrupt David Lereah (please feel free to add your own HP'ers):

TCDL, we'll sure miss you around here. Yes, you may have been doing the bidding of your evil masters at the NAR these past few years with your lies, deception and spin. And yes, you may have blood on your hands, someone who'll go down in history as enriching himself at the expense of others.

But it sure was one heck of a ride.

Bon Voyage TCDL. And good fu*king riddance.

Economist Lereah to leave Realtors for Move Inc.
David Lereah, chief economist of the National Association of Realtors, is leaving NAR to join Move Inc. as chairman and partner of a new business entity next month, NAR said Monday.

Lereah has directed NAR's research division, regulatory and industry relations division and other activities. He will leave the association in mid-May, NAR said.

As chief economist and senior vice president, Lereah is the NAR's spokesman on the U.S. economy and the housing and real estate markets.

California based Move Inc. provides homebuyers and renters with information about real estate and communities before, during and after moves, according to its Web site. Move Inc. operates NAR's Web site, Realtor.com.

Neither NAR nor Move Inc. offered details about the new entity, but a Move Inc. spokeswoman said more information would be forthcoming in the third quarter. The entity is "expected to be transformational for both consumers and real estate professionals," according to a Move Inc. news release.

Post-housing-bubble new city catch phrases

Here's five housing crash cities. Come up with your post-bubble mottos. Here's a few for starters:

Phoenix - There never was a there there

Las Vegas - Loser city of losers losing money (hat-tip anon HP'er)

Miami - I guess we'll go back to dealing hookers and cocaine now

San Diego - Mexicans still love us!

Washington D.C. - Anyone want my condo? Anyone? Anyone!

US Treasury Secretary Henry Paulson goes on record, calls housing crash bottom


Ha ha ha ha.

Ha ha.

Ha ha ha ha ha ha ha ha ha ha ha.


Ha ha.

Ha ha ha.

Treasury Secretary Henry Paulson delivered an upbeat assessment of the economy, saying growth was healthy and the housing market was nearing a turnaround.

"All the signs I look at" show "the housing market is at or near the bottom," Paulson said in a speech to a business group in New York. The U.S. economy is "very healthy" and "robust," Paulson said

HousingPANIC Stupid Question of the Day

In what year will US housing median price hit it's 2006 inflation-adjusted bubble high again?

A) 2008
B) 2010
C) 2015
D) 2020
E) Not in the 21st Century

F) Never

It all falls apart. The center doesn't hold. And the Bush White House implodes.

Can the country (or world) take much more of the Bush Administration? Will the US ever be able to dig itself out of the social and financial hole caused by this man, the worst president in the history of the United States of America?

You think it's bad now? Just wait until the apocalypse of the housing crash kicks in, combined with the Iraq debacle gaining steam. $1 Trillion for that "slam-dunk" Iraq and counting. Get those printing presses going.

Does anyone realize that Bush gave Presidential Medals of Freedom to Tenet, Greenspan and Bremer. Instead of medals, I'd be giving them subpoenas right about now.

In a letter written Saturday to former CIA Director George Tenet, six former CIA officers described their former boss as "the Alberto Gonzales of the intelligence community," and called his book "an admission of failed leadership."

The writers said Tenet has "a moral obligation" to return the Medal of Freedom he received from President Bush.

Vegas: Flippers flop - "There's going to be a lot of depression, a lot of anger. A lot drinking, gambling, and desperate stuff going on"

Anyone out there still believe we're not crashing? Anyone believe those lying realtors in Phoenix and Vegas and Miami and DC and San Diego and ...? Anyone believe that the worldwide debt bubble and housing crash won't affect your town too?

Think again.

Classic Ponzi scheme folks. Classic financial mania. And classically coming to a natural end. Hat-tip to all the HP'ers who sent this yahoo.com homepage story in today... Man the MSM is becoming more HP every day...

Flippers flop as housing market cools

In the rampant real estate speculation of the Las Vegas valley three years ago, people lined up outside Pulte Homes sales offices overnight as if they were waiting for the release of the latest video game console or hot new movie.

Having seen his house in an upscale part of suburban Henderson, Nev. jump $200,000 in value in 18 months, Sam Schwartz felt he couldn't miss any part of the boom.

He spent the night in the parking lot with TV, snacks and drinks, along with about a hundred other people.

Schwartz intended to buy a new home and then quickly sell it within the year — for a huge profit. Most people waiting were flippers just like him, he said.

"We had seen real evidence of what was possible in this crazy, inflated market, and we just wanted to get a piece of that investment equity," Schwartz said.

But when home prices unexpectedly took a backward step, many investors seeking to cash in quickly were left "upside-down," or owing more on their mortgages than what their homes were worth.

The result was a glut of homes in the marketplace, communities spotted with empty houses and for sale signs — and a foreclosure rate in Nevada that leads the nation as owners unable to sell became saddled with unbearable debt payments.

In Clark County, which encompasses Las Vegas, one of every 30 homes began the process toward foreclosure last year.

The day Schwartz reserved his home, the sales staff was raising prices $20,000 after every fifth buyer came inside. The $500,000 house he and his wife were eyeing had shot up to $540,000 by the time they sat down. Somehow, it still seemed like a good deal.

"Everybody was thinking, 'Hey it's not the end of the world, because the homes across town are selling for $720,000. We have almost $200,000 in equity in the house and it isn't even built yet,'" Schwartz said.

He and his wife put down $5,000 on a home that would end up costing $560,000 with upgrades.
While the Schwartzes were able to cancel before closing on a property that suddenly was worth only $490,000 — and recoup their deposit on a legal technicality — others were less fortunate.

Schwartz, a 44-year-old life coach, said he "narrowly escaped financial disaster." But the effects of the housing crunch would reverberate for years, he said, something he expects to see among the clients he coaches to succeed in their lives and careers.

"There's going to be a lot of depression, a lot of anger. A lot drinking, gambling, and desperate stuff going on."

April 29, 2007

Why do desperate homedebtors think they get to set the price?

"I'm not gonna sell for a penny below what I owe"

"There's no way I'm gonna take a loss"

"I deserve what my neighbor got last year"

"I'm gonna find a realtor who can get me what my place should go for"

Uh, no, you're not. The market sets the price, not the homedebtor, and trust us, that market price is WAY below what it was last year or the year before.

It's time for the Great Housing Blue Light Special.

Cleanup on aisle three.

Sobering video from the Denver Post on foreclosures, and the end of the housing bubble, Denver style

Everyone watch this uber-real video and read the excellent Denver Post series on Foreclosures, and the impact it's having on my favorite American city.

Denver had their bubble a few years before the rest of America, complete with mortgage fraud and an out of control and corrupt REIC.

And now they're having their crash.

Watch this video for a glimpse of America 2008 - 2010.
This will end so ugly. So very, very ugly. It already is in Denver.

Get ready.

Special Report: Foreclosing on the American Dream

Colorado leads a national wave of foreclosures that is leaving neighborhoods blighted and forcing many homeowners into financial ruin. In an ongoing series, The Denver Post examines why the state's foreclosure rate leads the nation and how it is affecting Coloradans, their communities and the economy.

Aggressive building and lending practices, lax regulation and a high rate of mortgage fraud, among other factors, are pushing thousands of homeowners into foreclosure.

HousingPANIC Stupid Question of the Day

Why is everyone seemingly so surprised with the housing crash?

Do we need to buy Manias, Panics and Crashes for every man, woman and child?

Geeze. It's just so damn OBVIOUS for HP'ers, and real economists (vs. TCDL).

So, when it comes to the housing crash underway, why are so many so damn clueless?

Vegas housing bull now calls "we've hit bottom" prediction "wishful thinking", predicts 20% to 30% price decline

How do these idiots keep their jobs, that's my question. Maybe we should send him a copy of "Manias, Panics and Crashes" too?

Gotta love calling bottom at the BEGINNING of a collapse. Lots of those idiots out there, but most were tied into the corrupt REIC and had a vested interest in lying, spinning and deceiving. When "analysts" and "economists" like this one get it so wrong, you gotta figure they're either corrupt too, or just not too bright.

At least the guy admitted he screwed up. But I think he's being conservative with his 20% to 30% drop prediction. House goes up 50% for no reason, it's coming down 33% at least just to get back to even. And why is everyone blaming subprime? That'd be like blaming a cold on a sneeze.


In his latest take on the Las Vegas housing market in light of new home sales remaining weak, new home prices dropping and inventory of existing homes increasing, Smith said he appears to have underestimated what was happening when he predicted at the end of 2006 that the market was bottoming out.

Smith said any suggestions that the market was going to improve by the end of 2007 appears to have been just wishful thinking. He said a recovery may not happen until 2008 or even 2009 based on the current trends.

Smith said he wouldn't be surprised if some neighborhoods saw home prices drop as much as 20 to 30 percent because of a glut in those areas. Other neighborhoods where fewer homes are on the market would remain the same, he said.

The fallout from the subprime market has been felt by the housing market because of tighter credit standards, Smith said. In some cases, it's taking a credit score of 720 to qualify for a 30-year fixed loan. Those with scores of 680 have to jump through extra hoops to try and qualify for a loan, he said.

"I have heard this from builders and lenders, and it is not helping sales," Smith said.

April 28, 2007

At this point in the housing crash, HP recommends everyone see "The Pursuit of Happyness"

Just read Casey Serin's latest post (he's alive) to get a glimpse how tough it's gonna get on a personal level for millions of people during the crash.

I also would like to point HP'ers to our official charity, the Denver Rescue Mission, which helps the homeless in foreclosure-central Denver Colorado. Please think about giving, even if it's just a couple of bucks.

The housing crash is here folks. There's no denying it. Lives will be ruined. Families will be torn apart. Crime will soar. The divorce rate will go through the roof. Bankruptcy will become a way of life. Neighborhoods will be decimated.

And the builders, mortgage brokers, bankers and realtors got paid all along the way. Never forget that.

HP recommends the brutally honest "Blown Mortgage" blog

Longtime readers know that even though HP is HATED by most REIC (who stupidly blame the messenger), there are actually some real estate clerks and mortgage brokers out there who actually have ethics, morals and open minds (and are hurting big time - thank you housing crash).

Remember this open letter to HP from Danilo, an honest realtor who was fed up with the lies and corruption of his peers?

Remember Boulder realtor Osman, who shockingly called for The Corrupt David Lereah to be fired?

Well, I've found us an honest, ethical and humane mortgage broker to look up to - Morgan Brown who writes "Blown Mortgage".

Here's a guy who owns his own mortgage broker practice, and from what I read, is a guy who wants to do the right thing for his clients, who'll turn down business if it's not ethical to take the deal, and who is disgusted by the absolute scum in his industry.

Check out his blog, especially the "Why I hate my industry sometimes" series. I think professionals like Morgan Brown are going the right direction. The only real estate clerks and mortgage brokers who will survive these next few years will be the ones with honesty, with morals and with ethics, and who understand that truth-tellers like HP aren't going away anytime soon.

Or they can stick to the unprofessionalism, personal attacks, deception and lies like some of their peers, and go the way of the dinosaur.

HousingPANIC Stupid Question ofthe Day

Won't it be weird in a few more months (or weeks) when it seems EVERYONE is talking about the housing crash, especially those brilliant market forecasting realtors? When the masses and MSM are saying how it was all such an obvious mania or Ponzi scheme, and how they knew it was all going to crash all along?

In other words, won't it be strange when HousingPANIC is mainstream, versus this cultish little quixotic fight-club? Or will that never happen, as the masses are too dumb to understand what's happening to them even during the downfall, too stubborn to admit they were wrong, or too lazy to find HousingPANIC?

If that comes to pass, I'll miss the days when it was little HP versus the world, a voice in the wilderness.

When the world panics over housing, which is right around the corner now, it might not be as fun to write HousingPANIC.

USATODAY: Property taxes up as house prices fall

Your home value is plummeting while your ARM is resetting, your monthly payment is jumping, your insurance is skyrocketing, your homeowners association fees are climbing, and to really twist the knife, your property taxes are going up.

Kinda sucks, eh?

Property taxes were the Government's dirty little secret during the Late Great Housing Bubble. Not only did the bubble bankroll consumer spending these past few years, it also poured billions of new $$$ into government coffers, so they could go out and spend wildly.

And as you know, property taxes are REALLY sticky. Good luck Desperate Homedebtors trying to get the government to lower your tax bill on your depreciating debt bomb. Meanwhile, the bubble sitters and bitter renters are sitting pretty.

Property taxes will keep rising nearly everywhere for homeowners even as house prices are falling in many parts of the country, according to a USA TODAY analysis of government data.

A key reason: Despite the downturn, the market value of millions of homes still exceeds their assessed value used for tax purposes.

"Some people are irritated to learn the news," says Jim Todora, a property tax assessor in Sarasota County, Fla. "Their home's value may have gone down, but their property tax is still going up."

Fresh evidence of the slumping real estate market came Tuesday when the National Association of Realtors reported that sales of existing homes dropped in March at the highest rate in 18 years.

April 27, 2007

"All the world's a bubble - The bursting of this bubble will be across all countries and all assets"

Remember, after bubbles pop, cash is king. So sell in May and go away? Or try to ride this crazy bubble 'til it's eventual and necessary end?

While euphoria sweeps stock markets here and worldwide, there are at least a few voices of dissent.

One, unsurprisingly, is legendary value investor Jeremy Grantham -- the man Dick Cheney, plus a lot of other rich people, trusts with his money. Grantham, chairman of Boston firm Grantham Mayo Van Otterloo, has been a voice of caution for years. But he has upped his concerns in his latest letter to shareholders.

Grantham says we are now seeing the first worldwide bubble in history covering all asset classes.

Everything is in bubble territory, he says.

Everything. 'The bursting of this bubble will be across all countries and all assets.'

"From Indian antiquities to modern Chinese art," he wrote in a letter to clients this week following a six-week world tour, "from land in Panama to Mayfair; from forestry, infrastructure and the junkiest bonds to mundane blue chips; it's bubble time!"

"Everyone, everywhere is reinforcing one another," he wrote. "Wherever you travel you will hear it confirmed that 'they don't make any more land,' and that 'with these growth rates and low interest rates, equity markets must keep rising,' and 'private equity will continue to drive the markets.' "

"The bursting of this bubble will be across all countries and all assets, with the probable exception of high-grade bonds," Grantham warned. "Since no similar global event has occurred before, the stresses to the system are likely to be unexpected. All of this is likely to depress confidence and lower economic activity."

Casey Serin at Iamfacingforeclosure.com appears to be done with it

After self-admittedly hitting bottom, the kid hasn't published or allowed comments for a week now.

Anyone care?

"We should anticipate trouble ahead"

Here's a very good article on the housing crash going mainstream (why is what's happening such a shock to "analysts" and MSM, when we've all known EXACTLY what's going to happen all along?). I really liked the author's conclusion statement, which I publish here:

There’ll probably always be some doubt as to whether the $11 trillion housing bubble was merely an accident of misguided monetary policy or if it was part of a larger plan to shift wealth from the middle class to the ultra-rich.

By seducing working class people with low interest rates, policymakers were able conceal the real effects of the unfunded tax cuts, currency deregulation, and the humongous trade deficits. As time goes by, however, the effects of those changes are becoming more apparent.

The country has undergone an unprecedented expansion of personal debt which has engendered the greatest wealth gap since the Gilded Age.

The deep economic divisions are creating problems that could end in political turmoil. The present uneven distribution of wealth is inimical to democratic institutions.

We should anticipate trouble ahead.

April 26, 2007

Today's the Day! Will Liar's Loan Alt-A kings Countrywide and IndyMac (finally) come clean?

Or will their insider-trading stock-pumping CEO's continue with the deception on their way to Ken Lay / Bernie Ebbers / Dennis Kozlowski fates?

Oh, how the screw turns... This story is playing out like a great Greek tragedy, wouldn't you say?

My guess today is more deception. I don't think they'll tell the market what's really going on with their Alt-A portfolio until after it's really hit the fan.

For you wonks out there, try to jump on the conference calls and report back here. That's where the real fireworks should be.

(Note I'm short NDE, not short CFC at the moment)

Financial Times: "Spanish property boom ends in panic"

Two articles yesterday here in Europe should give those of you in the US a peek at headlines to come there... Ah, the end of a grand worldwide game of musical chairs. Textbook financial mania (always followed by the textbook panic and crash). And remember, the rush to cash can be fierce.

Pero suzanne lo investig├│!!!

First this one in the Financial Times:

Spanish property boom ends in panic

Spain's overpriced property market came crashing down yesterday, with panic selling of real estate stocks signalling the end of a 10-year-old construction boom.

The sell-off dragged down related industries such as construction and banking and caused a 2.7 per cent drop in the Ibex 35 index of leading shares.

The fall also rippled through other European markets as investors worried about its knock-on effects.

And then this one in the Independent:

As Spain falters, is the world's property boom coming to an end?

Panic selling of Spanish real estate stocks this week sent shudders through property markets worldwide. As investors bet that Spain's 10-year construction boom is finally over, we take a look at global property hotspots to see who will be the next casualty.

For Brits fantasising about sipping sangria while watching the value of their Spanish holiday-home soar, the dream is over. After five years of double-digit growth, house prices rose by a relatively modest 9 per cent in 2006 and are expected to slow dramatically this year.

A constant stream of bad news has shaken foreign buyer confidence in Spanish property, while relatively high prices and competition from cheaper destinations such as Morocco and Bulgaria has drained demand. Corruption scandals linked to property deals have been rife - in Marbella, several municipal councillors are in jail awaiting trial for allegedly taking kick-backs.

Dateline expose on mortgage fraudster

There'll be so many stories the next few years on yucky mortgage broker fraudsters out there.

If you ever wanted to see a profession that attracted low-lifes, fraudsters and moral scum, look no further than "mortgage broker". Unregulated, fast money, no education or training required... The perfect Miami, Phoenix and Vegas profession!

Enjoy this one from Dateline - go here for the transcript and all six streaming video links - that's some good TV...

Paulson on entitlement programs: "Rising costs will drive government spending to unprecedented levels, consume nearly all projected federal revenues"

I've got a silly question.

Why doesn't anyone in America seem to care that we're lurching toward insolvency?

Or that the baby boom generation looted the treasure of the United States, at the expenses of all future generations?

One day soon we're going to have to face up to our problems, if we want to or not. And I can tell you one thing - Generation X and Generation Y are gonna be PISSED when they finally figure out what the baby boomers were up to (with their money).

The trustees who oversee Social Security and Medicare issued new warnings yesterday that the two programs are becoming unaffordable but pushed back slightly their predictions of when the crunch will hit.

By 2017, Social Security will pay out more in benefits than it collects in taxes, the trustees said in their annual report. The program's trust fund is projected to be exhausted by 2041, one year later than estimated last year.

Medicare, which serves more than 43 million elderly and disabled people, is in worse shape, with its hospital insurance trust fund projected to be insolvent by 2019, trustees said. But that also was one year later than last year's forecast.

"Without change, rising costs will drive government spending to unprecedented levels, consume nearly all projected federal revenues, and threaten America's future prosperity," said Treasury Secretary Henry M. Paulson, who serves on the six-member panel of trustees.

Over time, the programs are expected to consume a growing share of the federal budget. This year, about 7 percent of federal tax revenue goes toward paying Social Security and Medicare benefits. The figure is projected to climb to more than 10 percent by 2012, and 26 percent by 2020, said economist Thomas R. Saving, a trustee.

To keep the programs going, Congress and the president will have to increase taxes, reduce benefits or do both, the trustees said. "Without significant reform, these programs are not sustainable in the long run," Saving said.

An HP Trial Balloon: Ladies and Gentlemen, I give you the next President of the United States, Al Gore.

Have at it. Gore got a shot?

And who are you supporting (so far) in the '08 race (if anyone)?

April 25, 2007

A Bubble Sitter & Bitter Renter message to the desperate landlords ("Floplords") of America - You can't raise our rent (ha ha)

You can't increase our rent.

There are over 2 million vacant unwanted homes in America today. There's a 6% vacancy rate in apartments. There are millions of screwed desperate homedebtors ("Floplords" - hattip sac landing) desperately trying to find renters to cover (some of) their second home mortgages. And the housing-led economy is quickly going into the crapper.

If you try to raise our rent, there's millions of other places for us to go. You have no pricing power. And you don't set the rent - the market does.

Bitter Renters and Bubble Sitters rejoice. You have the power in America today. Enjoy it.

Good Time for Tenants - Real estate slump pushes house rents down

Many people are trying to hold onto houses they purchased as investments by becoming landlords. That has flooded the Northern San Joaquin Valley rental market with houses, pushing down rents and forcing landlords to compete for tenants.

Many rental properties originally were bought by speculators who got caught in the real estate downturn, explained Paula Leffler Zagaris, whose Liberty Property Management company manages 1,500 rental houses.

"They were gambling," Zagaris said of investors who intended to quickly sell — or "flip" — houses to cash in on rising property values. "Anybody who did that before October 2005 was a genius and made a lot of money. … But if they bought after that, they're stuck."

A HousingPANIC plea to the mainstream media of America

Wake the f*ck up and do your job.

Stop reporting NAR and US government flawed housing data and spin as fact. At least report the margin of error and the errors with the reports, and do your own analysis of the data. it's not hard, trust me. When we can predict your article and headline before you even write it, you know there's a problem.

Do not report their press release spin headlines as your headlines. Think before you write. And throw away your rolodex of realtors - their lies and BS are what got us into this mess.

Also, stop using The Corrupt David Lereah for quotes. At least refer to him as "the discredited mouthpiece of the National Association of Realtors" when you do lazily copy and paste quotes from him. And when you quote him blaming things like the bad weather for the housing crash, pull up weather.com and report on how the damn weather indeed was (trust us, it wasn't bad). Or report on what truly is causing housing to crash. Any fool knows it ain't the weather.

Bottom line, you have deservedly lost the trust of the American people. Your profession is withering away, along with your antiquated REIC supported business model.

Any of you involved in "rip and read" copy and paste jobs of NAR or Bush Administration press releases as news should be embarrassed to call yourselves reporters. And if you are being pressured to do such shoddy "reporting" by your REIC-influenced corporate masters, you should loudly resign, and seek new employment (or better yet, start a blog).

Enough is enough lazy reporters of America. We need Bernstein. We need Woodward. We need Cronkite. We need Murrow. You are failing us, your are failing yourselves, and you are allowing corrupt institutions and individuals to destroy what used to be a proud and fine profession.

Enough is enough. We're fed up and we're not going to take it anymore. And neither should you.

Bloomberg: Subprime `Liar Loans' Fuel Housing Bust

Nice to see some in the MSM waking the f*ck up. My only question is - WHAT TOOK SO DAMN LONG?

Meanwhile, the undisputed champion of liar's loans - IndyMac - reports tomorrow. Will they come clean? Or will they continue to lie and spin on their way to bankruptcy? (yup, I'm short IndyMac!)

April 25 (Bloomberg) -- Cheating on mortgage applications is so widespread and so seldom punished that it's fueling an increase in foreclosures that will prolong the housing slump, said Robert W. Russell, counsel to the director of the Office of Thrift Supervision, which oversees savings and loans.

Borrowers and brokers commit fraud when they exaggerate the applicant's income, qualifying the borrower for a home he otherwise couldn't afford. Such fraud robbed lenders of an estimated $1 billion last year, according to data collected by the Washington-based Mortgage Bankers Association and the Federal Bureau of Investigation.

``Misstatements about employment and income are being made every day,'' Russell said. ``The brokers are just putting down on paper what the underwriters would require. There are borrowers providing false information as well.''

Loans that require little or no documentation of income soared to $276 billion, or 46 percent, of all subprime mortgages last year from $30 billion in 2001, according to estimates from New York-based analysts at Credit Suisse Group. Homebuyers with those loans defaulted at a 12.6 percent rate in February, compared with 1.5 percent of fully documented prime mortgages, said San Francisco-based First American LoanPerformance, a mortgage consulting group.

A 2006 study cited by the Mortgage Asset Research Institute showed that almost 60 percent of stated income loans were exaggerated by at least 50 percent.

``Everyone calls these loans `liar loans' because we know these people were lying,'' said Jim Croft, a spokesman at the Reston, Virginia-based Mortgage Asset Research Institute.

``The loans were available to anyone with a pulse,'' said Greg Bass, a former account executive in Austin, Texas, for subprime lender Long Beach Mortgage Co.

``When everyone was eating up the subprime market, it was great to be in the business,'' said Josh Tullis, sales director for A. Anderson Scott Mortgage Group in Falls Church, Virginia. ``In the heyday, I knew guys who went from making $2,000 a month working 60 hours a week at McDonald's and they'd come over here and work 15 hours on a loan and make $4,000.''

HP favorite Thornberg lecture on the late great housing bubble

Check out all three parts - here's part one...And compare Dr. Thornberg, a real economist, to the laughable Corrupt David Lereah


Question everything your government is telling you. Everything.

April 24, 2007

FLASH: Existing home sales crash 13% vs. LAST YEAR, median price now down $13,200 or 6% from peak

As predicted, the brain dead and worthless MSM lead with the change versus last month, down a shocking 8.4%, and go with The Corrupt David Lereah's excuse that it was "bad weather" and that he expected the drop. Yeah, right.

Some days folks, you just gotta marvel at the incompetence and laziness of the MSM... At the same time you have to marvel at the swiftness of this American housing crash that's now gathering steam.

Here's the real headline, care of HP:


NAR Data: Sales: March 2007 482,000 vs. March 2006 554,000. Median Price: March 2007 $217,000 vs. $230,200 July 2006 peak

And here's the one of many MSM reports using the NAR spin:

Sales of existing homes plunged in March by the largest amount in nearly two decades, reflecting bad weather and increasing problems in the subprime mortgage market, a real estate trade group reported Tuesday.

The National Association of Realtors reported that sales of existing homes fell by 8.4 percent in March, compared to February. It was the biggest one-month decline since a 12.6 percent drop in January 1989, another period of recession conditions in housing. The drop left sales in March at a seasonally adjusted annual rate of 6.12 million units, the slowest pace since June 2003.

David Lereah, chief economist at the Realtors, attributed the big drop in part to bad weather in February, which discouraged shoppers and meant that sales that closed in March would be lower.

FLASH: GM runs out of gas, blames housing crash

I guess the fact that GM makes overpriced gas guzzling crappy cars nobody wants is just a side note.

Seriously, for a company this screwed and mismanaged (a car company that owns subprime loans!), I don't know how they can avoid bankruptcy. And the fact that (as HP predicted) the housing crash helped kill the US automotive industry is mind boggling.

For GM, all that cash-out refi loot is gone, never to return. I'd guess HELOC money bought half the new cars purchased these past few years (anyone know the #?). And how many trucks were purchased by people in the homebuilding profession? Those days are over...

Had enough? Here's more... The yen is undervalued. Toyota is kicking their behind. Their pension situation is a time bomb. Their cars are crap. Their workers make a hundred times someone in China would require. They still own 49% of subprime cancer GMAC. And now desperate homedebtors are flooding the used car market with inventory in an attempt to raise cash.

And yes, I'm short GM via put options at time of writing...

Mortgage 'meltdown' hits auto sales: GM's Lutz - Vice chairman sees entire sector hit by problems in home financing market, truck sales to suffer.

LOUISVILLE, Ky. (Reuters) -- The crisis in the U.S. mortgage market has hurt U.S. auto sales this month, General Motors Corp. Vice Chairman Bob Lutz said Monday.

"The market as a whole has been a little weakish. That has come as a result of the housing market problems and the mortgage industry meltdown," Lutz told Reuters. "A lot of people are finding themselves in a position of reduced affordability and that has had an impact, not just on us, but across the industry."

HousingPANIC Stupid Question of the Day

What does it mean to be an HP'er?

Free gram of gold at Bullion Vault

Free 1g of gold for HP'ers

Who says HP never gave you anything?

Bullion Vault, a partner I've used on HP for over a year to track live gold prices, is giving anyone who opens a free account a free gram of gold. I think that's like $15 or $20 at today's nearly $700 / oz gold price.

Hey, it's a start...

Interesting thing about Bullion Vault is you actually take possession of physical gold, stored at their facility (here in London, or Zurich or NYC) in your name. I have $$$ in the gold ETF "GLD" but I know many gold-bug HP'ers think that's a bit risky, since you don't have the physical stuff. Your thoughts on Bullion Vault, or any other ideas on easily and safely taking possession of the shiny stuff?

Enjoy your free gold...

Liar's Loans (Alt-A), a housing crash and IndyMac: Trouble ahead...

This may be a big wonkish, but here's the dealio.

Mortgage backed security investors, who buy up the loans packaged as collateralized mortgage obligations (CMO's), had a bit of a come-to-jesus recently with the subprime meltdown. So now they've wizened up to the con, and they're telling the Alt-A (Liar's Loan) companies that they're not gonna buy their junk anymore, or at least not at par value.

Why? Let's me put this in HP terms. Would any of you buy up Casey Serin's Liar's Loan portfolio? Yeah, that's what I thought.

IndyMac is the big kahuna in this space, with nearly 80% of their entire portfolio made up of this junk. Nice business when the getting was good and investors were buying up any debt they could find.

But not anymore. Party over.

It's been fun to watch their CEO (and #1 stock holder) Michael Perry pump his stock to the dubious market, screaming that they're not to be confused with those yucky subprime lenders, and how all is well. You also have the CEO and a few insiders trying to confuse the market and stop the hemorrhaging (of their stock holdings) by buying some nibbles of their own stock. Man, sometimes it's just so obvious.

You have to wonder how long until the SEC investigation, or in this case criminal charges are filed. There's this little thing called Sarbanes Oxley, where intentionally manipulating your stock, or not coming clean about your financials or prospects presents a wee bit of a problem for crooked CEOs and CFOs.

IndyMax reports Q1 this week. Let's see if they come clean on what's happening in their business, or if they choose to head down the Enron / Ken Lay / WorldCom / Bernie Ebbers well-worn path.

Note - I own a few IndyMac puts, betting the stock will (eventually) fall. This one is the mother of insider manipulation and disinformation, not for the wary, but it's a fun ride...

April 23, 2007

NAR to put out used home sales report tomorrow. Watch The Corrupt David Lereah spin his ass off

Don't be snowed when The Corrupt David Lereah spins the horrific drop in home sales by comparing March to February, when any idiot knows the real and only comparison is March 2007 vs. March 2006.

Watch the clueless and complicit MSM go with the March vs. February number. Also watch the MSM not question the median price number, which doesn't include incentives and cash back.
And watch the MSM take TCDL's "it was the weather" excuse and tell the frightened masses that "it appears we're bottoming", even though unsold and unwanted inventory will be soaring to close to a year's supply in many markets.

Regardless of the lies, deception and spin, the numbers tomorrow are going to be truly horrific. Even the NAR won't be able to hide the truth (spin as they may).

HousingPANIC Stupid Question of the Day

Why is skyrocketing housing price inflation trumpeted by the MSM as a great thing, while skyrocketing gas price or banana price inflation reported as terrible news?

Driving the money changers out (again) - The REIC in the church

A cold, politically incorrect and cynical question for church-going HP'ers (that has to be asked, since nobody else has):

Do you ever get hit up by real estate clerks or mortgage brokers at your church / synagogue / mosque? See a problem with that?

Ever wonder if those types joined your church for salvation, or was it those yummy cold hard commissions? Do (should) business and religion go together?

Hmmm... reminds me of a little story I once heard... And then there's this network of saved realtors (is that an oxymoron?)

Wouldn't finding a new ethical job be a first step after being saved?). Ya gotta wonder if everyone who joins this is on the up and up. Call me silly, but I've got a hunch... maybe because I've NEVER heard of a real estate clerk not interested in their whopping commission first.

Looking for a Real Estate Agent that answers to a Higher Authority??

You've come to the right place! We can connect you with a Christian Real Estate Agent or Loan Officer anywhere in North America.

Wouldn't you rather have a Christian agent that is more interested in YOU than in a commission???

The pressure on appraisers right now must be unbearable

Choice A: Do the right thing, appraise the property at the correct price, and never work again

Choice B: Do the wrong thing, appraise the property at the wildly overinflated price the corrupt realtor, mortgage broker and seller want/need, get the job and future jobs from the corrupt cabal, but know that you're contributing to mortgage fraud and could go to jail if the government ever wakes up.


The system got gamed folks. It was allowed to spin out of control. The conflicts of interest and quid-pro-quos make the NASDAQ bubble seem like child's play. And it ain't over yet.

The dubious value-add of appraisers - As housing market slumps, price-target pressure mounts

ORINDA, Calif. (MarketWatch) -- The solicitation that Texas real-estate appraiser Jim Amorin fielded came with a quid pro quo. If he'd appraise a mixed-use Austin subdivision for $25 million, the mortgage broker promised to steer 15 more major deals his way.

"After I asked a few questions, it became clear the real value was closer to $15 million," says Amorin, vice president of Atrium Real Estate Services. "I told him I'd accept the assignment but not with a predetermined value, so he kept looking for someone who would."

The pressure on appraisers to "make loans work" -- the industry parlance for hitting the number that a lender wants on a closing contract -- has been ratcheted up as U.S. home sales and mortgage refinancing have tumbled. By law, appraisers are required to render impartial judgments.

Federal and state authorities are now pushing for tighter regulation, licensing standards and criminal penalties to keep all players in the real-estate transaction process on the level.

"Mortgage and real estate brokers are paid on commission, so they have a vested interest in seeing that loans get funded," says Ted Faravelli, manager of the California Association of Real Estate Appraisers and an appraiser for 23 years who testifies as an expert witness in mortgage-fraud cases.

"If an appraiser speaks to the facts and indicates a market is declining and in oversupply, there's a good chance deals won't be consummated and referrals will dry up."

April 22, 2007

Did Osama bin Laden cause the housing bubble (and housing crash)?

OK, this one ain't PC, but think through the chain of events and unintended consequences of 9/11:

* Osama bin Laden's crew takes down the World Trade Center - check

* Greenspan panics and stupidly takes nominal interest rates down to 1% - check

* Housing market goes nuts with free money pouring out of the banks - check

* Greenspan and Bernanke stupidly leave interest rates way too low for way too long - check

* Housing and mortgage fraud go nuts while unregulated REIC spins out of control - check

* Consumers go on a spending and debt binge the likes of which have never seen before - check

* Housing Ponzi Scheme (finally) ends with millions left holding the bag, millions to go unemployed and trillions of dollars of wealth to vanish - check

* Osama bin Laden laughing in a cave - ???

US Presidents should inspire the world. Man, we need a JFK today.

After six years of the worst, most incompetent and most hated president in US history, I thought you'd all enjoy a speech from one of the best.

A little economist humor for HP'ers - "people are stupid". Yup.

hattip to http://www.speculativebubble.com

"Five months later, I lose $100,000 - I don't think I can take $100,000 into the stock market and lose it faster"

Man, it's really sad to watch the end of a Ponzi Scheme. So many dream-chasers are now so screwed.

They listened to their neighbors (who thought they were rich), they listened to their REALTORs (who got paid), they listened to their mortgage brokers (who got paid), they listened to their developers (who got paid), and they listened to their "ownership society" buffoon of a president (who was too dumb to understand), and they listened to themselves (really bad move).

And now they'll be listening to bankruptcy court judges and debt counselors.

Tulips anyone? Pets.com stock anyone? South Sea shares anyone? Phoenix condos anyone? Anyone? Anyone?

The late great American housing bubble has ended. Prices are crashing (no matter what the government or NAR tell you). Inventory is skyrocketing. Lives are ruined. Millions are asking "what the hell was I thinking". And an epic Ponzi Scheme ends.

'Upside Down' Home Sellers Owe More Than They Get

Jeffrey Taylor and his wife bought their dream home in Purcellville for $538,000 last August. Now they have to sell it because they are getting divorced and neither one can afford the mortgage alone.

The most they could get for it was $430,000. After paying all the real estate commissions and taxes, they will still owe the bank $118,000.

"Five months later, I lose $100,000," Taylor, a high school teacher, said. "I don't think I can take $100,000 into the stock market and lose it faster."

The people most vulnerable are those who bought their homes within the past two or three years and now want to sell, either because of a life change or a financial problem.
Prices in some places are notably lower than they were at the peak of the market, and the costs of selling can eat up even more money.

HousingPANIC Stupid Question of the Day

Knowing what you know now, isn't the housing bubble and crash looking more and more like a textbook Ponzi Scheme or economic bubble or every day?

An economic bubble (sometimes referred to as a "speculative bubble", a "market bubble", a "price bubble", a "financial bubble", or a "speculative mania") is “trade in high volumes at prices that are considerably at variance from intrinsic values”.[1] The intrinsic value is a theoretical calculation that aims at reflecting the fair value by taking into account hypotheses of future returns and risks.

The bubble is usually followed by a sudden drop in prices, known as a crash or a bubble burst. Both the boom and the bust phases of the bubble are examples of a positive feedback mechanism, in contrast to the negative feedback mechanism that determines the equilibrium price under normal market circumstances. Prices in an economic bubble can fluctuate chaotically, and become impossible to predict from supply and demand alone.

A Ponzi scheme is a fraudulent investment operation that involves paying abnormally high returns ("profits") to investors out of the money paid in by subsequent investors, rather than from net revenues generated by any real business, named after Charles Ponzi.

Ladies and Gentlemen, I give you "Toni - The Mortgage Broker Hottie ;-)"

Hat-tip to housing-boom blog and an eagle-eyed HP'er for bringing us this gift.. And to Toni - The Mortgage Broker Hottie ;-) herself, for being such a nice representation of this unregulated, untrained and unnecessary business.

At what point did "mortgage broker" even become something society needed? Remember when we had banks? Remember when you knew your banker and he knew you? And wouldn't the internet do a better job than an untrained and unregulated bartender?

Is there any question now why the cocaine-fueled poser cities of Phoenix, Vegas, Miami and San Diego became epicenters of rampant mortgage fraud and historic housing bubbles?

Well, at least Toni - The Mortgage Broker Hottie ;-) has a fallback position.

Be gentle HP'ers... she's just a girl trying to make a buck...

Toni - The Mortgage Broker Hottie ;-)

About me:

Hi guys, A little about me: Well Im a Mortgage Broker able to close both residencial and commercial loans in 42 states.

I love my job because I get to help people get buy homes or refinance them. In the process I also get to make some money.

On the side I also plan events and parties in best place of all... Miami Beach. Im a night club promoter so if you need to get on my guest list, just let me know. On Thursdays Im at Cielo, Fridays at Dek 23 and Saturdays at Glass.

Who I'd like to meet:

Im always happy to meet new people. Anyone whos in the mortgage or realestate business, anyone whos into the nightclub industry. Basically everyone. So send me a friend request and I might just accept it...lol

What exactly are HousingPANIC trolls hoping to accomplish?

Do they think trolling HP will help get people to buy houses again, regardless of the crash underway?

Perhaps they're Desperate Homedebtors who think if all this housing bubble chatter nonsense would stop, they could get right back to their annual mortgage equity withdrawals?

Maybe they're just striking out in anger at the messenger, since Charles Ponzi isn't around to take their call?

Or in their heart of hearts do these ramen-eating mortgage brokers and realtors truly believe the housing crash will just blow over, and a return to glorious commission-filled days is just around the corner?

I just don't get it.

Tell you what, HP trolls - tell us why you come to HP to spew your lies and anger. Help us understand the mind of a troll. And oh, one word of advice.


April 21, 2007

Nah, home prices aren't in freefall. Nah, there's no housing crash underway. Pssst... someone tell that to Lennar!

Hat-tip to Housingdoom (again) for this one. One word folks: FIRESALE!

Man, wanna have some fun? Run around to new home communities and ask for 50% off the original price. At least you'll get a nice counter offer. But obviously don't buy unless you can rent the place out for positive cash flow. Do that math with the builder on that one too...

Oh, for extra credit fun, go knock on doors in these new home communities and let the neighbors know how far their homes have fallen in value since they bought. Let 'em know the builder is conducting a historic firesale that will destroy the comps for years to come.

You might want to bring protection.

HousingPANIC Stupid Question of the Day

What will America do with all its unwanted and unneeded houses and condos now?

Empty houses and condos at record levels

The number that got all the attention this week was 2.7 percent. That's the percentage of homes that are sitting empty across the United States. And it's certainly noteworthy, because in the four decades since the Census Bureau began tracking that number, it's never gone higher than 2 percent.

Put another way, there are 2.1 million empty homes out there, and the people who own them are taking a vicious beating.

But the really nasty number almost got lost in the shuffle. It's 11 percent. That's the number of buildings with five or more units (read: condominiums) that were unoccupied during the fourth quarter.

These and other numbers are being bandied about this week at the National Association of Home Builders' International Business Show. If you recall, this is the same show at which economists last year announced what developers were already figuring out - that the speculators feeding the condo boom had packed up and gone home.

End game is almost here for poor Casey Serin at iamfacingforeclosure.com

From day 1 when HP broke Casey's story we've predicted massive media exposure (which has come - anyone see Nightline last week? The Economist? The USA Today?). We've predicted that Casey would become the face of the housing crash and mortgage fraud (which he has). And we've predicted that (after possibly some jail time) Casey would gain fame and fortune from this disaster (which he will). It is the American way after all. Especially watch for sharks like Kiyosaki and Trump to latch on.

Casey Serin, my friends, will be a famous rich man one day. Watch him doing speaking engagements, book deals, Senate testimony (wouldn't that be a hoot?) and more TV appearances.

But today, he's apparently hitting bottom. Isn't "despondency" one of the grief stages, after "denial" and before "acceptance"?

Although it pisses off most HP'ers who want him fed to the wolves, I wish Casey Serin well. In a country full of mortgage fraud and conmen, at least he came clean, whereas the other 99% are still at it. And unlike Sharpton with Imus, I believe in forgiveness and redemption. Plus I love his blog - it's a fricking hoot.

But here's Casey today on possibly shutting down his blog. The internets just wouldn't be the same without his site, so hopefully some HP'ers, even if you don't like the kid, get over there and tell him to keep blogging. Yes, there's one thing bloggers do, and that's stick up for each other. Well, except for some of us that is.

Debt. Finances. Blog. Foreclosure Site. Negativity. Haters. Details. Follow-through. Partnerships. Opportunities. Job. Book. Success story. Big deals. Crazy ideas. Passive income. Huge deals. Goals. Focus. Priorities. Marriage. Values. Faith. Purpose. Progress. Time. Finances. Finances. Finances…

The pressure of it all is getting to be too much.

This blog is on the chopping block right now… I’m seriously considering stopping this whole thing. It has brought me tons of great opportunities and contacts but its also a big distraction. I must either stop the blog, sell it or find a way to keep the time spent at bay.

What (if anything) can pump up American consumer spending now?

Or are we out of catalysts and bubbles?