HousingPANIC Stupid Question of the Day

Was your town's major industry and income driver these past few years "Buying and Selling Homes from Each Other at Higher and Higher Prices"?

Say hello to the Chicago Spire - 1,194 condos running $750,000 to $40 million in what will become a permanent monument to the Great Housing Mania

Oh, dear god, how stupid can people get?

Chicago Spire stupid I guess.

This all-condo 150 floor monument to stupidity and greed will become (if not torn down first) a permanent reminder of this housing Ponzi Scheme and crash for generations to come.

Too stupid to be imagined by even the dumbest of American developers, the lead developers on this project are Irish, home of the greatest housing bubble (and eventual collapse) in the world. And since hardly any US buyers are dumb enough to buy one of these Ponzi Scheme Specials, they're now trying to unload them to naive foreign speculators.

So, anyone want to guess what percent of people who put down deposits will be asking for their money back? Or what percent will fall into foreclosure?

Anyone want to guess how far in value these units will drop from peak to trough?

Anyone want to guess how long until the first terrorist attack?

And I think it needs a HP-worthy name. Here's a few for starters:

The Chicago Foreclosure Monument
The Great Chicago Condo White Elephant
The Chicago Spire of Babble
The Chicago Ponzi Stack
The Chicago Idiot Tower
The Chicago Spiral of Bad Debt
The Chicago Big Overpriced Dorm

So many people financed their spending these past few years with the Housing ATM. Not anymore. The Big Lie is over.

A house should never have been an open wallet. A house should never have been an ATM or a no-limit credit card. A house should never have been a retirement account. A house should never have been a lottery ticket. A house should not have been a replacement for a job.

A house should have been, and should always be, a home.

Everyone thought they were rich (or getting rich) these past few years. They ignored what was happening to America (manufacturing? who needs manufacturing? habeus corpus? ah, that's silly!) because the price of their home was going up and they could suck out the 'equity' and go blow it however they saw fit.

No more.

Now, people are behind on their payments on that mortgage they can't really afford. Millions have lost their jobs. The housing ATM is out of order. And money really doesn't grow on trees.

Have yourself a subprime little Christmas

Jackie Castleberry won't be playing Santa Claus this year.

She usually buys her grandchildren, nieces and nephews lots of gifts around the holidays -- bicycles, educational games, clothes -- but this year she is just struggling to keep her North Las Vegas, Nevada, house.

The interest rate on her four-bedroom home loan shot up in October and she is $6,000 behind on her payments. She now owes $168,000 on her home, which once was worth $220,000 but is now worth about $150,000.

In the past, when times were tough, she would borrow against her home's equity -- that's no longer possible.

"I was always seen as the person that's giving, but it's kind of affected this year," said Castleberry, a former casino buffet supervisor who now makes $11 an hour, 30 hours a week, supervising children before and after school. "This year, I can't see anything right now as far as gifts."

Castleberry is just one of thousands of homeowners nationwide who can no longer finance their spending by tapping into their once inflated, now depreciating home equity. Others can no longer afford their higher monthly payments due to a reset in their adjustable rate mortgages and have been foreclosed.

Please tell me that these type people, and these housing porn TV shows, are going to go away now that housing has crashed

Flip This House
Sell This House
Flip That House
Flipping Out
MTV Cribs
Property Ladder

BARF!!!!!

Make it stop. Please make it stop.

FLASH: San Diego home prices have already crashed 15% from the peak. How low will they go?

20%?
30%?
50%?
More?

Suzannnnneeee!!!!

It was all fraud and speculation folks. We're going back to looking at Price to Income ratios, and at Rental Yields. Unfortunately anyone who bought in 2004 - 2007 is going to get wiped out. And they can thank Alan Greenspan, Ben Bernanke and their local realtor on commission.

SAN DIEGO – Home prices in San Diego County tumbled nearly 10 percent last month from year-ago levels, taking the median down to $440,000, the lowest in more than three years, DataQuick Information Systems reported Monday.

The latest price represents a 15 percent fallback from the all-time record of $517,500 set in November 2005. It was a bigger decline than the 11.7 percent peak-to-trough drop from 1992 to 1996, when the San Diego economy slid into a deep, prolonged recession.

Here's an update on HP favorite Little Boy David Crisp, the flash-in-the-pan Bakersfield mortgage fraudster

Bling is the thing!

I guess not.

Must suck to be facing significant jailtime at his age, all because of greed. Must suck to be one of the millions of mortgage fraudsters, corrupt realtors and shady appraisers wondering every night if the FBI is gonna come get them too.

And it must suck to be Hillary Clinton, George Bush or Chuck Schumer, when they eventually realize that they destroyed their own political careers and legacies by trying (and failing) to use government resources to bail out mortgage fraudsters like David Crisp.

Fake it until you make it: A housing flipper saga

When David Crisp was only 25 years old, the Bakersfield, Calif., real estate star tooled around town in a $560,000 Mercedes-Benz McLaren sports car, along with a cohort of "black-suited bodyguards." He sported a $50,000 Chanel watch and Armani suits. His company, Crisp & Cole, leased Gulfstream jets to fly prospective investors into Bakersfield and Las Vegas and fronted money to its team of agents so they could sport their own luxury cars and designer clothes.

On Monday, Crisp's mansion was put up for auction with a starting bid of $1.8 million. Nobody bit, and the home was repossessed by the lender. According to the Bakersfield Californian, more than 100 defaulted and foreclosed-upon properties can be traced to associates of Crisp & Cole.

But what does it all mean? How many other David Crisps ran wild in the great housing boom of the early 21st century? How many of the collateralized debt obligations made out of repackaged subprime mortgage securities were built from loans made to similar scammers?

FLASH: Merrill Lynch just announced another $7.9 billion in mortgage cancer write-offs, and to think we're still just getting started

Ouch.

That's gotta hurt.

And you ain't seen nothing yet. Just wait until Countrywide Toxic Mortgage reports on Friday. Major companies will go away during this downfall. Banks will fail. And the financial community will be shaken to its core.

The losses when this whole Ponzi Scheme are counted up will be in the trillions. Yes, the trillions. Nobody can stop it, and the truth is getting tougher and tougher to hide.

Merrill 3Q Roiled by Mortgage Crisis - Merrill Lynch Posts Steep Third-Quarter Loss, Roiled by Mortgage and Credit Crisis

NEW YORK (AP) -- Merrill Lynch & Co., the world's biggest brokerage, on Wednesday said the summer's credit crisis triggered a bigger-than-expected $7.9 billion writedown during the third quarter.

Bad bets on mortgage securities and leveraged loans used for corporate takeovers caused it to post its first loss in six years. The blow makes Merrill Lynch the hardest-hit investment bank on Wall Street amid the recent market turmoil.

The losses were a big miss from what Merrill said it expected on Oct. 5. The company warned Wall Street at that time that it would take an almost $5 billion writedown for the quarter, because of its exposure to risky mortgage-related securities.

Chief Executive Stan O'Neal said the company continues to face uncertainty on the impact of its mortgage-related investments.

Housing Reality: $1.2 trillion lost already, $4 trillion more next year, builders walking away, foreclosures, bankruptcies and a historic crash

It should all be coming so clear now for Americans. The NAR may keep spinning, realtors on commission may keep lying, The Worst President Ever may keep quiet, and Wall Street may keep there head in the sand (or not).

But when it comes to the US housing market, an epic collapse is underway. And we're just getting started.

If you haven't sold your home yet, and you want to preserve any of your equity, sell now, sell at any price, and rent. If you bought at the peak and are already underwater, just walk away. Stop making payments, preserve your cash, and prepare for foreclosure. And if you're renting, keep renting. This crash will take years until we see bottom. Buy again when it's cheaper to "own" than "rent".

What happened to housing around the world these past few years was a classic financial mania, fueled by historic leverage and massive speculation. The market will take care of itself and wash away its sins. It hath been foretold.

Builders Giving Up On The Sinking Market

In California, where developers have been racing to turn farmers' fields into subdivisions, they're now walking away, leaving houses partially built.

Those who have already moved in wondering what will hit next.

“I'm concerned that once the weather starts getting bad, there's tile piled on the roof that could just fly off,” homeowner Marius Gieske told CBS News correspondent John Blackstone.

Dunmore Homes had building projects in a dozen California communities from Bakersfield to Yuba City. Now it’s halted work everywhere, giving up on a fast-falling market.

“We couldn't sell a moving target,” said John Slaughter, vice president of construction and operations for Dunsmoor Homes. “What we wanted to do is stop.”

That moving target, collapsing house prices, has already cut $1.2 trillion from the value of American homes. And the losses are mounting, going to $4 trillion by one estimate, by the end of next year.

Wall Street Journal Page One Expose: The United States of Subprime

Thanks to Beth over at the WSJ for sending this one over. I rip on the MSM for not doing their jobs during the bubble (or the Iraq invasion) but damn, some of 'em are making up for lost time now (the WSJ, the FT, the Economist and more).

Too much in here to list, but I'd encourage all of you to read the full article, and know what's coming.

This is gonna be ugly, it's gonna last for years and years, and the impact of the housing crash and mortgage meltdown will be felt worldwide.

No matter what realtors on commission try to tell you.

The United States of Subprime - Data Show Bad Loans Permeate the Nation; Pain Could Last Years

As America's mortgage markets began unraveling this year, economists seeking explanations pointed to "subprime" mortgages issued to low-income, minority and urban borrowers. But an analysis of more than 130 million home loans made over the past decade reveals that risky mortgages were made in nearly every corner of the nation, from small towns in the middle of nowhere to inner cities to affluent suburbs.

The analysis of loan data by The Wall Street Journal indicates that from 2004 to 2006, when home prices peaked in many parts of the country, more than 2,500 banks, thrifts, credit unions and mortgage companies made a combined $1.5 trillion in high-interest-rate loans. Most subprime loans, which are extended to borrowers with sketchy credit or stretched finances, fall into this basket.

The Journal's findings reveal that the subprime aftermath is hurting a far broader array of Americans than many realize, cutting across differences in income, race and geography. From investors hoping to strike it rich by speculating on condominiums to the working poor chasing the homeownership dream, subprime loans burrowed into the heart of the American financial system -- and now are bringing deepening woe.

"We had an aggressive home-mortgage industry trying to get people into homes they couldn't afford at a time when home prices were very high. It turned out to be a house of cards," says Karl Case, an economics professor at Wellesley College. "We're in the early stages of the cleanup."

Random look at housing crash through zillow zip code graphs. Here's a slice of Phoenix (85323). Any questions?

I took a quick spin on zillow.com (you know you love it) today to check out the freefall in home prices in my old 'hood, Phoenix Arizona.

It wasn't pretty.

I also looked at real estate foreclosures and noticed a bunch of units in my old development heading to auction. Gee, what a shocker. When "ownership" prices skyrocketed to three times the cost of renting, and flippers were buying at any price, you just knew how this one would end.

And end it has. And now, it's a long, long, long way back down.

And the clueless homedebtors and cheerleader realtors in Phoenix still have no idea what hit 'em.

Is Little Boy David Crisp the new Charles Ponzi? Crisp & Cole now tied to 94 properties in default and $59 million in mortgage loans gone kaput

Gotta love a good Ponzi Scheme. Gotta love a good swindle. Gotta love a good snake oil salesman, promoted by the snake oil company (the NAR). And gotta love it when out of control bankers lend millions to a little shoe shine boy during the greatest financial mania in recorded human history. David Crisp was simply Casey Serin with a much bigger credit line.

And we all know how this one ends....

Here's what the monkey-run NAR had to say about David Crisp in 2005 in their glowing "30 under 30" feature:

Bling is the thing: Crisp insists that his salespeople wear professional attire and be well-groomed. He buys luxury automobiles for his salespeople and has flown clients in private jets to view properties. “Image is key in this market,” he says. “Clients want to feel important and be with a real estate professional who’s successful.”

And of course, here's the report today, which is starting to read more like a police blotter:

On Sept. 10, the Department of Real Estate issued a complaint against Crisp, Cole and three employees, charging them with deceiving lenders to take out $12 million in home loans.

On Sept. 12, FBI and IRS agents searched 13 homes and offices related to the former Crisp & Cole Real Estate firm. Warrants were sealed, but a list belonging to a law enforcement officer listed bank records, appraisal documents and business and financial documents among items to be seized. San Joaquin Appraisals, owned by Kirk “Mark” Newton, was also searched.

As of the third week in September, Crisp, Cole, their companies, family members, employees and associates have defaulted on at least 94 properties. Payments are late on $58.76 million worth of home loans.

But don't forget the NAR's overarching message in this rags to riches to rags to orange jumpsuits story: BLING IS THE THING!!!

Any questions? There shouldn't be.

When real people can no longer afford homes, real people stop buying homes.

Sorry investors. Sorry flippers. Sorry realtors, mortgage brokers, homebuilders and assorted REIC.

This Ponzi Scheme is over.

FLASH: Real Estate fund manager expects a 50% fall in home values for inflated coastal markets

Are Arizona and Nevada close enough to the coast Ken?

For anyone thinking of buying a home today in San Diego, Miami, Tampa, Naples, Phoenix, Vegas, Boston, DC, Sacramento and a few others - unless you're getting 50% off of the peak bubble price, don't even think about it.

And nice to see an expert talk about the 800-pound gorilla in the room - that incentives are cuts in value just like price cuts are.

"I expect a 50% decline in the inflated coastal markets.... [When] homebuilders' conference calls talk about the concessions they make in the form of extras at no cost to the buyer, they can be 20% to 30% of the house price. So the full 50%... may come in other forms"

- Kenneth Heebner, manager, CGM Realty Fund, September 2007

Newsweek on the Las Vegas housing crash, empty McMansions, failed flippers and the end of the Great Housing Ponzi Scheme

First the low end got taken out with the subprime collapse - thus screwing around with the median price data. But now the high end is getting taken out by the fact that getting a Jumbo ($417,000 or greater) is damn near impossible.

Poor KB Home. Poor Toll Brothers. Nobody to buy your overpriced ugly prefab homes anymore... Here's the latest from housing meltdown Las Vegas - I'm heading there next week, wish I had time to tour the empty Toll neighborhoods. We'll see...

Newsweek - The New Money Pit It started with subprime mortgages. Now owners of McMansions are defaulting, and the effects of the housing bust are beginning to ripple through the economy.

Walking through the gated community of Black Mountain Vista on a hill in Henderson, Nev., Thomas Blanchard offers a guided tour of real-estate woe. A row of stucco duplexes that recently sold for as much as $500,000 sit empty. "That's a repo," the real-estate agent says as he stands in front of 678 Solitude Point Avenue. Then he points to the adjacent houses, where yellow patches blot the spartan lawns and phone books lie on front porches, their covers bleached from weeks under the desert sun. "No. 680, repo; 684, repo. Those two at the end, repo."

Three years ago, this Las Vegas suburb was teeming with modern-day prospectors armed with low-interest mortgages, all hoping to strike it rich in real estate. Now, what started with the subprime-mortgage mess and subsequent credit crunch are turning communities like Black Mountain Vista into luxury ghost towns.

Buyers who got in over their heads are being forced to abandon their homes, leaving behind empty McMansions on the California coast and see-through condominium towers on Miami Beach. Real estate is turning into a money pit, sapping the fortunes of home buyers, hedge-fund managers and house painters alike. The really bad news? This is only the beginning.

FLASH: Foreclosures soaring, and in mortgage meltdown cities failed flippers are just turning in the keys

Goodbye Florida.

Goodbye Arizona.

Goodbye California.

Goodbye Nevada.

And hello 50% falls in home values. No matter what lying realtors on commission try to tell you.

Subprime Mortgage Woes Push New Foreclosures to a Record High

WASHINGTON (AP) -- The number of homeowners receiving foreclosure notices hit a record high in the spring, driven up by problems with subprime mortgages.

Analysts said the problems in the formerly red-hot housing markets of California, Florida, Nevada and Arizona reflected in part speculators walking away from mortgages they can no longer afford.

During a five-year housing boom, the prices in these areas surged, creating what many analysts have described as a speculative bubble as investors bid up the price of homes hoping to quickly resell them for a profit.

Now with home sales falling, the inventory of unsold homes rising and prices stagnant, some speculators are choosing to default on their mortgages.

HousingPANIC Stupid Question of the Day

Is the social stigma of "owning" a home (renting money from a bank in order to sleep in a rapidly depreciating asset) now worse than renting?

BONUS: Heard in a Scottsdale nightclub: "Ooh, I don't think you should go home with that guy. I hear he's got an interest-only, negative-am on one of those Optima condos. Yeah, the ones that have lost half their value. And I think his car is leased and he lost his job as a mortgage broker"

Somethin like that... Actual picture from dirtyscottsdale

PIMCO's Bill Gross calls for taxpayers to bail out failed housing gamblers. HousingPANIC calls for Bill Gross to pull his head out of his ass

Some days, I can't believe what I read from our "leaders".

For respected bond trader Bill Gross to be calling for a federal housing gambler bailout with taxpayer money is not only pathetic, reckless and wrong, it's actually immoral. Either Gross knows how bad it's gonna get and is in panic stage, or there's some way he'll make money off of a government bailout.

Why should taxpayers who go to work, pay their bills, read fine print, live within their means and make rational financial choices send their hard earned income to others who gamble, live beyond their means and make poor financial choices?

FOR THE LOVE OF GOD HAVE PEOPLE GONE INSANE?

Sign the online petition against this crap here. We can help defeat this stupid thinking, just like the immigration law mess.

If the US government bails out failed flippers and housing gamblers in ANY way, then it will officially be over. Rome will have burned. And the US government will no longer be deserving of your support. But I have faith. Even George Bush and Congress aren't this stupid, reckless and corrupt. Right? If Bush or Congress try to increase their record-low ratings with a housing gambler bailout, my prediction is that it'll backfire worse than Schiavo.

Here's Gross and his "wisdom". I need to go puke now. And I'll also try to figure out how Gross's bailout call might directly financially benefit PIMCO and Bill Gross.

The ultimate solution, it seems to me, must not emanate from the bowels of Fed headquarters on Constitution Avenue, but from the West Wing of 1600 Pennsylvania Avenue.

Why is it possible to rescue corrupt S&L buccaneers in the early 1990s and provide guidance to levered Wall Street investment bankers during the 1998 LTCM crisis, yet throw 2,000,000 homeowners to the wolves in 2007?

If we can bail out Chrysler, why can’t we support the American homeowner?

This rescue, which admittedly might bail out speculators who deserve much worse, would support millions of hard working Americans whose recent hours have become ones of frantic desperation.

Now here's someone sane on Gross being a doof:

More Bailouts Could Bring Disaster Down the Road

In my humble opinion Mr. Gross is right about only one thing: that Mr. Bernanke is unable to eventually stop a destructive housing deflation.

At least now the pundits are admitting that a housing deflation is at the heart of the economic problems. That is a watershed event.

But for the “government”, which I thought was using taxpayer money (except for the $9 trln in debt it has borrowed), to bail out malinvestment is only to increase the problem. If you don’t punish your child for playing with matches, he may one day burn the house down.

Of course Mr. Gross, being worth $500 mln plus, really doesn’t worry about how much of his tax dollars are going into the abyss; he just wants to keep earning his fees.

HousingPANIC Stupid Question of the Day

So, tell us America, what are you thinking about realtors and mortgage brokers these days?

TIME Magazine FINALLY allows a housing crash article into their fine magazine (chuckle chuckle): "The value of our homes is collapsing"

I still can't believe these yahoos at TIME haven't put the housing crash or current debt crisis on their cover yet. Even from a business perspective, since the housing crash effects nearly every person in America, seems like they'd want to sell a few magazines.

But like the NAR, I think TIME is run by monkeys.

Anyway, here's their first article on the housing crash, kinda, since it's listed as "commentary". Hey, it's a first step. Anyone want to guess when we finally get the cover?

Your House Is Worth Less? Good

The last time we had this feeling of financial vertigo was when the Internet bubble popped seven years ago. But this is much worse: the value of our homes is collapsing. For generations, rising home prices have been central to our general sense of well-being.

So why is the real estate collapse a good thing?

First, because the collapse of any financial bubble can be interpreted as a morality play: greed gets its comeuppance. Subprime mortgages play the role that used to be played by junk bonds. They represent easy money--too easy, in retrospect. Borrowed money, if it gets out of hand, puts economic history on speed: everything rises faster, then collapses harder. Foolish lenders become the enablers of foolish borrowers.

In the 1990s, people came to believe that stock prices would rise forever. They learned differently. And now we are learning differently about real estate as well. Whenever the price people will pay today depends on the belief that other people will pay even more tomorrow, you've got a bubble. It takes only a slight letdown in those expectations to send the whole delightful, self-feeding process into reverse.

more here...

I wonder if these scummy mortgage agents still have their jobs. Doubt it. Good.

America, you got gamed by 20-something call-center-jockey kids pumping mortgages you couldn't afford and even they didn't understand so they could make a quick commission.

Tens of thousands of life's losers - call center jockeys, bartenders, used car salesmen, Herbalife distributors (you get the picture) - found their way into the unregulated and out-of-control REIC over these past few years. The one saving grace is that they're getting canned left and right - the party is over.

I wonder who'll be picking up the bottle service tab in Scottsdale tonight? Anyone? Anyone?